Shale Law Weekly Review—Week of March 6, 2023

GHG Emissions: DOE Announces $2.52 Billion in Funding for Carbon Capture Projects ⚡
On February 23, 2023, the Department of Energy (DOE) announced that two programs created to support the development of carbon capture technology will receive $2.52 billion in funding. The carbon management technologies in development include systems capture, transport, and storage of carbon dioxide (CO2) emissions. Both programs will focus on these technologies in order to make coal and natural gas use more effective. The first program, called “Carbon Capture Large-Scale Pilots,” will receive $820 million in funding for testing up to ten large-scale projects aimed at lowering risks and costs associated with the commercial use of carbon capture technology in the power and industrial sectors. The second program is called the “Carbon Capture Demonstration Projects Program,” and it will receive the remaining $2.5 billion. Most of this funding will be used to develop six projects, include two each for natural gas, coal, and non-electric energy generation.

Hydraulic Fracturing Bans: Six States File Amicus Curiae Brief Requesting Supreme Court to Reverse Permitting Ban in the Pacific Outer Continental Shelf
On February 27, 2023, the states of Texas, Alaska, Idaho, Montana, Oklahoma, and Utah filed an amicus brief in support of the American Petroleum Institute and other oil companies petitioning the Supreme Court for review of the Ninth Circuit’s decision to uphold an injunction against all new well-stimulation treatment permits in the Pacific Outer Continental Shelf. In their brief, the six states assert their interest in the underlying case by emphasizing the importance of the oil-and-gas industry to the U.S. economy. They contend that offshore drilling has been critical to the industry’s contemporary development and that the Ninth Circuit’s decision, if upheld, threatens to extinguish its continued growth in the Gulf of Mexico. In the first section of their argument, the states remain focused on the industry’s contribution to the economy, arguing that offshore drilling the Gulf Coast has led to “unprecedented economic prosperity.” In the second section, the focus shifts to the Ninth Circuit’s interpretation of the Department of the Interior’s issuance of an Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) with respect to well-simulation treatments as “final agency action” within the meaning of the APA. Here, the states assert that the circuit court erred in finding the issuance to constitute a final agency action, as it related only to a hypothetical permitting scenario and not one of material, legal consequence. Further, they emphasize that the decision conflicts with the interpretations of three sister circuits and, if upheld, subjects the courts to costly and repetitive review of proposed national energy projects. 

Climate Change: FERC Approves New Standards for Combating Extreme Cold Weather
On February 16, 2023, the Federal Energy Regulatory Commission (FERC) issued an order approving proposed standards, terms, and risk factors associated with extreme cold weather preparedness and operations. The new standards, which were proposed by the North American Electric Reliability Corporation (NERC), impose several winter preparedness requirements for grid generators. They have been implemented to prevent the recurrence of a large-scale power outage like the one experienced by Texas in the winter of 2021. As per the requirements, grid generators must implement measures to protect against freezing, and grid operators must be trained to identify, fix, and replace freeze-sensitive equipment within these generators. The news release notes that FERC will continue working to identify additional areas of improvement with respect to grid preparedness that will supplement these newly approved NERC standards.

 

Oil & Gas Law & Policy Resources:

Markowitz, et al., This Week’s Climate Policy Update (February 28, 2023)

Bloomberg, US and UK Energy Secretaries Meet Amid Rift Over Green Subsidies (February 28, 2023)

Sartain & Nadilini, Long-Running Texas Boundary Dispute Continues (March 1, 2023)

Hug, et al., FERC Directs NERC to Further Enhance Extreme Cold Weather Reliability Standards for Generation Resources. (March 1, 2023)

Energy Connects, ADNOC Drilling awards newbuild contract for 10 hybrid power land rigs (March 2, 2023)

Sartain & Bowman, Reserved Royalty Interest is “Floating”, (March 3, 2023)

McFarland, RBN Energy Blog Square One Series: Excellent Tutorial on Exploration and Production (March 3, 2023)

Energy Connects, Equinor acquires Suncor Energy UK (March 3, 2023)

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks February 25– March 3, 2023:

Australian Government proposes more controls on LNG exports (Oil & Gas Journal)

Freeport LNG in US exports first cargo since June 2022 fire: vessel tracking (S&P Global)

States ask Supreme Court to upend NEPA offshore fracking ruling (PoliticoPro)

Pakistan in bailout bid sharply raises natural gas taxes (PoliticoPro)

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Penn State Farmland Energy Legal Podcast: Listen to the latest episode here.

