Energy industry: is your insurance sufficient to handle a major cyber event? Larry Bracken, Mike Levine and I, Andrea DeField, address this question and more in our recent article for Electric Light & Power, found here. In the article, we identify three major gaps in cyber insurance that we routinely see when analyzing coverage
Coal
Eleventh Circuit Potentially Poised to Address Impact of Kisor
The Eleventh Circuit appears to be poised to be one of the first, if not the first, appellate courts in the country to address the impact of the Supreme Court’s decision in Kisor v. Wilkie, which addresses how courts should evaluate an agency’s interpretation of its own regulations. …
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DOI & Opponents Disagree on Remedy in Coal Leasing Moratorium Case
In the wake of the April 19 ruling by Judge Morris of the US District Court of the District of Montana that required the DOI to conduct an environment review on its decision to lift the coal leasing moratorium, the parties disagree on the necessary remedy and the next steps. Instead of immediately reinstating the moratorium, Judge Morris ordered additional briefing on the remedy, setting a July 22 deadline. The parties submitted dueling briefs; while DOI is requesting additional time to finalize its environmental review for its decision to lift the moratorium, environmental groups and states are requesting that the court vacate the Secretarial Order that lifted the moratorium altogether. …
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BLM Releases Draft Environmental Assessment for Lifting Coal Leasing Moratorium
In response to a court order, the Bureau of Land Management released a draft environmental assessment evaluating the potential environmental impacts of lifting the federal coal leasing moratorium. The publication opens a 15-day comment period that ends on June 6, 2019. The assessment focuses on the environmental impacts resulting from the three non-exempt leases issued as a result of the Zinke Order and the eight pending leases that would be produced about two years later if the moratorium remained in effect. …
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Decision Vacating DOI Valuation Rule May Impact Future Rulemakings
On April 12, 2019, the US District Court for the Northern District of California entered an order vacating the Department of the Interior’s repeal of the 2016 Valuation Rule due to violations of the Administrative Procedures Act. The court’s ruling may impact the Trump administration’s repeal and replace rulemakings that are scheduled to be finalized in the near future. …
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IRS to Seek Comment on Key Issues to be Interpreted in Section 45Q Tax Credit
The Department of Treasury and Internal Revenue Service have released Notice 2019-32 seeking comment on key issues to be interpreted in the Section 45Q carbon oxide sequestration tax credit. Congress significantly enhanced the Section 45Q tax credit in the Bipartisan Budget Act of 2018, increasing the credit from $10/ton for CO2 used as a tertiary injectant (i.e., to produce oil or gas) to $35/ton; and increasing the credit for CO2 geologically stored but not used as a tertiary injectant from $20/ton to $50/ton. See our previous blog post here for additional details on the applicable credit amounts for projects before and after enactment of the Bipartisan Budget Act and other credit amount details.
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NSR Reform — EPA’s ACE Proposal
Our regulatory state is founded on the principle that regulated parties must have notice of their compliance obligations. Laws or regulations that fail to give fair notice violate due process and cannot give rise to liability. See, e.g., Gen. Elec. Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995).
A notoriously unclear regulatory program addresses circumstances under which an existing facility triggers the Clean Air Act’s (CAA) “new source review” (NSR) program and its associated control technology and air quality review requirements. Over the past two decades, courts have concluded that the same words in the regulations have diametrically opposed meanings. Compare Nat’l Parks Conservation Ass’n, Inc. v. TVA, No. 3:01-CV-71, 2010 WL 1291335 (E.D. Tenn.Mar. 31, 2010) (boiler tube replacement is “routine” repair and replacement) with United States v. Ohio Edison Co., 276 F. Supp. 2d 829 (S.D. Ohio 2003) (boiler tube replacement is not “routine” repair and replacement). Indeed, after addressing the application of NSR to an industrial facility on two occasions, one three-judge panel in the Sixth Circuit produced five different opinions advancing three different interpretations of key provisions of the rules. See United States v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013); United States v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017). Disagreement among judges over the meaning of a regulation is objective evidence of a rule’s failure to provide fair notice of its compliance obligations.
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District Court Dismisses First Ever CCR Rule Citizen Suit
In April 2015, EPA issued a final rule governing the control and management of coal combustion residuals (CCR) in surface impoundments used to treat those residuals. As part of its rule, EPA required operators to submit initial closure plans for impoundments and post them on a publicly available website in November 2016. These initial closure plans must contain information related to the method of closure, and are subject to change as operators gather additional information. In June 2017, the Roanoke River Basin Association filed the first ever citizen suit under the CCR Rule.
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More Energy From Carbon, Lower Emissions
There are 7.6 billion people on the planet today. By 2050, there are projected to be 9.7 billion—or put another way, in just thirty years we will add the equivalent population of seven United States. The world’s most credible energy forecasting entities predict a global increase over that time not only in demand for energy, but demand for fossil energy. Even with steady increases in energy efficiency and a massive increase in renewables, consumption of fossil fuels will grow. That means carbon dioxide emissions won’t be reduced significantly without some technology to do so.
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Section 45Q Tax Credit Enhancements Could Boost CCS
As part of the Bipartisan Budget Act of 2018, Congress significantly increased and extended the Section 45Q tax credit for sequestration of carbon oxides. This has been a top priority of carbon capture and sequestration (CCS) supporters for several years.
CCS is considered to be essential to global efforts to reduce CO2 emissions. The world’s most respected analysis organizations all estimate that fossil fuel use will increase in the coming decades, even with energy efficiency improvements and vast increases in renewable energy.
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