The IRS’s much anticipated new guidance (here and here) for Section 45Q carbon sequestration tax credits was rather anticlimactic in that it focused on just two of the many issues for which the IRS had solicited comments in May 2019. Largely patterned after existing IRS guidance for renewable energy tax credits, the new
Sage-Grouse: Short Flight for Pending 10 Million-Acre Withdrawal from General Mining Law?
Secretary of the Interior Zinke has directed that the Bureau of Land Management immediately begin implementing the recommendations in his Sage-Grouse Review Team’s report, which was was released today, concerning the 2015 greater sage-grouse amendments to federal land use management plans. (Prior post on Sage-Grouse Review Team here.) Among other things, such as coordinating federal mitigation policy with state mitigation approaches, the Trump Administration will now be moving to “[r]emove all [sagebrush focal areas (SFAs)] and the management actions tied to SFAs.” This would include the pending withdrawal for up to 20 years of over 10 million acres of SFAs on public lands in six western states from mineral location and entry under the General Mining Law . (Prior posts on withdrawal here and here.) The report also recognizes a short-term “[n]eed to clarify under what circumstances or how the [land use management] plans recognize valid existing rights.” Because valid existing rights (i.e., a mining claim within which a valuable mineral deposit has been discovered) are relevant if a withdrawal is approved, this recommended clarification indicates that the Trump Administration may well withdraw the SFAs for a short time while it moves forward with amending the plans to remove the SFAs altogether.
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Reconsidering Helium Production on Federal Lands Amid Privatization of Federal Helium Reserve
On Wednesday the Bureau of Land Management (BLM) will auction helium stored in its Cliffside Field underground storage facility in west Texas (aka the Federal Helium Reserve). This annual auction under the Helium Stewardship Act of 2013 is part of a privatization effort that began back in 1996 and will culminate with the BLM divesting itself of that facility by 2021. At the same time, concerns about helium supply are again rising, as production from Qatar, which accounts for 25% of global helium supply, was interrupted last month by an economic boycott in the region. These events are prompting Congress to consider changing the nearly century-old treatment of helium under the Mineral Leasing Act of 1920.
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With Mining Law Segregation on 10 Million Acres to Expire in Three Months, Interior Forms Sage-Grouse Review Team
Late Wednesday Secretary of the Interior Zinke signed Secretarial Order 3353 establishing a Sage-Grouse Review Team to review the Obama Administration’s 2015 amendments to federal land use management plans. To avoid listing the greater sage-grouse under the Endangered Species Act, those plan amendments had proposed that over 10 million acres of “sagebrush focal areas” on public lands in six western states be withdrawn from mineral location and entry under the General Mining Law for up to 20 years. The new Sage-Grouse Review Team’s work will include recommending changes to the amended plans that “give appropriate weight to the value of energy and other development on public lands within BLM’s overall multiple-use mission.” Comprised of representatives from various Department of the Interior agencies and working with the U.S. Forest Service and state agencies, the Sage-Grouse Review Team is to provide a written report on or before August 6, 2017.
Continue Reading With Mining Law Segregation on 10 Million Acres to Expire in Three Months, Interior Forms Sage-Grouse Review Team
North Dakota’s UIC Class VI Primacy Wait is Almost Over
The U.S. Environmental Protection Agency (EPA) is poised to approve North Dakota’s application for primary enforcement authority over the underground injection of CO2 for geologic sequestration in that state. Nearly four years after North Dakota became the first state to seek primacy from EPA over carbon sequestration wells – known as Underground Injection Control (UIC) Class VI wells – EPA just published the proposed rule to effect this delegation on Friday. 82 Fed. Reg. 22,949 (May 19, 2017). The 60-day public comment period on the proposed delegation ends on July 18, 2017.
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Mining the Deep Seabed for Renewable Energy
On Friday the China Minmetals Corporation signed a 15-year contract with the International Seabed Authority (ISA) for exploration of polymetallic nodules on the deep seabed of the Pacific Ocean. The ISA has now executed nearly 30 exploration contracts for polymetallic nodules, polymetallic sulphides, and ferromanganese in the Atlantic, Indian, and Pacific Oceans. These materials are rich in minerals – such as cobalt, lithium, and tellurium – used to produce batteries and solar panels. Last month British scientists announced the discovery of a deposit of tellurium deep in the Atlantic Ocean sufficient to make solar panels capable of generating 65% of the United Kingdom’s electricity supply.
Created under the United Nations Convention on the Law of the Sea of 1982 (UNCLOS), the ISA regulates seabed activities occurring more than 200 miles offshore (i.e., beyond countries’ Exclusive Economic Zones). The mining part of UNCLOS (aka Part XI) was renegotiated in the early 1990s resulting in the 1994 Implementing Agreement. UNCLOS became effective later in 1994 when a 60th country (Guyana) ratified it. Over 160 countries have now ratified UNCLOS, but the United States has not. As a result, U.S. companies cannot pursue ISA contracts.
