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Welcome to the seventh 2024 issue of Currents - our e-newsletter focused on energy topics.
There are less than six months left for companies formed before January 1, 2024 to file their initial beneficial owner report under the Corporate Transparency Act. As a reminder, the Corporate Transparency Act requires some businesses to submit information to the Financial Crimes Enforcement Network (FinCEN) about the beneficial owners of the business. For more information about who is required to file a report, who is considered a beneficial owner, and what information must be reported, please see our prior update on this topic, which can be found here or FinCEN’s FAQs, which can be found here.
If your company was formed before January 1, 2024, your initial report is due by December 31, 2024. If your company was formed between January 1, 2024 and December 31, 2024, your initial report is due within 90 calendar days of the date the entity is formed. Companies formed on or after January 1, 2025, will have 30 calendar days from their formation to file their reports.
If you have not already done so, we encourage you to determine whether your company is required to file a beneficial owner report. If you are required to file a report, we encourage you to begin collecting the information needed to make the submission. Please contact us if you have any questions about your reporting obligations or would like assistance with filing your initial beneficial owner report.
If you have any questions about the Corporate Transparency Act, please contact Brienne T. Marco, Member and Chair of the Corporate Department and/or Joseph C. Unger, Senior Attorney.
Thank you for reading!
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Chevron, Energy and the Pivotal Shift | |
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By Derrick Price Williamson and Schenley N. Kent
The U.S. Supreme Court recently overturned the Chevron doctrine, a significant legal principle established by Chevron U.S.A., Inc. v. Natural Resources Defense Council. For 40 years, lower courts have relied on the Chevron doctrine to decide thousands of cases dealing with deference to federal agencies. This doctrine required courts to defer to federal agencies' interpretations of ambiguous laws if the agency's position was reasonable. The move to eliminate Chevron deference is anticipated to disrupt agency rulemaking efforts throughout the U.S. government and necessitate that Congress be much more precise when drafting legislation for agency enforcement.
Click here to read the entire article.
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“Three energy-producing states — Ohio, Indiana and West Virginia — challenged the rule, along with the steel industry and other groups, calling it costly and ineffective.”
Why this is important: In June, the Supreme Court issued a decision prohibiting the Environmental Protection Agency (EPA) from enforcing its rule limiting air pollution while separate legal challenges are pending around the country. Referred to as the "good neighbor" rule, the rule is intended to restrict smokestack emissions from power plants that can then burden downwind areas with smog-causing pollution. Ohio, Indiana, and West Virginia challenged the rule as costly and ineffective.
According to the article, the Supreme Court's conservative majority has increasingly reined in the power of federal agencies, including through its decision to overturn what is commonly referred to as Chevron deference. If the EPA is ultimately prohibited through the pending legal challenges from enforcing the good neighbor rule, then power plants will continue to operate without needing upgrades and modifications that would reduce pollution but also increase costs to many consumers. --- Steven W. Lee
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“Now, a decade later, new research shows a Marcellus Shale drilling by-product could be the key to energy independence in the future.”
Why this is important: This article explains that for years, the Marcellus Shale drilling in Pennsylvania sparked debate over its economic benefits versus environmental costs. Now, a decade later, research from the National Energy Technology Laboratory (NETL) reveals that the wastewater produced from these drilling operations could play a crucial role in achieving future energy independence. This groundbreaking research suggests that what was once considered waste from Marcellus Shale drilling could become a valuable domestic source of lithium, contributing to energy independence and environmental sustainability. According to the article, the wastewater from Pennsylvania wells alone could supply up to 40 percent of the lithium currently imported by the U.S. This finding is significant as the demand for lithium, a critical mineral for batteries and other technologies, is increasing rapidly. --- Schenley N. Kent
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“A breakthrough in high-speed drilling, coupled with improvements in robotics and sensing technologies, is poised to dramatically transform production of geothermal heat and energy over the next five years, according to Cleantech Group.”
Why this is important: The prospects for geothermal energy, generating power from heat in the earth, have grown by leaps and bounds as a result of new drilling methods developed by the oil and gas industry. Horizontal boreholes, fracturing rock, and faster drilling have increased the number of sites that are economical. Like all new processes, it will take some time to work out the kinks and to develop a viable model that can be replicated in a variety of places. In its favor is a key feature that other renewables lack – consistent operation, not tied to wind or sunshine. --- David L. Yaussy
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“In the hills of West Virginia, researchers are finding that water pouring out of abandoned coal mines contains the rare earth elements that are so valuable for making everything from electric vehicle batteries to fighter jets smaller, lighter or more powerful.”
