December 2, 2024

Shale Law Weekly Review—Week of December 2, 2024

Methane Emissions: EPA Finalizes Methane Emissions Fee for Oil and Gas Sector ⚡
On November 12, 2024, the U.S. Environmental Protection Agency (EPA) issued a final rule implementing a Waste Emissions Charge (WEC) on certain oil and gas operations. The WEC will apply to high-emitting oil and gas facilities, defined as those reporting to the Greenhouse Gas Reporting Program annual emissions exceeding 25,000 metric tons of carbon dioxide equivalent. This rule was issued under a Congressional directive of the Inflation Reduction Act requiring the EPA to implement and collect the fees, as well as provide for appropriate exemptions where emissions reduction practices have been employed. Per the Act’s directive, emissions above statutorily specified levels will be charged at a graduated rate over the coming years, starting at $900 per metric ton for 2024, increasing to $1,200 for 2025, then $1,500 in 2026 and beyond.  When announcing the final rule, the EPA estimated that this rule will lead to a 1.2 million metric ton methane reduction and will provide $2 billion in climate benefits. The EPA also stated that the WEC will work in conjunction with the Clean Air Act to reduce wasteful and environmentally harmful practices within the oil and gas industry, and to drive adoption and innovation of cost-effective technologies in methane monitoring and mitigation. The final rule becomes effective January 17, 2025. More information on the Waste Emissions Charge can be found here.

National Energy Policy: Department of Energy Announces Updates on the Sustainable Aviation Fuel Grand Challenge
On November 20, 2024, an interagency team consisting of the U.S. Department of Energy (DOE), U.S. Department of Agriculture (USDA), and U.S. Department of Transportation’s (DOT) Federal Aviation Administration (FAA) released the Sustainable Aviation Fuel (SAF) Grand Challenge Roadmap Implementation Framework. The SAF Grand Challenge was announced in 2021 to promote innovative solutions to pollution caused by the byproducts of burning aviation fuel. This document supplements the previously released roadmap, which addressed the actions to be taken, by informing stakeholders of the current efforts and capabilities of the agencies involved in implementing those actions. More information on the Roadmap Implementation Framework can be found on the released factsheet and in the DOE’s announcement.

Environmental Impact Study: D.C. Circuit Court of Appeals Limits Council of Environmental Quality’s Authority
On November 12, 2024, the D.C. Circuit Court of Appeals issued an opinion ruling that the Council of Environmental Quality (CEQ) does not have the authority to issue binding regulations under the National Environmental Policy Act (NEPA). Marin Audubon Society v. FAA, No. 23-1067 (D.C. Cir. 2024). NEPA was enacted in 1969, and enacted guidelines for federally funded projects. The CEQ is an agency within the executive branch and is tasked with enforcing NEPA. The court, in its 2-1 decision, stated the confusion over the CEQ’s authority stems from an executive order issued in 1977, which required federal agencies to comply with the regulations issued by the CEQ. However, the court ruled that neither NEPA nor any other federal statute gives the CEQ the authority to issue binding regulations.

Pipelines: North Dakota Public Services Commission Okays Construction on the Summit Carbon Pipeline Project
On November 11, 2024, the North Dakota Public Service Commission (Commission) approved an application submitted by SCS Carbon Transport LLC to begin construction on the Summit Carbon Pipeline Project. The Project will span five states connecting 57 ethanol plants in total. Carbon released from these plants will travel the pipelines for storage underground in North Dakota. SCS has not yet received a permit for underground storage. SCS previously submitted an application to begin Construction of the pipeline that was denied but resubmitted with a changed route. The Commission approved the second submission noting that the proposal would involve minimal environmental impacts if all 12 additional measures posed by the Commission were adhered to. Among these additional measures are 24-hour monitoring and system requirements and regular testing of components of the pipeline. More information on the pipeline can be found on the Commission’s docket.

Pipelines: FERC Authorizes Texas-Louisiana Project and Rover-Bulger Delivery Meter Station Project in Pennsylvania
On November 21, 2024, FERC authorized Natural Gas Pipeline Company of America LLC (NGPL), a subsidiary of Kinder Morgan, to construct and operate the Texas-Louisiana Project. The project proposes to transport 467,000 dekatherms per day (Dth/d) of “firm transportation service,” to Natural’s existing pipeline system and 300,000 Dth/d of newly constructed eastbound pipeline on Natural’s Louisiana Line, servicing the Texas and Louisiana Gulf Coast region. On the same day, it also authorized Rover Pipeline LLC, an Energy Transfer LP subsidiary, to construct and operate the Rover-Bulger Delivery Meter Station Project in Washington County, Pennsylvania. The proposed station will transfer up to 400,000 dekatherms per day of ethane-rich natural gas to ETC Northeast Pipeline LLC to be processed at at ETC Northeast’s Revolution Cryogenic Facility to extract natural gas liquids (NGL). After processing to NGL, the residual methane will be injected into Rover’s pipeline at the same facility.

