January 5, 2025

Shale Law Weekly Review—Week of January 6, 2025

LNG Exports: DOE Releases Updated Study on LNG Exports and Invites Public Comment ⚡
On December 17, 2024, the U.S. Department of Energy (DOE) released the 2024 LNG Export Study: Energy, Economic, and Environmental Assessment of U.S. LNG Exports. The long-awaited study examines the potential effects on domestic households, consumers, economy, and energy security by U.S. LNG exports, as well as the exports’ effects on communities near LNG export terminals and production facilities. According to the Secretary of Energy’s statement, the study will help inform the DOE’s public interest analysis when making LNG export decisions where the U.S. has no free trade agreement (FTA) with the intended export destination, as required by the Natural Gas Act. The Secretary highlighted five key findings from the study: the continued growth of U.S. natural gas exports will eventually outpace international demand; increased exports would lead to an over 30% price increase for domestic natural gas consumers; LNG facilities are concentrated in communities already subject to increased pollution from natural gas production and refining industries; more exports inevitably leads to a net increase in global emissions defeating commitments to limit global warming to 1.5°C; and the export destination must be considered when making export determinations, as well as any applicable guardrails. Availability of the study was published in the Federal Register on December 20, 2024, and public comment is encouraged through February 18, 2025.

Methane Emissions: Department of Energy, Environmental Protection Agency Announce $850 Million in Funding for Methane Emissions Reduction Projects
On December 20, 2024, the U.S. Department of Energy (DOE) and the U.S. Environmental Protection Agency (EPA) announced approximately $850 million in funding for 43 selected projects to reduce methane emissions from the oil and gas sector. The funding for these projects, part of the National Energy Technology Laboratory’s (NETL) Methane Emissions Reduction Program, is made available through the provisions in the Inflation Reduction Act and is directed by President Biden’s Investing in America agenda. The Agencies stated that the 43 projects “will help small oil and gas operators, Tribes, and other entities across the country to reduce, monitor, measure, and quantify methane emissions from the oil and gas sector,” while incentivizing “companies’ near-term actions to conserve valuable energy resources for American consumers, improve operational efficiencies in a global market, and reduce methane emissions.” This round of funding follows $350 million in funding for methane emissions reduction programs announced in August 2023. See also, SLWR—Sept. 18, 2023 “$350 Million Grant Program to Reduce Methane Emissions Announced.” 

Air Quality: Fifth Circuit Affirms Damages and Judgment Against ExxonMobil in Clean Air Act Case 
On December 11, 2024, the Fifth Circuit affirmed the district court’s judgment in a suit against ExxonMobil (Exxon) involving violations of the Clean Air Act. Env Tx Citizen Lobby v. ExxonMobil, Docket No. 17-20545 (5th Cir. Aug 28, 2017). The Plaintiffs, Environmental Texas Citizen Lobby, Incorporated and Sierra Club, filed suit against Exxon, alleging that Exxon “put thousands of unauthorized emissions” into the air from Exxon’s Baytown facility. The main issue on appeal was whether the Plaintiffs had standing to sue Exxon. The court determined that the Plaintiffs did have standing and affirmed the district court’s holding and award of damages. The court explained that civil penalties were permitted because they are “a form of prospective relief.” Further, the court also explained that the Plaintiffs had standing to sue in this case because the Plaintiffs were able to show the necessary factors: “an ongoing harm or the ‘real and immediate threat’ of future harm, traceable to Exxon’s unlawful emissions ongoing at the time of suit, and redressable by the deterrent effect of civil penalties.”

Air Quality: Environmental Protection Agency Grants California’s Requests for Clean Car Regulations
On December 18, 2024, the Environmental Protection Agency (EPA) announced that it would be granting two California requests to implement “Advanced Clean Cars II” (ACC II) regulations. The grant, which required a waiver from the EPA, comes under the Clean Air Act, allowing California to create its own regulations that are separate from the EPA’s regulations. The ACC II outlines requirements for “on-road-light and medium-duty engines and vehicles” for model years 2026-2035, including requirements regarding lowering and removing emissions. The ACC II is projected to remedy air quality and improve overall public health by removing smog and other pollutants.

Production and Operation: Parties in Class Action Settle, Agree to Plug 2,600 Wells
On November 13, 2024, the parties in McEvoy v. Diversified Energy Co. agreed to settle, ending a lawsuit that has been ongoing since 2022. The case was a class action lawsuit, alleging that Diversified Energy failed to promptly plug abandoned wells, which caused injuries. In the settlement, Diversified agreed to plug 2,600 wells in six states (West Virginia, Virginia, Ohio, Kentucky, Pennsylvania and Tennessee), and will pay the costs of a Court-appointed Settlement Account Administrator, who will ensure Diversified is complying. The settlement also requires Diversified to pay up to 3.25 million to a settlement account. A final approval hearing will be held in April 2025.

Natural Gas Storage: North Dakota Grants Summit Carbon Permits to Construct Three Carbon Storage Facilities
On December 12, 2024, the North Dakota Industrial Commission voted to approve permits requested by Summit Carbon Solutions to construct three separate underground carbon dioxide storage facilities. The facilities will be located in Mercer, Morton, and Oliver Counties, and construction is estimated to begin in 2026. Once completed, the facilities are estimated to hold a total of 352 million metric tons of carbon dioxide over 20 years. This approval comes a month after North Dakota granted Summit a route permit for its proposed pipeline. Summit has also received about 82% of the North Dakota easements it requires to build its pipeline.

