Like many companies in other sectors, oil and gas companies are increasingly confronted with the need to address Environmental, Social and Governance (“ESG”) imperatives in their businesses. Traditionally viewed as ‘license to operate’ issues—effectively ensuring that companies continued to have ‘social permission’ to operate—these considerations have assumed an ever-greater importance as companies face both an accelerating energy transition and increased shareholder activism and government regulation. But, whilst many companies are keen to demonstrate their ESG credentials, they are hampered in doing so effectively by an absence of globalised standardised ESG metrics. Continue Reading
Canada Given Green Light to Carbon Pricing: The Supreme Court of Canada Upholds the Greenhouse Gas Pollution Pricing Act
On March 25, 2021, the Supreme Court of Canada upheld the Greenhouse Gas Pollution Pricing Act (“GGPPA”), which establishes a national pricing benchmark for greenhouse gas (“GHG”) emissions. Reference re Greenhouse Gas Pollution Pricing Act, case numbers 38663, 38781, and 39116. Several provinces challenged the law, arguing that it was unconstitutional and that it imposed unlawful taxes. In upholding the constitutionality of Canada’s federal pricing program, the decision is a strong affirmation of the need to impose a uniform price on carbon emissions across jurisdictions and has some significant “upshot” implications for businesses and policymakers in the United States. Continue Reading
Hydrogen Policy Development in the UK
The UK Government has set itself very stretching emissions targets. A reduction of 68% on 1990 levels by 2030 and a Net-Zero target by 2050. To achieve these goals, the UK established a Committee on Climate Change with responsibility for setting a credible roadmap. It does this though a series of four-year Carbon Reduction Budgets, starting in 2008. The UK met the First and Second Budgets and is on course to meet the Third Budget. However, it is not on course to meet the Fourth and Fifth, covering the period 2023 – 2032. The CCC has set out five main measures to span the gap between the ambition of the 2050 Net-Zero Target and the reality of missing the next two Carbon Budgets. Two of those measures are demand-side. Of the remaining three measures, two involve the increasingly extensive use of hydrogen. Continue Reading
A Property Right To Exclude Others: Cedar Point Nursery’s Implications For Regulatory Enforcement
The Supreme Court recently heard oral argument in Cedar Point Nursery v. Hassid (No. 20-107), a case that has generated considerable amicus participation and press coverage. In that case, union organizers, relying on a California law, entered the property of a fruit nursery with bullhorns in hand in order to urge unionization directly to the employees. Cedar Point argued that the California access regulation is a taking of property under the Fifth Amendment because it interferes with its fundamental right to exclude persons it does not wish to have on its property. The Ninth Circuit rejected the takings claim, and the Supreme Court granted certiorari. During oral argument on March 22, the Court appeared to be seeking a way to draw a line between per se takings and the government’s right to access property for traditional police and enforcement purposes. How the Court’s opinion deals with this issue remains to be seen. Continue Reading
New Environmental Enforcement Flexibilities in the Biden Administration: What you Can Do Now To Benefit from a Powerful Tool for Resolving Controversies
The Biden Administration has signaled its willingness to resume the practice of including supplemental environmental projects (SEPs) in settlements by swiftly revoking Trump Administration memoranda which formally eliminated their use. This is an important development that regulated entities can benefit from when they face investigations and enforcement proceedings. Although further clarification from the Department of Justice is expected in this area, targets in potential enforcement actions can begin to prepare now. Continue Reading
FERC Assesses Impact of Pipeline Project’s GHG Emissions On Climate Change
The Federal Energy Regulatory Commission (FERC) has for the first time ruled on whether the greenhouse gases (GHG) emitted during the construction and operation of a proposed natural gas pipeline has a significant impact on climate change in determining whether to authorize a project as consistent with public convenience and necessity under Section 7 of the Natural Gas Act. In earlier orders, FERC concluded that it was unable to assess the significance of a project’s GHG emissions or those emissions’ contribution to climate change. In a recent order approving Northern Natural Gas Company’s proposal to replace a pipeline segment, FERC stated that is no longer the case and then assesses the significance of the project’s GHG emissions and their contribution to climate change. Continue Reading
FERC Upholds Rule Opening Electricity Markets to Distributed Resource Aggregators and Acts to Restrict State Regulator Interference
In two recent orders, the Federal Regulatory Energy Commission (FERC) continued its push to enable distributed energy resource (“DER”) aggregators to compete in organized wholesale electricity markets. DERs are located on the distribution system or behind the customer meter, and include electric storage resources, intermittent generation, distributed generation, demand response, energy efficiency, thermal storage, and electric vehicles and their charging equipment. Aggregators may aggregate multiple small DERs as a single resource to compete in the market. Continue Reading
FERC to Address Electrification and the Grid of the Future
FERC has opened a proceeding regarding the shift from non-electric to electric sources of energy at the point of final consumption, such as to fuel vehicles and to provide heating and cooling, including process heat at industrial facilities. To that end, FERC announced an April 29, 2021 conference “to initiate a dialog between Commissioners and stakeholders on how to prepare for an increasingly electrified future.” Continue Reading
Biden Issues Interim Social Cost of Carbon, Paving the Way for A Climate Agenda
The Biden Administration has promulgated interim figures for the social cost of carbon (SCC), which will support key policy efforts in the next year until a final, revised figure can be established. Continue Reading
FERC Accepts Study Agreement to Assess New Jersey Offshore Wind Deliverability
On February 16, the Federal Energy Regulatory Commission (FERC) issued an order accepting an executed State Agreement Approach Study Agreement (Study Agreement) between PJM Interconnection, L.L.C. (PJM) and the New Jersey Board of Public Utilities (NJ BPU), pursuant to which PJM will solicit project proposals to expand or upgrade its transmission system to provide for the deliverability of 7,500 MW of offshore wind into New Jersey by 2035. New Jersey is the first state in the PJM region to use the State Agreement Approach, a supplementary transmission planning and cost allocation mechanism in PJM’s Operating Agreement designed to meet states’ public policy needs. Continue Reading
