July 30, 2024

Shale Law Weekly Review—Week of July 29, 2024

LNG Exports: D.C. Federal Court Orders Environmental Assessment for Commonwealth LNG Project ⚡
On July 16, 2024, the U.S. Court of Appeals for the District of Columbia Circuit issued a per curiam order granting in part and denying in part petitions to review the Federal Energy Regulatory Commission’s (FERC) approval of a proposed Gulf Coast LNG project by Commonwealth LNG. Healthy Gulf v. FERC, No. 23-1069 (D.C. Cir. 2024). The petitioners, five environmental groups, argued that FERC did not properly address National Environmental Policy Act (NEPA) and Natural Gas Act (NGA) requirements, nor did it properly “determine the environmental significance of the project’s greenhouse gas emissions, and it failed to adequately assess the cumulative effects of the project’s nitrogen dioxide emissions.” FERC’s 2022 Final Environmental Impact Analysis concluded that “some adverse environmental impacts” would result if the LNG export facility and connection pipelines were approved, including “significant impacts on visual resources and impacts on environmental justice communities.” The court did not vacate FERC’s approval of the project but stated that because FERC failed to sufficiently explain why it was unable to assess the significance of the Project’s greenhouse gas impacts and failed to appropriately assess the cumulative effects associated with the Project’s Nitrogen Dioxide emissions, the agency must “reevaluate its public interest determination under Section 3 of the NGA.”

Oil and Gas Leasing: Federal Court Ruling Suspends Alaska Oil and Gas Lease Pending Environmental Review
On July 18, 2024, United States District Court for the District of Alaska ordered the suspension of the lease sale of offshore oil and gas development sites in the Cook Inlet of Alaska. Cook Inletkeeper et al v. U.S. Dept. of the Interior et al, Docket No. 3:22-cv-00279 (D. Alaska Dec 21, 2022). Cook Intelkeeper challenged the lease sale claiming the Bureau of Ocean Energy Management (BOEM) failed to conduct sufficient environmental impact studies per the requirements of the National Environmental Policy Act (NEPA). The federal judge ruled in favor of Cook Intelkeeper, noting the BOEM environmental impact studies indeed failed to meet NEPA standards, but declined to vacate the lease sale, stating that the Inflation Reduction Act mandated the sale. The court instead issued a temporary suspension of the lease directing BOEM to conduct another environmental impact study.

Oil and Gas Leasing: Federal Court Ruling Suspends Authorization of New Wyoming Oil and Gas Developments
On July 16, 2024, United States District Court for the District of Columbia ordered a pause on new oil and gas projects in 120,000 acres of public land in Wyoming. Wilderness Society et al v. Haaland et al, Docket No. 1:22-cv-01871 (D.D.C. Jun 29, 2022). The Wilderness Society claimed the Bureau of Land Management (BLM) failed to meet the environmental impact review standards set by the National Environmental Policy Act (NEPA) when deciding to auction the land for oil and gas development. The court found in favor of the Wilderness Society, but declined to vacate the auction, instead remanding the case to the BLM to perform another supplemental NEPA environmental impact review within 180 days.

Oil and Gas Leasing: Wyoming Adds Definitions for Bidding Qualifications on Oil and Gas Leases
On June 6, 2024, Wyoming’s Office of State Lands and Investments announced its intention to a definition of a “qualified bidder” for bidding on oil and gas leases. The change was mandated by HB0141, which required the director to determine whether a bidder is qualified for an oil and gas lease. In the proposed changes of Chapter 18, in Section 2, a “qualified bidder” is defined “a person or entity engaged in good faith exploration for, or production of Oil and Gas as a primary component of their business activity.” Additionally, in Section 5 (b), the Director of the Office of State Lands and Investments will be the person to determine whether an applicant is considered a “qualified bidder.” The process the Director will follow is also outlined in Section 5 (b). Further, the original Section 9 (d), which stated that “an oil and gas lease which has once been extended beyond its primary term under W.S. 36-6-101(e) will not be committed to a subsequent unit or cooperative agreement” was removed from Chapter 18 altogether.

Pipelines: Third Circuit Allows Case Against Transcontinental Gas Pipe Line Company to Move Forward
On July 8, 2024, The United States Court of Appeals for the Third Circuit affirmed the denial of Transcontinental Gas Pipe Line Company (Transco) motion to stop the appeal of required permits it had obtained. Transcon. Gas Pipe Line Co., LLC v. Pa. Env’t Hearing Bd., No. 23-2052, 2024 U.S. App. LEXIS 16531 (3d Cir. July 8, 2024).  Transco is a natural gas company that sought to abandon some of its pipeline facilities and expand others in Pennsylvania. However, federal law requires the Federal Energy Regulatory Commission (FERC) provide a Certificate of Public Convivence, and as a condition for granting that certificate, the FERC required Transco to obtain a water quality certification from the Pennsylvania Department of Environmental Protection (PADEP). PADEP issued that certification and, in using its powers under the Clean Water Act (CWA), required three other permits that were also granted. A month later Transco began construction. However, three environmental advocates filed an administrative appeal under the Environmental Hearing Board (EHB), claiming the environment would be adversely affected and Transco’s permits should be revoked. Transco moved for a preliminary injunction to prevent the appeal, the district court denied the motion, and Transco appealed. Transco argued that the Natural Gas Act preempts administrative appeals to the EHB. The appeals court reasoned that the EHB is not a court; it instead possesses the powers of an administrative agency. Additionally, the Natural Gas Act itself contains an anti-implied preemption clause, and through that clause it can be concluded that an administrative appeal is not subject to preemption. Finally, the beforementioned clause permits state regulation of pipelines under the CWA. As such, Transco’s arguments fail as a matter of law, and the judgment of the district court is affirmed.

