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In response to President Biden’s Executive Order entitled, “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” the Environmental Protection Agency (EPA) recently issued a proposed rule taking aim at greenhouse gases (GHG) and volatile organic compounds (VOC) emissions from new and existing oil and natural gas production, processing, transmission, and storage facilities.  The proposal contains three basic components.  In a break with precedent, EPA did not provide proposed regulatory language.

First, the proposed rule would revise the new source performance standards (NSPS) for GHGs and VOCs for new, modified, and reconstructed sources, including the production, processing, transmission, and storage segments.  Specifically, EPA proposes to a new subpart OOOOb that would update and expand the current requirements under CAA Section 111(b) for methane and VOC emissions from sources constructed, modified, or reconstructed after November 15, 2021.  NSPS OOOOb would include standards for emission sources not regulated previously under the 2016 NSPS OOOOa.  Among other changes, EPA proposes to apply to VOC emissions thresholds to storage vessel tank batteries as opposed to individual storage tanks.  EPA has also suggested a change to the definition of legal and practical enforceability which could impact the utilization of state-level permitting previously used to reduce the potential to emit to below the 6 ton per year VOC-threshold.

Second, the proposed rule would create a new subpart OOOOc that would contain the first nationwide emissions guidelines (EG).  The EG would be a state model rule that states could use to develop, submit, and implement state plans that establish performance standards to limit GHGs from existing sources.…

Continue Reading EPA issues proposal to reduce GHGs and VOCs from new and existing oil and natural gas sources

Litigation seeking to broaden the application of Pennsylvania’s Environmental Rights Amendment, Pa. Const. art. I, §27 (“ERA”) was rejected on August 6, 2021, when the Commonwealth Court of Pennsylvania dismissed an amended petition for review filed by the Pennsylvania Environmental Defense Foundation (“PEDF”) challenging the Pennsylvania Department of Conservation and Natural Resources’ (“DCNR”) State Forest Resource Management Plan (“SFRMP”).  Pennsylvania Environmental Defense Foundation (“PEDF”) v. Commonwealth, No. 609 M.D. 2019 (Pa. Cwmlth. 2021).

PEDF sought declaratory relief regarding DCNR’s SFRMP published in 2016.  Specifically, PEDF asked the Commonwealth Court to: (1) declare certain statements made by DCNR in the SFRMP in violation of the ERA, and (2) compel DCNR to amend the SFRMP to make it comport with DCNR’s responsibilities to manage the resources consistent with its duties as a trustee under the ERA.  According to PEDF, in 2016, DCNR amended its SFRMP to support management decisions based on economic principles.  PEDF also raised issues related to DCNR’s mission statement regarding extraction and sale of oil and gas for the benefit of DCNR and the Commonwealth.  Additionally, PEDF asked the Commonwealth Court to require DCNR to include an evaluation of the degradation of resources caused by past and present oil and gas development in the SFRMP, and to implement measures into the SFRMP that remedy the alleged degradation.

The Commonwealth Court granted DCNR’s preliminary objections and dismissed all counts.  With respect to the requests by PEDF to declare DCNR is in violation of the ERA based on specific statements in the SFRMP, the Commonwealth Court held that the SFRMP does not create legal requirements or regulations, meaning DCNR is not mandated to take any actions by the SFRMP.  Therefore, the Commonwealth Court found declaratory judgment would be inappropriate.  Similarly, the SFRMP lacked “concreteness” with respect to whether PEDF’s claims were ripe for review.  As such, PEDF’s claims would bring the court into “the realm of speculation and conjecture.”  Finally, the Commonwealth Court determined that the relief seeking general pronouncements of law with respect to DCNR’s statements runs against the proscription against advisory opinions, because there was no justiciable dispute or controversy within the meaning of the Declaratory Judgments Act.  42 Pa.C.S. §§7531-7541.…

Continue Reading Court rejects attempt to scrutinize nonbinding state agency policy under Pennsylvania’s Environmental Rights Amendment

Using his Presidential platform, Joe Biden announced his Build Back Better Plan, “a national effort aimed at creating the jobs we need to build a modern, sustainable infrastructure now and deliver an equitable clean energy future.” As part of this plan, Biden intends to make a $2 trillion accelerated investment to set the United States…

On Friday, June 25, 2021, the U.S. Supreme Court reversed a Tenth Circuit Court decision that had vacated an Environmental Protection Agency (“EPA”) exemption relieving small refineries from the fuel blending requirements of the Renewable Fuel Program (“RFP”), codified by 42 U.S.C. § 7545(o). The decision represents a huge victory for small refineries.

In an effort to reduce greenhouse gas emissions and reduce America’s dependence on imported oil, Congress created the Renewable Fuel Program in 2005, and expanded it in 2007, to require gasoline sold in the United States to contain a certain blend of renewable fuels. However, Congress created a temporary small refinery exemption to avoid disparately impacting small refiners (defining a “small” refiner as one with an average daily crude oil throughput of 75,000 barrels or less). Although the exemption applied through 2011, any small refinery could petition the Department of Energy for a two-year extension of the exemption. After two years, Congress permitted small refineries to petition for additional extensions of the exemption in circumstances of “disproportionate economic hardship,” as determined by the EPA.

The Court’s decision in HollyFrontier Cheyenne Refining, LLC, et al. v. Renewable Fuels Association et al. considered whether the EPA could grant an extension to small refineries that did not continuously receive a hardship exemption each year since 2011. Renewable fuel producers argued that small refineries must have a continuous, unbroken exemption to be eligible for an extension. However, the Court held that the statutory language of the RFP, under 42 U.S.C. § 7545(o), imposed no continuity requirement upon small refineries, confirming that a small refinery that previously received a hardship exemption may obtain an extension even if it did not continuously receive the exemption.…

Continue Reading Supreme Court Update: Supreme Court reaches decisions on HollyFrontier and PennEast Pipeline cases

The regular session of the Texas Legislature came to a fraught end on May 31, 2021. The political spectacle in recent days capped off a legislative session dramatically interrupted by a winter storm in February that crippled much of the state with snow, ice, and power outages. That natural disaster led to intense scrutiny of the state’s power distribution infrastructure and calls to weatherize the power grid.

In response, the Texas Legislature approved legislation aimed at addressing some of the infrastructure issues caused by the storm. The Legislature’s response to the storm understandably received much attention. Perhaps this allowed another energy infrastructure bill—one that makes a big statement in terms of energy and climate policy—to pass without similar attention.

House Bill 17 passed the Texas Legislature earlier this year and was signed into law by Governor Abbott on May 18, 2021. The law prohibits Texas localities from restricting or discriminating against utility infrastructure based on the type or source of the energy delivered to the end-use customer. The law also prohibits Texas localities from imposing additional charges on development and building permit applicants that encourage or discourage the installation of infrastructure based on the type or source of energy. While not expressly stated, the intent of the bill is to prohibit localities from phasing out natural gas and its infrastructure.…

Continue Reading Texas keeps the gas taps flowing, but will others do the same as energy infrastructure takes center stage?

Last week the EU Commission announced that the ‘public consultation’ phase of its Sustainable Products Initiative is now open. This begins the next step in the process, following the conclusion of the ‘feedback period’, which closed in November 2020.

More detail on what the Commission aims to achieve through this initiative is available in our…

Beginning in May 2021, California Air Resources Board (“CARB”) enforcement staff will begin additional analysis of fuel samples taken during ocean-going vessel inspections. CARB is seeking to improve compliance due to changing international regulatory sulfur limits, which has created situations where a vessel’s fuel may meet international and California regulatory sulfur limits, but not meet…