Welcome to the ninth issue of Currents for 2022.
We are very pleased to announce that 60 of the firm's attorneys were selected by their peers for inclusion on the 2023 Best Lawyers list, 10 were selected as Best Lawyers "Lawyers of the Year," and nine others were selected as Best Lawyers "Ones to Watch." Many of the attorneys named work in the energy law field and related practice areas. Recognition by Best Lawyers is based entirely on peer review. Its methodology is designed to capture the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. You can click here to learn more.
In addition, we are proud to sponsor the West Virginia Economic Development Council's Annual Conference, September 6-8 at the Oglebay Resort & Conference Center. On September 8, our own Josh Jarrell will be presenting - Tools for Funding Infrastructure. Please introduce yourself to Josh if you plan on attending. You can learn more here.
As always, thank you for reading.
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"Coronado Global Resources Inc., an international coal company, is committing $169.1 million toward the effort to increase capacity at its Buchanan Mine Complex to meet the growing demand for metallurgical coal, which is an important element in steel production."
Why this is important: Coronado Global Resources Inc. plans to invest $169.1 million to increase capacity at its Buchanan Mine Complex to meet the worldwide demand for metallurgical coal. The mine in Buchanan and Tazewell Counties in Virginia produces metallurgical coal used in steel making. The investment will add 181 new mining jobs over the next four years. Coronado has 600 jobs at the complex now. Coronado also operates the Logan Mine Complex in West Virginia. The worldwide demand for metallurgical coal has led to record prices this year and shows no sign of ending with the Russian invasion of Ukraine disrupting coal markets, along with rebounding economies post-COVID-19 leading to greater energy demands. --- Mark E. Heath
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"While solar leads the projected utility-scale additions for 2022 at 17.8 GW, that number is down 3.7 GW since the beginning of the year due to supply chain disruptions and other challenges."
Why this is important: This article notes the continued expansion of renewable resource additions to the grid along with the retirement of carbon-emitting units like coal and natural gas. Renewable resource additions were slowed by supply chain and other trade issues. Despite these hurdles, the article explains that the trend of increased solar and wind resources is expected to continue with passage of the Inflation Reduction Act, which will invest monies in renewable and clean energy development; however, questions remain about the speed with which that can be accomplished given the potential for ongoing supply chain issues and the need for a more robust development of the electric grid. --- Carrie H. Grundmann
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"The Inflation Reduction Act is estimated to reduce greenhouse gas emissions by a gigaton by 2030, according to the Department of Energy."
Why this is important: The Department of Energy recently announced that the Inflation Reduction Act ("IRA") will purportedly cut greenhouse gas emissions to 40 percent below 2005 levels by 2030. According to the article, the study also found that, combined with the Bipartisan Infrastructure Law passed earlier this year, federal policies "target every aspect of the energy system" and will reduce U.S. carbon emissions by nearly 1.15 billion metric tons over the next eight years. The IRA includes subsidies for both clean energy companies and for individuals buying electric vehicles and green energy resources for their homes. In total, the $369 billion dedicated to green energy and climate provisions is intended to encourage substantial changes to the U.S. energy system in the coming years, but whether that actually occurs will be an open question. --- Steven W. Lee
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"For example, starting in 2024 and running through 2032, utilities will be able to get a credit of $15 per megawatt-hour for electricity produced by existing nuclear plants."
Why this is important: Earlier this year, West Virginia Gov. Jim Justice signed a bill eliminating the state's ban on nuclear power plants. The legislation, S.B. 4, passed the West Virginia Senate and House of Delegates with no substantial opposition and became effective in May. The Inflation Reduction Act includes significant benefits for the nuclear industry that could encourage nuclear developments in West Virginia and other states through production tax credits, investment tax credits, and loan guarantees.
Starting in 2024 and running through 2032, utilities will be able to get a credit of $15 per megawatt-hour for electricity produced by existing nuclear plants. New nuclear power plants are eligible for claiming an Investment Tax Credit made available through the new law for facilities that generate energy with zero emissions and that go into service in 2025 or after. The IRA also provides funding for the Department of Energy to guarantee up to $250 billion worth of loans to revitalize energy infrastructure. Nuclear infrastructure projects could be eligible for this loan guarantee program.
