February 5, 2024

Shale Law Weekly Review—Week of February 5, 2024

Oil and Gas Leasing: BOEM Publishes Final Procedures for Bid Adequacy in Lease Sales ⚡
On Monday, January 22, 2024, the Bureau of Ocean Energy Management (BOEM) published final revisions to the bid adequacy procedures for offshore oil and gas lease sales. The final procedures yielded no significant changes from the proposed revisions that were published and available for comment in the Federal Register in January 2023. BOEM states that these revisions will simplify bid adequacy determinations by eliminating steps in the existing process, including tract classification. This methodology update evaluates a tract’s fair market value and uses that to set a threshold of adequacy, increasing transparency throughout the bidding process. These procedures are effective, beginning with sales in the 2024-2029 National OCS Oil and Gas Leasing Program. A more thorough look at the updated procedures can be found on BOEM’s website.

Infrastructure: Department of Energy Announces Another Round of Funding to Boost Electric Vehicle Charging Infrastructure
On January 19, 2024, the Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy announced $46.5 million in funding for projects that expand the “charging performance, resiliency, and reliability” of electric vehicles and increase consumer access. This funding is provided through the National Electric Vehicle Infrastructure (NEVI) Formula Program and the Charging and Fueling Infrastructure Discretionary Program, with a stated goal to establish “500,000 public EV charging ports by 2030.” DOE notes that 30 projects are receiving funding through this announcement.

National Energy Policy: Department of Agriculture Announces Funding for Renewable Energy and Fertilizer Projects
On January 22, 2024, the U.S. Department of Agriculture (USDA) announced a $207 million investment in projects that promote “renewable energy and domestic fertilizer” production. These investments are made through the Rural Energy for America Program (REAP) and the Fertilizer Production Expansion Program (FPEP). The USDA notes that projects funded through REAP aim to cut energy costs and boost renewable energy capacity in areas disproportionately affected by pollution. The USDA hopes that projects funded through the FPEP will increase the capacity of domestic fertilizer production and increase research into modern production methods. A list of the funded projects can be found on the USDA website.

Landowner Royalties: Hilcorp Settles False Claims Act Case with DOJ for $34.6 Million
On January 18, 2024, Hilcorp San Juan L.P. (Hilcorp)  agreed to a $34.6 million settlement with the DOJ relating to claims under the False Claims Act, for underpaid royalties from August 2017 to December 2018. Hilcorp is an oil and gas operation headquartered in Houston, Texas with activity in nine different states. According to the complaint, Hilcorp had knowledge that it underpaid royalties on oil and natural gas extracted from federal lands, primarily located in the San Juan Basin area, covering parts of New Mexico and Colorado. Under the False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733, any person who knowingly submits, or causes to submit, false claims to the government is liable for triple the government’s damages plus an inflation-adjusted penalty.

Landscape Issues: Pennsylvania Department of Environmental Protection Allocates $101.1 Million for Environmental Restoration Projects on Abandoned Mine Lands
On January 17, 2024, the Pennsylvania Department of Environmental Protection (DEP)  announced it allocated $101.1 million in grants from the funds received through the federal Bipartisan Infrastructure Law for environmental restoration projects on abandoned mine lands. These grants aim to address issues such as acid mine drainage (AMD) through construction, operation, and maintenance of treatment facilities. Significant allocations include $68.3 million to the Susquehanna River Basin Commission for the Morris Run AMD Treatment Plant in Tioga County and $24.2 million to the Clean Streams Foundation, Inc. for the Ernest-Fulton Run project in Indiana County, targeting water quality improvements and ecosystem recovery. Applications for the next grant round are open until February 19, with additional rounds scheduled for 2024.

Pipelines: Canada Energy Regulator Approves New Variance Application for Trans Mountain Pipeline
On Wednesday, January 31, 2024, the Canada Energy Regulator (CER) published its supporting reasons for approving a variance application for the Trans Mountain pipeline project, which was approved after an oral hearing held on January 12, 2024. Prior to this approval, a variance application for Trans Mountain was denied for failing to properly address pipeline integrity and environmental impact concerns. The new application, which also seeks to reduce the diameter of the 2.3-kilometer pipeline from 36 inches to 30 inches due to challenges posed by the hard rock conditions of the region, was approved after the CER determined that the integrity and environmental concerns were adequately addressed. More specifically, the CER found that the material quality of the smaller pipeline, after chemical and mechanical pipe testing, did conform to the specifications of the Trans Mountain Expansion Project. Furthermore, the CER did not note any concerns for additional environmental harm resulting from the changes to the pipeline size and material.

 

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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 February 8–10, 2024, PASA Sustainable Agriculture will hold their 2024 Sustainable Agriculture Conference at the Lancaster County Convention Center in Lancaster, Pennsylvania. On Friday, February 9, 2024, from 4:00–5:00pm, Staff Attorney Brook Duer will present “Protecting Your Farm’s Food Business with Product Liability Insurance” with the Small Business Development Center as part of the conference.

