April 8, 2024

Shale Law Weekly Review—Week of April 8, 2024

Federal Lands: Interior Department Finalizes BLM Rule to Reduce Natural Gas Waste from Oil & Gas Production on Federal and Tribal Lands ⚡
On Wednesday, March 27, 2024, the Department of the Interior announced a final rule to the Federal Register that was originally proposed by the Bureau of Land Management (BLM) on November 30, 2022. The objective of the new rule is “to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases.” Additionally, the rule will provide royalty payments to public and Indian mineral owners when Federal or Indian gas is “wasted.” In the executive summary, the final rule explains that, when oil and gas exploration and production occur on these lands in accordance with BLM leases, gas is commonly lost through “venting, flaring, and leaks.” Some of these activities resulting in loss, like venting, are intentional, while others, like leaks, are not. Similarly, while some of these losses are unavoidable, others are avoidable, and the final rule is designed to ensure that public and mineral owners receive royalty payments when “gas is avoidably wasted.” Overall, the new compensatory standards are estimated to increase royalty revenue by $51 million per year and to reduce greenhouse gas emissions with ancillary effects of $17.9 million per year.

Oil and Gas Leasing: D.C. Court Upholds Interior’s Oil and Gas Lease Sales
On March 22, 2024, the U.S. District Court for the District of Columbia granted summary judgment to the Department of the Interior for a suit involving federal drilling rights. Dakota Resource Council v. Interior, D.D.C., No. 1:22-cv-01853, 3/22/24. The suit was brought by eight environmental groups challenging the Bureau of Land Management’s (BLM’s) June 2022 auction of 173 oil and gas drilling parcels across seven western U.S. states. This auction was held pursuant to the 2021 lifting of the moratorium on leasing federal land for oil and gas. The plaintiffs argued that because BLM failed to fully account for the GHG emissions the sales would yield, the sales themselves were in violation of the National Environmental Policy Act (NEPA). The Court found that the BLM had, in fact, exhausted all analysis tools before reasonably concluding that the sales would not create any significant environmental impact. As such, the Court held that there was no legal error in the environmental analysis or the approval of the sales, and the BLM was in compliance with the NEPA. The plaintiffs also argued that by approving the challenged lease sales, the BLM was violating its substantive duties to avoid unnecessary degradation under the Federal Land Policy and Management Act, but the Court found no support for this argument.

State Regulation: First Gas Ban in U.S. Now Being Repealed
On March 22, 2024, the city of Berkeley, California agreed to repeal its’ local ordinance banning natural gas hookups in new construction, implemented in July 2019. The repeal is the result of a settlement between the city and the California Restaurant Association (CRA). The CRA brought suit arguing that the ban violates the federal Energy Policy and Conservation Act (EPCA). Ultimately, the U.S. Court of Appeals for the Ninth Circuit agreed, finding that the ordinance was preempted by the EPCA, which says that only the Department of Energy can set energy efficiency standards, rather than states and localities. Following the Court denying a rehearing of the case, the city of Berkeley agreed to repealing the ban, but until that process is complete, there will be no enforcement.

Municipal Regulation: Fayette County Commissioners Amend Zoning Ordinances for Class I-IV Injection Well Permits
On March 21, 2024, the County Commissioners in Fayette Pennsylvania announced a zoning ordinance amendment to the procedures for applying for oil and gas wastewater injection well permits. The amendment requires Class I-IV injection wells to apply for a special exception when seeking a permit within a M-1 Light Industrial, & M-2 Heavy Industrial zoning district. Applicants seeking a special exception must file a petition, a traffic study, and ten other studies or reports. The amendment also sets insurance and bonding requirements for Class I-IV seeking a special exception.

State Regulation: Chevron Agrees to Settlements Resolving Two Oil Spills in Kern County California
On March 20, 2024, the California Natural Resources Agency announced that settlements were reached with Chevron for oil spills in Kern County. The settlements total $13.1 million, with $5.6 million going to the CA Department of Conservation and 7.5 going to the CA Department of Fish and Wildlife. These settlements stem from actions initiated in 2019 to address oil spills in Kern County, one of which is still ongoing. The settlement paid to the Department of Conservation will go to various conservation projects and towards plugging up orphaned wells across the state. The settlement paid to the Department of Fish and Wildlife will assist the state’s spill prevention and response efforts.

LNG Exports: 16 States File Lawsuit Against Department of Energy for LNG Export Ban
On March 21, 2024, a coalition of 16 states filed a complaint in the United States District Court for the Western District of Louisiana against President Biden and U.S. Department of Energy (DOE) seeking declaratory and injunctive relief from the LNG export ban with non-Free Trade Agreement countries issued on January 26, 2024. Louisiana v. DOE, No. 2:24-cv-00406, (W.D. La. Mar. 21, 2024). According to DOE’s notice, the ban “pauses determinations on pending applications for export of LNG to non-Free Trade Agreement countries” to assess “the public interest of proposed exports.” The notice states that it is considering various factors in its assessment including: “market, economic, national security, environmental considerations, including current authorized exports compared to domestic supply, energy security, greenhouse gas emissions including carbon dioxide and methane, and other factors.” The 16 states that joined as plaintiffs are: Louisiana, Texas, Mississippi, Alabama, Alaska, Arkansas, Florida, Georgia, Montana, Nebraska, Oklahoma, South Carolina, Utah, West Virginia, and Wyoming.

