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U.S. Appeals Court Blocks EPA Water Rule Nationally

The U.S. Circuit Court of Appeals for the Sixth District in Cincinnati on Friday blocked implementation nationwide of the controversial U.S. Water Rule from the Environmental Protection Agency (EPA).

The court cited pending litigation challenging the legality of the Obama administration's move. The order, following a more geographically limited one from a federal judge in North Dakota in late August (see Shale Daily, Sept. 8), provides encouragement to the 18 states that have challenged the new EPA regulation which would add ever-smaller bodies of water under the federal rules.

In North Dakota, one of the other states challenging the rule, Judge Ralph Erickson earlier had called the EPA proposal "exceptionally expansive." Erickson is the chief district judge for the U.S. District Court for the District of North Dakota Southeastern Division, who granted a preliminary injunction sought by another combination of 13 states (see Shale Daily, Aug. 28).

North Dakota led attorneys general for eight of the 13 states in filing the motion, arguing that if the Clean Water Rule was to be effective as planned Aug. 28, the revised definition of what constitutes "Waters of the United States" would "irreparably harm the states' sovereign interests and their state budgets during the pendency of this litigation." The oil/gas industry has been strongly opposed to the EPA's expanded rule.

Along with the U.S. Army Corps of Engineers, the EPA earlier this year issued its rule, which it estimates puts about 3% more of the nation's waterways under federal jurisdiction, requiring federal permits to pollute those waters and could restrict access totally to the newly included waters. Critics have included lawmakers and business/energy/farming groups.

"We’re at the beginning stages of the swing back of the regulatory overreach pendulum from the Obama Administration," said Kathleen Sgamma, Western Energy Alliance (WEA) vice president for government/public affairs. "With the mercury rule, the BLM fracking rule, the lesser sage grouse listing, and now WOTUS, we’re seeing the courts starting to rein in the regulatory overreach that was upsetting the balance of power both among the co-equal branches of government as well as with respect to the states."

Sgamma said that WEA not only views the latest court ruling as a positive sign regarding final rules that overreached, but "these court rulings send a cautionary message to the White House as it tries to rush in place even more new regulations before the clock winds down."

Texas Attorney General Ken Paxton called the court's ruling "good news" for property owners who would be subject to "extensive new federal regulation" under the EPA's rule. Paxton described the EPA's move as a "blatant power grab," and said Texas would continue to fight the proposal.

A major critic of the agency and the water rule, U.S. Sen. Ben Sasse (R-NE) said the water rule "is now on borrowed time." EPA should not be allowed to act like "a super-legislature,” he said.

Sasse was a co-sponsor of a resolution objecting to the Waters of the United States (WOTUS) rule, and he joined in supporting the proposed Federal Water Quality Protection Act, authored by a colleague, Sen. John Barrasso (R-WY).

A spokesperson at the North Dakota Petroleum Council said the industry group is pleased by the court action and it is still reviewing the seven-page order.

The Sixth Circuit's ruling was on a consolidation of four cases involving the 18 states: Ohio, Michigan, Tennessee, Oklahoma, Texas, Louisiana, Mississippi, Georgia, West Virginia, Alabama, Florida, Indiana, Kansas, Kentucky, North Carolina, South Carolina, Utah and Wisconsin. The three-judge panel concluded that the states "have demonstrated a substantial possibility of success on the merits of their claims [including that the EPA rule is at odds with a past U.S. Supreme Court ruling]."

Noting that uncertainty surrounds the definitions of "navigable waters" and "waters of the U.S.," the court said it could "appreciate the need for the new [EPA] rule." However, on a 2-1 vote the panel granted the stay, adding that it "allows for a more deliberate determination of whether this exercise of executive power -- enabled by Congress and explicated by the Supreme Court -- is proper under...federal law.

"A stay temporarily silences the whirlwind of confusion that springs from uncertainty about the requirements of the new rule and whether they will survive legal testing."

In May the EPA unveiled its long-awaited finalized Clean Water Rule (CWR), extending regulatory protection to smaller upstream rivers and creeks, but doing so against the wishes of the oil and gas industry, manufacturers and their Republican allies in Congress (see Shale DailyMay 27).

The action by EPA has spurred a number of lawsuits in both district and appeals courts. Ultimately, one court will be selected to hear the challenges on a consolidated basis.

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