April 3, 2023
Shale Law Weekly Review—Week of April 3, 2023
Oil and Gas Leasing: Federal Pause on Oil and Gas Leases on North Dakota’s Public Lands and Waters Overruled ⚡
On Monday, March 27, 2023, the District Court of North Dakota decided in favor of a motion for preliminary injunction filed by the State of North Dakota in an ongoing lawsuit against the Department of Interior (DOI). State of North Dakota v. United States Department of Interior et al, No. 1:21-cv-00148. The underlying complaint was filed after the DOI and the Bureau of Land Management (BLM), in accordance with Executive Order Number 14008, paused all but one quarterly lease sale of federal lands for oil and gas exploration in North Dakota for 2021 and 2022. In its order, which grants and denies different parts of Plaintiff’s motion, the court ultimately concludes that “North Dakota has a substantial likelihood of prevailing on the merits and has met the other factors favoring a preliminary injunction.” Specifically, the court enjoined and restrained Defendants from implementing a pause on new oil and gas leases on public lands in North Dakota. However, the court refused to compel the federal government to hold the quarterly oil and gas lease sales that were previously canceled.
Climate Change: Appeals Court Rejects Federal Jurisdiction Argument in Minnesota Climate Change Lawsuit
On Thursday, March 23, 2023, the 8th Circuit Court of Appeals issued a ruling denying a motion to remand in an ongoing lawsuit between the State of Minnesota and several oil and gas companies, including American Petroleum Institute, Exxon Mobil, and others. American Petroleum Institute, et al v. State of Minnesota, No. 21-8005. Minnesota originally filed the case against the energy companies in state court, alleging that, by going on a decades-long misinformation campaign with respect to the impact of fossil fuels on the environment, the companies have committed common law fraud and violated several of the state’s consumer protection statutes. At the request of the defendants, the case was removed to the district court, but it was later sent back to the lower court after Minnesota’s motion to remand was granted. In granting the motion, the district court explained that it lacked original jurisdiction and that the claims were not sufficiently connected to Defendants’ federal activities. The present ruling was made on Defendants’ appeal of the motion to remand, in which they again argue for the existence of federal jurisdiction and the removability of the case under the federal officer removal statute, 28 U.S.C. § 1442. In rejecting Defendants’ appeal, the 8th Circuit Court explains that while federal jurisdiction may arise as the case develops further, the claims brought by Minnesota do not currently turn on federal law. This decision aligns the 8th Circuit Court with six sister circuits, all of which have denied similar jurisdictional arguments made by energy companies in climate change lawsuits brought by states and local governments.
State Regulation: California Governor Signs New Gross Gasoline Refining Margin Regulations into Law
On Tuesday, March 28, 2023, California Governor Gavin Newsom approved a bill concerning the maximum gross gasoline refining margins permitted under California law. Beginning on January 1, 2023, the State Energy Resources Conservation and Development Commission will have the authority to penalize refiners for exceeding the maximum gross gasoline refining margin as established by the commission. The penalties authorized by the bill include injunctions and civil penalties, both of which the commission can impose against refiners who exceed the margin. As explained by the text of the bill, the decision to subject refiners to more intensive price gouging penalties is largely due to the state’s record-high gasoline prices throughout 2022, which have continued to rise even as the price of crude oil has declined.
