Upcoming European Chemical Restrictions in Apparel Raise Concerns

The European Commission intends to ban the use in apparel of hundreds of Cat. 1A and 1B carcinogenic, mutagenic and toxic for reproduction substances (“CMRs”) within the next year. To do so, the Commission expects to use the so-called “fast-track” procedure to ban CMRs under Regulation 1907/2006 (“REACH Regulation”), instead of the standard procedure for prohibiting substances. Historically, the fast-track procedure has been reserved for mixtures that contain CMRs and are intended for the general public.  The Commission has indicated that its proposal to ban the use of CMRs in apparel is a “test-case” of its intention to also ban Cat. 1A and 1B CMRs in articles (i.e., objects) intended for consumers on a regular basis in the near future.  This fast-track procedure allows less scientific input from the European Chemicals Agency (“ECHA”) and industry, and the related restrictions would create significant barriers to international trade.  Continue Reading

OEHHA Requires Proposition 65 Warnings for BPA, Including for Items Sold Over the Internet

California’s Office of Environmental Health Hazard Assessment (OEHHA) recently took a further step toward expanding the scope of state Proposition 65 regulations to out-of-state online retailers that sell into California when it issued an emergency regulation under Proposition 65 for canned and bottled foods and beverages containing bisphenol A (BPA).[1] The emergency regulation provides recommended “safe harbor” warning language for products containing BPA, a substance commonly used to line food containers, including metal cans, bottle caps, and jar lids, and requires retailers—including online retailers if the products are offered for sale in California—to place warnings at checkout areas explaining that exposure to BPA is known to cause reproductive harm to women. Continue Reading

Strict DoD Sourcing Requirements for PV Devices

As part of an ongoing Department of Defense (“DoD”) effort to increase its energy efficiency,  late last month the U.S. Army committed to develop its largest renewable energy project to date — a 65MW  wind and solar  project at Fort Hood.  This ambitious project will need to comply with the latest DoD rules regarding sourcing requirements for photovoltaic (“PV”) devices.  We previously analyzed the proposed rule issued by DoD in May 2015 that placed stricter sourcing requirements on PV devices.  Toward the end of last year, DoD issued a final rule implementing the requirements of the proposed rule with relatively minimal, but still notable, changes.  The solicitation for the Fort Hood project was amended to add the updated DFARS clause implementing this final rule.  The final rule tightens the sourcing restrictions for PV devices and may raise some compliance challenges for contractors. Continue Reading

U.S. Supreme Court Confirms FERC’s Broad Jurisdictional Reach over Demand Response and other Activities that Affect Wholesale Electricity Markets

In FERC v. EPSA, issued on January 25, 2016, the U.S. Supreme Court ruled, in a 6-2 decision, that FERC has jurisdiction under the Federal Power Act (FPA) to regulate demand response transactions in wholesale electricity markets administered by independent system operators (ISOs) and regional transmission organizations (RTOs).  The Court also upheld, as reasoned decision-making, FERC’s determination that ISOs/RTOs should pay the same compensation (i.e., the market clearing price) to generators and demand response resources participating in the day-ahead and real-time energy auction markets.  In so holding, the Supreme Court may have paved the way for FERC to provide regulatory incentives for other emerging electricity transactions and practices that blur the historical distinction between FERC-regulated wholesale sales and state-regulated retail sales. Continue Reading

FWS to Update Regulations Governing Drilling on National Wildlife Refuges

The United States Fish and Wildlife Service (FWS) recently announced its intent to update regulations governing its management of oil and gas activities on national wildlife refuges.  The proposal responds in part to a March 2015 report by the Inspector General of the Department of the Interior, which called management of oil and gas development “inconsistent, and at times, nonexistent” due to lack of data about the locations and operational statuses of drilling wells and drilling infrastructure. Continue Reading

The European Commission Adopts Circular Economy Package

The European Commission has adopted a Circular Economy Package (“Package”) intended to create a single market for the reuse of materials and resources.  The policy initiatives discussed in the Package will impose on companies manufacturing or marketing goods in Europe additional eco-design, waste take back, and other producer responsibility requirements.  Some initiatives may also encourage the development of second hand and other alternative markets.

