The Nickel Report

On November 16, 2022, the California Air Resources Board (CARB or the Board) proposed a new Scoping Plan for the reduction of greenhouse gas (GHG) emissions.  Generally, the Scoping Plan is a means by which the Board can assess California’s progress toward achieving carbon neutrality by 2045, and issue new policies and strategy to meet that goal.  The Board is required by law to update the Scoping Plan every five years, and this is the third such update since the California legislature enacted the California Global Warming Solutions Act in 2006.  CARB staff are touting the Scoping Plan not only as reducing GHG emissions, but also as leading to the creation of four million new jobs and the avoidance of $200 billion in pollution-related health expenditures.

On November 28, 2022, the Council of the European Union (EU) formally adopted the Corporate Sustainability Reporting Directive (CSRD), following the European Parliament’s formal adoption of the directive earlier last month. The CSRD is a broad environmental, social, and governance (ESG) reporting framework that will impose uniform, mandatory reporting requirements on many companies with European operations, including companies not based in Europe.

Carbon Capture and Sequestration Will Be Necessary to Meet State Climate Targets

On November 16, 2022, the California Air Resources Board (CARB) released its proposed final “2022 Scoping Plan for Achieving Carbon Neutrality” (Scoping Plan). The proposed final Scoping Plan—California’s fourth roadmap for mitigating climate change—lays out a path for California to achieve carbon neutrality and reduce anthropogenic emissions to 85 percent below 1990 levels by 2045.

On 6 September, the US EPA released its proposed rule to add perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) to the list of hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund.

If finalized, these hazardous substance designations could have a significant impact on many industries, from creating new reporting obligations to increased compliance, enforcement and litigation risks related to site cleanup.

Click here to read the full article, published in Chemical Watch.

In Executive Order 14008 President Biden paused oil and gas lease sales on public lands and offshore waters. Thereafter, the Bureau of Ocean Energy Management (BOEM) canceled Lease Sales 258 (in Alaska's Cook Inlet) and 259 (in the Gulf of Mexico). Congress, however, required BOEM to hold both lease sales in the Inflation Reduction Act (IRA).

Below, we briefly summarize recent developments for each lease sale and subsequent opportunities available to upstream oil and gas companies.

The Biden-Harris administration is taking new steps to put some teeth into its emphasis on addressing environmental justice (EJ). Two recent developments are worth noting given the potential impact on projects and communities. 

One, EPA announced on September 24, 2022 that it is launching its new Office of Environmental Justice and External Civil Rights (OEJECR or EJ Office). Establishing the EJ Office on par with other key EPA offices, such as the Office of Air and Radiation, the Office of Enforcement and Compliance Assurance, and the Office of Land and Environmental Management, signals the emphasis that the Biden-Harris administration is placing on EJ.

Two, in August 2022, EPA’s Office of General Counsel (OGC) issued a guidance document entitled Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions (EJ FAQs) that outlines EPA’s current views as to how federal, state, and local permitting agencies can meet the requirements of civil rights laws when they are administering environmental permitting requirements. The FAQs document signals greater focus on environmental justice in permitting, even noting that denial of permits based on environmental justice or civil rights concerns may be appropriate in some cases.

On October 18, 2022, the Department of the Interior announced that the Bureau of Ocean Energy Management (BOEM) will hold an offshore wind energy lease sale on December 6, 2022, for areas on the Outer Continental Shelf (OCS) off central and northern California.

This will be the first-ever offshore wind lease sale on America’s west coast and the first-ever U.S. sale to support potential commercial-scale floating offshore wind energy development. Auction details, lease terms, and qualified bidding companies that can participate in the auction will be outlined in a Final Sale Notice (FSN) to be published in the Federal Register later this week.

The Texas Commission on Environmental Quality (TCEQ) is inviting informal public comment on the draft TCEQ Regulatory Guidance Document for Evaluation of Regionalization for Potential New Wastewater Systems (“Draft Regionalization Guidance”). Under Section 26.081 of the Texas Water Code, TCEQ is required to implement a policy to “encourage and promote the development and use of regional and area-wide waste collection, treatment and disposal systems to serve the waste disposal needs of the citizens of the state and to prevent pollution and maintain and enhance the quality of the water in the state.”

On September 30, the US Fish and Wildlife Service (USFWS or Service) published proposed rule that would revise the regulations governing the issuance of eagle take permits (ETPs) under the Bald and Golden Eagle Protection Act.  87 Fed. Reg. 59,598 (September 30, 2022). In the preamble to the proposed rule, the Service acknowledges that its current ETP regulatory process, first established in 2009 and revised in 2016, is not working as intended.  In particular, the Service notes that “[w]hile there are more than 1,000 wind-energy projects on the landscape, the Service has received fewer than 100 applications from those projects and has currently issued only 26 permits since the promulgation of the 2016 Eagle Rule.”  87 Fed. Reg. at 59,602.

Beginning with the inauguration of Ronald Reagan in 1983, each newly inaugurated president from a different political party than his predecessor has ordered the withdrawal from the Office of the Federal Register (OFR) of all pending regulations that have not yet been published.  86 Fed. Reg. 7425 (Jan. 28, 2021) (Biden); 82 Fed. Reg. 8346 (Jan. 24, 2017) (Trump); 74 Fed. Reg. 4435 (Jan. 26, 2009) (Obama); 66 Fed. Reg. 7702 (Jan. 24, 2001) (Bush); 58 Fed. Reg. 6074) (Jan. 25, 1993) (Clinton); 46 Fed. Reg. 11,227 (Feb. 16, 1981) (Reagan). The incoming presidents have used this approach to advance their policies as opposed to being constrained by the policies of their predecessors reflected in such “midnight rules.” The D.C. Circuit, in Humane Society v. U.S. Dept. of Agric., No. 20-5291 (D.C. Cir. July 22, 2022), has limited the rules that can be withdrawn under this long-standing approach.