National Energy Policy: Texas Lawsuit Challenges Federal Protections of Lesser Prairie Chickens
On Tuesday, March 21, 2023, the State of Texas and other state-run organizations filed a complaint against the Department of the Interior (DOI) and the Fish and Wildlife Service (FWS) in the Western District of Texas. State of Texas et al v. United States Department of The Interior et al, No. 7:23-cv-00047. In their complaint, Plaintiffs assert that, by listing the Lesser Prairie-Chicken (LPC) as a “threatened and endangered” species, Defendants have violated the Administrative Procedure Act (APA), the Endangered Species Act (ESA), and the National Environmental Policy Act (NEPA). Specifically, Plaintiffs seek to challenge a final rule by the FWS’s titled “Endangered and Threatened Species: Lesser Prairie-Chicken; Threatened Status with Section 4(d) Rule for the Northern Distinct Population Segment and Endangered Status for the Southern Distinct Population Segment.” In making the determination to designate LPCs as endangered and threatened, Plaintiffs assert that the FWS made “inaccurate and arbitrary assumptions” about current and future impacts of oil and gas development on the LPC population. Further, they contend that the FWS made several errors in analyzing the current conservation efforts surrounding the LPC population, leading the service to falsely conclude that the northern LPC population is threatened and that the southern LPC population is endangered. The complaint also points to the alleged vagueness of the new rule, arguing that it leaves the agencies and citizens of Texas guessing as to what activities are permissible within the LPC’s range. Next, Plaintiffs contend that, by authorizing unidentified third parties to manage the LPC’s grazing plan, the FWS has exceeded its statutory authority. Finally, Plaintiffs argue that the FWS violated its agency obligations by failing to conduct and environmental assessment before enacting the new rule. In closing, Plaintiffs emphasize the current LPC conservation efforts of the State of Texas and how, if upheld, the rule will thwart these efforts.
Oil & Gas Law & Policy Resources:
McFarland, Damning Report from Environmental Integrity Project on TCEQ’s Failure to Hold Polluters Accountable (March 24, 2023)
Energy Connects, Wintershall Dea and partners submit development plan for Zama field (March 27, 2023)
Tigre & Carrillo, “The ICJ’s Advisory Opinion on Climate Change: What Happens Now?” (March 29, 2023)
Energy Connects, QatarEnergy grows its offshore exploration portfolio in Atlantic Canada (March 29, 2023)
Sartain & White, “All Means All” in Construing an Assignment of Leases (March 31, 2023)
Bloomberg, Oil Heads for Weekly Surge as Iraqi Supply Disruption Continues (March 31, 2023)
Energy Connects, Wintershall Dea completes purchase of stake in Mexican offshore field (March 31, 2023)
Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks March 24– March 31, 2023:
Oil and gas activity was catalyst for Peace River earthquakes in 2022, study finds (CBC News)
FERC Moves Forward Tentatively on Pipeline Rates, Affiliates (Underground Infrastructure)
EU strikes deal on world’s 1st green shipping fuel mandate (Offshore Energy)
United States Orders Matador Production Company to Reduce Unlawful Air Pollution from its Oil and Gas Wells in New Mexico, Eliminating 16,000 Tons of Harmful Air Pollutants (Department Of Justice)
Mountain Valley pipeline at a stalemate: What’s next? (E&E News)
Connect with us on Facebook.
Penn State Farmland Energy Legal Podcast: Listen to the latest episode here.
FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE
U.S. DEPARTMENT OF ENERGY
DOE Releases Strategy to Accelerate and Expand Domestic Offshore Wind Deployment (March 29, 2023)
Biden-Harris Administration Announces $50 Million to Incentivize Smart Manufacturing at Small- and Medium-Sized Facilities (March 31, 2023)
U.S. ENVIRONMENTAL PROTECTION AGENCY
EPA Continues Oversight of Cleanup Operations Performed by TC Energy Near Washington, Kansas (March 30, 2023)
FEDERAL EXECUTIVE AGENCIES (Federal Register March 27–March 31, 2023):
Environmental Protection Agency
88 FR 18824: Proposed Rule, Comments End 5/30/23: “Supplemental Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category” (March 29, 2023)
88 FR 18396: Rule: “Testing Provisions for Air Emission Sources” (March 29, 2023)
88 FR 18638: Proposed Rule, Comments Close 5/30/23: “PFAS National Primary Drinking Water Regulation Rulemaking” (March 29, 2023)
Federal Energy Regulatory Commission
88 FR 19298: Notice: “Combined Notice of Filings” (March 31, 2023)