International Development: UK Government Approves CO2 Pipeline Linking North West England and North Wales
On March 20, 2024, the United Kingdom (UK) Government published a press release announcing the approval of the Hynet Carbon Dioxide Pipeline project, a new pipeline that will transport carbon dioxide (CO2) “produced and captured” in North West England and North Wales. According to a decision letter approving the project, “[t]he overall goal of the wider HyNet Project is to reduce carbon dioxide emissions from industry, homes and transport and support economic growth.” This will be made possible through the development of “a new hydrogen production plant, hydrogen distribution pipelines, hydrogen storage and the creation of additional carbon capture and storage infrastructure.” The project was first submitted to the UK Planning Inspectorate by Liverpool Bay CCS on October 3, 2022, and it was recommended to the Secretary of State on December 20, 2023, after a thorough review by the Examining Authority. After reviewing the recommendations of the Examining Authority, the Secretary of Energy Security and Net Zero issued a final decision approving the project on March 20, 2024.

 

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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 Tuesday, April 23, 2024, from 12 noon–1:00 ET, the Penn State Center for Agricultural and Shale Law will conduct the latest installment in its Quarterly Dairy Legal Webinar series. Each quarter’s free one-hour webinar covers the legal and regulatory developments in the U.S. dairy industry from the preceding quarter, as well as including an in-depth look at a single focus topic of law, regulation, or government policy of interest to dairy professionals of all kinds.

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

US gas producers shrug off low prices, bet on LNG boom (Reuters)

Pennsylvania’s many orphaned wells just might yield a pot of gold (Pittsburgh Post-Gazette)

EIA: US was world’s largest LNG exporter in 2023 (Oil & Gas Journal)

Oil and Gas Executives Blast ‘LNG Pause,’ Call Natural Gas a ‘Destination Fuel’ (Inside Climate News)

Mountain Valley Pipeline opponents ask Virginia agency to issue stop work order (Virginia Mercury)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Eisenson, Ohio Approves Nation’s Largest Agrivoltaics Project, Finding It Will Serve the Public Interest (April 1, 2024)

Webb, International Governance of Ocean-Based Carbon Dioxide Removal: Recent Developments and Future Directions (April 2, 2024)

Energy Connects, Aramco awards $7.7 billion contracts to add 1.5 bscfd of raw gas to Fadhili Gas Plant (April 2, 2024)

Elkin & Eisenson, Rebutting 33 False Claims About Solar, Wind, and Electric Vehicles (April 3, 2024)

Maxwell, Williamson, & Mead, Future Trends in Climate Litigation Against Governments (April 4, 2024)

Sartain, Louisiana Regulatory Taking Claim Defeated (April 5, 2024)

McFarland, Disposal of Produced Water in the Permian Basin (April 5, 2024)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Releases First Ever Federal Blueprint to Decarbonize America’s Buildings Sector (April 2, 2024)

DOE Announces Better Buildings Initiative to Accelerate Heat Pump Manufacturing and Adoption, Reducing Energy Waste and Lowering Energy Bills (April 3, 2024)

DOE Finalizes Energy Efficiency Standards for Distribution Transformers That Protect Domestic Supply Chains and Jobs, Strengthen Grid Reliability, and Deliver Billions in Energy Savings (April 4, 2024)

DOE Announces $27 Million to Help 40 State, Local and Tribal Communities Lead America’s Equitable and Resilient Clean Energy Future (April 4, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

EPA and DEC Launch Statewide Environmental Justice Listening Tour (April 5, 2024)

Biden-Harris Administration Announces $20 Billion in Grants to Mobilize Private Capital and Deliver Clean Energy and Climate Solutions to Communities Across America (April 4, 2024)

EPA Regional Administrator visits University of Pittsburgh to discuss research, collaboration (April 2, 2024)

FEDERAL EXECUTIVE AGENCIES (Federal Register March 30– April 5, 2024)

Environmental Protection Agency

89 FR 23840: Rule: “National Emission Standards for Hazardous Air Pollutants: Ethylene Production, Miscellaneous Organic Chemical Manufacturing, Organic Liquids Distribution (Non-Gasoline), and Petroleum Refineries Reconsideration” (April 4, 2024)

89 FR 23294: Rule: “National Emission Standards for Hazardous Air Pollutants: Integrated Iron and Steel Manufacturing Facilities Technology Review” (April 3, 2024)

Energy Department

89 FR 24206: Proposed Rule, Comments Close 6/4/24: “Energy Conservation Program: Test Procedure for Central Air Conditioners and Heat Pumps” (April 5, 2024)

89 FR 22139: Notice: “National Petroleum Council Meeting” (March 29, 2024)

Ocean Energy Management Bureau

89 FR 22444: Notice: “Notice of Availability of the Area Identification for the Proposed Gulf of Mexico Oil and Gas Lease Sales for Years 2024-2029″ (April 1, 2024)

Other Agencies

89 FR 23981: Notice: “Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico” (April 5, 2024)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

DEP Holds Keystone Sanitary Landfill Accountable for Odor Concerns, Reaches Settlement on Civil Penalty & Requires Keystone to Immediately Begin Mitigating Odors (April 1, 2024)

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 14 – April 6, 2024)

Department of Environmental Protection

54 Pa.B. 1904: Notices: “Availability of Technical Guidance”

Pennsylvania Public Utility Commission

54 Pa.B. 1915: Notices: “General Rule Transaction”

Pennsylvania Legislature

HB 2184 “An Act amending Title 75 (Vehicles) of the Pennsylvania Consolidated Statutes, in general provisions, further providing for definitions; in liquid fuels and fuels tax, further providing for definitions and for imposition of tax, exemptions and deductions and providing for electric vehicle road user charge; and imposing a penalty.” Referred to TRANSPORTATION [House] (April 3, 2024)

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