Background
In January 2026, the U.S. Environmental Protection Agency (EPA) announced that it would no longer monetize health-related benefits when developing certain air regulations under the Clean Air Act. This analytical shift changes how economic justifications are presented in rulemakings, including those affecting New Source Performance Standards (NSPS) for stationary combustion turbines.
Following that announcement, Arnold & Porter issued a February 2026 advisory examining the administrative law implications of this change and how courts may evaluate the durability of EPA’s revised approach. This bulletin focuses on what the shift may mean from both a legal and facility-level risk perspective.
Legal Durability Considerations
Under federal administrative law, agencies may revise their methodologies. However, when an agency departs from a longstanding analytical framework, courts typically require a reasoned explanation, consideration of prior reliance interests, and a defensible administrative record.
While certain provisions of the Clean Air Act preclude cost considerations in setting standards (such as the National Ambient Air Quality Standards), economic analysis often supports rule justification and implementation design. A meaningful change in cost-benefit methodology may invite judicial review, particularly if stakeholders argue that prior regulatory approaches relied on quantified public health benefits.
Facility-Level Risk Implications
For industrial operators, the issue is not necessarily whether standards will become more or less stringent, but whether future rules may face increased litigation and potential remand. Regulatory stability often carries as much weight as stringency when evaluating compliance strategy.
If federal rulemaking analyses narrow their economic framing, greater scrutiny may occur at the permit level. Facilities may benefit from conservative modeling assumptions, clear justification for control technologies, robust emissions documentation, and proactive engagement with regulators and surrounding communities.
Compliance with permit limits remains essential. However, the defensibility of the administrative record supporting those limits is becoming equally important.
Technical Distinction: Health Standards vs. Economic Analysis
It is important to distinguish between health-based standards, such as the National Ambient Air Quality Standards (NAAQS), which are set without cost consideration under the Clean Air Act, and economic analyses that support regulatory justification but do not establish statutory health thresholds. The current policy shift primarily affects the presentation of benefits in rulemaking analyses rather than the underlying health standards themselves.
Brief Summary of the Arnold & Porter Advisory (February 2026)
The advisory explains that while EPA may revise its cost-benefit methodology, courts reviewing final rules will assess whether the agency provided a sufficient and reasoned explanation for departing from prior approaches. The durability of future rules may depend on the strength of the administrative record supporting this analytical shift.
The advisory also notes that litigation risk may increase if stakeholders challenge whether the revised framework adequately addresses statutory obligations. In some cases, courts could remand rules for further explanation, potentially creating regulatory uncertainty during review cycles.
As the regulatory landscape evolves, facility owners should prioritize both compliance and defensibility. An early permitting strategy, well-supported technical demonstrations, and comprehensive operational documentation remain critical for managing long-term regulatory and litigation risk.
SCS Engineers Summary
SCS Engineers recommends the importance of adhering to permit limits and maintaining a robust administrative record to support them. As regulatory requirements evolve, ensuring both compliance and defensibility is critical for organizations. Sophisticated software designed for the waste industry supports the dual goals of creating compliance-ready reports and substantiation.
Additional Clean Air Act Resources:
Meet our Author: John Tsun, National Practice Leader – Industrial Clean Air Act Services, SCS Engineers.
The updates to air regulations intend to remove redundant requirements and reduce compliance burdens where environmentally appropriate.
The U.S. Environmental Protection Agency (EPA) proposed updates to the oil and natural gas industry national standards. The proposal intends to remove regulatory duplication while maintaining health and environmental regulations on oil and gas sources that the agency considers appropriate. The proposal is the result of EPA’s review of the 2016 New Source Performance Standards (NSPS) for the oil and natural gas (O&G) industry conducted in response to Executive Order 13783 – Promoting Energy Independence and Economic Growth. The goal was to review existing regulations that could potentially “burden the development or use of domestically produced energy resources,” including oil and natural gas.
The resulting regulatory impact analysis from EPA estimates that the proposed amendments could save the O&G industry $17-$19 million a year, for a total of $97-$123 million from 2019 through 2025.
“EPA’s proposal delivers on President Trump’s executive order and removes unnecessary and duplicative regulatory burdens from the oil and gas industry,” said EPA Administrator Andrew Wheeler. “The Trump Administration recognizes that methane is valuable, and the industry has an incentive to minimize leaks and maximize its use. Since 1990, natural gas production in the United States has almost doubled while methane emissions across the natural gas industry have fallen by nearly 15%. Our regulations should not stifle this innovation and progress.”
In its primary proposal, the agency is proposing to remove sources in the transmission and storage segment of the O&G industry from regulation. These sources include transmission compressor stations, pneumatic controllers, and underground storage vessels. The agency is proposing that the addition of these sources to the 2016 rule was not appropriate, noting that the agency did not make a separate finding to determine that the emissions from the transmission and storage segment of the industry cause or significantly contribute to air pollution that may endanger public health or welfare.
The primary proposal also would rescind emissions limits for methane, from the production and processing segments of the industry; keeping emissions limits for ozone-forming volatile organic compounds (VOCs). These sources include well completions, pneumatic pumps, pneumatic controllers, gathering and boosting compressors, natural gas processing plants and storage tanks. The controls to reduce VOCs emissions also reduce methane at the same time, so separate methane limitations for that segment of the industry are redundant.
In an alternative proposal, EPA would rescind the methane emissions limitations without removing from regulation any sources from the transmission and storage segment of the industry.
The agency also is seeking comment on alternative interpretations of EPA’s legal authority to regulate pollutants under section 111(b)(1)(A) of the Clean Air Act.
This proposal is in addition to a September 2018 technical action that proposed targeted improvements to help streamline implementation, reduce duplication of EPA and state requirements, and significantly decrease unnecessary burdens on domestic energy producers. EPA is currently reviewing comments received on that technical package and expects to issue a final rule in the upcoming months.
EPA will take comment on the proposal for 60 days after its publication in the Federal Register, and will hold a public hearing. EPA will announce details of the hearing shortly.
More information, including a pre-publication version of the Federal Register notice and a fact sheet, is available at https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry
Link to the proposal: https://www.epa.gov/sites/production/files/2019-08/documents/frn_oil_and_gas_review_2060-at90_nprm_20190828revised_d.pdf
Link to fact sheet:
Air Monitoring at SCS Engineers / O&G Services
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