The United States Environmental Protection Agency (EPA) is set to issue its final rule establishing for the first time by regulation the standard by which emissions from separate sources in the oil and gas sector are aggregated under the Clean Air Act (the Aggregation Rule). On April 7, 2016, EPA sent the final rule to the White House Office of Management and Budget (OMB) for review. The regulation will likely become effective in June 2016 after OMB completes its review.
Continue Reading EPA’s Final Regulation on Oil & Gas Industry Nears Publication

On January 22, 2016, the Bureau of Land Management (BLM) proposed a new rule targeting oil and gas producers on federal and Indian lands. The rule aims to reduce waste of natural gas by limiting flaring, prohibiting venting, and requiring operators to identify and repair leaks. Additionally, the proposal would grant BLM discretion to increase the royalty rate for future leases. The rule represents the latest in a series of recent efforts by state and federal regulators to limit greenhouse gas emissions by the oil and gas production sector. BLM will accept comments on the proposed rule for 60 days after it appears in the Federal Register.
Continue Reading BLM Targets “Waste” in the Oil and Gas Industry

Recent and anticipated litigation from the United States Environmental Protection Agency (EPA or the Agency) and environmentalists signals that permitting decisions involving whether to aggregate emissions from separate facilities will be at the forefront of environmental enforcement in 2015 and beyond. Schiff Hardin continues to closely follow these on-going developments, the results of which will likely have significant impact on the oil and gas industry.
Continue Reading Aggregation Update: Oil & Gas Industry Permitting Under Heightened Scrutiny in 2015

This is the first in a series of articles highlighting the economic and operational issues raised by the interdependency of the natural gas and electric markets.  This post analyzes a recent complaint filed by Duke Energy Corporation (Duke) against PJM Interconnection, LLC (PJM) in FERC Docket No. EL14-45.   The complaint involves generating units owned by Duke that were directed by PJM to be prepared to run during last winter’s Polar Vortex, but that were not actually dispatched on the day in question.  Due to PJM’s strongly-expressed reliability concerns, Duke procured natural gas even though gas prices were unusually high and the pipeline delivering the gas to the generation facility had imposed certain operational restrictions.  Because PJM did not dispatch Duke’s facilities, Duke has unrecovered gas purchase costs approaching $10 million.  In its complaint, Duke is asking FERC to permit recovery of its gas purchase costs under these unusual conditions.
Continue Reading Duke v. PJM: How Gas-Electric Coordination Issues Arise in a Real World Situation