## Facts

- The States of California and New Mexico, along with environmental organizations, challenged a federal agency rule that rolled back prior requirements limiting venting and flaring of natural gas on federal and tribal lands.
- In 2016, the Bureau of Land Management (BLM) adopted a Waste Prevention Rule updating older regulations to reduce avoidable loss of natural gas and related methane emissions, and to increase royalty collection from conserved gas.
- In 2018, BLM adopted a “rescission or revision” rule that largely repealed or weakened the 2016 protections, citing regulatory burdens and cost concerns and revising its view of its authority under the Mineral Leasing Act (MLA).
- The 2018 rule redefined “waste of oil or gas” to center on the lessee’s economics, treating waste as present only when compliance costs were lower than the value of gas expected to be conserved.
- In evaluating climate impacts, BLM shifted from a global social-cost-of-methane metric used previously to a narrower domestic-only metric using different discounting assumptions.
- The consolidated actions came before the district court on cross-motions for summary judgment under the Administrative Procedure Act (APA) and National Environmental Policy Act (NEPA).

## Issues

1. Whether the 2018 rescission rule was arbitrary and capricious or contrary to law under the APA because it reversed the 2016 rule without a reasoned explanation, relied on flawed economic and climate-damages analysis, and adopted an impermissibly narrow view of “waste” and BLM authority under the MLA.
2. Whether BLM violated NEPA by failing to take a hard look at the environmental and climate consequences of increased venting and flaring when rolling back the 2016 requirements.
3. Whether the proper remedy, if the 2018 rule was unlawful, was vacatur and reinstatement of the 2016 rule rather than remand without vacatur.

## Decision

- The court granted plaintiffs’ motions for summary judgment and denied defendants’ and intervenors’ motions.
- The court held the 2018 rescission rule was unlawful under the APA on multiple independent grounds, including an impermissible statutory interpretation and an inadequately explained reversal of prior findings and analyses.
- The court held BLM violated NEPA because its environmental review did not take the required hard look at environmental and climate impacts of the rollback, including impacts from increased methane emissions.
- The court vacated the 2018 rescission rule and reinstated the 2016 Waste Prevention Rule.

## Legal Principles

- An agency rescinding or revising a prior rule must acknowledge the change and provide a reasoned, evidence-based explanation that addresses prior factual findings, policy judgments, and reliance considerations; a change in priorities alone is insufficient under the APA.
- An agency may not reinterpret statutory terms or narrow its asserted regulatory role in a manner inconsistent with statutory text, structure, and longstanding agency practice; the MLA permits and requires reasonable measures to prevent waste of publicly owned oil and gas.
- Cost-benefit analysis used to justify deregulatory action must be explained in a rational manner; material methodological shifts (including social-cost metrics and discounting choices) require reasoned justification rather than outcome-driven adjustments.
- NEPA requires a hard look at environmental consequences of agency action, including reasonably foreseeable climate effects and emissions-related impacts; an environmental assessment must meaningfully analyze those consequences and not minimize them through unsupported assumptions or truncated metrics.
- Vacatur is an available and appropriate remedy for serious APA/NEPA defects where leaving the rule in place would perpetuate ongoing harms and the deficiencies are not minor or readily curable.

## Conclusion

The court set aside BLM’s 2018 rollback of methane waste-prevention requirements because the agency exceeded permissible bounds under the MLA, failed to justify its reversal of the 2016 rule with reasoned analysis under the APA, and did not adequately evaluate environmental and climate impacts under NEPA; the court vacated the rescission and restored the 2016 rule.


California v. Bernhardt, 472 F. Supp. 3d 573 (N.D. Cal. 2020)