On June 4, 2020, the Massachusetts Attorney General (AG) filed a Petition which requested the Massachusetts Department of Public Utilities (DPU) to open an investigation into the potential changes to support the Commonwealth’s legislatively mandated greenhouse gas (GHG) emission limit reductions (the Petition).  Specifically, the AG’s Petition seeks to evaluate the industry, regulatory and policy adjustments necessary to meet the state GHG limits, and to “determine what near and long-term adjustments are necessary to maintain a safe and reliable gas distribution system and protect consumer interests as the Commonwealth transitions” to carbon neutrality by 2050.
Continue Reading Key Northeastern States Take Steps to Study the Transition to Net-Zero GHG Emissions

On May 21, 2020, the Federal Energy Regulatory Commission (“Commission”) issued a Policy Statement on Determining Return on Equity for Natural Gas and Oil Pipelines in Docket No. PL19-4-000, that revises its policy for analyzing the return on equity (“ROE”) for interstate natural gas and oil pipelines based on the methodology established for analyzing electric utility ROEs in Opinion Nos. 569 and 569-A, with certain exceptions to account for the “statutory, operational, organizational and competitive differences among the industries.” Specifically, the Commission stated that it will: (i) determine just and reasonable natural gas and oil pipeline ROEs by averaging the results of the Discounted Cash Flow (“DCF”) model and the Capital Asset Pricing Model (“CAPM”) analyses, giving equal weight to both models; (ii) retain the existing two-thirds/one-third weighting for the short-term and long-term growth projections in the DCF model; (iii) exclude the Risk Premium model as modified in Opinion No. 569-A; (iv) consider using Value Line data as the source of the short-term growth projection in the CAPM; (v) consider proposals to include Canadian companies in pipeline proxy groups while continuing to address outliers in pipeline proxy groups on a case-by-case basis, refraining from applying specific outlier tests; and (vi) encourage, or perhaps require, oil pipelines to file updated FERC Form No. 6, page 700 data for 2019 to reflect the revised ROE policy established in the Policy Statement. Importantly, parties are not permitted to seek rehearing of the Policy Statement because it is only a statement issued to provide guidance and regulatory certainty.
Continue Reading FERC Revises Policy for Analyzing Pipeline Return on Equity

Yesterday, the Railroad Commission of Texas voted by a 2-1 margin to dismiss the request that had been filed in late March of this year by two producers to determine reasonable market demand for oil and the need for curtailment of oil production in Texas.
Continue Reading Railroad Commission of Texas Votes Against Mandatory Oil Production Cuts

With oil prices plummeting and markets battered by the disruptions caused by the COVID-19 pandemic, two oil and gas producers filed a joint motion late last month for the Railroad Commission of Texas to consider curtailing oil production, an extraordinary remedy that has not been employed since the 1970s. In response, the RRC convened an initial public meeting yesterday to consider the request and comments filed by more than 50 stakeholders with, not surprisingly, wide-ranging views on the subject. Due to the significance of the issues under discussion and the potential impact on not only oil and gas producers, but also the midstream and downstream sector, the ten-hour long meeting drew a substantial audience across the country and the globe.
Continue Reading Railroad Commission of Texas Considers Oil Production Cuts

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

Regulatory staff continue to advance the Administration’s regulatory agenda, including issuing proposed and final rules. This blog post highlights the status of key natural resource regulatory actions.
Continue Reading COVID-19 and the CRA Deadline: Status of the Natural Resources Regulatory Agenda

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

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.

Continue Reading EPA Proposes New Multi-Sector General Permit for Industrial Stormwater

National Environmental Policy Act (NEPA) analyses and Endangered Species Act (ESA) Section 7 consultations are high on the list of project time, cost and risk drivers. The impact of these environmental reviews on projects often turns on the scope of those reviews, which in turn depends on determining which effects will be caused by the action. In August 2019 the US Fish and Wildlife Service and National Marine Fisheries Service established, for the first time, a regulatory causation standard governing ESA section 7 consultations, and, in January 2020, the Council on Environmental Quality proposed a new regulatory causation standard governing NEPA reviews.
Continue Reading Streamlining NEPA and ESA Reviews: Importance of the Scope of Analysis