Construction of nuclear power plants typically takes more than five years, so it is unlikely that the production tax credits will be utilized in West Virginia. However, the investment credits and loan guarantees could help jump-start nuclear construction and production in the state. Nuclear energy projects would also bring jobs to the state. Among surrounding states, there are a combined 8,500 nuclear energy jobs in Maryland, Ohio, Pennsylvania and Virginia. --- Joseph C. Unger
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"The Virginia Energy Plan is a guiding document that is crafted within the first year of each governor’s administration and provides a framework for energy infrastructure in the state."
Why this is important: Virginia’s Energy Plan is often cited by parties participating in proceedings before the Virginia State Corporation Commission – the state agency that oversees electric utilities in Virginia – as justification for or against a given course of action. Any update is sure to have similar import, thus it is appropriate that Governor Youngkin has solicited feedback from interested parties. With the Virginia Clean Economy Act ("VCEA") expected to result in the transition of Virginia to a carbon-free electric grid by 2050, the next version of the Energy Plan is sure to play a guiding force in how that transition occurs. --- Carrie H. Grundmann
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"Government investing in new wave of coal-fired power plants as discourse shifts from promoting net-zero to achieving energy security."
Why this is important: Drought and heatwaves have China in an energy crisis, and it’s turning back to coal in a big way. China now proclaims energy security is a more urgent national mission than a green energy transition. In the first quarter of 2022, China approved 8.63 gigawatts of new coal plants and, in May, announced 10 billion yuan (US$1.45 billion) of investment in coal-powered electrical generation plants. China also will increase capacity of its coal mines to ensure domestic supply as the international coal market price has jumped amid Russia’s invasion of Ukraine. This rapid growth in the world’s biggest economy will make it difficult to reduce greenhouse gases worldwide. --- Mark E. Heath
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"The deal appears to pertain to both the environmental review process broadly and more immediately to a natural gas pipeline in West Virginia that he has long sought."
Why this is important: The opposition of environmental groups to the permitting reforms proposed under the recent Inflation Reduction Act is short sighted. The prolonged and overly complicated federal review of improved electric power interconnection and transmission facilities has slowed and in some cases prevented the completion of new clean energy projects. Shovel-ready solar and wind projects have been cancelled or suffered prolonged delays because of the length of time required for the environmental approval of permits for the enhanced facilities necessary to connect those projects to the power grid. The establishment of definite timeframes for the review of applications for such permits would actually serve the larger environmental goal of accelerating the deployment of clean energy sources. --- William M. Herlihy
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"The same processes that created the U.S. power system may now be preventing its transition to clean generation."
Why this is important: There are many solar and wind energy projects that have been planned, permitted and are shovel-ready. They can't be built, though, until they have permission to connect to a regional or state grid. Making those connections may involve construction of significant amounts of transmission line, and the grid managers have to assess how to balance new power additions. The interconnection review is one of the biggest impediments to adding new renewable power. --- David L. Yaussy
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"It can be scaled up to very large plants, it is firm power (available upon demand), and it produces no carbon dioxide while generating electricity."
Why this is important: Nuclear power can be scaled up to very large plants, is available upon demand and produces no carbon dioxide while generating electricity. These facts could make nuclear power critical to reducing greenhouse gases across the globe, and there is increasing consideration of using nuclear power again to generate electricity. Nuclear power was growing dramatically in the 1970s before Three Mile Island, Chernobyl and Fukushima accidents significantly stopped the industry from adding new plants. Now, studies suggest it may be time to revisit using nuclear generated power, particularly in Asia. The Asia Pacific region, which is already the source of the bulk of the world’s carbon emissions, could see significant CO2 reductions if China and India move from coal to nuclear power. --- Mark E. Heath
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"Recent research suggests that we may be able to simultaneously clean up the pollution and extract the minerals and elements needed to power green technologies."
Why this is important: The move to a cleaner and greener environment will require innovation and cooperation among stakeholders with often divergent interests. The author discusses how acid mine drainage from coal mines – which can contain critical minerals and materials like cobalt, manganese and lithium – could potentially be used to power green technologies while simultaneously removing the chemicals from local rivers and streams. The United States is highly reliant on international sources of such minerals and materials. Developing a domestic source for these minerals and materials would benefit the energy transition in this country. --- Carrie H. Grundmann
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Here is a round-up of the latest statistics concerning the energy industry.
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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