June 29, 2021

Shale Law Weekly Review – Week of June 28, 2021

Biofuels: U.S. Supreme Court Allows Non-Continuous Small Refinery Renewable Fuels Standard Blending Obligation Waiver Extensions ⚡
On June 25, 2021, the Supreme Court of the United States issued an opinion holding that a small refinery that previously received a waiver from Renewable Fuel Standard (RFS) blending obligations may still receive an “extension” of the waiver even if it did not acquire a continuous waiver in previous years and allowed a previous exemption to lapse. HollyFrontier Cheyenne Refining, LLC, et al., v. Renewable Fuels Association, et al., No. 20-472. The court found that the term “extension,” which is undefined in the Energy Policy Act of 2005 or the Energy Independence and Security Act of 2007 (42 U.S.C. §7545), does not require “unbroken continuity.”

Public Lands: Federal Court Issues Preliminary Injunction Against Public Land Lease Pause
On June 15, 2021, the U.S. District Court for the Western District of Louisiana issued an opinion and order granting a nationwide preliminary injunction against the U.S. Department of the Interior (DOI) and the U.S. Bureau of Land Management (BLM) from pausing new oil and gas leases on public lands and offshore waters. Louisiana v. Biden, No. 2:21-cv-00778. The court’s order was a direct response to Section 208 of President Biden’s January 27, 2021 Executive Order, “Tackling the Climate Crisis at Home and Abroad” (E.O. 14008 of Jan 27, 2021). The thirteen plaintiff states claimed that the pause deprived them of lease sale funds in violation of the Outer Continental Shelf Lands Act (OCSLA), which has an effective five-year plan, and the Mineral Leasing Act (MLA), which requires the DOI to hold quarterly lease sales of eligible land. The court agreed, stating that both statutes require the agencies to sell eligible oil and gas leases. The court found that by pausing the leases, the agencies had “in effect amend[ed] two Congressional statutes . . . which they do not have the authority to do,” and stated that “the power to ‘Pause’ lies solely with Congress.”

National Energy Policy: Federal Court Dismisses 2020 NEPA Rule Challenge, CEQ Extends Deadline for Agency NEPA Proposals
On June 21, 2021, the U.S. District Court for the Western District of Virginia issued an opinion and order dismissing a suit challenging the Council on Environmental Quality’s (CEQ) July 2020 final rule (85 FR 43304), effective September 14, 2020, which amended National Environmental Policy Act (NEPA) regulations. Wild Virginia v. Council on Environmental Quality, No. 3:20-cv-00045. Among several changes, the NEPA revisions provide for a number of exemptions to projects that would previously require an environmental impact statement. The plaintiff environmental organizations argued that these changes would allow accelerated oil and gas development on environmentally sensitive lands. The plaintiffs alleged that CEQ violated the Administrative Procedure Act (APA) on several accounts, citing the agency’s 600-page comment response that failed to “meaningfully address” the majority of the 1.1 million comments the agency received, which opposed the revisions. The court held that the plaintiffs’ lacked standing and their claims were not ripe for review because CEQ’s rule “does not directly regulate the plaintiffs” and other agencies must promulgate their own regulations in accordance with CEQ’s rule before it affects a specific project. Further, the court noted that CEQ “expects to provide further guidance on the 2020 Rule, which it is actively reconsidering.” On June 29, 2021, CEQ published in the Federal Register an interim final rule with request for comments (86 FR 34154), which extends the deadline by two years for agencies to propose regulations in accordance with CEQ’s 2020 NEPA rule.

Climate Change: Massachusetts State Court Denies Exxon’s Motions to Dismiss Case Alleging Climate Deception
On June 22, 2021, the Commonwealth of Massachusetts Superior Court of Suffolk County issued two orders denying Exxon Mobil’s motion to dismiss and special motion to dismiss a case filed against the company by the state of Massachusetts alleging that Exxon had “intentionally misled” the state’s consumers and investors as to the climate change-causing effects of its products and the “climate-driven risks to its business.” Commonwealth of Massachusetts v. Exxon Mobil Corp., No. . Exxon had filed dual motions to dismiss 1) for failure to state a claim and lack of personal jurisdiction and 2) pursuant to Massachusetts’ anti-SLAPP (Strategic Litigation Against Public Participation) statute, which bars frivolous suits designed to prevent a party from exercising their “rights of freedom of speech and petition for the redress of grievances.” The court found that Exxon told Massachusetts investors that “climate change risks posed no meaningful threat to [its] business model, its assets, or the value of its securities” even though Exxon knew of the “potentially ‘catastrophic’ nature of these risks,” which the court held sufficient to allege deception and defeat a motion to dismiss. Additionally, the court found that Exxon’s statements were not protected by the anti-SLAPP statute because its speech activities were directed at investors and consumers—not a government entity—and denied both of Exxon’s motions to dismiss.

