December 11, 2023

Shale Law Weekly Review—Week of December 11, 2023

Climate Change: New Jersey Adopts Rule Requiring 100% of Light-Duty Vehicle Sales to be Zero-Emission Vehicles by 2035 ⚡
On November 21, 2023, the New Jersey Office of the Governor announced the next stages for Advanced Clean Cars II rule, requiring all “light-duty vehicle” manufacturers to incrementally increase sales of zero-emission vehicles (ZEV) beginning in 2027 to reach 100% of vehicle sales by 2035. The rule was proposed on August 21, 2023 by the NJ Department of Environmental Protection and, according to the announcement, is now scheduled to be confirmed on December 18, 2023. The rule is modeled after the California rule of the same name and incorporates the same definition of “light-duty vehicles” which includes passenger cars, SUVs, pickup trucks, and vans.

National Energy Policy: U.S. Appeals Court Overturns EPA’s Denial of Biofuel Waiver Petitions Filed by Numerous Small Refiners
On November 22, 2023, the Fifth Circuit Court of Appeals issued a ruling on a case involving six small refineries and the Environmental Protection Agency (EPA). Ergon Refining, Incorporated v. EPA, 5th Cir. 2023 (No. 22-60433). The case was brought by the refineries after the EPA denied their petitions to receive exemptions from the biofuel production obligations imposed by the Renewable Fuel Standard (RFS) program of the Clean Air Act (CAA) for several compliance years. Ruling in favor of the refineries, the Appeal Court held that the denials, which were based on “novel” interpretations of the CAA and “economic” theory published by the EPA in 2021, were “(1) impermissibly retroactive; (2) contrary to law; and (3) counter to the record evidence.” More specifically, the court found, among other things, for refineries to comply with the EPA’s new interpretation of the CAA, they must suffer “disproportionate economic hardship,” meaning that they are entitled to a temporary waiver. In addition to striking down the EPA’s waiver denials, the court also denied a motion by the EPA to transfer the case to the District of Columbia. The case will now be remanded to the lower court for a judicial review of the refineries’ exemption petitions.

GHG Emissions: Ohio Diesel Shop Owner Pleads Guilty to Tampering with Emissions Control Devices in Violation of the Clean Air Act
On November 28, 2023, David Owens, a co-owner of a diesel shop in North Bend, Ohio, pleaded guilty to “aiding and abetting the tampering with a monitor device required under the Clean Air Act.” USA v. Owens, S.D. Ohio 2023, (No. 1:23-cr-00102-MWM). Under the Clean Air Act (CAA), the Environmental Protection Agency (EPA) has the authority to regulate motor vehicle emissions, including those from diesel vehicles. More specifically, CAA standards require that vehicles be equipped with an “on-board diagnostic system” (OBD) so that the vehicle’s emissions can be monitored, and the driver can be alerted if the vehicle’s emissions systems become defective. According to the complaint, individuals may attempt to circumvent the monitoring obligations imposed under the CAA by modifying or removing the OBD or by altering the vehicle’s exhaust pipe. A Department of Justice press release also notes that modifying a vehicle’s OBD or exhaust system can increase the emission of “non-methane hydrocarbons” by up to 1,100 times. In the original filing, Owens was alleged to have sold “physical parts” and “tuning” software to a company for the intended purpose of disabling the functionality of its OBD monitoring systems, which would prevent malfunctions in the vehicle’s emissions control systems from being detected. If found guilty of violating 42 U.S.C. 7413(c)(2)(C), Owens may face up to 2 years in prison and/or $250,000 in fines.

State Regulation: Michigan Governor Signs Clean Energy Bill
On November 28, 2023, Michigan Governor Gretchen Whitmer signed into law Senate Bill 271, a clean energy bill aimed to “promote the development and use of clean and renewable energy resources and the reduction of energy waste.” The Bill requires the state’s electric providers to achieve a “clean energy portfolio” of 100% by 2040 and a “renewable energy credit portfolio” of 60% by 2035.  The Governor welcomed the legislation as part of the MI Healthy Climate Plan, a program to “reduce greenhouse gas emissions and transition toward economy-wide carbon neutrality.” For background on Senate Bill 271 see SLWR—Dec. 4, 2023 “State Regulation: Michigan Legislature Requires Electric Providers to Invest in Clean Energy.”