The Package consists of a framework Communication and various upcoming legislative and non-legislative initiatives, including:

  • legislative proposals to amend the Waste Directive, the Packaging and Packaging Waste Directive, the Waste Landfill Directive, and the Directive on Waste Electrical and Electronic Equipment;
  •  announcements of upcoming legislative proposals to amend the EU Fertilizers Regulation, to introduce new product design, and marking requirements to facilitate the dismantling, reuse and recycling of electronic displays;
  •  an initiative on Green Public Procurement; and
  •  the review of the voluntary EU eco-label criteria.

The Package is intended to replace a series of previous legislative and policy initiatives on waste and resource efficiency that, in a controversial move, the Commission withdrew earlier this year. Continue Reading

What’s the Deal with Low Oil Prices?

The International Energy Agency (IEA)’s latest monthly market report, published on November 13, 2015, revealed that the already “massive cushion” of oil stockpiles has inflated further to reach a record level of almost 3 billion barrels.  Following the announcement, oil prices reportedly dropped to a two-month low.

The IEA described this stockpile as “an unprecedented buffer against geopolitical shocks or unexpected supply disruptions.”  The glut in oil supplies is expected to maintain pressure on global oil prices, which many analysts predict will remain at the lower end of a $54-$64.0/bbl range during 2016.

In this post, we highlight two observable trends in the M&A activities of industry participants during 2015 as they navigate the current challenges facing the sector.

Continue Reading

California Enacts Law Requiring 50% Renewables By 2030

Last week, California Governor Jerry Brown signed the Clean Energy and Pollution Reduction Act of 2015.  The law establishes ambitious energy efficiency and renewable energy goals for California, including increasing from 33% to 50% the procurement of California’s electricity from renewable sources and doubling the energy efficiency savings through energy efficiency and conservation.

Key provisions of the new law:

  • Renewable Energy: California’s existing Renewables Portfolio Standards Program aims to increase the amount of electricity generated from renewable energy sources to at least 33% by December 31, 2020.  The new law increases that renewable energy target to 50% by December 31, 2030, with interim targets of 40% by the end of 2024 and 45% by the end of 2027.
  • Energy Efficiency: The new law requires the California’s Energy Resources Conservation and Development Commission to set annual targets for statewide energy efficiency savings, with the goal of doubling of statewide energy efficiency savings in electricity and natural gas final end uses of retail customers (such as homes, businesses and factories) by January 1, 2030.  California’s Public Utilities Commission must establish efficiency targets for electrical and gas corporations consistent with this goal.
  • California Independent Systems Operator (“ISO”): Current law requires the ISO to ensure efficient and reliable operation of California’s electrical transmission grid.  The new law provides for the transformation of the California ISO into a regional organization to promote the development of regional electricity transmission markets in the western states.  Specifically, the new law requires the ISO to propose governance modifications to accomplish this goal, which must be approved and implemented by the state legislature.

Cairn Energy Compels India to Engage in Arbitration Proceedings

Cairn Energy’s investment arbitration proceedings against India recently demonstrated the importance of default arbitrator nomination procedures in international arbitration.

Cairn Energy’s dispute with India

In March 2015, Cairn UK Holdings Limited received a draft assessment order from Indian tax authorities, requiring payment equivalent to US$1.6 billion, plus any applicable interest and penalties, in respect of the 2006-2007 fiscal year.[1]  The assessment was made under a 2012 law pursuant to which the Indian government has tried to tax transactions retrospectively,[2] in this case due to a group reorganization that facilitated Cairn Indian Limited’s IPO Cairn Energy, the ultimate parent company of both Cairn UK Holdings Limited and Cairn India Limited, contests the assessment.

While other companies have sought to resolve similar issues before the national Indian courts, Cairn Energy commenced a claim under the UK-India Investment Promotion and Protection Treaty, arguing that India has expropriated Cairn Energy’s investments by attaching its shares in Cairn Indian Limited.[3]  Cairn Energy filed its notice of dispute in March 2015 and appointed an arbitrator for a three-person tribunal in late May 2015.[4] Continue Reading