January 2, 2024

Shale Law Weekly Review—Week of January 1, 2024

GHG Emissions: U.S. Treasury Provides New Guidance on Sustainable Aviation Fuel Credits ⚡
On December 13, 2023, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) published Notice 2024-6, which contains additional guidance on how to qualify for sustainable aviation fuel (SAF) tax credits defined under Section 40B of the Internal Revenue Code. According to Section 40B, to qualify for credit, a SAF must have a minimum reduction in lifecycle greenhouse gas emissions of at least fifty percent. Additionally, a supplemental credit in the amount of one cent per percent can be earned for each reduction beyond fifty percent, allowing for a maximum credit of $1.75 per gallon. The new notice provides additional guidance on features relevant to the SAF, including safe harbors, claim certificate requirements, and methods for calculating the greenhouse gas (GHG) emissions reduction percentage. The information on safe harbors explains that, if an SAF mixture qualifies as a renewable fuel under the Renewable Fuel Standard (RFS), and its reduction in emission percentage has been determined by the RFS, then the fuel “will be assigned a 50-percent emissions reduction percentage.” The notice also provides an updated model certificate for SAF synthetic blending components, which the IRS and Treasury require claimants to file with any claim after December 15, 2023. Finally, the notice explains that the Department of Energy and other agencies are working to develop a new model that can be used by taxpayers to calculate emissions reduction percentages in SAF transactions.  The model is expected to be available in early 2024.

Oil and Gas Leasing: Interior Finalizes Gulf of Mexico Oil and Gas Leasing Program
On December 15, 2023, the Department of the Interior Bureau of Ocean Energy Management published the final 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program (Lease Program) as required by the Inflation Reduction Act (IRA). Pursuant to the IRA, the BOEM is required to lease at least 60 million acres of outer continental shelf in the Gulf of Mexico (GOM) for oil and gas exploration the year prior to issuing leases for offshore wind projects. The oil and gas lease sales will take place over a five-year period in 2025, 2027, and 2029. During each individual leasing period, the Secretary of the Interior will determine “whether, when, and under what terms, [the] lease sale should be held and the precise acreage to be offered.” In determining the scope of the scheduled lease sales, the Secretary considered “economic, social, and environmental values in managing non-renewable resource” in the GOM against domestic energy needs. More information on the Lease Program’s announcement can be found in the BOEM’s press release.

 

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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.

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

Southgate natural gas pipeline granted 3-year extension (Oil & Gas Journal)

Drilling under Pennsylvania’s ‘Gasland’ town has been banned since 2010. It’s coming back. (AP)

EPA’s enforcement results bounce back (E&E News)

Supreme Court to hear arguments on blocking EPA cross-state smog pollution rule (The Hill)

Yale-based start-up converts captured CO2 into methanol (Offshore Energy)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Akin Gump, Akin Advises LetterOne on $11.2 Billion Harbour Energy Acquisition of Wintershall Dea Assets (December 22, 2023)

Elkin, DOE Proposes to Expand the Fast-Track Lane for Certain Clean Energy Projects–But Excludes Wind (December 22, 2023)

McFarland, Crane County salt water spill from overpressured zone used for water disposal (December 27, 2023)

Bloomberg, Oil Holds Large Gain as Fresh Red Sea Attack Puts Market on Edge (December 27, 2023)

Bloomberg, Oil Holds Decline on Signs of Further Build in Crude Stockpiles (December 28, 2023)

Bloomberg, Stock Bull Run Takes a Break at End of Banner Year: Markets Wrap (December 29, 2023)

Energy Connects, EIG to acquire Ocyan for US$390 mln (December 29, 2023)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Finalizes Efficiency Standards for Residential Refrigerators and Freezers, Closing Out Remarkable Year of Cost-Saving Progress (December 29, 2023)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

Biden-Harris Administration Selects Texas Southern University to Receive $50,000,000 to Fund Environmental Justice Projects Across Region 6 (December 22, 2023)

FEDERAL EXECUTIVE AGENCIES (Federal Register December 23 – December 29, 2023)

Federal Energy Regulatory Commission

88 FR 89442: Notice: “Combined Notice of Filings #1” (December 27, 2023)

Energy Department

88 FR 89330: Proposed Rule, Comments Close 1/10/24: “Energy Conservation Program: Energy Conservation Standards for Consumer Water Heaters” (December 27, 2023)

Other Agencies

88 FR 89611: Rule: “Endangered and Threatened Wildlife and Plants; Endangered Species Status for Black-Capped Petrel” (December 28, 2023)

88 FR 88943: Notice, Comments Close 1/25/24: “Marine Mammals; Incidental Take During Specified Activities; Proposed Incidental Harassment Authorization for the Southern Beaufort Sea Stock of Polar Bears on the North Slope of Alaska” (December 26, 2023)

88 FR 88981: Notice, Comments Close 1/25/24: “Monthly Notice; Applications and Amendments to Facility Operating Licenses and Combined Licenses Involving No Significant Hazards Considerations” (December 26, 2023)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 52—December 30, 2023)

Department of Environmental Protection

53 Pa.B. 8133: Notices: “Proposed Reducing Industrial Sector Emission in Pennsylvania Grant Program; Request for Information”

 

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