BSEE’s August 2020 update of its Notice to Lessees signals renewed interest in decommissioning of aging oil & gas platforms offshore of California. While so-called “rigs to reefs” in-place decommissioning is a potential option, uncertainty remains surrounding decommissioning methods and timing for platforms, pipelines and related infrastructure located in state and federal waters off the coast of California.
Continue Reading BSEE Renews Offshore Platform Decommissioning Guidelines

The first comprehensive revision of the NEPA implementing regulations in over forty years goes into effect today. Litigants sought a preliminary injunction to block implementation of the rule nationwide, but their motion was denied by a district court late last week. While litigation is ongoing in three district courts, the new rule will apply to all new NEPA reviews started on or after September 14, 2020, and agencies will have discretion to apply the new rule to ongoing NEPA reviews initiated before September 14.
Continue Reading After Surviving Preliminary Injunction Motion, New NEPA Rule Becomes Effective Today

Flaring has the attention of RRC, Producers and Stakeholders

Flaring has the attention of the Texas Railroad Commission (RRC), oil and natural gas companies and stakeholders such as royalty owners, investors and environmental groups. Requests for RRC authorization of flaring has been on the increase in the Permian Basin. As a result, a number of interested parties are looking at regulatory changes. Some interested parties voice concern that a valuable resource is being wasted, others state that the definition of natural gas ‘waste’ is too limited, still others are concerned about methane emissions and some all of the above. Though the interested parties may not always be aligned, there is a general sense that regulatory amendments are needed.
Continue Reading RRC Flaring Rules – Still Up in the Air

On July 16, 2020, the Council on Environmental Quality (CEQ) published its highly anticipated final rule to improve its National Environmental Policy Act (NEPA) regulations.  The update, which largely mirrors the proposed rule, is the first comprehensive amendment to the regulations since their original publication in 1978.  The final rule is designed to streamline the NEPA review process, clarify important NEPA concepts, and codify key guidance and case law. 
Continue Reading CEQ Releases Long-Awaited Final Rule to Improve NEPA Regulations

The Treasury Department and IRS have issued long-awaited Proposed Regulations regarding the tax credit for carbon capture and sequestration under Section 45Q of the Code1 (the “section 45Q credit”).

Generally, the amount of the section 45Q credit and the party that is eligible to claim the credit depend on whether the taxpayer captures qualified carbon oxide using carbon capture equipment originally placed in service at a qualified facility before February 9, 2018 (“Old 45Q Facility”), or on or after February 9, 2018 (“New 45Q Facility”), and whether the taxpayer disposes of the qualified carbon oxide in geological storage (“sequestration”), uses it as a tertiary injectant in a qualified enhanced oil or natural gas recovery project (“EOR”), or utilizes the carbon oxide in certain specified ways (“utilization”). The effective date of the amendments to the Code extending and expanding the section 45Q credit is February 9, 2018 (the “Credit Effective Date”). The Credit Effective Date appears throughout the Proposed Regulations to distinguish between Old 45Q Facilities and New 45Q Facilities and establishing the effective date for certain provisions.
Continue Reading Treasury Issues Proposed Regulations on Section 45Q Tax Credit for Carbon Capture

Yesterday the Supreme Court of the United States issued its most significant Clean Water Act decision in more than a decade, resolving a split among lower courts over the reach of the Clean Water Act’s “point source” or National Pollutant Discharge Elimination System (NPDES) program. Pollutants travel to bodies of water in many ways: by pipe, ditch, or runoff, for example. The Clean Water Act defines some of those ways of moving pollutants as “point sources”—specifically, pipes, ditches, and similar “discernible, confined and discrete conveyance[s]”—and bans the “addition of any pollutant to navigable waters from any point source” without an NPDES permit. But no similar permitting requirement applies to pollution added from nonpoint sources, which is instead controlled by state and other federal environmental laws. 
Continue Reading County of Maui v. Hawai’i Wildlife Fund: Supreme Court Rejects Ninth Circuit’s Expansive Test for NPDES Permitting Under Clean Water Act, Requires Direct Discharges to Navigable Waters or Functional Equivalent of a Direct Discharge

In its ruling today in Atlantic Richfield Company v. Christian, the Supreme Court upheld a decision by the Montana Supreme Court allowing owners of contaminated residential properties at one of the nation’s largest Superfund sites to pursue state law claims for damages in the form of restoration of their properties beyond the cleanup mandated by the U.S. Environmental Protection Agency, rejecting claims by the defendant in the state court action that these claims were barred by the terms of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The Court also held that the property owners, although never pursued by EPA to contribute to any of the CERCLA response costs at the site, nonetheless were “potentially responsible parties” within the meaning of the statute, and therefore would be required to obtain approval from EPA for any additional cleanup arising under state law.
Continue Reading Supreme Court Green Lights State Law Claims for Broader Cleanup at Superfund Sites, but only with EPA’s OK

Building on a host of renewable and alternative energy portfolio programs that have incrementally worked to decarbonize the electric sector, Massachusetts is poised to launch a Clean Energy Peak Standard (CPS) in the summer of 2020. The pivotal distinction between the CPS and other Massachusetts programs is that programs to date have incentivized renewable and alternative energy sources to simply “show-up,” while the CPS takes aim at incentivizing new and existing generation resources to “show-up at the right time” in order to further reduce greenhouse gas (GHG) emissions.
Continue Reading Massachusetts Races to Decarbonize the Peak

Facing criticism that they impede sustainable development, traditional cross-border investor protections are eroding. More balanced stabilization and equitable treatment provisions allow greater discretion to regulate environmental and social impacts. Enhanced due diligence, focused on project impacts, international standards, CSR obligations and regulatory discretion in applicable treaties or investment contracts, can help offset this increased risk.
Continue Reading Eroding Investor Protections: Managing CSR and Political Risk in the Sustainable Brave New World