Pipelines: D.C. Circuit Court Vacates Spire STL Pipeline’s FERC Certificate
On June 22, 2021, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion vacating and remanding the Federal Energy Regulatory Commission’s (FERC) August 2018 Order Issuing Certificates, which granted authorization for Spire STL Pipeline, LLC to build a new natural gas pipeline in St. Louis, Missouri. Environmental Defense Fund v. FERC, No. 20-1016; FERC No. CP17-40. The court found that FERC’s actions “did not reflect reasoned and principled decision making,” and noted that both Spire STL and FERC admitted that the pipeline was not intended to serve “new load” because the demand for natural gas in the area was anticipated to remain “relatively flat.” Further, the court pointed to Spire STL’s use of a precedent agreement between itself and one of its shipping affiliates as “evidence of need” and the lack of pipeline-induced savings found by the agency, and held that FERC’s grant of the certificate order was arbitrary and capricious.

Pipelines: Federal District Court Terminates Dakota Access Pipeline Litigation
On June 22, 2021, the U.S. District Court for the District of Columbia issued a minute order dismissing all outstanding claims and terminating the Standing Rock Sioux Tribe’s litigation over the Dakota Access Pipeline. Standing Rock Sioux Tribe v. United States Army Corps of Engineers, No. 1:16-cv-01534. However, the order specified that the plaintiff tribe may request to reopen litigation if the defendants violate the court’s previous orders. The order also stated that if the plaintiffs want to challenge the Army Corps of Engineers’ upcoming Environmental Impact Statement (EIS), due March 2022, the plaintiffs may file a new, separate action marked as “related” so that the court will retain assignment of the case. Additionally, the court noted the “Corps’ monthly public updates and Plaintiffs’ cooperating agency arrangements” and terminated its previously-required independent updates and status reports. For background, see SLWR—May 10, 2021, “Army Corps of Engineers Reaffirms Position Against Dakota Access Pipeline Injunction,” and SLWR—May 24, 2021, “Federal District Court Denies Motion to Force Shutdown of Dakota Access Pipeline.”

Shale Law/Policy Resources of Interest:

Korey Silverman-Roati, U.S. Climate Litigation in the Age of Trump: Full Term (June 23, 2021).

Jennifer Danis, D.C. Circuit Decision: Pipeline Developers Can’t Self-Deal in the Public Interest (June 22, 2021).

Charles Sartain and Rusty Tucker, Oil and Gas Lease Addendum Supersedes Printed Form (June 22, 2021).

Jeremy Mercer, Does “Other Minerals” Language in Ohio Deeds Include Oil and Gas? It Depends. (June 21, 2021).

Cameron Haltom, In re Sanchez Energy Corporation: Presence of Real Property Covenants No Shield to Rejection in Bankruptcy (June 21, 2021).

AGENCY PRESS RELEASES – STATE/FEDERAL

Pennsylvania Department of Environmental Protection

DEP Celebrates 1,000 Electric Vehicle Chargers Installed Statewide with ‘Driving PA Forward’ Funding (June 25, 2021).

U.S. Department of Energy

U.S. Secretary of Energy Granholm, Canadian Minister of Natural Resources O’Regan Launch Cooperative Agreement on Clean Energy, Innovation, and Energy Justice (June 24, 2021).

DOE Announces Over $65 Million in Public and Private Funding to Commercialize Promising Energy Technologies (June 24, 2021).

DOE Announces $22 Million for Energy Research Projects in Underserved Regions (June23, 2021).

DOE Invests $61 Million in Advanced Nuclear Energy R&D Projects Across America (June 22, 2021).

U.S. Environmental Protection Agency

EPA Fines East Oahu Plant over Clean Air Act Violations (June 23, 2021).

EPA to Improve Access, Transparency and Timeliness of Air Toxics Data and Risk Information (June 23, 2021).

EPA Marks 5th Anniversary of Landmark Improvements to Chemical Safety Regulation (June 22, 2021).

EPA Administrator Regan Signs Proclamation to Mark National Pollinator Week (June 21, 2021).

STATE ACTIONS—EXECUTIVE/LEGISLATIVE

Pennsylvania Executive Agencies—Actions and Notices (Pa. Bulletin Vol. 51, No. 26—June 26, 2021)

51 Pa.B. 3549 Notice—Request for Comments: “Draft Revised Water Quality Assessment Methodology; Available for Public Comment.”