On Tuesday, February 13, 2024, from 12 noon–1:00 ET, the Center 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 

Biden administration to pause natural gas export approvals as it updates how to assess projects (The Hill)

Trans Mountain pipeline gets regulator’s variance approval (Oil & Gas Journal)

FERC issues natural gas project approvals, extension (Oil & Gas Journal)

Colorado eyes tighter rules on drilling (PoliticoPro)

Pennsylvania reaches milestone with first EV charging station under federal infrastructure law (Penn Capital Star)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Mallen, et al., Implications of US Department of Energy Decision to ‘Pause’ Authorizations of Liquefied Natural Gas Exports May Extend Beyond Delays to Pending Projects (January 31, 2024)

Hardwick, et al., Securing Bankable Construction Delivery Terms for Energy Transition Projects (January 31, 2024)

Energy Connects, ADNOC Distribution saw a year of expansion and transformation in 2023 (January 31, 2024)

Energy Connects, QatarEnergy awards $6 billion EPC contracts to boost Al-Shaheen oil production (February 1, 2024)

Bloomberg, Oil Resumes Gain Ahead of Promised US Response to Jordan Attack (February 1, 2024)

Sartain, Employee or Independent Contractor? Know the New Rules (February 2, 2024)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Finalizes Cost-Saving Efficiency Standards for New Cooking Products, Based on Recommendations from Manufacturers and Consumer Advocates (January 29, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

EPA announces first ENERGY STAR certified vehicle dealerships (February 1, 2024)

EPA Region 7 Invites Public to Attend Virtual Environmental Justice Community Stakeholder Meeting (January 31, 2024)

EPA Launches “Be EPA” Recruitment Week: New Video Aims to Expand and Diversify Environmental Workforce and Inspire Next Generation of Environmental Leaders (January 31, 2024)

Public comment period opens on draft permit to bring the largest offshore wind farm project to Virginia’s coast (January 30, 2024)

Oil Companies to Pay $7.4 Million in Civil Penalties to Resolve U.S. Claims for Pipeline Spill on Allotted Tribal Land (January 30, 2024)

FEDERAL EXECUTIVE AGENCIES (Federal Register January 27– February 2, 2023)

Environmental Protection Agency

89 FR 5891: Notice, Comments Close 2/29/24: “Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Responsible Appliance Disposal Program (Renewal)” (January 30, 2024)

Other Agencies

89 FR 7566: Proposed Rule, Comments Close 4/2/24: “Energy Labeling Rule” (February 2, 2024)

89 FR 5864: Notice: “Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico” (January 30, 2024)

89 FR 5572: Notice: “Proclaiming Certain Lands as Reservation for the Pascua Yaqui Tribe” (January 29, 2024)

U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.7200 “To require the Secretary of Energy to establish a hydrogen infrastructure finance and innovation pilot program, and for other purposes.” Referred to the Committee on Energy and Commerce, and in addition to the Committees on Transportation and Infrastructure, and Science, Space, and Technology, 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 1, 2024)

H.J.Res.111 “Disapproving the rule submitted by the Department of Energy relating to “Energy Conservation Program: Energy Conservation Standards for Consumer Furnaces”” Referred to the House Committee on Energy and Commerce. (February 1, 2024)

H.R.7176 “To repeal restrictions on the export and import of natural gas.” Referred to the House Committee on Energy and Commerce. (January 31, 2024)

H.R.7171 “To amend the Energy Policy and Conservation Act to require a certain efficiency level for certain distribution transformers, and for other purposes.” Referred to the House Committee on Energy and Commerce. (January 31, 2024)

H.R.1121 “Protecting American Energy Production Act” Placed on the Union Calendar, Calendar No. 305. (January 31, 2024)

H.Res.987 “Denouncing the harmful, anti-American energy policies of the Biden administration, and for other purposes.” Referred to the Committee on Energy and Commerce, and in addition to the Committee on Natural Resources, 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. (January 31, 2024)

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE 

S.J.Res 58 “A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Department of Energy relating to “Energy Conservation Program: Energy Conservation Standards for Consumer Furnaces”.” Read twice and referred to the Committee on Energy and Natural Resources. (February 1, 2024)

S.3704 “A bill to amend the Natural Gas Act to allow the Federal Energy Regulatory Commission to approve or deny applications for the siting, construction, expansion, or operation of facilities to export or import natural gas, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (January 31, 2024)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 5 – February 3, 2024)

Department of Environmental Protection

54 Pa.B. 552: Notices: “Interstate Pollution Transport Reduction: Proposed 2024 Ozone Season Nitrogen Oxide Emission Limits for Nonelectric Generating Units”

Pennsylvania Public Utility Commission

54 Pa.B. 592: Notices: “Pennsylvania Public Utility Commission, Bureau of Investigation and Enforcement v. PPL Electric Utilities Corporation”

Pennsylvania Legislature

SB 590: “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, further providing for bonding.” Referred to ENVIRONMENTAL RESOURCES AND ENERGY [Senate] (January 29, 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