88 FR 19123: Notice: “Combined Notice of Filings” (March 30, 2023)
Justice Department
88 FR 19328: Notice: “Notice of Lodging of Proposed Consent Decree Under the Clean Air Act” (March 31, 2023)
Other Agencies
88 FR 18446: Proposed Rule: “Superfund Chemical Taxes” (March 29, 2023)
88 FR 18126: Notice: “Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico” (March 27, 2023)
U.S. HOUSE ENERGY AND COMMERCE COMMITTEE
H.R.2434 “To promote low-carbon, high-octane fuels, to protect public health, and to improve vehicle efficiency and performance, and for other purposes.” Referred to the House Committee on Energy and Commerce. (March 30, 2023)
H.R.1 “Lower Energy Costs Act” The Clerk was authorized to correct section numbers, punctuation, and cross references, and to make other necessary technical and conforming corrections in the engrossment of H.R. 1. (March 30, 2023)
H.R.2384 “To lower energy costs by ending judicial review for legacy projects and providing jurisdiction to the United States Court of Appeals for the District of Columbia Circuit, and for other purposes.” Referred to the House Committee on Energy and Commerce. (March 29, 2023)
H.R.2008 “To provide for a limitation on availability of funds for Department of Health and Human Services, The Administration for Children and Families, Low Income Home Energy Assistance for fiscal year 2024.” Referred to the Committee on Energy and Commerce, and in addition to the Committee on Education and the Workforce, 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. (March 29, 2023)
H.R.1603 “Homeowner Energy Freedom Act” Placed on the Union Calendar, Calendar No. 19. (March 28, 2023)
U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE
S.1112 “A bill to amend the Energy Reorganization Act of 1974 to clarify whistleblower rights and protections, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (March 30, 2023)
S.1089 “A bill to maintain the Natural Coal Council in the Department of Energy to provide advice and recommendations to the Secretary of Energy on matters relating to coal and the coal industry, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (March 30, 2023)
S.1043 “A bill to amend the Energy Policy and Conservation Act to modify standards for water heaters, furnaces, boilers, and kitchen cooktops, ranges, and ovens, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (March 29, 2023)
S.1005 “A bill to amend the Energy Conservation and Production Act to improve the weatherization assistance program, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (Sponsor introductory remarks on measure: CR S1001-1002) (March 28, 2023)
S.989 “A bill to establish a more uniform, transparent, and modern process to authorize the construction, connection, operation, and maintenance of international border-crossing facilities for the import and export of oil and natural gas and the transmission of electricity.” Read twice and referred to the Committee on Energy and Natural Resources. (March 27, 2023)
S.988 “A bill to provide for coordination by the Federal Energy Regulatory Commission of the process for reviewing certain natural gas projects under the jurisdiction of the Commission, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (March 27, 2023)
STATE ACTIONS—EXECUTIVE & LEGISLATIVE
PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 13 April 1, 2023)
DEPARTMENT OF ENVIRONMENTAL PROTECTION
53 Pa.B. 1869: Notices: “Request for Applications for Watershed Planning and Restoration Grants through the Section 319 Nonpoint Source Management Program”
53 Pa.B. 1868: Notices: “Growing Greener Plus Grants Program; Request for Applications”
SUSQUEHANNA RIVER BASIN COMMISSION
53 Pa.B. 1900: Notices “Projects Approved for Consumptive Uses of Water”
53 Pa.B. 1899: Notices “Actions Taken at March Meeting”
PENNSYLVANIA LEGISLATURE
H.B. 175 “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, providing for public health protections related to hydraulic fracturing infrastructure; imposing duties on Department of Health and Department of Environmental Protection; and establishing the Oil and Natural Gas Public Health Registry Fund.” Referred to HEALTH [House] (March 28, 2023)
H.B. 740 “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, providing for an impact fee for natural gas and oil pipelines; establishing the Pipeline Impact Fund; and imposing powers and duties on the Pennsylvania Public Utility Commission.” Referred to ENVIRONMENTAL RESOURCES AND ENERGY [House] (March 31, 2023)
Written by:
Kole Zellers, Research Assistant
Kendal Ashman, Research Assistant
Jackie Schweichler, Staff Attorney