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Washington State Streamlines Permitting for Geothermal Exploration
On Monday Governor Inslee signed SB 5470, which the legislature unanimously passed to streamline Department of Natural Resources (DNR) permitting for drilling core holes used to gather geothermal data. Before SB 5470, each core hole required a separate permit, and if a core hole penetrated more than 750 feet into bedrock or geothermal energy
Swing and a Foul Ball? Practical Effect of Obama Administration’s Now-Defunct Coal Leasing Moratorium Likely Relatively Small
An executive order, secretarial order, and lawsuit challenging said secretarial order, all in the span of less than 36 hours and all concerning federal coal leasing. The Trump administration on Wednesday reversed a 2016 Obama administration moratorium on federal coal leasing, and environmental organizations have already filed suit challenging this change of direction. While the effect on coal mining from this Trump administration reversal is uncertain, the now-defunct moratorium likely had a relatively small practical effect on federal coal leasing.
By way of background, in January 2016 then Secretary of the Interior Sally Jewell issued Secretarial Order No. 3338. This order directed the Bureau of Land Management (BLM) to (i) prepare a Programmatic Environmental Impact Statement (PEIS) under the National Environmental Policy Act (NEPA) to review the federal government’s coal leasing program, and (ii) imposed a “pause” on federal coal leasing while the PEIS was prepared. As a result, the BLM would neither process new applications for coal leases nor conduct lease sales for pending applications until the PEIS was complete. However, Secretary Jewell’s order exempted five categories of coal leasing decisions from the moratorium (e.g., when the NEPA process had already been completed and a record of decision had already been issued by either the BLM or the applicable federal surface management agency). Yesterday, current Secretary of the Interior Ryan Zinke implemented President Trump’s Energy Independence Executive Order by revoking Secretary Jewell’s order through his own Secretarial Order No. 3348. (The executive order was not focused just on federal coal leasing. Here is an analysis of its potential impact on the broader energy industry, and here is an analysis of its rescission of President Obama’s 2015 natural resource mitigation memorandum.)
Continue Reading Swing and a Foul Ball? Practical Effect of Obama Administration’s Now-Defunct Coal Leasing Moratorium Likely Relatively Small
Idaho Modifies Oil and Gas Statutes (Again)
Both houses of the Idaho Legislature unanimously approved House Bill 301a last week following a seven-hour negotiation and two days of hearings earlier this month. Supported by Governor Otter, this bill will (among other things) amend the forced pooling provisions enacted just 12 months ago. In fact, House Bill 301a is the latest in a series of legislative actions taken since exploration and development operations commenced in western Idaho in 2010. The Idaho Department of Lands’ website shows nine producing wells plus six shut-in wells as of last month.
Changes to Idaho’s current oil and gas statutes brought by House Bill 301a include:
- Decreasing the default spacing unit for a vertical gas well from 640 acres to 160 acres and allowing federal minerals to be excluded from a spacing unit if the U.S. Bureau of Land Management fails to auction a lease for such minerals for at least six months.
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Oil Transportation and Suction Dredge Mining Legislative Topics in Washington Too
Following up on last week’s post about Oregon legislative proposals, here are some of the mineral-related bills currently pending in the Washington State Legislature:
Oil and Gas
SB 5462 and HB 1611 – These two almost identical bills are follow-ups to the Oil Transportation Safety Act that was enacted in Washington two years ago. Among other things, SB 5462 and HB 1611 would (i) require that railroads transporting crude oil and petroleum products demonstrate financial ability to pay for a “worst case spill”; (ii) obligate refineries to account for different types of crude oil in their emergency planning and training; (iii) impose a public notice requirement if a refinery proposes to export more than 10% of its annual production; (iv) allow the Department of Ecology to share confidential information regarding oil transportation with elected local officials responsible for emergency response agencies; (v) levy oil spill response and administration taxes on crude oil and petroleum products delivered via pipeline to bulk oil terminals; and (vi) give the state’s Energy Facility Site Evaluation Council (EFSEC) jurisdiction over crude oil pipelines that are at least five miles (rather than the current 15 miles) long.
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Mineral-Related Bills Pending Before Oregon Legislature
The Oregon Legislature’s 2017 session officially kicked off last week. A variety of mineral-related bills have been introduced. Here are some of the ones to follow:
Mining
SB 3 – SB 3 is primarily focused on suction dredge mining. It would build on the 2013 enactment of a moratorium, currently in effect until 2021, on the use of motorized equipment engaged in small-scale precious metal mining of placer deposits (i) within and upstream of spawning habitat for salmon and bull trout, and (ii) 100 yards upland from such areas if water quality could be impacted. SB 3 would wrap Pacific lamprey spawning habitat into the moratorium, but would eliminate the prohibition on upland use of such equipment starting in 2019. Instead, the use of such equipment, regardless of the size of the operation, within 100 yards upland of any river’s ordinary high water line would be subject to the Department of Geology and Mineral Industries’ (“DOGAMI”) existing exploration and operating permit programs, including the associated reclamation requirements. Starting in 2021, suction dredge mining would be permanently prohibited in a wide variety of locations unless the mining concerned a federal mining claim and the prohibition would violate federal law. In those areas where suction dredge mining was allowed, it would require a removal-fill permit issued by the Department of Environmental Quality (“DEQ”) rather than the Department of State Lands. SB 3 would also provide that the surface mining exclusion certificate required under ORS 517.753 only applies to commercial sand, gravel, and crushed stone operations.
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