Shale Law Weekly Review – Week of September 20, 2021

State Regulation: Los Angeles County Board of Supervisors Unanimously Votes to Phase Out Oil and Gas Development ⚡
On September 15, 2021, the County of Los Angeles Board of Supervisors unanimously voted on a motion to prohibit new oil and gas development within the county. In that regard, the Board requested the Los Angeles County Department of Regional Planning (DRP) to modify the pending Draft Oil Well Ordinance for unincorporated Los Angeles County to reflect that ban. Additionally, the Board also agreed to initiate a process to phase out existing oil and gas drilling in the unincorporated areas of the county and directed DRP to conduct an amortization study of oil and gas drilling sites in these areas.

International Development: Shell Announces Final Investment Decision to Build Biofuel Facility in the Netherlands
On September 16, 2021, Royal Dutch Shell PLC has taken a final decision to invest and build an 820,000 tonnes-a-year biofuels facility at the Shell Energy and Chemicals Park Rotterdam, located in the Netherlands. According to a media release, “[t]he new facility will help the Netherlands and the rest of Europe to meet internationally binding emissions reduction targets. It will also help Shell to meet its own target of becoming a net-zero emissions energy business by 2050, in step with society’s progress towards achieving the climate goals of the Paris Agreement.” Production is scheduled to begin in 2024.

Pipelines: FERC Issues Temporary Certificate Order for Spire STL Pipeline to Ensure Continuity of Service
On September 14, 2021, the U.S. Federal Energy Regulatory Commission (FERC) issued an order granting Spire STL Pipeline, LLC a temporary certificate for the construction and operation of the Spire STL Pipeline Project. FERC Docket No. CP17-40-009. The day before, Spire STL Pipeline, LLC, filed a motion to stay until December 13, 2021, the court’s judgment dated June 22, 2021, vacating FERC’s Certification Order, and remanding with vacatur the case to the Commission for further review. FERC justified its decision by indicating that such temporary order is necessary “to assure adequate natural gas supplies to Spire Missouri and its customers” during critical winter peaks while the Commission decides on the appropriate course of actions.

State Regulation: Illinois Enacts Climate Legislation Promoting Energy Efficiency
On September 15, 2021, Illinois Governor J.B. Pritzker signed S.B. 2408 into law – now known as the Climate and Equitable Jobs Act – providing for further energy efficiency and the decarbonization of the state’s power sector by 2045. The Illinois government issued a press release, stating that this landmark legislation “puts the state on a path toward 100% clean energy, invests in training a diverse workforce for the jobs of the future, institutes key ratepayer and residential customer protections, and prioritizes meaningful ethics and transparency reforms. Illinois is the first state in the Midwest to enact legislation to combat the climate crisis and build an economy for the future.”

Landowner Royalties: Bureau of Safety and Environmental Enforcement Terminates Royalty Relief Policy Supporting Oil and Gas Producers through COVID-19
On September 13, 2021, the Bureau of Safety and Environmental Enforcement (BSEE) announced the termination of a special case royalty relief (SCRR) option put in place by the prior administration in April 2020. The SCRR option provided a break on paying royalties to eligible oil and gas producers following the decline of oil prices and reduced economic activities due to the COVID-19 pandemic. BSEE wrote, “Analysis of the effectiveness and administrability of the program has led to the conclusion that this SCRR, specific to non-drilling circumstances, is no longer necessary.”

National Energy Policy: The House Committee on Oversight and Reform Investigates Fossil Fuel Industry for Climate Change Misinformation
On September 16, 2021, the House Committee on Oversight and Reform decided to initiate investigation against top executives at ExxonMobil Corporation, BP America Inc., Chevron Corporation, Shell Oil Company, American Petroleum Institute, and the U.S. Chamber of Commerce, alleging that they spread misinformation about the evidence of climate change. The top executives are expected to testify at a committee hearing on October 28, 2021.

Shale Law/Policy Resources of Interest:

John McFarland, Railroad Commission Issues Proposed Rule to Address Gas Supply Critical Infrastructure in the Wake of Winter Storm Uri (September 17, 2021).

John McFarland, Mining Bitcoin a Solution to Gas Flaring? (September 16, 2021).

Charles Sartain, Fifth Circuit Tells the Oil Patch That a Day Rate is Not a Salary (September 15, 2021).

