As we enter into our 7th year of publishing Currents, we want to thank our readers who have consistently engaged with this publication and our attorneys regarding these important energy topics. We have tried to be broad in our search for a variety of subjects, while focusing on the importance of those issues to our clients and readers. We keep that goal in mind as we look forward to 2023. As always, if you have a topic of specific interest or have any suggestions regarding Currents, please let us know. Your opinion and input are invaluable to the success of this publication.
We do want to mention a couple of events that you and/or your colleagues may find interesting.
We are hosting the 2023 National Labor and Employment Law Symposium February 5-8 in Park City, Utah. This event will feature roundtable, interactive, employment law discussions with more than 20 speakers representing in-house counsel, management and plaintiff. You will hear both the plaintiff and defense sides of important labor and employment issues. And, you will learn and network with colleagues in your practice area from across the U.S. Click here to learn more and register.
On January 24 and 25, we are sponsoring the 2023 West Virginia Economic Development Council Legislative Conference. Click here to learn more and register.
As always, thank you for reading.
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“A controversial natural gas pipeline in West Virginia appears dead for now after it failed to make next year’s spending bill from Congress.”
Why this is important: With apologies to Mark Twain, the reports of the Mountain Valley Pipeline’s death are (slightly) exaggerated. While Senator Joe Manchin’s permitting reform bill (which would eliminate the MVP permitting obstructions) failed to win political approval to include in a defense authorization bill in the 2022 congressional session, the bill could be re-introduced in 2023 by Manchin or another lawmaker. However, the battle continues with the U.S. Forest Service’s draft Supplemental Environmental Impact Statement, which proposes (for a third time) a plan to run the 42-inch diameter pipeline through 3.5 miles of the Jefferson National Forest. Public comment on the draft is due February 6. The same legal and regulatory battles to revoke the permit are expected, and it remains to be seen if Manchin’s bill will be re-introduced in the new congressional session. --- Matthew P. Heiskell
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“Glencore is one of the world’s largest producers and traders of the fossil fuel used in power generation and record prices of the commodity helped add some $10 billion to its earnings in the six months to June.”
Why this is important: International investors with $2.2 trillion in assets are asking Glencore PLC to show how its development of thermal coal mines meets the goals of the Paris Climate Accord to keep global warming to 1.5 degrees. Glencore, one of the world’s largest producers and traders of the fossil fuel used in power generation, has seen record high coal prices add $10 billion to its earnings in the six months to June. In 2021, Glencore produced 103.3 million tons from mining in Australia, South Africa and Columbia. Both internationally and in the U.S., many companies are seeing pressure from institutional investors to produce less coal to slow global warming. --- Mark E. Heath
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“While the Department of Environmental Protection has collected more than $1.3 million in fines, reporting requirements are routinely flouted and improperly abandoned wells present environmental hazards to the public — as well as new burdens on taxpayers, who could be on the hook to pay for environmental remediation.”
Why this is important: This article discusses the significant challenge to the Commonwealth and operators of abandoned wells, primarily older, conventional vertical wells (as opposed to newer horizontal wells in the Marcellus). PADEP plugged 18 wells in 2020 at roughly $83,333 per well. While some federal funding is coming, it won’t scratch the surface to close all of the abandoned wells in Pennsylvania. To close the gap, owner/operators in Pennsylvania can expect increased enforcement efforts and more fines and penalties. --- James D. Elliott
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“The Richmond based utility is evaluating several sites in Southwest Virginia, including retired fossil fuel plants and former coal mines.”
Why this is important: Many utilities across the United States have announced plans to deploy Small Modular Nuclear Reactors (“SMR”). The 2032 date is the earliest anticipated date that SMRs would be commercially available. In the fall of 2022, Dominion Energy filed its Integrated Resource Plan with the Virginia State Corporation Commission, which is its 15-year plan for meeting its customers’ energy needs. In that filing, the company disclosed its intent to pursue SMRs by 2032. Whether Dominion Energy will actually deploy SMRs by 2032 remains to be seen. Appalachian Power Company is another utility interested in SMRs. At present, SMR technology is in various pilot stages around the country as approval is sought from the Nuclear Regulatory Commission (“NRC”). Moreover, Dominion Energy would need to make a filing with and obtain approval from the Virginia State Corporation Commission in order to pursue such a resource. If SMRs become commercially viable, they could become a reliable, carbon-free resource that help reduce carbon emissions. --- Carrie H. Grundmann
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“The EPA is also seeking comments on lowering the decade-old standard to 8 µg/m3 or 11 µg/m3.”
Why this is important: The EPA is considering changing the PM 2.5 rule for power plants by lowering the level of emissions from coal-fired electrical generation plants. The changes would reduce fine particulate matter standards and could result in coal-fired electrical generation plants closing early. Coal plant owners in non-attaintment areas for a revised standard will have to meet requirements outlined in any approved state plans for meeting the federal PM 2.5 limit, according to Julia Criscuolo, ESAI Power manager of renewables and emissions. They may also have to meet “good neighbor” requirements if emissions from their state prevent other states from meeting the standard, she said Thursday in an email. EPA is taking comments now and hopes to finalize a rule by August. --- Mark E. Heath
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“As climate activists in Germany occupy the village of Lützerath to protest the expansion of a coal mine, politicians and the public are posed a question by the dirtiest fossil fuel.”
Why this is important: Due to the Ukraine invasion and disruption of gas markets in Europe, Germany has increased coal mining to make electric power. This has included reopening coal mines and mining brown coal, with lower BTU levels, to generate power and meet its energy needs. To return to its previous coal mining levels to reduce greenhouse gases, Germany now plans to phase out the use of coal for electric generation by 2030, eight years earlier than previous projections. --- Mark E. Heath
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"’An act regulating the terms and conditions of certain leases regarding natural gas and oil,’ further providing for definitions, for payment information to interest owners and for accumulation of proceeds from production.’”
Why this is important: In November 2022, the Pennsylvania General Assembly amended the Oil and Gas Lease Act of 1979. The amendments amended/changed certain definitions and expanded the information payors need to provide on “check stubs” to royalty owners in an effort to better explain charges/fees/deductions from the royalty payments. The amendments set certain timeframes for payments to royalty owners. Operators need to be familiar with the amendments as they go into effect Friday, March 3, 2023. --- James D. Elliott
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“New evidence from an economic analysis considering international markets suggests an important reason why subsidies should be higher than the price put on carbon emissions to incentivize their reduction.”
Why this is important: Government subsidies that provide incentives to create active and passive carbon capture technologies would promote a more comprehensive approach to the reduction of carbon emissions. Expanding carbon capture processes to an operating scale will create a needed limit on future emissions during the time needed for renewable energy sources to replace fossil fuels. --- William M. Herlihy
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“Hydro and World Wide Wind will jointly develop a wind turbine prototype that they say will be uniquely designed for floating deep-water offshore conditions.”
Why this is important: The size of wind turbines, including those than can be mounted off shore, are growing significantly. A new sea-based tower by Hydro and World Wide Wind will float with its generator in its base. The tower has curved, alternating rotating blades. The two blades are mounted inverted on the columns. The towers will tilt with the winds and the sea - like a sail powered ship does. In addition, traditional wind towers are getting bigger. China has unveiled a new 18 MW wind turbine. It has an 853 foot rotor diameter and 420 foot blades. The rotors, while turning, will cover 570,487 square feet with each full rotation. One tower will produce 74 million-kilowatts per year, enough to power 40,000 households per year. --- Mark E. Heath
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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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