Pipelines: FERC Authorizes Construction on the Commonwealth Energy Connector Project the Virginia Reliability Project
On November 16, 2023, the Federal Energy Regulatory Commission (FERC) issued an order authorizing the construction and operation of the Commonwealth Energy Connector Project (CEC). Transcontinental Gas Pipe Line Company, LLC, 185 FERC ¶ 61,130 Docket Nos. CP22-502-000 (2023). The order grants authority to Transcontinental Gas Pipe Line Company, LLC’s (Transco), a subsidiary of Williams Gas Pipeline Company, LLC, for their pipeline to provide natural gas to Virginia Natural Gas, Inc (Virginia Gas) for local distribution. The FERC order outlines the CEC as providing “105,000 Dth per day of firm transportation service” from existing stations in Pittsylvania County, Virginia to stations in Greensville County, Virginia. From here, the pipeline will connect with systems operated by Columbia Gas Transmission, LLC (Columbia). In the same order, FERC authorized Columbia to “abandon certain pipeline facilities and to construct and operate upgraded pipeline facilities as part of its Virginia Reliability Project.” The FERC order described Columbia’s Virginia Reliability Project (VRP) as an effort to modernize facilities while also supplying Virginia Gas with “100,000 Dth per day of firm transportation service” from its station in Chesapeake County, Virginia.

 

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CENTER PROGRAMS & RESOURCES

Understanding Agricultural Law – A free monthly Zoom webinar series for all agricultural and rural business advisors. One hour of substantive CLE credit available for Pennsylvania-licensed attorneys at no charge. Recordings and materials from the series, more information, and registration available here.

On December 11, 2023, at 12:00 pm, The University of Scranton SBDC, the PA SBDC Agriculture Center of Excellence, and the Penn State Center for Agricultural and Shale Law are co-sponsoring a webinar titled “Making Laws Work for You, Part 2: Right to Farm, ACRE, and the Agritourism Activity Protection Act—Brook Duer with SBDC Ag Center of Excellence.” This webinar series will provide plain-language examples of how five Pennsylvania laws—the Agricultural Area Security Law; the Agricultural Conservation Easement Purchase Program; Clean & Green Taxation; Right to Farm Law; the Agriculture, Communities and Rural Environment (ACRE) law; and the Agritourism Activity Protection Act—can help you preserve and protect your farm’s economic vitality and viability.

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

California Supreme Court rules against case seeking damages from PG&E over its planned power outages (The Press Democrat)

OPEC+ Production Cuts Fail to Convince Oil Traders Amid Lack of Detail (Bloomberg)

Whitmer signs climate change legislation setting 100% clean energy standard for Michigan by 2040 (Michigan Advance)

Connecticut lawmakers seek compromise on switch to all-electric cars, after ambitious plan scrapped (AP)

UN chief calls on world leaders to plan for future without fossil fuels (The Hill)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Bloomberg, Chevron, Exxon Opt Out of Funding COP28 Methane-Cutting Fund (December 4, 2023)

Barakat, et al., Clean Vehicle Tax Credit – Foreign Entity of Concern Rules Proposed (December 5, 2023)

Wentz, Climate Attribution and the Willow Project: Federal Obligations to Evaluate the Effects of Fossil Fuel Leasing on Endangered Species (December 5, 2023)

Sartain, Master Service Agreement Dispute Turns on Definitions (December 6, 2023)

Bloomberg, Exxon Boosts Share Buybacks as Hunt for More Oil Accelerates (December 6, 2023)

McFarland, Contrasting Philosophies of Lease Construction: Boulder County v. Crestone Peak (Colo. 2023) (December 7, 2023)

Tigre, et al., Sabin Center’s Network of Peer Reviewers Responds to African Commission’s Call for Comments on Climate Change and Human Rights (December 7, 2023)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Signs Clean Energy Cooperation MOU with Mauritania (December 4, 2023)

DOE Releases First in Series of Reports Highlighting Pathways Toward Clean Hydrogen EarthShot (December 5, 2023)

At COP28, Countries Launch Declaration of Intent on Clean Hydrogen (December 6, 2023)

At COP28, Net Zero World Showcases Progress in Transforming Emerging Energy Economies (December 6, 2023)

Joint Statement by the U.S. Department of Energy, U.S. Department of Transportation and Transport Canada on Taking Action to Reduce Rail Sector Emissions (December 6, 2023)

DOE Partners with Tennessee Valley Authority to Power Oak Ridge Facilities with 100% Carbon Pollution-Free Electricity (December 7, 2023)

