Thank you for reading our 11th and final issue of Currents for the year.
As we head toward the end of 2023, we want to thank you for reading this e-newsletter. Our goal is to provide vital information while also giving you our opinions and explanations of why these issues are important. That was our goal when we started Currents seven years ago and that will remain our goal for years to come. If you have any thoughts, questions and/or suggestions for this publication, please let us know! Your opinions are essential for this process.
We are very pleased to announce that the firm was named to the 2024 "Best Law Firms" list by Best Lawyers in 58 areas of law throughout the firm’s footprint. The rankings are based on a rigorous assessment process that involved the collection of client and lawyer evaluations, peer review from leading attorneys, and review of additional information provided by law firms. Thank you to everyone that participated in the evaluation process! You can learn more about this award and Best Law Firms here.
In our last issue, we announced attorneys Alex Turner and Malcolm Lewis would be hosting a webinar - The Road Ahead: How To Properly Collect, Store, and Use Consumer Data. If you missed the live recording, you can watch it at your leisure here.
We hope you enjoy this issue, and, as always, thank you for reading.
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● Pennsylvania and RGGI – Decision and Resolution
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On November 1, 2023, the Commonwealth Court of Pennsylvania, in a five-judge panel decision, issued a long-awaited ruling denying the authority of the executive branch, through the Pennsylvania Department of Environmental Protection, to bind Pennsylvania as a member of the Regional Greenhouse Gas Initiative ("RGGI"), colloquially a "carbon cap and trade" program, with current membership from 11 northeast and Mid-Atlantic states.
Click here to read the entire article.
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“The Trump administration approved the oil and drilling leases in January 2021, shortly before the former president left office.”
Why this is important: The article details how litigation is continuing over the Biden administration’s attempt to claw back leases for oil and gas development in Alaska’s Arctic National Wildlife Refuge (“ANWR”) that had been authorized by the Trump administration after decades of political wrangling over the issue. The Biden administration cited ongoing environmental and climate change concerns in pulling the lease proposals secured previously by the Alaska Industrial Development and Export Authority, which has now sued to pursue development. This is a reflection of the ongoing conflict between those promoting oil and gas development in the U.S. and those who oppose such development on environmental protection grounds, while at the same time efforts to enhance crude oil imports from outside of the U.S. are continuing. --- Derrick Price Williamson
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“Pennsylvania and Ohio — two major fossil fuel-producing states — are emerging as unlikely battlegrounds in local governments’ sprawling legal fight to put the oil and gas industry on the hook for the costs of climate change.”
Why this is important: Who will pick up the tab for climate change? Supporters at the Center for Climate Integrity are urging municipal governments in Ohio and Pennsylvania to realize the financial impact climate change will have on their budgets as extreme weather conditions continue. At present, tax payers will foot the bill.
The Center for Climate Integrity released a report in July, which estimates that by 2040, Pennsylvania will need to spend nearly $1 billion a year to protect residents from extreme heat, rising seas, and heavy rains and snow. The Center’s Ohio report released in 2022 estimated that municipalities in the state would need to increase spending to $5.9 billion per year by midcentury to adapt to climate change.
What is the hold up? Pennsylvania and Ohio are not exactly anti-oil & gas, hence the intention of the Center’s reports. Pennsylvania is second only to Texas in estimated natural gas reserves, and Ohio accounts for roughly 5 percent of U.S. natural gas production. While pitched as a tax break for citizens or retribution for bad acts, judgments levied against oil and gas companies in these energy rich states would also cause significant disruptions in the job market and political arena.
While far from Texas and its state restriction on contracts with financial firms that ‘boycott’ fossil fuels, no climate litigation has been initiated or effectively discussed in Pennsylvania or Ohio that would bring about the financial retribution from energy producers. Further, leaders in the oil and gas space claim foreign interests are behind the Center and are using it as a tool to halt development and progress in the United States energy sector through costly litigation.
This is not to say nothing is happening. Several Democratic city council leaders have spoken out and generally blamed “polluters” for not doing their fair share. Former Pennsylvania Governor Tom Wolf’s efforts to bring the state into a regional carbon reduction program in 2019 were thwarted by Republican law makers and “hard-hat Democrats.”
Therefore, the lines are blurred when it comes to oil and gas industries paying up. The climate consequences are already here; however, whenever climate litigation catches up, many fear it will create a new kind of storm – one of the economic variety. Pennsylvania and Ohio are target jurisdictions for climate litigation because of their prominent reserves. The East Coast has already been the center for climate litigation, with cases in New York, Vermont, Massachusetts, New Jersey, Maryland and more. A “win” for the Center in Ohio or Pennsylvania could spell disruption in price, supply, and employment for the same municipalities that could bring claims.
Regardless of the method, if companies do not contribute, tax payers will soon feel the extreme effects of climate change in their wallets and the weather. --- Sophia L. Hines
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“China will give power utilities more flexibility on signing long-term thermal coal supply contracts with domestic miners for 2024, as supply concerns have waned amidst surging output and imports.”
Why this is important: China has decided it will allow more flexibility in long-term domestic coal contracts for the coming year. The contracts are designed to also avoid electric shortages that occurred in 2021 and 2022. For 2024, generators will target to have 80 percent of their domestic coal needs under long-term clients. In the first 10 months of 2023, utilities were asked to target long-term contracts at a higher level of 105 percent of domestic demand. The lower volume requirements will give producers more flexibility in contracting and potentially lower prices. Also for the first 10 months of 2023, China imported 384 million metric tons with trade with Australia resuming. With steam import prices dropping to $126 a metric ton, the lower contract level of 80 percent will potentially allow lower generation costs. China continues to be one of world’s largest users of coal for electrical generation. --- Mark E. Heath
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“The updated LCOE of USD 77/MWh is in 2027 dollars and includes the 30 per cent production tax credit.”
