Facing growing criticism that they impede sustainable development goals, investment protections afforded by traditional international investment agreements (IIAs) are steadily eroding. Increasingly, the trend is toward provisions allowing host states greater flexibility to regulate environmental, transparency, human rights and other social impacts. At the same time, enhanced corporate social responsibility (CSR) obligations have become more common in recent IIAs.

Moreover, when evaluating investor claims, such as those grounded in stabilization or “fair and equitable treatment” (FET) provisions, arbitration panels often evaluate the reasonableness of both host state and investor conduct. Panels are less likely to find expropriation or protectionist intent, for example, if state action is deemed a reasonable exercise of bona fide regulatory discretion. If investor conduct is deemed unreasonable or unlawful, however, arbitral panels are more likely to reduce any damages award, to deny the investor’s claim and even to award costs to the host state in extreme cases. While arbitral decisions may not represent binding precedent, combined with evolving IIA language, they provide valuable insights on current trends impacting investor risk. Continue Reading Eroding Investor Protections: Managing CSR and Political Risk in the Sustainable Brave New World

Even as COVID-19 is altering daily routines and operations within the federal agencies, all indications are that natural resource agencies continue to work on agency priorities and to advance the regulatory agenda.  Agencies including the Environmental Protection Agency (EPA), US Army Corps of Engineers (Corps), US Fish & Wildlife Service (FWS), Natural Marine Fisheries Service (NMFS), and Council on Environmental Quality (CEQ) have not indicated any plans, at this point, to delay their efforts on the Administration’s key initiatives. Public interest groups and organizations representing state and local officials have asked the White House to freeze rulemakings that are not directly related to the COVID-19 response effort.  EPA has responded to these requests by noting that it continues to be open for business and is fully functioning.

For an an update on regulatory actions underway in the natural resources arena, see our sister site, The Nickel Report.

Following Governor Abbott’s recent proclamation of a state of disaster in Texas due to the COVID-19 pandemic, both the Texas Commission on Environmental Quality (TCEQ) and the Railroad Commission of Texas (RRC) have issued guidance for regulated entities relating to environmental compliance concerns as well as other useful information relative to agency operations during these uncertain times. Continue Reading TCEQ and RRC Issue COVID-19 Regulatory Guidance

On March 20, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) Office of Pipeline Safety issued a Notice to gas and hazardous liquid pipeline, underground natural gas storage and liquefied natural gas (LNG) facility operators, as well as PHMSA state partners, explaining that it will stay enforcement of certain PHMSA pipeline safety requirements in light of the President’s March 13, 2020, Declaration of National Emergency relating to COVID-19. The Notice acknowledges that operators may have limited personnel resources in light of the COVID-19 National Emergency and may need to take actions to meet ongoing operational and maintenance needs in a manner that “may not fully meet federal operator qualification (OQ), control room management (CRM), and employment drug testing requirements.”

In light of these circumstances, the Notice explains that PHMSA “does not intend to take any enforcement action with regard to OQ and CRM requirements, and will consider exercising its enforcement discretion with regard to Part 199 drug testing requirements.”

Continue Reading PHMSA Issues Notice of Stay of Enforcement to Pipeline Operators

On March 2, 2020, the Environmental Protection Agency (EPA) proposed its new Multi-Sector General National Pollutant Discharge Elimination System Permit (MSGP), which authorizes the discharge of stormwater associated with industrial activity. 85 Feb. Reg. 12,288 (March 2, 2020). The 2015 MSGP expires on June 4, 2020. The MSGP authorizes stormwater discharges associated with a wide range of facilities and activities, including oil and gas, mining and mineral processing and manufacturing, among other operations.

