February 27, 2023

Shale Law Weekly Review—Week of February 27, 2023

National Energy Policy: DOE, IRS, and Treasury Department Release New Guidance on Qualifying Advanced Energy Project Credit Program ⚡
On February 13, 2023, the U.S. Treasury Department, the U.S. Department of Energy (DOE), and the Internal Revenue Service (IRS) released new guidance on the expanded Qualifying Advanced Energy Project Credit program under Section 48C of the Internal Revenue Code. The program will allocate $10 billion in credits that will be awarded for certain advanced energy projects. The purpose of the credits is to create jobs in the clean energy technology sector, reduce industrial greenhouse gas (GHG) emissions, and protect the domestic supply of minerals critical to the production of clean energy technologies. There are several clean energy manufacturing and recycling projects that qualify, including the use of distribution pipelines to collect and transport carbon oxide captured from industrial facilities. Carbon dioxide pipelines may also qualify for carbon capture under the GHG Emission Reduction Projects guidelines. For all project types, the guidance notes that property which uses fossil fuel burning equipment or energy derived from fossil fuels is ineligible for credits.

Municipal Regulation: Montana Sues City of Portland Over Fuel Export Infrastructure Prohibitions
On February 14, 2023, the State of Montana and four affected companies filed suit against the City of Portland for its fuel transportation policies and zoning regulations that allegedly violate the Commerce Clause. According to the complaint, which was filed in the Portland Division of the District of Oregon, the zoning amendments in question were adopted in 2015, 2016, 2019, and 2022 for the purpose of prohibiting fuel export infrastructure from being newly built or expanded upon in the region. Plaintiffs assert that because existing and new terminals designed to supply fuel to the Portland region have been unaffected by these amendments, the City has violated the Commerce Clause by intentionally discriminating in favor of local users. Further, they allege that the amendments wrongly prohibit the construction of safer, more modern fuel export infrastructure designed to transport clean or renewable fuel, thereby preventing a transition to renewable fuel from occurring.

State Regulation: New Jersey Governor Accelerates 100 Percent Clean Energy Goal from 2050 to 2035
On February 15, 2023, New Jersey Governor Phil Murphy announced three executive orders, all of which relate to the state’s roadmap towards 100 percent clean energy over the next few decades. Executive Order No. 317 requires the New Jersey Board of Public Utilities to create a plan for reducing “emissions from the natural gas sector,” by fifty percent. Order No. 316 calls for the “electrification of commercial and residential buildings,” to decrease the reliance on fossil fuels for heating, appliances, or other uses. Executive Order No. 315 accelerates the state’s deadline to transition from fossil fuels and achieve its 100 percent clean energy goal from 2050 to 2035. The 2050 goal was originally set pursuant to Executive Order No. 28 in 2018, but a recent ratepayer impact study by the New Jersey Board of Public Utilities has found that accelerating the goal to 2035 would cost only two percent more for an average residential ratepayer in 2030. In accordance with the low impact findings of this study, Governor Murphy has made significant time adjustments to the state’s clean energy pathway.

 

Oil & Gas Law & Policy Resources:

Turner, New Details about the Inflation Reduction Act’s Greenhouse Gas Reduction Fund & Takeaways for Cities (February 16, 2023)

Bloomberg, Russian Oil Flows to China Hit Highest Levels Since Ukraine Invasion (February 21, 2023)

Markowitz, et al., “This Week’s Climate Policy Update” (February 22, 2023)

Akin Gump, IRS Publishes Initial Guidance on Section 48C(e) Advanced Energy Project Tax Credit (February 22, 2023)

McFarland, Betsy Webster v. T.J. Heard: The Story of a Secret Love, Slavery, and a Railroad Lawyer (February 22, 2023)

Energy Connects, Crescent Petroleum signs three contracts to develop oil and gas fields in Iraq (February 22, 2023)

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks February 18– February 24, 2023:

China Taking Control of LNG as Global Demand Booms (Bloomberg)

DEP Approves Permits For Transcontinental Gas Regional Energy Access Expansion Pipeline Project in Luzerne, Northampton, Bucks, Chester, Monroe Counties (PA Environment Digest)

EU carbon hits 100 euros taking cost of polluting to record high (Reuters)

FERC approves power plant rules to fight extreme weather (E&E News)

Russia to Cut Oil Production by 5 Percent in March (Insitute for Energy Research)

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FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY

U.S. Department of Energy Announces New Actions to Accelerate U.S. Floating Offshore Wind Deployment (February 22, 2023)