Pipelines: Wisconsin Tribe and Environmental Groups Challenge Pipeline Rerouting Project
On December 12, 2024, the Bad River Band of Lake Superior Chippewa (“Band”) filed a challenge in Wisconsin state court against the approval of initial permits for the Line 5 Relocation pipeline project by Enbridge, a Canadian pipeline company. A coalition of environmental groups, including Clean Wisconsin and Midwest Environmental Advocates, also filed a challenge requesting a contested case hearing on the permits. The pipeline at issue currently crosses a 12-mile segment through the tribe’s Bad River Reservation, which Enbridge has proposed to reroute by building a new 41-mile segment within Bad River watershed crossing 186 waterways and disturbing 101 acres of wetlands. Wisconsin Department of Natural Resources (DNR) announced on November 14, 2024 that Enbridge’s first round of permits for the reroute had been approved with conditions in place to ensure compliance with state wetland and waterway protections. All petitioners are arguing that because the watershed is an ecologically sensitive area, this project poses major risks to the freshwater resources which DNR have underestimated and failed to protect against as required by state law. The Band also expressed concern that the project will jeopardize their rights within Lake Superior, directly impact lands adjoining the Reservation, and perpetuate fossil fuel usage. The Band previously sued Enbridge back in 2019, which resulted in a federal judge ruling that Enbridge had to remove the pipeline spanning the Reservation by 2026. For more information about the Band’s previous lawsuit, see SLWR July 29, 2019 “Pipelines: Native American Tribe Files Lawsuit Against Enbridge for Removal of Pipeline” and SLWR June 26, 2023 “Pipelines: Federal Judge Orders Natural Gas Company to Remove Pipeline from Tribal Land.”

State Regulation: Lawsuits Filed in Support and Opposition of Washington State Ballot Initiative Measure Prohibiting Natural Gas Bans
On December 11, 2024, a lawsuit was filed in the King County Superior Court of Washington State by opponents of the recently passed Washington Initiative Measure No. 2066, alleging that the measure was unconstitutional because it violated the State Constitution’s single subject rule for legislative initiatives (Wash. Const. art. 2, § 19). Climate Solutions v. Washinton, 24-2-28630-6 SEA. The initiative, or I-2066, was approved by 51.7% of voters in November 2024 and requires local governments and utility companies to provide natural gas to eligible customers even if other energy sources or services are available, and prohibits the state building code council from “in any way prohibiting, penalizing, or discouraging the use of gas for any form of heating, or for uses related to any appliance or equipment in any building.” The plaintiffs in Climate Solutions requested that I-2066 be permanently enjoined from taking effect or “otherwise being implemented or enforced,” arguing that I-2066 is unconstitutional because it addresses two different subjects, and because it fails to “state in full each of the state law provisions it would alter.” This action followed a complaint for declaratory judgment filed in the Thurston County Superior Court of Washington State on December 6, 2024, by supporters of I-2066, requesting that the court enter a judgment upholding I-2066 and that the Washington State Building Code Council is subject to the new law.

 

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CENTER PROGRAMS & RESOURCES

Quarterly Dairy Legal Webinar – 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 and includes an in-depth look at a single focus topic of law, regulation, or government policy of interest to dairy professionals of all kinds.

Understanding the Basics of Pennsylvania’s Carbon Sequestration Law – 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 

Biofuels Lobby Seeks to Come Together for 2025 Tax Fight   (Bloomberg)

Why Is the USA Natural Gas Price Rising Today  (Rigzone)

North America Drops 71 Rigs WoW (Rigzone)

Ample supply, slow demand to temper oil price gains in 2025: Reuters poll (Reuters)

EIA: US crude inventories down 4.2 million bbl (Oil and Gas Journal)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Bloomberg, Cheniere achieves fiirst LNG at the Corpus Christi Stage 3 Project (December 31, 2024)

Quigley, Swami, At the Well Navigating PFAS Laws Under the New Administration: What to WatchWeekly (December 31, 2024)

Sartain, Do Montanans’ Rights Include a Fossil-Fuel-Free Environment? (December 30, 2024)

Quigley, Swami, PFAS Litigation: New Claims against Upstream Manufacturers (December 31, 2024)

Bloomberg, Oil Steadies in Thin Trading as Investors Focus on 2025 Outlook (December 30, 2024)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE’s Top Clean Energy Accomplishments in 2024 (December 23, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

EPA issues first ever underground injection permits for carbon sequestration in California (December 31, 2024)

FEDERAL EXECUTIVE AGENCIES (Federal Register November 29- December 6, 2024)

Federal Energy Regulatory Commission

90 FR 97 Notice: “Columbia Gas Transmission, LLC; Notice of Request Under Blanket Authorization and Establishing Intervention and Protest Deadline” (January 2, 2025)

Pipeline and Hazardous Materials Safety Administration

89 FR 106744 Notice “Pipeline Safety: Meeting of the Liquid and Gas Pipeline Advisory Committees.” (December 30, 2024)

Other Agencies

National Oceanic and Atmospheric Administration: 89 FR 105536 Notice: “Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico” (December 27.2024)

Maritime Administration: 89 FR 106737 Notice: “Deepwater Port License Application: Texas GulfLink LLC (GulfLink)-Special Notice” (December 30, 2024)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 51 – December 21, 2024)

 

Written by:
Jasmine Gunning, Research Assistant
Riley Amdor, Research Assistant
Caden Dean-Sauter, Research Assistant
Victoria Dutterer, Research Assistant
Jose Rojas, Research Assistant
Jackie Schweichler, Staff Attorney