American Oil and Gas Reporter - November 2015 - 34

Headed For Veto?
The final step is getting a bill signed by
the president, and two days before the
House vote on HR 702, the White House
issued a statement that, "Legislation to remove crude export restrictions is not
needed at this time. If the president was
presented with HR 702, his senior advisers would recommend that he veto the
bill."
Neither Fuller nor Stenholm read that
as absolute opposition to lifting the ban under any scenario. "If it is a package that
has bipartisan support, you will have
pressure coming from the Democratic side

saying, 'Mr. President, don't veto that bill,"
Stenholm assures.
Fuller opines it is likely the administration's statement is intended to strengthen Senate Democrats' negotiating leverage. He says, "The administration has
been cautious not to say specifically
there is no way it would support crude oil
exports," although he worries, "Each
time (the administration) takes a position,
its threshold for support becomes more
constrained."
He particularly expresses disappointment in the second part of the White House
statement that instead of repealing the ex-

port ban, "Congress should be . . . supporting our transition to a low-carbon economy. It could do this through a variety of
measures, including ending the billions of
dollars a year in federal subsidies provided to oil companies."
At the end of the day, Stenholm offers,
success or failure will be determined by
both sides finding the political will to compromise. "That means some of us are going to have to take some things we would
just as soon not have," he concludes. "But
a package that is good for the economy and
moves us forward will benefit the oil and
gas industry, too."
❒

Court Blocks EPA's Clean Water Rule

CINCINNATI-A federal court has issued a national stay on implementing the
U.S. Environmental Protection Agency's
Clean Water Rule until it determines
whether legal challenges filed by a number of states should be heard in appeals or
district courtrooms.
The U.S. Court of Appeals for the 6th
Circuit in Cincinnati issued its stay Oct. 9.
According to court documents, briefings
on questions of which court holds jurisdiction were scheduled for Nov. 4, with a decision expected within several weeks. Issuing the stay means the definition of "waters of the United States" (WOTUS) in
place before EPA and the Army Corps of
Engineers published their new rule on Aug.
28 will remain in effect.
The involved states also requested the
court rule that it lacked jurisdiction to hear
their appeals, which would allow them to
pursue their cases in district courts.
The Cincinnati order follows a preliminary injunction issued Aug. 27 by a federal judge in North Dakota. The judge there
ruled the 13 states requesting the injunction against the rule were likely to prevail
on their claims that EPA and the Corps
failed to follow federal procedures in developing their WOTUS definition. In its
response, EPA declared the ruling applied
only to those states seeking the injunction
(AOGR, October 2015, pg. 18).
Two other district courts ruled they
lacked jurisdiction to hear challenges to the
rule. The federal agencies asked the U.S.
Judicial Panel on Multidistrict Litigation
(JPML) to combine the multiple district
court cases filed across the country, court
documents indicate. On July 28, the panel consolidated eight actions within the 6th
Circuit involving 18 states: Alabama,
Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi,
North Carolina, Ohio, Oklahoma, South
Carolina, Tennessee, Texas, Utah, West

34 THE AMERICAN OIL & GAS REPORTER

Virginia and Wisconsin.
The states sued after the agencies
sought to expand the federal WOTUS definition. According to court documents,
EPA and the Corps argue the new definition establishes "bright-line boundaries"
to "make the process of identifying waters
protected under the Clean Water Act easier to understand, more predictable, and
consistent with the law and peer-reviewed
science while protecting the streams and
wetlands that form the foundation of our
nation's water resources."
The plaintiffs assert the revised definition would expand the federal agencies' regulatory jurisdiction and dramatically alter
the balance of federal/state collaboration.
In addition, court documents say, the states
contend the new bright-line boundaries used
to determine which tributaries and waters
adjacent to navigable waters have a "significant nexus" to waters protected under
the CWA are not consistent with the law as
defined in several Supreme Court decisions,
and were adopted in violation of the Administrative Procedures Act.
Cincinnati Ruling
In the 2-1 decision blocking the Clean
Water Rule, the 6th Circuit judges held the
petitioning states demonstrated a substantial possibility of success on the merits of their claims. According to court documents, the plaintiffs claim the rule's
treatment of significant nexus and navigable waters is at odds with the Supreme
Court's 2006 ruling in Rapanos v. United
States, which set parameters for determining what was properly to be considered
"waters of the United States."
The judges also upheld the plaintiffs'
assertions that the rule's use of distance
limitations to determine adjacent waters
under the significant nexus clause was not
included in the proposed rule submitted to
the public comment process. As a result,

they say the final version cannot be considered a "logical outgrowth" of the proposed rule, and thus violates the Administrative Procedures Act.
"Although the record compiled by respondent agencies is extensive, respondents have failed to identify anything in the
record that would substantiate a finding
that the public had reasonably specific notice that the distance-based limitation
adopted in the rule was among the range
of alternatives being considered," the
court states. "Nor have respondents identified specific scientific support substantiating the reasonableness of the bright-line
standards they ultimately chose. Their argument that 'bright-line tests are a fact of
regulatory life' and they used 'their technical expertise to promulgate a practical
rule' is undoubtedly true, but not sufficient."
The 6th Circuit also held the federal
government had not persuasively rebutted
arguments that the rule's bright-line distance limitations had adequate scientific
support.
While there is no compelling evidence
that any of the petitioning states would suffer immediate irreparable harm-in the form
of interference with state sovereignty or in
unrecoverable expenditures to comply
with the new regulations-if a stay was not
issued while the legal system determines
which court should have jurisdiction, the
Cincinnati court determined there also was
no indication the integrity of the nation's
waters would suffer imminent injury if the
Clean Water Rule was delayed.
"What is of greater concern to us, in
balancing the harms, is the burden-potentially visited nationwide on governmental
bodies, state and federal, as well as private
parties-and the impact on the public in
general, implicated by the rule's effective
SEE CLEAN WATER PAGE 37

American Oil and Gas Reporter - November 2015

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