Why this is important: While several Atlantic Coast states like New Jersey, New York and Massachusetts have seen offshore wind power projects scuttled, Dominion is moving ahead with its plans for a 2.6 GW wind farm off the Virginia coast. It has calculated a levelized cost of energy of $77/MWh (with tax credits) for the array, although that LCOE does not include the cost of purchasing back up power when the turbines are not producing electricity during periods of low or no wind. --- David L. Yaussy
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“NRDC has teamed up with the International Brotherhood of Electrical Workers Local 32 in a joint legal filing that asks the Ohio Supreme Court to reverse a decision of the Ohio Power Siting Board, which found that a proposed solar project was not in the ‘public interest’ and thereby was denied certification.”
Why this is important: A major case on the approval of large-scale solar farms is now before the Ohio Supreme Court and has found unions, environmental groups and businesses all supporting the 300 MW farm. The Ohio Power Siting Board (OPSB) found the new solar farm was not in the public interest. Now, a broad array groups want the decision overturned. Unions want the farm approved for jobs, environmental groups support CO2 free power generation, and local governments want $80 million in tax revenue the farm will bring over its life. The case should be watched closely. Many solar farms across the country have faced difficulty in getting permits due to local land owners opposing the solar farms. This case will determine whether other benefits such as jobs, environmental benefits and tax revenue are in the greater public interest to mandate approval of solar farms. --- Mark E. Heath
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“With 50,000 solar panels that will produce 18.9 megawatts, it is the largest of five planned facilities by the utility.”
Why this is important: The article notes that First Energy intends to go live with an 18.9 MW solar farm located in Monongalia County, West Virginia, by the end of 2023. This is the first such solar energy project in First Energy’s West Virginia service territory, and the company plans to move forward with construction at two additional sites in the near future. The article also notes there are two further sites that may be constructed if sufficient support is gained for the project, which was a condition the West Virginia Public Service Commission imposed on First Energy as a pre-condition to starting construction. Because many companies have expressed a desire for some of their energy mix to come from renewable resources, First Energy’s decision to construct this (and other) solar farms could help attract new business to West Virginia, which continues to be dominated by coal as its primary energy source. Customers take service from these projects by purchasing the solar renewable energy credits (SRECs) generated by the solar farm. Ensuring these resources are not only available but priced competitively are the keys to relying upon them for economic development; that could be further enhanced by allowing end users to acquire these resources not just from FirstEnergy but also from the competitive market or third-party producers of renewable power. --- Carrie H. Grundmann
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“Solar energy costs have fallen 90 per cent over the last decade, while new discoveries have seen efficiency rates rise.”
Why this is important: One issue with solar energy in the residential context is that production does not always meet energy demands, i.e. there is little to no production during evening hours when demand can peak. Energy storage via cost effective batteries is the key to overcoming this hurdle. While standalone solar panels cost about $18,000, a solar storage system will cost closer to $30,000 or more. Do not expect many households going off-grid until these battery systems become more affordable. --- Joseph C. Unger
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“Wyoming's Airloom Energy has come out of stealth mode with a new CEO fresh out of Google[x], US$4 million in seed funding, led by Bill Gates's Breakthrough Energy Ventures fund, and a radically different technical approach that it says fundamentally upends the financial equation for wind farms.”
Why this is important: Airloom Energy is trying (or re-trying) an approach to wind power that doesn’t rely on turbines on towers. Instead, it has wind vanes moving on a horizontal track, pulling a cable that in turn provides impetus to a generator. Its proponents say it will produce power for a fraction of the cost of traditional wind turbines, with less of an impact on the viewshed. The company is looking for an opportunity to see if its system works at commercial scale. --- David L. Yaussy
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“Centrus’ new Piketon plant is the first U.S. commercial plant to make fuel for advanced nuclear reactors that need high-assay, low-enriched uranium.”
Why this is important: A new nuclear enrichment plant is coming online in Ohio to make high assay, low enriched uranium (HALEU) fuel rods for one type of small modular reactor used at nuclear power generation plants. HALEU rods contain 5 to 20 percent fossil uranium while current large scale nuclear plants use five percent uranium rods. Small scale modular reactors will produce around 300 MW, about 10 percent of large scale nuclear plants, but are seen as easier and cheaper to build and safer to operate. Some believe small natural gas-powered plants are cheaper to generate power, but produce significant CO2 emissions. Environmental advocates see the reactors as key to reducing greenhouse gases in the atmosphere. Two types of small reactors are under development. The first are HALEU reactors, and the second type are small plants being developed by NUSCALE that use regular fuel rods.
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“Evidence is piling up that electric vehicles are driven much less than gas-powered models, which could sap the tech's power against climate change if the trend continues.”
Why this is important: It appears electric vehicles (EVs) are not being driven as many miles as internal combustion engine vehicles (ICEVs). EV owners may simply drive less, or the EV owners may also own ICEVs, with the EVs reserved for shorter trips, where range anxiety is not an issue. If the latter is true, and EV owners are still burning gasoline, it reduces some of the environmental benefit of owning EVs. --- David L. Yaussy
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Here is a round-up of the latest statistics concerning the energy industry.
ELECTRICITY
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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