Since the United States Supreme Court established the Major Questions Doctrine in 2022, the ruling has proved invaluable to the energy industry’s fight against federal agencies seeking to enforce President Biden’s 2020 campaign promise to “end fossil fuels.”
The Permian Basin Petroleum and Texas Independent Producers & Royalty Owners associations say the doctrine was set in the court’s West Virginia vs. Environmental Protection Agency ruling that agencies may not write regulations that would have major economic or political ramifications without congressional approval.
The EPA had wanted to require the nation’s power generation fleet to completely end the use of fossil fuels.
PBPA President Ben Shepperd traces the legal trail back to a 1984 Supreme Court decision in the Chevron versus National Defense Council case in a doctrine known as Chevron Deference was established.
“This doctrine provides for ‘judicial deference’ that should be given to administrative actions by federal agencies,” Shepperd said. “In other words courts should defer to an agency’s answer or interpretation of congressional action instead of substituting their own interpretation of that statute as long as that answer is not unreasonable and as long as Congress has not spoken directly to the issue being raised.
“This is largely the doctrine that administrative agencies have relied upon to stretch their authority over the years and we have particularly seen this stretching under the current administration.”
But through West Virginia vs. EPA and numerous other cases, Shepperd said, the Supreme Court has declared that if an agency seeks to decide an issue of major national significance, its action must be supported by clear congressional authorization.
“In the question before the Supreme Court having to do with EPA action under the Clean Air Act the court determined that EPA had stretched its interpretations of congressional authorization under the CAA too far with the majority holding that courts should presume Congress does not delegate to agencies or the administration issues of major political or economic significance,” he said. “Specifically the opinion provided that courts should ‘hesitate before concluding that Congress meant to confer such authority.’
“This opinion is in line with the Major Questions Doctrine.”
Shepperd said states, individuals and companies have since used the Major Questions Doctrine to challenge federal regulations and in many cases have been successful.
“The doctrine itself may not be referenced by name in court documents, but the opinions provided by the Supreme Court in which the doctrine is utilized are quoted and referenced,” he said. “Not all of these cases concern upstream operations in the oil and gas industry, but they do impact the industry and should change the regulations that the EPA and other federal agencies create.
“However, not every claim challenging a regulatory action by a federal agency is ripe for a Major Questions Doctrine application. For instance the PBPA’s claims against the U.S. Fish and Wildlife Service’s listing of the Lesser Prairie Chicken under the Endangered Species Act, which were adjudicated in PBPA’s favor in 2015, were more reliant on illustrations of violations under the Administrative Procedures Act.
“Whether it is the Major Questions Doctrine or other legal claims, holding administrative agencies accountable for their actions based on the authority they have been given by the Constitution or by congressional action is absolutely essential for the stability of our democracy.”
Shepperd said two important cases are currently before the Supreme Court.
“The cases have to do with a rule issued by the National Marine Fisheries Services that requires the herring fishing industry to bear the costs of government observers on their fishing boats,” he said. “The Chevron Deference was applied by the U.S. Court of Appeals for the District of Columbia Circuit Court to find that the services’ interpretation of federal law was reasonable.
“The Circuit Court’s ruling was then upheld by the U.S. Court of Appeals for the 1st Circuit. Arguments have been heard by the Supreme Court and a decision is expected sometime this summer.”
While those cases have nothing to do with the oil and gas industry, Shepperd said, they do entail claims of agency overreach and a broader Supreme Court opinion could impact the strength of Chevron Deference, making it an asset for anyone fighting back against federal regulatory violations of the separation of powers.
TIPRO President Ed Longanecker said from Austin that the Major Questions Doctrine reflects a reversal of pro-regulatory bias in Supreme Court case law that started over 80 years ago under President Franklin D. Roosevelt.
“The court now has six justices who favor trimming the powers of regulatory agencies,” Longanecker said. “These are the justices who introduced the Major Questions Doctrine as a binding rule of law in West Virginia v. EPA.
“Subsequent to that an amicus group including TIPRO raised the doctrine in the three electric vehicle cases before the DC Circuit: the California waiver challenge, the National Highway Traffic Safety Administration fuel economy standards challenge and the EPA tailpipe challenge.
“The DC Circuit recently used a standing analysis to uphold the California waiver and avoid the major question argument. If the DC Circuit rules similarly in the other two cases or otherwise finds a way to uphold the two rules, the Supreme Court will likely accept the appeals and there’s a good chance they won’t have much patience with the standing argument.”
Longanecker said the Major Questions Doctrine will continue to play a significant role in regulatory decisions.
“It’s unclear how the doctrine will fare in the lower courts given the wide variety of judicial philosophies across the federal trial and appellate courts,” he said. “However, we will likely see a number of Major Questions Doctrine cases coming out of the Supreme Court and lower courts with conservative judges in the coming years. This is especially important given the unprecedented number of rules and regulations being promulgated by the current administration, some of which are an extreme overreach that could endanger America’s access to affordable and dependable energy.”
Longanecker said the timing of the rules and regulations is aimed at influencing this year’s elections in favor of Biden and the Democrats and at preventing the use of the Congressional Review Act to overturn federal agency rules if the Republicans regain power.
