November 13, 2023

Shale Law Weekly Review—Week of November 13, 2023

GHG Emissions: PA Commonwealth Court Finds State Membership in Carbon Emissions Trading Alliance Illegal ⚡
On Wednesday, November 1, 2023, the Commonwealth Court of Pennsylvania granted a request for declaratory and injunctive relief filed by numerous private companies and individuals in the fossil fuel industry acting as petitioners in a lawsuit against the Pennsylvania Department of Environmental Protection (DEP). Bowfin Keycon Holdings, LLC v. Pennsylvania Department of Environmental Protection (No. 247 M.D. 2022.) The original petition for declaratory and injunctive relief was brought against the DEP for its allegedly illegal participation in a carbon emissions trading alliance known as the Regional Greenhouse Gas Initiative (RGGI.) Under the alliance, fossil fuel power plants were required to buy allowances for every ton of carbon dioxide emitted beyond the established limit of twenty-five megawatts These requirements were created to reduce greenhouse gas emissions through the gradual reduction of allowances sold. Petitioners argued that these allowances behave like a tax, which the DEP is not permitted to enforce, as taxing authority is explicitly reserved to the state legislature. Respondents disagreed with this interpretation, arguing that because the proceeds of the allowance would be used to improve air pollution control, it would behave like a fee, not a tax, making it permissible under the Air Pollution Control Act. In striking down the initiative, the Court agreed with the petitioners, finding that the allowance language of the initiative was akin to a tax, meaning it was outside of the DEP’s authority to enforce. As such, the regulations of the RGGI were voided and the DEP was enjoined from enforcing them.

Landowner Royalties: XTO Energy, Exxon Mobil’s Subsidiary, Settles at $16M for Underpaid Royalties on Natural Gas from Federal and Native American Land
On October 31, 2023, XTO Energy Inc., a subsidiary of Exxon Mobil, entered into a settlement agreement for $16 Million dollars with the Department of Justice (DOJ) – on behalf of the Department of the Interior. The agreement settles administrative claims of royalty fraud under the False Claims Act. According to the DOJ Press Release, XTO had “knowingly underpaid royalties owed on natural gas produced from federal and Native American lands” from January 2009 to August 2017. Furthermore, the DOJ alleged that XTO “improperly deducted costs necessary to put the gas in marketable condition, deducted costs of transporting carbon dioxide and failed to pay royalties on carbon dioxide.” The settlement agreement releases XTO from liability of “any civil or administrative monetary claim” arising from the alleged conduct, except for criminal violations, tax liability, personal liability, products liability, and any “personal injury or property damage.”

Infrastructure: The Department of Energy Selects Prime Recipients in the Renew America’s Nonprofits Grant Program
On October 25, 2023, the Department of Energy (DOE) announced the Prime Recipients of the Renew America’s Nonprofits grants, which provide funding to “reduce energy use and costs in buildings owned and operated by 501(c)(3)s.” These Prime Recipients will receive $45 million in awards, which they will sub-awarded to individual nonprofits, noted as Subrecipients by the program, for projects that reduce fuel usage. According to the DOE, “nonprofits operate approximately half a million [commercial] facilities” that could reduce net energy usage by adopting new energy-efficient methods. One noted project eligible for funding under this grant program is “fuel switching” which entails transitioning from a traditional fuels source, such as coal, oil, or natural gas, to something described in the grant as more energy efficient, such as electricity. The projects proposed by the Prime Recipients “have projected energy cost savings of up to 39%, and greenhouse gas reductions of up to 35%.” The next step in the process is for Prime Recipients to submit portfolios to the DOE identifying specific Subrecipients and projects to receive sub-awards. These portfolios must be submitted by June 2024.

National Energy Policy: State Department Announces Collaboration with Nonprofit to Improve Domestic Mineral Supply Chains
On Wednesday, November 1, 2023, the U.S. Department of State announced a new “public private partnership’ with the Center for Critical Minerals Strategy of SAFE, a nonprofit, nonpartisan organization interested in “diversifying fuel sources and supply chains needed for energy.” Known as the Minerals Investment Network for Vital Energy Security and Transition (MINVEST), the new partnership has the primary goal of both promoting the domestic supply of minerals and working towards a more sustainable future of energy sourcing. The activities of the partnership are intended to serve both economic and national security objectives, with a strong focus on the use of minerals to improve the industries of “energy, transportation, and defense.” The partnership is also centered around the transition to clean energy, and it is intended to encourage dialogue about and investment into “mining, processing and recycling opportunities that adhere to high environmental, social, and governance (ESG) standards.”

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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 Thursday, November 16, 2023, the University of Maryland Agriculture Law Education Initiative will hold the 2023 Annual Agricultural and Environmental Law Conference at the Crowne Plaza Hotel in Annapolis. From 12:45 pm–1:50 pm, Center Staff Attorney Brook Duer will present, “HPAI: How Can We Miss You, If You Won’t Go Away?” as part of the conference.