51 Pa.B. 3580 Notice: “Natural Gas Service [Application of Abandonment of Service to a Residential Premise].”

Pennsylvania Legislature

SB 806 “An Act amending the act of July 20, 1979 (P.L.183, No.60), known as the Oil and Gas Lease Act, further providing for definitions, for payment information to interest owners and for accumulation of proceeds from production.” Referred to ENVIRONMENTAL RESOURCES AND ENERGY [Senate] (June 25, 2021).

SB 139 “A Resolution urging the United States Environmental Protection Agency (EPA) to exercise its authority under section 211(o)(7)(A)(i) of the Clean Air Act to revise the nationwide Renewable Fuel Standard (“RFS”) updating volume mandates to provide relief to refiners in Pennsylvania, the East Coast and elsewhere, and to implement additional reforms going forward which will allow for the blending of renewable fuels consistent with the original intention of the RFS program, while containing costs for independent refiners.” Adopted (47-3) [Senate] (June 24, 2021).

HB 120 “A Resolution urging the United States Environmental Protection Agency to exercise its waiver authority in Clean Air Act Section 211(o)(7)(A)(i) to reduce nationwide Renewable Fuel Standard volume mandates to provide relief to refiners in Pennsylvania, the East Coast and elsewhere and to implement additional reforms going forward which will allow for the blending of renewable fuels consistent with the original intention of the Renewable Fuel Standard program, while containing costs for independent refiners.” Referred to ENVIRONMENTAL RESOURCES AND ENERGY [House] (June 24, 2021).

SB 718 “An Act amending the act of July 13, 1988 (P.L.530, No.94), known as the Environmental Hearing Board Act, further providing for Environmental Hearing Board [Reduces term limits from six to five years and provides for reappointment].” First consideration [Senate] (June 23, 2021).

SB 717 “An Act amending the act of July 13, 1988 (P.L.530, No.94), known as the Environmental Hearing Board Act, further providing for definitions and for jurisdiction [Definitions related to the appeal of a decision].” First consideration [Senate] (June 23, 2021).

HB 604 “An Act amending the act of April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929, providing for environmental permits and plan approvals; making related repeals; and abrogating regulations.” Re-committed to RULES [House] (June 23, 2021).

HB 591 “An Act amending . . . The Clean Streams Law, in other pollutions and potential pollution, further providing for potential pollution. [Allows for waiver applications for National Pollutant Discharge Elimination System permit on projects one to five acres in size.]” Re-reported as committed [House] (June 22, 2021).

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies (Federal Register June 21–25 2021):

Environmental Protection Agency

86 FR 33703 Notice—Request for Nominations: “Request for Nominations of Candidates for the Clean Air Scientific Advisory Committee (CASAC) Particulate Matter (PM) Panel” (June 25, 2021).

86 FR 32656 Proposed Rule: “Approval and Promulgation of Implementation Plans; Colorado; Revisions to Regulation Number 7; Aerospace, Oil and Gas, and Other RACT Requirements for 2008 8-Hour Ozone Standard for the Denver Metro/North Front Range Nonattainment Area” (June 22, 2021).

Federal Energy Regulatory Commission

86 FR 33698 Notice: “Combined Notice of Filings #1 [Exempt Wholesale Generator Filings]” (June 25, 2021).

86 FR 33697 Notice: “Combined Notice of Filings [Natural Gas Pipeline Rate and Refund Report Filings]” (June 25, 2021).

86 FR 33699 Notice: “PJM Interconnection, L.L.C.; Notice of Institution of Section 206 Proceeding and Refund Effective Date” (June 25, 2021).

86 FR 33277 Notice: “Combined Notice of Filings #1 [Electric Rate Filings]” (June 24, 2021).

86 FR 33271 Notice: “Combined Notice of Filings #1 [Electric Rate Filings]” (June 24, 2021).

86 FR 33276 Notice: “Combined Notice of Filings [Natural Gas Pipeline Rate and Refund Report Filings]” (June 24, 2021).

86 FR 33276 Notice: “Jackson Generation, LLC v. PJM Interconnection, LLC; Notice of Complaint” (June 24, 2021).

86 FR 33268 Notice: “Adelphia Gateway, LLC; Notice of Availability of the Draft Environmental Impact Statement for the Proposed Marcus Hook Electric Compression Project” (June 24, 2021).

86 FR 33274 Notice: “Dominion Energy Questar Pipeline, LLC; Notice of Request Under Blanket Authorization and Establishing Intervention and Protest Deadline” (June 24, 2021).