George A. Bibikos, At the Well Weekly (v.9.10.2021) (September 14, 2021).

AGENCY PRESS RELEASES – STATE/FEDERAL

Pennsylvania Department of Environmental Protection

DEP Dedicates Public Drinking Water System to Leacock Township (September 14, 2021).

U.S. Department of Energy

DOE Announces $16 Million to Support Community-Driven Pathways to Clean Energy (September 15, 2021).

U.S. Environmental Protection Agency

EPA Rescinds Previous Administration’s Guidance on Clean Water Act Permit Requirements (September 16, 2021).

EPA Releases Case Study on Air Pollution Reductions for the New York/New Jersey Harbor Deepening Project (September 15, 2021).

EPA Settlement with Jeg’s Automotive Inc. of Delaware, Ohio, Resolves Clean Air Act Violations for Sales of Motor Vehicle Emission Control Defeat Devices (September 13, 2021).

STATE ACTIONS—EXECUTIVE/LEGISLATIVE

Pennsylvania Executive Agencies—Actions and Notices (Pa. Bulletin Vol. 51, No. 38—September 18, 2021)

Department of Conservation and Natural Resources

51 Pa.B. 6051 Notice: “Conservation and Natural Resources Advisory Council Public WebEx Meeting [on September 22].”

Pennsylvania Public Utilities Commission

51 Pa.B. 6119 Notice: “Natural Gas Service [Abandonment of Service to one Commercial Property in Westmoreland County].”

Pennsylvania Legislature

SB 868 “An Act providing for registration of extraordinary water users; imposing a water resource fee; establishing the Water Use Fund; and providing for submission of a question to the electorate authorizing incurring of indebtedness for water-related environmental initiatives.” Referred to Environmental Resources and Energy [Senate] (September 17, 2021).

HB 1873 “An Act providing for the sale and recycling of covered products; imposing duties on the Department of Environmental Protection; and providing for registration of manufacturers.” Referred to Environmental Resources and Energy [House] (September 16, 2021).

HB 637 “An Act authorizing the Department of Environmental Protection to conduct a public comment process on and submit to the General Assembly a measure or action intended to abate, control or limit carbon dioxide emissions by imposing a revenue-generating tax or fee on carbon dioxide emissions.” Laid on the table [House] (September 15, 2021).

HB 1850 “An Act amending Title 42 (Judiciary and Judicial Procedure) of the Pennsylvania Consolidated Statutes, in general provisions relating to civil actions and proceedings, providing for liability for easements to benefit landlocked properties.” Referred to Judiciary [House] (September 13, 2021).

Upcoming Meeting: House Environmental Resources and Energy Meeting on Monday, September 27, 2021.

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies (Federal Register September 13–September 17, 2021):

Energy Department

86 FR 51230 Rule: “Energy Conservation Program: Test Procedure for Distribution Transformers [Updates Will Not Significantly Change Test Procedure]” (September 14, 2021).

Environmental Protection Agency

86 FR 51315 Proposed Rule: “Air Plan Partial Disapproval; Commonwealth of Pennsylvania; Reasonably Available Control Technology Regulations for the 1997 and 2008 Ozone National Ambient Air Quality Standards” (September 15, 2021).

Federal Emergency Management Agency

86 FR 51832 Rules: “FEMA’s Hazard Mitigation Assistance and Mitigation Planning Regulations; Correction [Date of Effectiveness Corrected to October 1, 2021]” (September 17, 2021).

Federal Energy Regulatory Commission

86 FR 51844 Proposed Rule: “Petition for Rulemaking: American Gas Association [et al.] . . . [requesting revision of ‘regulations for electronic filings of tariffs and related materials’]” (September 17, 2021).

86 FR 51665 Notice: “Adelphia Gateway, LLC; Notice of Revised Schedule for Environmental Review of the Marcus Hook Electric Compression Project [EIS Issuance Date Changed to October 1, 2021]” (September 16, 2021).

86 FR 51664 Notice: “Modernizing Electricity Market Design; Supplemental Notice of Technical Conference on Energy and Ancillary Services in the Evolving Electricity Sector [Remote Conference on October 12, 2021]” (September 16, 2021).

86 FR 51138 Notice: “Edison Electric Institute, American Gas Association; Notice of Filing [Requesting Extension of Modification of Allowance for Funds Used During Construction]” (September 14, 2021).