  • November 16, 2023, 12:45 pm – 1:50 pm. HPAI: How Can We Miss You, If You Won’t Go Away? (Register)

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

Cooper Energy signs gas sales agreement with EnergyAustralia (Oil & Gas Journal)

CHINA’S GAS IMPORTS UP 9% IN JANUARY-OCTOBER (Natural Gas World)

Pennsylvania partners with natural gas driller on air and water monitoring amid new regulatory push (AP)

House GOP approves cutting EPA budget by nearly 40 percent (The Hill)

Cheniere pens long-term LNG supply deal with Foran (Offshore Energy)

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

Oil & Gas Law & Policy Resources:

Akin Gump, Akin Advises Southwest Airlines in Strategic Relationship with USA BioEnergy (November 6, 2023)

Sartain, Federal Receiver Allowed to Abandon Texas Pipeline (November 7, 2023)

Bloomberg, Oil Dips as Shaky Demand Outweighs Saudi, Russian Supply Cuts (November 7, 2023)

McFarland, Iskandia Energy Operating vs SWEPI LP – The looming problem of contamination by salt water injection wells in the Permian (November 8, 2023)

Turner, The Legal Case for Equity in Local Climate Action Planning (November 9, 2023)

Sartain, Court Addresses Questions in Trespass to Try Title/Adverse Possession Suit (November 10, 2023)

Field, Banking Regulators Act in the Face of Headwinds to Address Climate Risk (November 10, 2023)

Bloomberg, Oil Set for Third Weekly Drop as Demand Fears Outweigh War Risk (November 10, 2023)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Announces New Biden-Harris Administration Appointees (November 7, 2023)

Joint Statement Between DOE and the UK Department for Energy Security and Net Zero Concerning a Strategic Partnership to Accelerate Fusion (November 8, 2023)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

EPA Awards Nearly $1.2M to Three California Small Businesses to Research Environmental Issues and Help Grow the Green Economy (November 9, 2023)

Biden-Harris Administration Announces New Get the Lead Out Initiative to Accelerate Removal of Lead Service Lines Nationwide as Part of Investing in America Agenda (November 7, 2023)

FEDERAL EXECUTIVE AGENCIES (Federal Register November 4 – November 10, 2023)

Federal Energy Regulatory Commission

88 FR 77299: Notice: “Combined Notice of Filings” (November 9, 2023)

Land Management Bureau

88 FR 77352: Notice: “Notice of Proposed Class II Reinstatement of Terminated Oil and Gas Leases UTU88835 and UTU88838, San Juan County, Utah” (November 9, 2023)

88 FR 77350: Notice: “Notice of Availability of the Draft Resource Management Plan Amendment and Environmental Impact Statement for Big Game Habitat Conservation for Oil and Gas Management, Colorado” (November 9, 2023)

88 FR 76846: Notice, Comments Close 1/8/24: “Agency Information Collection Activities; Oil and Gas, or Geothermal Resources: Transfers and Assignments” (November 7, 2023)

Pipeline and Hazardous Materials Safety Administration

88 FR 76889: Notice: “Hazardous Materials: Public Meeting Notice for the Office of Hazardous Materials Safety Research, Development & Technology Virtual Forum” (November 7, 2023)

Ocean Energy Management Bureau

88 FR 77363: Notice: “Gulf of Mexico Outer Continental Shelf Oil and Gas Lease Sale 261” (November 9, 2023)

Other Agencies

88 FR 76991: Rule: “Publication of Venezuela Sanctions Regulations Web General Licenses 3I, 5M, 9H, 43, 44, and 45” (November 8, 2023)

88 FR 76576: Notice, Comments Close 12/5/23: “Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the Port of Alaska’s North Extension Stabilization Step 1 (NES1) Project in Anchorage, Alaska” (November 6, 2023)

U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.6348 “To direct the Secretary of Energy to establish a grant program to facilitate tree planting that reduces residential energy consumption, and for other purposes.” Referred to the House Committee on Energy and Commerce. (November 9, 2023)

H.R.6326 “To amend the Nuclear Energy Innovation and Modernization Act to reduce regulatory costs for advanced nuclear reactor application reviews, and for other purposes.” Referred to the House Committee on Energy and Commerce. (November 9, 2023)

H.R.6303 “To assess and improve the competitiveness of United States nuclear commerce, to expedite Department of Energy review of certain nuclear technology exports, and for other purposes.” Referred to the Committee on Energy and Commerce, and in addition to the Committee on Foreign Affairs, 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. (November 8, 2023)

H.R.1121 “Protecting American Energy Production Act” Ordered to be Reported by the Yeas and Nays: 21 – 17. (November 8, 2023)

H.R.6268 “To enable timely licensing reviews for nuclear reactor facilities at brownfield sites and retired fossil fuel sites, and for other purposes.” Referred to the House Committee on Energy and Commerce. (November 7, 2023)

H.R.6265 “To direct the Nuclear Regulatory Commission to update the mission statement of the Commission to ensure licensing and regulation is efficient and is in alignment with the policies stated in the Atomic Energy Act of 1954, and for other purposes.” Referred to the House Committee on Energy and Commerce. (November 7, 2023)

H.R.6252 “To direct the Nuclear Regulatory Commission to submit a report and conduct a rulemaking on facilitating efficient, timely environmental reviews of nuclear reactor applications, and for other purposes.” Referred to the House Committee on Energy and Commerce. (November 6, 2023)

H.R.6236 “To streamline nuclear technology regulatory permitting and licensing, and for other purposes.” Referred to the House Committee on Energy and Commerce. (November 6, 2023)

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE 

S.3289 “A bill to ratify and approve all authorizations, permits, verifications, extensions, biological opinions, incidental take statements, and any other approvals or orders issued pursuant to Federal law necessary for the establishment and administration of the Coastal Plain oil and gas leasing program, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (November 9, 2023)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

Shapiro Administration Announces $16 Million in Grants for Electric Grid Resilience Projects (November 8, 2023)

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 45—November 11, 2023)

Department of Environmental Protection

53 Pa.B.7088: Notices: “Federal Consistency under the Coastal Zone Management Act; PhilaPort—Packer Avenue Marine Terminal Maintenance Dredging”

 

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