On April 12, 2019, the US District Court for the Northern District of California entered an order vacating the Department of the Interior’s (DOI) repeal of the 2016 Valuation Rule due to violations of the Administrative Procedures Act (APA). The 2016 Valuation Rule made changes to the government’s methods for valuing oil, gas and coal produced on Federal and Indian lands. The court’s ruling on the APA claims may impact the Trump administration’s repeal and replace rulemakings that are scheduled to be finalized in the near future.
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Over the past several decades, significant tension has developed between the federal role in overseeing and authorizing certain types of energy infrastructure projects and states’ roles in regulating water quality under the cooperative federalism structure of the Clean Water Act (CWA or the Act). This tension has played itself out in various contexts, but the

In Algonquin Gas Transmission, LLC v. Weymouth Massachusetts, a First Circuit panel last month ruled that a statute of limitations defense is inapplicable to a Natural Gas Act (NGA) preemption claim against a locality. The court also held that the Federal Energy Regulatory Commission’s (FERC) longstanding policy of “encourag[ing] cooperation between interstate pipelines and

The costs of overly nationalistic policies likely outweigh the benefits for Mexico with respect to the international energy community. If the AMLO administration chooses to attempt nationalization of the considerable foreign investment which followed the 2013 Energy Reforms in an effort to stay true to its campaign rhetoric, it would not be surprising to witness Mexico’s rapid descent into international pariah status.
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Last week the Federal Energy Regulatory Commission (FERC) made some headway in how it evaluates greenhouse gas (GHG) emissions from natural gas-related projects. In recent FERC pipeline certification proceedings, the two Democrats on the Commission have been critical of how FERC addresses a project’s potential GHG emissions and climate change impacts. With only four active

“According to FERC, it is now commonplace for states to use Section 401 to hold federal licensing hostage.”

These are the words the DC Circuit used in Hoopa Valley Tribe v. Federal Energy Regulatory Commission, No. 14-1271, p. 10 (D.C. Cir., Jan. 25, 2019), to describe the state of play on § 401 certifications affecting hydroelectric facility licensing or re-licensing applications. CWA § 401(a)(1) requires, as a prerequisite for federal permits for activities that may result in a discharge into the navigable waters, that affected states certify that any such discharge will comply with applicable, enumerated provisions of the Clean Water Act. But, if a state fails or refuses to act on a request for certification within “a reasonable period of time (which shall not exceed one year) after receipt of such request,” the statute deems the certification requirements waived.
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On Friday, a court ruling provided some clarity regarding the Clean Water Act (CWA) § 401 water quality certification process. As forecasted in our November 1, 2018 blog post (below), the US Court of Appeals for the DC Circuit has ruled that a state waives its CWA § 401 authority when, pursuant to a written agreement, an applicant repeatedly withdraws and resubmits its request for water quality certification in order to restart the one-year waiver clock. Hoopa Valley Tribe v. FERC, No. 14-1271 (D.C. Cir. Jan. 25, 2019). According to the Court’s opinion, this sort of arrangement serves to circumvent the Federal Energy Regulatory Commission’s (FERC) “congressionally granted authority over the licensing, conditioning, and developing of [the] project,” and “if allowed, the withdrawal-and-resubmission scheme could be used to indefinitely delay federal licensing proceedings and undermine FERC’s jurisdiction to regulate such matters.”
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2018 was a banner year for M&A activity in the energy space, with numerous high dollar value transactions in the upstream, midstream, downstream and oil field services (OFS) segments. As investors in the public securities markets have shown a significantly decreased appetite for new issuances of equity by energy companies, the preferred exit or growth strategy for 2018 has been through strategic mergers, acquisitions or divestitures. These transactions have manifested themselves in various forms: asset acquisitions and divestitures, private equity investment into “drillcos” with strategic oil and gas companies, public-public mergers between OFS companies and upstream shale drillers, and simplification transactions by master limited partnerships (MLPs) in the midstream space. In addition to all this M&A activity, one element has become significantly more prevalent in the oil and gas industry throughout 2018 and shows no signs of letting down for 2019: water.
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In recent litigation involving the development of interstate natural gas pipelines, one of the key issues has been whether the state has waived its authority under Clean Water Act section 401 by exceeding the one-year time period. In a separate case involving a series of hydroelectric facilities, the waiver period was again directly at issue. On October 1, at oral argument before the D.C. Circuit, the parties addressed whether California and Oregon had waived their water quality certification authority by having the applicant withdraw and resubmit its request for certification over a number of years. Notably, the judges seemed to agree that FERC could make a waiver determination before the end of the one-year time limit and that withdrawing and resubmitting an application may not always restart the clock.
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The issuance of FERC and PHMSA’s Memorandum of Understanding (MOU) last month potentially signals an improved review and authorization process for Liquefied Natural Gas (LNG) projects, but only time will tell how the MOU will work in practice and if it will achieve its stated goal of increasing efficiency and effectiveness of the application review process in a manner that will “reduce expenses for LNG project applicants . . . and the U.S. taxpayer.” Perhaps as an indication of things to come in the FERC/PHMSA partnership under the MOU, FERC issued environmental schedules for twelve pending LNG projects on the very day that the MOU was issued that, according to the Commission, reflect FERC’s “efforts in recent months to streamline its review process for LNG project applications,” including by entering the MOU with PHMSA.
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