LNG Infrastructure: FERC Authorizes Venture Global LNG to Introduce Natural Gas to Plaquemines LNG Export Plant
On November 14, 2024, the Federal Energy Regulatory Commission (FERC) issued a letter authorizing Venture Global LNG to introduce low-pressure fuel gas to its Plaquemines LNG export plant in Louisiana. FERC outlined conditions for introducing gas into the facility in its letter to Venture Global. Specifically, it only permitted introduction of gas to “the hot oil heaters to circulate high temperature hot oil through the distribution system.” The letter stipulates that future authorization to introduce “hazardous fluid” to other parts of the facility will be conditioned on compliance with 2019 Order.

Climate Change: Canada Initiates Funding for Port Projects in Ontario for Alternative Fuel Solutions
On November 12, 2024, the Canadian Government announced an investment into “clean technology and infrastructure” for projects in Ontario, Canada. The project’s goals include updating/upgrading infrastructure and conducting a study to determine whether it will be possible to create a new port for the public. Named the “Green Shipping Corridor Program,” up to $25.2 million will be allotted to four projects. The Hamilton Oshawa Port Authority will receive a maximum of $13.8 million to build a “12-acre, 8-million-litre biofuel terminal . . . offering refueling infrastructure within the Great Lakes region. Sterling Fuels Limited will receive up to $4.9 million to update and upgrade infrastructure that will help “establish a green shipping corridor within the Great Lakes region.” Sault Ste Marie will receive a maximum of $405,300 to conduct a study to determine whether a public port can be built around the Great Lakes region. QSL will receive at most $6.049 million for the installation of “shore power charging facilities” to help lessen emissions and to recharge batteries.

Production and Operation: EQT and Equinor Finalize Sale of Remaining Non-Operating Natural Gas Assets in Marcellus Shale
On October 29, 2024, EQT announced the sale of its remaining non-operated natural gas assets in Northeast Pennsylvania to Equinor for $1.25 billion in cash. The 2025 estimated net production of the assets is 350 MMcf/d. The transaction has an effective date of December 31, 2024. This transaction follows a previous swap deal, announced on April 15, 2024, in which Equinor exchanged several gas assets in Pennsylvania and Ohio with EQT, including infrastructure and gas purchase agreements.

 

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CENTER PROGRAMS & RESOURCES

“Legal and Tax Structures for Business and Land Ownership,” Brook Duer Presents at the Cultivating Business Conference with Penn State Extension. – Penn State Extension will host the “Cultivating Business Conference” in-person at the American Helicopter Museum in West Chester, Pennsylvania. As part of the conference, Center Staff Attorney Brook Duer will present “Legal and Tax Structures for Business and Land Ownership. More Information Here

Understanding the Basics of Children, Minors & Farm Work – The Penn State Center for Agricultural and Shale Law, alongside the Pennsylvania Department of Agriculture’s (PDA) Agricultural Business Development Center (ABDC), will present the next webinar in the Understanding Agricultural Law educational series.

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

Exclusive-Trump prepares wide-ranging energy plan to boost gas exports, oil drilling, sources say  (Yahoo Finance)

Natural Gas Is Surging Again (Rigzone)

Trump Team Preparing Early Action to End Biden’s LNG Pause (Rigzone)

France: Europe’s Largest LNG Importer (Natural Gas World)

Biden proposes to restrict pollution from new gas plants (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, China’s Surging LNG Imports From US Threatened by Next Trade War (November 20,  2024)

McFarland, MIT On Greenhouse Gases (November 21, 2024)

Bloomberg, Oil Steady as Traders Weigh Ukraine Risks After Stockpiles Gain (November 21, 2024)

Sartain, Climate Change Contratrians: Saying What Needs To Be Said (November 22, 2024)

Bloomberg, Oil Advances on Rising Geopolitical Tensions From Iran, Russia (November 22, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

FEDERAL EXECUTIVE AGENCIES (Federal Register November 11 – 18, 2024)

Federal Energy Regulatory Commission

89 FR 92673 Notice: “Pacific Gas and Electric Company; Notice of Application Accepted for Filing and Soliciting Motions To Intervene and Protests” (November 22, 2024)

89 FR 92921 Notice: “Texas Connector Pipeline, LLC; Notice of Scoping Period Requesting Comments on Environmental Issues for the Proposed Texas Connector Amendment Project” (November 25, 2024)

Land Management Bureau

89 FR 92602 Rule: “Waste Prevention, Production Subject to Royalties, and Resource Conservation” (November 22, 2024)

Department of Justice

89 FR 93661 Notice: “Notice of Lodging of Proposed Consent Decree Under the Clean Air Act” (November 27, 2024)

Other Agencies

 U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.10252 Bill: “To direct the Administrator of the Environmental Protection Agency to amend certain regulations for purposes of the renewable fuel program, and for other purposes.” (November 22, 2024)

 U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE 

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

ICYMI: DEP Acting Secretary Jessica Shirley Touts Shapiro Administration’s Commitment to Permit Modernization and Environmental Protection in New Op-Ed (November 26, 2024)

 PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 48 – November 30, 2024)

 

Written by:
Riley Amdor, Research Assistant
Jasmine Gunning, Research Assistant
Dillon Lightfoot, Research Assistant
Sergio Porras, Research Assistant
Caden Dean-Sauter, Research Assistant
Jose Rojas, Research Assistant
Jackie Schweichler, Staff Attorney