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY

U.S.-U.K. Strategic Energy Dialogue Joint Statement (February 28, 2023)

Biden-Harris Administration Invests $315 Million to Advance Reliable Clean Energy in Rural and Remote Communities (March 1, 2023)

U.S. Department of Energy Releases Guidance for Second Award Cycle of Bipartisan Infrastructure Law’s $6 Billion Civil Nuclear Credits Program (March 2, 2023)

U.S. ENVIRONMENTAL PROTECTION AGENCY

Biden-Harris administration announces $91.9 million to Pennsylvania for Water Infrastructure upgrades through the Bipartisan Infrastructure Law (February 27, 2023)

EPA Announces Most Energy-Efficient Manufacturing Plants of 2022 (February 28, 2023)

Biden-Harris Administration Announces Over $250 Million to Fund Innovative Projects That Tackle Climate Pollution (March 1, 2023)

FEDERAL EXECUTIVE AGENCIES (Federal Register February 25–March 3, 2023):

Energy Department

88 FR 13520: Proposed Rule: “Energy Conservation Program: Energy Conservation Standards for Residential Clothes Washer” (March 3, 2023)

Environmental Protection Agency

88 FR 13034: Rule, Comments Close 4/3/23: “Vermont: Final Authorization of State Hazardous Waste Management Program Revisions” (March 2, 2023)

88 FR 12835: Rule: “Air Plan Approval; Florida; Update to Materials Incorporated by Reference” (March 1, 2023)

Federal Energy Regulatory Commission

88 FR 13442: Notice: “Combined Notice of Filings” (March 3, 2023)

Bureau Of Indian Affairs

88 FR 13018: Rule: “Civil Penalties Inflation Adjustments; Annual Adjustments” (March 2, 2023)

Pipeline and Hazardous Materials Safety Administration

88 FR 13624: Proposed Rule, Comments Close 5/2/23: “Hazardous Materials: Adoption of Miscellaneous Petitions and Updating Regulatory Requirements” (March 3, 2023)

Bureau of Land Management

88 FR 12697: Notice, Comments Close 5/1/23: “Agency Information Collection Activities; Oil and Gas Leasing: National Petroleum Reserve-Alaska” (February 28, 2023)

Ocean Energy Management Bureau

88 FR 13464: Notice, Comments Close 5/2/23: “Agency Information Collection Activities; Operations in the Outer Continental Shelf for Minerals Other Than Oil, Gas, and Sulfur” (March 3, 2023)

88 FR 13459: Notice, Comments Close 5/2/23: “Agency Information Collection Activities; Plans and Information” (March 3, 2023)

88 FR 12413: Notice: “Gulf of Mexico, Outer Continental Shelf, Oil and Gas Lease Sale 259” (February 27, 2023)

88 FR 12404: Notice: “Gulf of Mexico Outer Continental Shelf Oil and Gas Lease Sale 259” (February 27, 2023)

Other Agencies

88 FR 13277: Proclamation: “Increasing Duties on Certain Articles From the Russian Federation” (March 2, 2023)

88 FR 12175: Rule: “Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR) and Refinements to Existing Controls” (February 27, 2023)

U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.1197 “To prohibit the President from revoking Presidential permits relating to cross-border energy facilities.” Referred to the Subcommittee on Railroads, Pipelines, and Hazardous Materials. (February 27, 2023) 

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE

S.649 “A bill to require the Secretary of Energy to establish a hydrogen infrastructure finance and innovation pilot program, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (March 2, 2023)

S.646 “A bill to amend the Energy Policy Act of 2005 to establish a Hydrogen Technologies for Heavy Industry Demonstration Program, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (March 2, 2023)

S.617 “A bill to amend the Outer Continental Shelf Lands Act to permanently prohibit the conduct of offshore drilling on the outer Continental Shelf in the Mid-Atlantic, South Atlantic, North Atlantic, and Straits of Florida planning areas.” Read twice and referred to the Committee on Energy and Natural Resources. (March 1, 2023)

S.535 “A bill to streamline the oil and gas permitting process and to recognize fee ownership for certain oil and gas drilling or spacing units, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (February 27, 2023)

S.534 “A bill to withdraw certain Bureau of Land Management land from mineral development.” Read twice and referred to the Committee on Energy and Natural Resources. (February 27, 2023)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES
UPDATE: Pennsylvania DEP Has Tested Nearly Every Private Well Within One Mile of Norfolk Southern Derailment Site in the Commonwealth (February 25, 2023)

Shapiro Administration Awards $1.5 Million to Help Municipalities, Schools, and Businesses Switch to Clean Transportation (February 28, 2023)

DEP Approves Permits for Regional Energy Access Expansion Pipeline Project (February 28, 2023)

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 9 March 4, 2023)

DEPARTMENT OF ENVIRONMENTAL PROTECTION

53 Pa.B. 1247: Notice: “Availability of Technical Guidance”

PENNSYLVANIA LEGISLATURE

SB 115 “An Act amending the act of July 7, 2008 (P.L.654, No.55), known as the Bituminous Coal Mine Safety Act, in diesel-powered equipment, further providing for schedule of maintenance.” Third consideration and final passage, Feb. 28, 2023 (49-0) [Senate] (February 28, 2023)

SR 9 “A Resolution urging the President of the United States to restart and expedite the completion of the Keystone XL pipeline.” Adopted, Feb. 28, 2023 (31-18) [Senate] (February 28, 2023)

 

Written by:
Kole Zellers, Research Assistant
Kendal Ashman, Research Assistant
Jackie Schweichler, Staff Attorney