The Securities & Exchange Commission (SEC) hoped to finalize a greenhouse gas reporting rule that it first made a priority in early 2021. Consistent pressure by investors and Supreme Court rulings prevented it from becoming a reality.
SEC chairman Gary Gensler could read the writing on the wall last fall when he delayed finalizing the environmental, social and governance (ESG) rule. Now Bloomberg Law reports Gensler won’t try a Hail Mary during Joe Biden’s final months in office to push the reg through.
The commission removed a requirement that companies report scope 3 — or indirect — emissions of carbon dioxide and methane in its proposal this past March. Scope 3 emissions aren’t released directly by the company or any of its owned facilities — they’re attributed to emissions associated with the products a company buys or leases through vendors and suppliers. Soon after announcing the proposal in March, 27 states sued for a stay of the rule.
Supreme Court (SCOTUS) decisions on significant federal agency rulemaking and the EPA‘s climate change agenda over the past two years changed the landscape for businesses, particularly the oil & gas industry. The federal appeals courts one rung below SCOTUS are ruling against the government more frequently on significant regs as well. Agencies will be less likely to propose “expensive” rules for the time being.
Climate Change Activists Could Go Broke
The federal courts used to side with the EPA against industry when it came to tough or “novel” regs. Then SCOTUS overturned the 40-year-old Chevron doctrine that gave regulators deference to determine what statutes allow for. An example in the EPA’s case: setting very stringent emission limits on pollutants like mercury and nitrogen oxides that cost electricity producers billions of dollars to comply with. Federal courts are now vacating rules they view as regulatory overreach.
Now a reliable ally of the EPA’s — Greenpeace USA — may be on the verge of bankruptcy. Activist groups like Greenpeace have routinely sued the EPA, claiming the agency’s pollution regs aren’t tough enough. Then the agency would settle with the groups, giving the eventual rules greater legitimacy in the eyes of the courts.
Greenpeace took part in protests that stalled construction of the Dakota Access pipeline in 2016. Construction eventually got under way, but Kelcy Warren, founder of oil & gas pipeline company Energy Transfer, didn’t forgive and forget. “Everybody is afraid of these environmental groups and the fear that it may look wrong if you fight back with these people,” Warren told a TV interviewer. “But what they did to us is wrong, and they’re gonna pay for it.”
Warren wasn’t bluffing — he sued Greenpeace USA for inciting groups to destroy company property, cause criminal mischief and libel. Total damage: $300 million, according to his company lawyers.
Fast forward eight years, Greenpeace USA is expected to lose the case in a North Dakota state court in February. One of the group’s executives says a sizable award against Greenpeace USA poses an “existential” threat to the chapter staying afloat, according the The Wall Street Journal.