U.S. Department of Energy Announces $68 Million For Small Businesses Developing Technologies to Cut Emissions and Study Climate (February 22, 2023)

Biden-Harris Administration Announces $2.5 Billion to Cut Pollution and Deliver Economic Benefits to Communities Across the Nation (February 23, 2023)

ICYMI: Biden-Harris Administration’s Inaugural Offshore Wind Shot Summit Demonstrates Momentum Toward U.S. Deployment Goals (February 24, 2023)

U.S. Department of Energy Announces $48 Million to Improve Reliability and Resiliency of America’s Power Grid (February 24, 2023)

U.S. ENVIRONMENTAL PROTECTION AGENCY

Biden-Harris Administration Announces $550 Million to Advance Environmental Justice (February 23, 2023)

EPA Releases Proposed Approach for Considering Cumulative Risks under TSCA (February 24, 2023)

EPA Releases 2022 Power Plant Emissions Data (February 24, 2023)

Biden-Harris Administration Announces $2.4 Billion for Clean Water Infrastructure Upgrades Through the Bipartisan Infrastructure Law (February 24, 2023)

FEDERAL EXECUTIVE AGENCIES (Federal Register February 18–February 24, 2023):

Environmental Protection Agency

88 FR 11286: Proposed Rule: “Fall 2022 Unified Agenda of Regulatory and Deregulatory Actions” (February 22, 2023)

88 FR 10724: Proposed Rule, Comments Close 4/24/23: “Clean Water Act Methods Update Rule for the Analysis of Effluent” (February 21, 2023)

Bureau of Land Management

88 FR 11818: Rule: “Onshore Oil and Gas Operations and Coal Trespass-Annual Civil Penalties Inflation Adjustments” (February 24, 2023)

Other Agencies

88 FR 11244: Proposed Rule: “Semiannual Regulatory Agenda” (February 22, 2023)

88 FR 10966: Proposed Rule: “Introduction to the Unified Agenda of Federal Regulatory and Deregulatory Actions-Fall 2022” (February 22, 2023)

U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.1148 “To direct the Secretary of Energy to promulgate regulations to facilitate the timely submission of notifications regarding cybersecurity incidents and potential cybersecurity incidents with respect to critical electric infrastructure, and for other purposes.” Referred to the House Committee on Energy and Commerce. (February 21, 2023)

H.R.1141 “To repeal the natural gas tax.” Referred to the House Committee on Energy and Commerce. (February 21, 2023)

H.R.1140 “To authorize the Administrator of the Environmental Protection Agency to waive application of certain requirements with respect to processing and refining a critical energy resource at a critical energy resource facility, and for other purposes.” Referred to the House Committee on Energy and Commerce. (February 21, 2023)

H.R.1131 “To require the Administrator of the Environmental Protection Agency to authorize the use of flexible air permitting with respect to certain critical energy resource facilities, and for other purposes.” Referred to the House Committee on Energy and Commerce. (February 21, 2023)

H.R.1130 “To repeal restrictions on the export and import of natural gas.” Referred to the House Committee on Energy and Commerce. (February 21, 2023)

H.R.1121 “To prohibit a moratorium on the use of hydraulic fracturing.” Referred to the Committee on Natural Resources, and in addition to the Committee on Energy and Commerce, 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. (February 21, 2023)

H.R.1115 “To provide for Federal and State agency coordination in the approval of certain authorizations under the Natural Gas Act, and for other purposes.” Referred to the House Committee on Energy and Commerce. (February 21, 2023)

H.R.1058 “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.” Referred to the Subcommittee on Railroads, Pipelines, and Hazardous Materials. (February 21, 2023)

H.R.150 “Protecting American Energy Production Act” Referred to the Subcommittee on Energy and Mineral Resources. (February 21, 2023)

H.Con.Res.14 “Expressing disapproval of the revocation by President Biden of the Presidential permit for the Keystone XL pipeline.” Referred to the Subcommittee on Energy and Mineral Resources. (February 21, 2023)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 8 February 25, 2023)

DEPARTMENT OF ENVIRONMENTAL PROTECTION

53 Pa.B. 1115: Notice: “Agriculture Energy Efficiency Rebate Program Deadline Extension”

53 Pa.B. 1115: Notice: “Electrifying Trucks for Cleaner Air in Our Communities: The Medium- and Heavy-Duty Zero-Emission Vehicle Fleet Pilot Grant Program; Application Deadline Extension”

Written by:
Kole Zellers, Research Assistant
Kendal Ashman, Research Assistant
Jackie Schweichler, Staff Attorney