86 FR 33272 Notice: “ANR Pipeline Company; Notice of Scoping Period Requesting Comments on Environmental Issues for The Proposed Skunk River Replacement Project” (June 24, 2021).

86 FR 32916 Notice: “Combined Notice of Filings #2 [Exempt Wholesale Generator Filings]” (June 23, 2021).

86 FR 32918 Notice: “Combined Notice of Filings #1 [Exempt Wholesale Generator Filings]” (June 23, 2021).

86 FR 32915 Notice: “Combined Notice of Filings #1 [Electric Rate Filings]” (June 23, 2021).

86 FR 32917 Notice: “Notice of Complaint; ConocoPhillips Company v. El Paso Natural Gas Company, LLC” (June 23, 2021).

Justice Department

86 FR 33359 Notice: “Notice of Lodging of Proposed Consent Decree Under the Oil Pollution Act” (June 24, 2021).

Land Management Bureau

86 FR 33347 Notice—Comments Requested: “Agency Information Collection Activities; Onshore Oil and Gas Operations and Production” (June 24, 2021).

House Energy and Commerce Committee Actions:

H.R.4153 “To advance clean power technology development and use through innovation and clean energy standards, and for other purposes.” Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Science, Space, and Technology, Transportation and Infrastructure, Oversight and Reform, and Financial Services. . . (June 24, 2021).

H.R.4084 “To require the Secretary of the Treasury to levy a fee on methane emissions from oil and natural gas facilities, and for other purposes.” Referred to the Committee on Energy and Commerce, and in addition to the Committee on Natural Resources. . . (June 23, 2021).

H.R.4027 “To facilitate the generation and delivery of power from affordable and reliable renewable generation projects and energy storage projects.” Referred to the Subcommittee on Environment and Climate Change (June 23, 2021).

H.R.1374 “Enhancing State Energy Security Planning and Emergency Preparedness Act of 2021” Received in the Senate and Read twice and referred to the Committee on Energy and Natural Resources (June 23, 2021).

H.R.2467 “PFAS Action Act of 2021” Ordered to be Reported by the Yeas and Nays: 33 – 20. (June 16, 2021).

H.R.2791 “Renewable Energy for Puerto Rico and the U.S. Virgin Islands Act” Referred to the Subcommittee on Commodity Exchanges, Energy, and Credit (June 21, 2021).

Senate Energy and Natural Resources Committee:

S.2302 “A bill to amend the Department of Energy Organization Act to assign certain functions to the Assistant Secretaries of Energy relating to energy emergencies and energy security, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (June 24, 2021).

S.2269 “A bill to secure the bulk-power system in the United States.” Read twice and referred to the Committee on Energy and Natural Resources (June 24, 2021).

S.2241 “A bill to amend the Public Utility Regulatory Policies Act of 1978 to require States to consider measures to promote greater electrification of the transportation sector, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (June 24, 2021).

S.2199 “A bill to require the Secretary of Energy to establish a voluntary Cyber Sense program to test the cybersecurity of products and technologies intended for use in the bulk-power system, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (June 23, 2021).

S.2177 “A bill to amend the Mineral Leasing Act to ensure sufficient bonding and complete and timely reclamation of land and water disturbed by Federal and Indian oil and gas production, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (June 22, 2021).

S.2170 “A bill to amend the Mineral Leasing Act to provide for transparency and landowner protections in the conduct of lease sales under that Act, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (June 22, 2021).

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks June 21–25, 2021:

Requiem for a Pipeline: Keystone XL Transformed the Environmental Movement and Shifted the Debate Over Energy and Climate, Inside Climate News

Senators Introduce Bill, Plan Hearing Against Cyberattacks, E&E News

API: US Petroleum Demand Continued to Grow in May, Oil & Gas Journal

After Blowing $300 Billion, U.S. Shale Finally Makes Money, Bloomberg

Maine Becomes First State to Order Public Fossil-Fuel Divestment, Bloomberg

U.S. Dry Natural Gas Production and Rig Count Continue to Grow from Pandemic Lows, US Energy Information Administration

Biden Admin Backs Trump-Era Approval of Controversial Line 3 Pipeline Permit, The Hill

Most US Upstream Execs Expect Global Oil Supply Gap by 2025: Dallas Fed Survey, S&P Global Platts

Judge Closes out Dakota Access Lawsuit; Future Legal Challenges Still Possible, Bismarck Tribune

California Oil Regulators Delay Health, Safety Rules Again, Associated Press

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