The Nickel Report

“Decommissioning” is the process of terminating oil and gas operations at offshore platforms. It includes dismantling and removal of platforms and related infrastructure to restore the ocean and seafloor to pre-lease conditions. As elaborated in a prior post, decommissioning may involve partial structure removal or toppling in place, including the creation of artificial reefs. The U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) estimates that about 3,700 active oil and gas platforms are under its jurisdiction, 40 percent of which are over 25 years old and likely to require decommissioning soon.

California Gov. Jerry Brown signed SB 1371 nearly six years ago, directing the California Public Utilities Commission and the California Air Resources Board to work together to further the dual goals of minimizing safety hazards associated with gas pipeline leaks and reducing pipeline greenhouse gas emissions.

On June 4, 2020, the Massachusetts Attorney General’s Office (AGO) filed a Petition requesting the Massachusetts Department of Public Utilities (DPU) to open an investigation into potential changes to natural gas distribution operations to support the Commonwealth’s legislatively mandated greenhouse gas (GHG) emission limit reductions (the Petition).

On September 6, Assistant Secretary of Energy for Electricity Bruce Walker issued an order under Section 202(c) of the Federal Power Act declaring an emergency shortage of electric generation and directing the California Independent System Operator (CAISO) to require the dispatch of electrical output from specified electric generating units, if the CAISO determines the generation is necessary to meet demand.  The order applies during afternoon and evening hours from September 6 through September 13, 2020.

The US Securities and Exchange Commission (SEC) has adopted amendments to modernize its Regulation S-K and thereby change the rules related to environmental disclosure requirements and increase the reporting threshold for disclosure of actual or potential environmental penalties.[1]  In doing so, the SEC is updating rules that have not been revised significantly in 30 years.  Proposed last year as part of the SEC’s Disclosure Effectiveness Initiative, [2] the amended rules, which were adopted on August 26, 2020, are intended to improve disclosure for investors and simplify compliance for registrants.  As described in the rule preamble, the amendments are “intended to improve the readability of disclosure documents, as well as discourage repetition and disclosure of information that is not material.” [3]

As I have reported previously, the US Court of Appeals for the DC Circuit issued a significant decision in September 2019 on EPA’s implementation of the so-called “Good Neighbor Provision” of the federal Clean Air Act (CAA). That is the CAA’s principal provision addressing what is often termed “interstate transport,” the physical process in which emissions from cars, trucks, factories, power plants, and myriad other sources—and the resulting air pollution—are carried by prevailing winds across state borders. The main purpose of the Good Neighbor Provision (section 110(a)(2)(D)(i)(I) of the CAA) is to prevent “significant contribution” by “upwind” states’ emissions to violations of national ambient air quality standards (NAAQS) in “downwind” states. Although states have the principal responsibility to implement this provision, EPA periodically has invoked its CAA authority to impose requirements to curb interstate transport when it determines upwind states have not adopted adequate controls.

Determining which areas constitute habitat for listed species has important consequences under the Endangered Species Act (“ESA” or “Act”), yet “habitat” is not currently defined by the Act or its implementing regulations.  On August 5, 2020, the US Fish and Wildlife Service and the National Marine Fisheries Service (jointly, “the Services”) proposed a rule to define “habitat” for purposes of designating “critical habitat” under section 4 of the Endangered Species Act.  See 85 Fed. Reg. 47,333 (Aug. 5, 2020).  The Services’ proposal responds to the Supreme Court’s November 27, 2018, unanimous holding in Weyerhaeuser Co. v. U.S. Fish & Wildlife Service, 139 S. Ct. 361 (2018), that an area is eligible for designation as critical habitat under the ESA only if the area is actually habitat for that species.  Accordingly, a final rule defining “habitat” would determine which areas of land and water are eligible for designation as critical habitat.  Such designations can affect projects that require federal agency permits or funding, because ESA section 7 consultation requires federal agencies to ensure that their actions are not likely to adversely modify or destroy designated critical habitat.  The result for federally approved or funded projects can be increased permitting costs and risks, and longer timelines.  The proposal’s comment period ended on September 4.  Over 160,000 comments were submitted.  Stakeholders now await a final rule.

As we have previously reported, in July 2020, the Council on Environmental Quality (CEQ) published its highly anticipated final rule to improve its National Environmental Policy Act (NEPA) regulations, the first comprehensive revision of the NEPA implementing regulations in over forty years.  The final rule, which has generated much controversy and spurred numerous lawsuits, goes into effect today.  This post provides a brief update on the pending litigation and implementation of the new rule.