A sweeping court order blocking the Biden administration from using its social cost of greenhouse gas emissions calculations to justify agency decision-making could delay dozens of regulations and other federal actions, including the permitting of oil and gas wells, an administration official said in a recent court filing.
The court's decision, if not stayed, would force agencies to postpone or rework "a significant number of agency rules and actions," said Dominic Mancini, deputy administrator of the Office of Information and Regulatory Affairs, or OIRA, within the Office of Management and Budget.
Mancini asked the U.S. District Court for the Western District of Louisiana to stay its order in Louisiana v. Biden (No. 2:21-CV-01074) pending appeal.
On Feb. 11, District Court Judge James Cain issued a preliminary injunction against the Biden administration's estimates for the social cost of greenhouse gas emissions and ordered agencies to revert to the Trump administration's much lower cost estimates.
The injunction barred the administration from "adopting, employing, treating as binding, or relying upon" any products from a reestablished interagency working group to determine the social costs of greenhouse gases. Cain also prohibited agencies from using any cost estimates that are "based on global effects" or do not use discount rates of between 3% and 7%.
The judge's decision could have major impacts on the Biden administration's regulatory agenda, Mancini said in a Feb. 19 filing.
The OIRA official said the U.S. Energy Department initially identified about 21 rulemakings that would be affected. For instance, the DOE is under a court-ordered deadline to issue final energy conservation standards for manufactured housing by May 16, with a 45-day comment period for a draft environmental impact statement ending in about two weeks.
Barring the DOE from using the administration's interim estimates for the social cost of emissions "could complicate concluding the environmental review in time to meet the court deadline," Mancini said.
Energy permitting delays
The court order could also disrupt energy permitting in federal areas. The U.S. Interior Department has tentatively identified three rulemakings and roughly 27 analyses mandated under the National Environmental Policy Act that could be affected by the district court decision.
OIRA is now reviewing a proposed rule from the Bureau of Land Management, or BLM, to curb waste from oil and gas leases on public lands that could result in associated cuts in methane emissions. The rule is intended to address a 2020 ruling from a federal district court in California that found that an earlier version of the rule failed to consider how methane emissions from those leases could affect geopolitical security and foreign assets owned by U.S. companies.
"If BLM uses a domestic-only estimate of the social cost of methane, which fails to consider these direct impacts to U.S. welfare that methane emissions will cause through climate effects occurring outside U.S. borders, I understand that BLM would risk violating the California district court's order," Mancini said.
In addition, Interior has already incorporated the interagency working group's interim cost estimates into its NEPA analysis for several planned and potential oil and gas lease sales. Revising NEPA analyses for planned onshore oil and gas lease sales "would be a burdensome and time-consuming process for the BLM," Mancini said, and would require the bureau to recirculate the revised analyses for 30 days of public comment.
Furthermore, the BLM "risks potentially running afoul of other court precedents if it were to monetize other costs or benefits, such as coal and oil royalties, but not monetize the climate costs," Mancini added.
Mancini also said the preliminary injunction has halted work by the BLM on applications for permits to drill for at least 18 wells on federal oil and gas leases in New Mexico, with the bureau still assessing how many other applications may be similarly affected.
The U.S. Environmental Protection Agency has identified five rulemakings that could be affected by the district court decision. Mancini did not elaborate on what those EPA rules are, but the agency has been planning to introduce greenhouse gas performance standards in 2022 for existing fossil fuel-fired power plants.
"The cumulative burden of the preliminary injunction is quite significant," the Feb. 19 filing said. "Regulatory impact analyses and analyses in support of other agency actions are often very complex and time-intensive studies that agencies can spend months developing and refining. Changing the value of key parameters ... would often require agencies to re-run numerical models and simulations that they may be using to develop impact assessments."
Other arguments
Along with the potential rulemaking impacts, Mancini said the district court decision could disrupt internal agency activities and executive branch coordination on federal actions.
Mancini said Cain's order was so broad that "staff across the affected agencies were ... having to assess how to stop attending meetings or developing work product that bore some relation to the social cost of greenhouse gases," including ordinary budgetary discussions and work on proposed regulatory actions.
As an example, Mancini said agencies including the EPA have canceled or postponed all-staff webinar training sessions where the interagency working group's social cost estimates were to be discussed. In addition, the Office of Management and Budget has told agencies not to send comments on sections of draft documents that refer to the social cost of greenhouse gas emissions.
More broadly, the OIRA official said Office of Management and Budget guidance on rulemaking gives agencies the discretion to evaluate the global impacts of regulations, although those effects should be reported separately. Mancini also said the individual provisions of the Office of Management and Budget's guidance are not legally binding requirements on executive branch agencies.
"Tying agencies' hands and preventing their selection of the best available data and methodological assumptions ... has the potential to undermine confidence in the quality of the regulatory analyses," Mancini said.