EPA Methane Rule Vacated: D.C. Circuit Says Agency Skipped Notice and Comment on Final Standards

WASHINGTON — The D.C. Circuit on Tuesday vacated the Environmental Protection Agency's 2026 methane rule for oil and gas operations, holding that the final standards departed so far from what the agency had proposed that the public never had a chance to comment on them. The decision in the consolidated challenges returns the industry to the stricter 2024 standards the 2026 rule had been written to replace, and it does so on procedural grounds that leave the agency's substantive judgment untested.

"An agency may change its mind between proposal and final rule. It may not change the subject," the panel wrote.

The rule

EPA's 2024 rule under Section 111 of the Clean Air Act set performance standards for new oil and gas sources and emissions guidelines for existing ones, covering leak detection and repair, flaring, storage tanks and pneumatic controllers. In 2025 the agency announced it would reconsider the rule, and in early 2026 it proposed revisions: longer intervals between leak surveys at certain sites and an extension of compliance deadlines for existing sources. The final rule, issued in May 2026, went further. It adopted a different monitoring schedule, tied to a site's production rather than its equipment count, and it added an exemption for wells producing below a threshold that the proposal had not mentioned. Environmental groups and a coalition of states petitioned for review, arguing that both provisions were unlawful on the merits and that neither had been proposed; industry groups challenged other provisions.

What the court held

1. Not a logical outgrowth. The Administrative Procedure Act requires notice of a proposed rule and an opportunity to comment. A final rule may differ from the proposal, but only if interested parties could have anticipated the change — the logical outgrowth test the court has applied since Shell Oil v. EPA (1991) and restated in CSX Transportation v. Surface Transportation Board (2009). The proposal, the court found, asked whether survey intervals should be lengthened; it did not suggest that the basis for setting them would change from equipment to production, and it said nothing about exempting any category of well. A commenter reading the proposal could not have known to address either.
2. Not harmless. EPA argued that any error was harmless because the agency received comments on monitoring generally and would not have changed course. The court rejected that: the rule of prejudicial error does not excuse an agency from hearing comments on the provisions that matter most, and the record showed that the parties who did comment on the proposal's narrower changes opposed them, which made it likely they would have opposed the broader ones.
3. Vacatur. Applying Allied-Signal v. NRC (1993), the court weighed the seriousness of the defect against the disruption of vacating the rule. The defect was serious — the unproposed provisions were the rule's core — and the disruption slight, because vacating an amending rule reinstates the rule it amended, and operators had already been complying with the 2024 standards for eighteen months when the revisions took effect. The court declined EPA's request to leave the rule in place while it re-proposed.
4. Merits not reached. The panel did not address whether the exemption or the revised schedule would have been lawful had they been proposed, or the industry petitioners' challenges to provisions that were properly noticed; those were dismissed as moot.

Why the decision matters

The 2024 standards are back in force, with their original survey frequencies and compliance deadlines — subject to the separate challenges to that rule, which were held in abeyance during the reconsideration and will now resume. Operators that had relied on the low-production exemption are no longer exempt and face the 2024 rule's deadlines for existing sources, some of which have already passed; EPA will have to say whether it will exercise enforcement discretion in the interim. The methane fee that Congress enacted in 2022 and disapproved under the Congressional Review Act in 2025 was not at issue.

The decision is also a reminder that the deregulatory rulemakings of the past two years are reviewed under the same procedural rules as the regulations they replace. The D.C. Circuit has vacated rules in both directions for logical-outgrowth failures, and the agency's option now is the one it had in 2025: propose the exemption and the revised schedule, take comment, and defend them on a record. That process takes a year at least.

An agency may change its mind between proposal and final rule. It may not change the subject.

From the opinion

What happens next

EPA has forty-five days to seek rehearing en banc and ninety days to petition for certiorari; the government has not said which, if either, it will pursue. The agency may instead publish a new proposal incorporating the vacated provisions, which several industry groups have urged. The abeyance in the challenges to the 2024 rule is expected to be lifted within weeks, putting the underlying standards before the same court.

The Counsel will report EPA's response and the resumption of the 2024 rule litigation. Operators should review compliance status under the 2024 standards with environmental counsel; deadlines that passed during the reconsideration are the immediate exposure.

This report is for general information only and is not legal advice. Readers should consult a licensed attorney about their own circumstances. Docket numbers and citations are to the official reporters unless otherwise stated.