86 FR 51136 Notice: “Rover Pipeline LLC; Notice of Scoping Period Requesting Comments on Environmental Issues for the Proposed North Coast Interconnect Project” (September 14, 2021).

86 FR 50880 Notice: “ANR Pipeline Company; Notice of Applications and Establishing Intervention Deadline [for Conversion Plan at Two Michigan Sites]” (September 13, 2021).

Geological Survey

86 FR 51368 Notice: “Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; National Ground-Water Monitoring Network Cooperative Funding Application” (September 15, 2021).

Justice Department

86 FR 51923 Notice: “Notice of Lodging of Proposed Consent Decree Under the Clean Air Act [‘Pertaining to [CAA] Violations at the Petrochemical Manufacturing Plant. . . Owned and Operated by Formosa Plastics Corporation, Texas’]” (September 17, 2021).

86 FR 51384 Notice: “Notice of Lodging of Proposed Consent Decree Under the Clean Air Act [Resolves CAA and State Law Claims Against Arbor Hills Energy LLC in Connection with Their Landfill Gas-to-Energy operation in Northville, Michigan]” (September 15, 2021).

Land Management Bureau

86 FR 51912 Notice: “Agency Information Collection Activities; Onshore Oil and Gas Operations and Production” (September 17, 2021).

Mine Safety and Health Administration

86 FR 51679 Notice: “Petition for Modification of Application of Existing Mandatory Safety Standards [Relating to Procedures for Plugging Oil and Gas Wells” (September 16, 2021).

Southwestern Power Administration

86 FR 51141 Notice: “Integrated System Rate Schedules [Effective October 1, 2021]” (September 14, 2021).

Susquehanna River Basin Commission

86 FR 51217 Notice: “Projects Approved for Consumptive Uses of Water” (September 14, 2021).

Wage and Hour Division

86 FR 51683 Notice: “Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect as of January 1, 2022” (September 16, 2021).

House Energy and Commerce Committee Actions:

H.R.5292 “To amend title XVII of the Energy Policy Act of 2005 to specify that the Secretary of Energy may not make a loan guarantee under such title for a project if the applicable borrower has previously defaulted on an obligation guaranteed under such title, and for other purposes.” Referred to the Committee on Energy and Commerce, and in addition to the Committee on Science, Space, and Technology. . . (September 17, 2021).

H.R.5124 “Manufacturing Reinvestment Corporation Act [‘To establish a new Manufacturing Reinvestment Corporation in the Department of Commerce’ focusing of on boosting domestic manufacturing and correcting supply chain weaknesses]” Referred to the Subcommittee on Nutrition, Oversight, and Department Operations. . . (September 14, 2021).

H.R.5122 “Community Wood Facilities Assistance Act of 2021 [Alterations to the Farm Security and Rural Investment Act of 2002 including additional funding for biomass energy generation]” Referred to the Subcommittee on Conservation and Forestry. . . (September 14, 2021).

Senate Energy and Natural Resources Committee:

S.2733 “United States Enrichment Corporation Fund Termination and Transfer Act [Remaining funds will be transferred to the treasury]” Read twice and referred to the Committee on Energy and Natural Resources. . . (September 14, 2021).

PN1050 Nomination: Brad John Crabtree — Department of Energy [Assistant Secretary of Energy (Fossil Energy and Carbon Management)] Received in the Senate and referred to the Committee on Energy and Natural Resources. . . (September 13, 2021).

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks September 13–September 17, 2021:

Gazprom Completes Nord Stream 2 Construction, Oil & Gas Journal

Nuclear Waste in the Oil Patch? Feds Spark Clash with Texas, E&E News

Texas Oil Body Makes It a Little Harder for Wells to Flare Gas, BNN Bloomberg

Committee OKs Methane Fee, Launches Debate on Climate Plan, E&E News

Golden Pass LNG Said ‘On Schedule’ for 2024 Start-Up, Natural Gas Intelligence

US Oil, Gas Partnership Says Members Flared 50% Less Gas From Wells in 2020, S&P Global

Global Oil Demand to Exceed Pre-Pandemic Levels Next Year, OPEC Says, Wall Street Journal

IEA: Unexpected Outages Extended Sharp Drawdown in Global Oil Stocks, Oil & Gas Journal

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Written by:
Noah Gochnauer, Research Assistant
Chloe Marie, Research Specialist
Jackie Schweichler, Staff Attorney