At COP28, U.S., Canada, France, Japan, and UK Announce Plans to Mobilize $4.2 Billion for Reliable Global Nuclear Energy Supply Chain (December 7, 2023)

DOE Announces $42 Million for Inertial Fusion Energy Hubs (December 7, 2023)

U.S. Department of Energy Announces Clean Energy Achievements at COP28 (December 8, 2023)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

Biden-Harris Administration Announces 14 Organizations to Receive Nearly $7 Million to Recruit and Train Workers for Community Revitalization and Cleanup Projects as Part of Investing in America Agenda (December 8, 2023)

EPA Enforcement Program Seeks Public Ideas for Supplemental Environmental Projects (December 7, 2023)

Biden-Harris Administration Announces Availability of $30 Million for Projects in Underserved Communities That Promote a Healthy and Resilient Gulf of Mexico (December 6, 2023)

EPA takes action against Connecticut-based school bus transportation company for idling violations (December 6, 2023)

$12 Million in Grants Awarded to Improve the Environment of Long Island Sound (December 4, 2023)

Biden-Harris Administration Finalizes Standards to Slash Methane Pollution, Combat Climate Change, Protect Health, and Bolster American Innovation (December 2, 2023)

FEDERAL EXECUTIVE AGENCIES (Federal Register December 2– November 8, 2023)

Environmental Protection Agency

88 FR 85112: Rule: “Air Plan Disapproval; Louisiana; Excess Emissions” (December 7, 2023)

88 FR 84626: Rule: “Air Plan Partial Approval and Partial Disapproval; AK, Fairbanks North Star Borough; 2006 24-Hour PM2.5 Serious Area and 189(d) Plan” (December 5, 2023)

Other Agencies

88 FR 85330: Notice: “ProTechnics, a Division of Core Laboratories LP; Discharge of Radioactive Tracers in Well Completion Fluids” (December 7, 2023)

88 FR 85244: Notice, Comments Close 1/8/2024: “Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental To U.S. Navy 2024 Ice Exercise Activities in the Arctic Ocean” (December 7, 2023)

88 FR 84704: Rule: “Travel Management; Administration of the Forest Transportation System; Postdecisional Administrative Review Process for Occupancy or Use of National Forest System Lands and Resources; Land Uses; Special Uses” (December 6, 2023)

U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.6681 “To amend the Clean Air Act to include fuel for ocean-going vessels as additional renewable fuel for which credits may be generated under the renewable fuel program.” Referred to the House Committee on Energy and Commerce. (December 7, 2023)

H.R.6665 “To amend the Internal Revenue Code of 1986 to eliminate certain fuel excise taxes and impose a tax on greenhouse gas emissions to provide revenue for maintaining and building American infrastructure, and for other purposes.” Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, Natural Resources, Education and the Workforce, Transportation and Infrastructure, Science, Space, and Technology, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned. (December 7, 2023)

H.R.6494 “To amend title 49, United States Code, to provide enhanced safety in pipeline transportation, and for other purposes.” Ordered to be Reported in the Nature of a Substitute by Voice Vote. (December 6, 2023)

H.R.6544 “To advance the benefits of nuclear energy by enabling efficient, timely, and predictable licensing, regulation, and deployment of nuclear energy technologies, and for other purposes.” Ordered to be Reported (Amended) by the Yeas and Nays: 47 – 2. (December 5, 2023)

H.R.5718 “Nuclear Fuel Security Act of 2023” Ordered to be Reported by the Yeas and Nays: 48 – 0.  (December 5, 2023)

H.R.4045 “Hydropower Clean Energy Future Act” Ordered to be Reported (Amended) by the Yeas and Nays: 28 – 19. (December 5, 2023)

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE 

S.3445 “A bill to promote domestic energy production, to require onshore and offshore oil and natural gas lease sales, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (December 7, 2023)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

DEP To Host Public Hearing on Plan Approval Application by Power Plant in Carbon County (December 4, 2023)

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 49—December 9, 2023)

Department of Environmental Protection

53 Pa.B. 7607: Notices: “Applications, Actions and Special Notices”

Pennsylvania Legislature

HB 1889 “Electronic Receipts of Light Fuel Oil Deliveries” Referred to AGRICULTURE AND RURAL AFFAIRS [House] (December 6, 2023)

Written by:
Kendal Ashman, Research Assistant
Kole Zellers, Research Assistant
Sergio Porras, Research Assistant
Dillon Lightfoot, Research Assistant
Jackie Schweichler, Staff Attorney