Climate Change: Circuit Court for Baltimore City Grants BP’s Motion to Dismiss in Climate Change Case
On July 10, 2024, the Circuit Court for Baltimore City in Baltimore, Maryland, granted the Defendant’s (BP) Motion to Dismiss the Plaintiff’s (Mayor and City Council of Baltimore) Complaint in a case relating to climate change. Mayor and City Council of Baltimore v. BP P.L.C., et al, Case No: 24-C-18-004219. In the Plaintiff’s Memorandum in Opposition to the Defendant’s Motion to Dismiss, the Plaintiffs explained that their complaint alleged that BP, and other defendants, failed to warn others of the “climatic risks of their fossil fuel products . . .”  The court granted the motion to dismiss for failure to state a claim upon which relief can be granted in a memorandum opinion and order. BP challenged the Plaintiff’s complaint with four claims for dismissal. First, BP asserted that the Plaintiff’s claims are “preempted by federal common law.” Second, BP argued that the Plaintiff’s claims are also “preempted by the Clean Air Act.” Third, BP argued that the Plaintiff’s claims are political questions, and hence cannot be heard by the court. Fourth, BP asserted that Maryland state law requires the Plaintiff’s claims to be dismissed for a number of reasons. Ultimately, the court decided to dismiss the complaint because the matter “goes beyond the limits of Maryland state law” because the effects of climate change are global.

 

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CENTER PROGRAMS & RESOURCES

Ag Progress Days – the Penn State College of Agricultural Sciences will host its annual Ag Progress Days, “Pennsylvania’s largest outdoor agricultural exposition,” at the Russell E. Larson Agricultural Research Center in Pennsylvania Furnace. Throughout the event, the Penn State Center for Agricultural and Shale Law will host an information booth in the Horizon Farm Credit Exhibit Building at W. 6th Street & Main. Come visit us in booth A509!

Solar Law Symposium – Penn State Extension will host its virtual Solar Law Sympium. As part of the symposium, Center Staff Attorney Brook Duer will co-present a session on Penn State research about the impact of solar development on rural areas. Registration available with optional CLE credits.

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

US LNG Momentum Evident Despite DOE License Pause (Energy Intelligence)

Appeals court unanimously sides with Biden administration on updated power plant rules (The Hill)

Puerto Rico files $1 billion suit against fossil fuel companies (The Verge)

North America Adds Rigs For 9 Consecutive Weeks (Rigzone)

US oilfield firms slash prices as mega-mergers shrink customer base (Reuters)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Bloomberg, Oil Rises as Biden Quits US Race, Blazes Threaten Canadian Wells (July 22, 2024)

Sartain, Texas Common Carrier Status Confirmed (July 23, 2024)

Introcaso, Hanawalt, The SEC’s Climate Disclosure Rule Will Reveal Healthcare’s Significant Climate Risk Exposure (July 23, 2024)

Sartain, How Courts Look at Fixed or Floating Royalty Disputes (July 26, 2024)

Chin, Oil Holds Drop as Traders Track Chinese Demand, US Stockpiles (July 23, 2024)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Announces $33 Million to Deploy Solar Technologies to Decarbonize America’s Industrial Sector (July 25, 2024)

DOE Announces Cleanup to Clean Energy Project at Hanford Site (July 25, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

Biden-Harris Administration Announces $13.9 million to Pennsylvania in Environmental and Climate Justice Community Change Grants (July 25, 2024)

FEDERAL EXECUTIVE AGENCIES (Federal Register June 1, 2024 – June 7, 2024)

Environmental Protection Agency

89 FR 59832 Rule: “Clean Air Act Reclassification; Colorado; Reclassification of the Denver Metro/North Front Range 2015 Ozone Nonattainment Area to Serious” (July 24, 2024)

Federal Energy Regulatory Commission

89 FR 60612 Notice: “ANR Pipeline Company; Notice of Scoping Period Requesting Comments on Environmental Issues for the Planned Heartland Project, and Notice of Public Scoping Session” (July 26, 2024)

Energy Department

89 FR 60610 Notice: “Natural Gas Pipeline Company of America LLC; Notice of Request Under Blanket Authorization and Establishing Intervention and Protest Deadline” (July 26, 2024)

Pipeline and Hazardous Materials Safety Administration

89 FR 60489 Notice: “Pipeline Safety: 2024 Risk Modeling Public Workshop” (July 25, 2024)

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE 

S.4786 “A bill to cancel Federal oil and gas leases held by persons that manipulate the market price of oil or gas in violation of Federal law, and for other purposes.” (July 25, 2024)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 30 – July 27, 2024)

Department of Environmental Protection

54 Pa.B. 4404 “Change in Practice Regarding Title V Operating Permit Application Submissions to Meet Federal Clean Air Act Requirements” (July 27. 2024)

 

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