The MSGP authorizes discharges in only those states where EPA is still the NPDES permitting authority (Idaho, Massachusetts, New Hampshire and New Mexico), Indian country, US Territories and other select jurisdictions. However, most states model their state-specific industrial stormwater permits on the EPA’s MSGP, which makes this permit important as the trendsetter. Continue Reading EPA Proposes New Multi-Sector General Permit for Industrial Stormwater

Federal environmental reviews are high on the list of project time, costs and risk drivers. National Environmental Policy Act (NEPA) analysis and Endangered Species Act (ESA) Section 7 consultation are often chief among those drivers. The impact of preparing an Environmental Impact Statement or Biological Opinion (such as scheduling; consultant, mitigation and market opportunity costs; and litigation risks) often turns on the scope of analysis, which in turn depends on determining which effects will be caused by the action. In August 2019, the US Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) established, for the first time, a regulatory causation standard governing ESA section 7 consultations, and, in January 2020, the Council on Environmental Quality (CEQ) proposed a new rule clarifying the causation standard and scope of review under NEPA. Continue Reading Streamlining NEPA and ESA Reviews: Importance of the Scope of Analysis

Since the first Gulf of Mexico rig was installed in 1947, over 12,000 offshore oil and gas platforms have been installed globally. A 2016 study forecasts 600 will require decommissioning by 2021 and 2,000 more by 2040 at a cost of US$210 billion. Many newer platforms are sited in deeper waters, facing higher decommissioning costs and complexity.

The 1958 UN Convention on the Continental Shelf and 1972 London Convention broadly prohibited ocean “dumping.” Subsequent frameworks recognize exceptions permitting in situ offshore structure decommissioning consistent with internationally recognized standards. The 1982 UN Convention on the Law of the Sea (UNCLOS), for example, requires member states adopt rules no less stringent than the London Protocol, amending the original Convention to allow deliberate placement of subsea structures in defined circumstances. Thus, in situ offshore platform decommissioning has been recognized as conforming with governing treaties and legal frameworks. Continue Reading Offshore Platform Sustainable Decommissioning – “Rigs to Reefs” Goes Global

The reach of the CWA is “notoriously unclear.” Sackett v. EPA, 132 S. Ct. 1367, 1375 (2012) (Alito, J., concurring). It can be difficult for a landowner to understand whether wetlands or a small creek on his or her parcel, for example, are federal waters that require a Clean Water Act (CWA) permit before the landowner can begin work to build a home, develop the property, or cultivate the land. Last week, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) (together, the Agencies) issued a new, long-awaited final rule, titled the “Navigable Waters Protection Rule,” which seeks to streamline and clarify the geographic scope of federal CWA jurisdiction. Continue Reading Agencies Release Final Rule Clarifying Federal Jurisdiction Under the Clean Water Act

On January 9, 2020, the Council on Environmental Quality (CEQ) released its highly anticipated proposed rule to improve its National Environmental Policy Act (NEPA) regulations. The proposed changes would be the first comprehensive amendment of the NEPA regulations since their original publication in 1978. CEQ’s proposed changes are designed to streamline and speed the NEPA review process, clarify important NEPA concepts, and codify key guidance and case law. CEQ’s Proposal is informed by comments it received on last year’s Advanced Notice of Proposed Rulemaking.

NEPA requires that federal agencies analyze the environmental effects of their proposed federal actions. This means that virtually any project that requires a federal permit or authorization could be required to undergo a NEPA review. Development of broadband infrastructure, roads, bridges, oil and gas pipelines, and renewable energy facilities are just a few examples of the types of activities that could trigger NEPA. A NEPA review can take significant agency and applicant resources, can substantially delay permits and can provide a basis for a federal court challenge to the project. Continue Reading CEQ Unveils Long-Awaited Proposal to Improve NEPA Regulations

On January 9, 2020, conservation groups filed a second phase of litigation in the DC District Court challenging the Bureau of Land Management’s (BLM) issuance of over 2,000 oil and gas leases across five western states citing climate change concerns. The groups are requesting that the court, among other things, vacate all 2,000 leases and require the BLM to conduct additional climate change impact analysis for each lease. Continue Reading ENGOs Challenge BLM’s Approval of Over 2,000 Oil and Gas Leases