Why this is important: For years, acid mine drainage has been a leftover from underground coal mining that has damaged streams throughout Appalachia and caused governments and companies to struggle financially to clean up the discharges long after mining has ceased. Now it has been determined that what is referred to as acid mine drainage actually contains many of the rare earth minerals that are needed to build the new batteries for a green economy and even military equipment. Under test programs, rare earth minerals are now being extracted from AMD water that is high in iron or aluminum. Part of the interest in removing these metals from AMD to produce rare earth elements is being derived by funding provided by the 2021 infrastructure bill. As the world is moving toward more electric vehicles, look for greater investment in new ways to find rare earth minerals. --- Mark E. Heath
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“Offshore wind, the industry’s most promising area for growth, faced setbacks last year.”
Why this is important: The article highlights a significant milestone in the U.S. energy sector with wind power generation exceeding coal production in March and April 2024. This shift underscores the growing momentum of renewable energy despite recent setbacks in the offshore wind industry. Offshore wind projects face numerous hurdles, including economic challenges, lengthy approval processes, and misinformation. Several companies have had to cancel or renegotiate projects due to economic pressures. Rising inflation and post-pandemic supply chain issues have further complicated developments. According to the article, despite obstacles, the offshore wind industry is expected to grow, with substantial investments and job creation projected by 2030. Several states view offshore wind production as an economic development opportunity to reinforce their long-term goals irrespective of federal political changes. --- Schenley N. Kent
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“Timet’s facility in West Virginia will use solar and batteries to make titanium products.”
Why this is important: Titanium Metals Corporation, or Timet, has begun construction of a titanium plant in West Virginia that the article claims will run primarily on renewable energy. Timet plans to utilize, through a third party, arrays of solar panels and large battery systems to form a solar microgrid that connects to the titanium facility. The article states that this project may be the first to directly power a large industrial facility using solar-plus-storage technology.
This third-party onsite power arrangement was made possible through special legislation. As electrification and demands on the nation's grid increase, micro-grids may be able to reduce the demand on grid systems, thereby reducing the need for expensive infrastructure investment that would impact many consumers. --- Steven W. Lee
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“The cost of clean hydrogen-fired generation would far outstrip other forms of clean baseload energy, according to analysis by the Clean Air Task Force.”
Why this is important: Hydrogen is costly to make, whether from electrolysis or from natural gas (or other hydrogen-containing raw material). It is unlikely to be a near-term means of replacing fossil fuels, due to its high cost and the difficulty in storing it. It may have a role as a means of long-term energy storage, which could provide power for longer than a typical grid-scale battery. More likely, it could be used in steel-making, to reduce the carbon dioxide generated by use of oxygen in that process. --- David L. Yaussy
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“The amount of coal transported to power plants, which are often located far from mines, decreased by more than half, falling from 957 million tons in 2010 to 422 million tons in 2023.”
Why this is important: Coal used for electric generation continues to decline and is expected to drop an additional 8 percent this year. This means that since 2012, U.S. coal consumption for electrical generation has dropped from 957 million tons to 422 million tons in 2023. The decline is directly related to the closure of coal-fired electrical generation plants that no longer buy coal to burn. Coal will make a slight rebound in 2024 before continuing to drop as more closures of coal-fired generation plants impact the market. --- Mark E. Heath
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“Electric vehicles are ‘batteries on wheels’ that can put energy back into the National Grid when solar panels and windfarms do not provide much power.”
Why this is important: Proponents of battery electric vehicles point to a unique possibility they offer over internal combustion engines – using many individual EVs to put power into the grid when it is needed at times of peak use. Electricity that is taken from the EVs at 5:00 p.m. could be replaced by charging in the early morning hours, when demand is low. While an interesting concept, developing the infrastructure to move power in both directions could be difficult, as would be the management of variable power and the compensation paid to EV owners. Like many aspects of the energy transition, the idea of two-way charging has a lot of hurdles to jump before it is ready for deployment. --- 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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What are your areas of interest? If there are particular industries or issues that you would like to hear about, email us! We have a large number of attorneys willing to weigh in on the issues that impact you and your business.
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