Federal Bill Proposes Streamlined Pipeline Permitting, Vesting Authority in FERC

On July 19, 2017, Republicans in the U.S. House of Representatives passed legislation that grants the Federal Energy Regulatory Commission (“FERC”) increased autonomy over pipeline approvals.  The bill, Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 2910), is aimed at streamlining the federal permitting process for pipeline approvals.

H.R. 2901 would specify timeframes and procedures for FERC and other affected agencies to follow in conducting environmental reviews related to natural gas pipelines.  The bill would give FERC the authority to designate which other agencies will participate in the permitting and environmental review process, and FERC would hold primary authority by setting the terms of environmental reviews, requiring other federal agencies to defer to FERC.  In addition, all National Gas Act reviews would be required to proceed concurrently and finish within 90 days of the environmental review, unless otherwise mandated by law.

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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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Senate Proposes Legislation to Modernize Federal Energy Policies

On June 28, 2017, the Senate introduced a bill that aims to revitalize and overhaul various federal energy and natural resources policies.  Senate Bill 1460 (S.1460), sponsored by Senators Lisa Murkowski (R-Arkansas) and Maria Cantwell (D-Washington), broadly proposes reform of United States policies on topics such as energy efficiency, supply and conservation.  A key highlight of S.1460 is modernization of the electric grid, an issue that has often been touted as a national security concern.  Further, on the conservation side, the bill would establish a National Park Maintenance and Revitalization Fund.  While details of the bill are still forthcoming, the bill’s authors state that S.1460 will lay out a plan to strengthen the nation’s energy infrastructure.

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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.

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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. Continue Reading

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. Continue Reading

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 was discovered, then a hearing was required.  As a result of SB 5470, a single permit can cover multiple core holes and a hearing is not required, regardless of depth or discovery.  Consequently, DNR permitting of all core holes will be exempt from the State Environmental Policy Act (SEPA).  This DNR map illustrates geothermal resource potential across the state.

Some Not-So-Good News Out of Washington, D.C. for Pipeline Operators – Feds Increase Fines for Pipeline Safety Violations

President Trump’s recent executive orders have benefited the oil pipeline industry in a number of ways, including most notably, giving the final “okay” to the Dakota Access Pipeline.  But some legislative mandates have been out of the reach of the President’s pen.  On April 27, the federal Pipeline and Hazardous Materials Safety Administration (“PHMSA”), within the Department of Transportation, released a final rule revising its maximum penalties for violations of pipeline safety laws.  The rule titled, Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties, was issued pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires federal agencies to adjust their civil monetary penalties annually to account for changes in inflation.  So what’s changed?

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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

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. Continue Reading
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