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Energy Forum of the Energy Bar Association
On October 10 and 11 was held in Washington, D.C. the "Mid-Year Energy Forum" ("Mid-Year Energy Forum") of the Energy Bar Association (EBA). of 2023. The forum was devoted to holding a series of panels on the most important issues concerning energy legislation and markets in the United States.
The theme of this year's forum was "Regulating a Modern Energy Mix." ("Regulating a modern energy mix").
In the United States, as in other countries around the world, both government and industry players are introducing Further measures to increase the use of renewable energy.
At the same time, this brings challenges in terms of cost, supply, and regulatory tools to make it a reality. The Forum was an event where experts presented and discussed the most pressing issues in energy law and policy.
How FERC's new Interconnection Procedures could advance the New Generation of Manufacturing
The Forum opened with its first general session focused on providing an overview of the Federal Energy Regulatory Commission’s (FERC) new interconnection procedures. The panelists discussed what has changed recently and the associated challenges, for large-scale transmission projects aimed at delivering clean energy.
FERC is an independent agency, part of the U.S. federal government, that regulates the interstate transmission of natural gas, oil, electricity and hydroelectric projects.
Interconnection refers to the process of connecting new electricity generators, such as solar, wind, and energy storage, to the electric grid.Building up the interconnection grid is central to ensuring renewable energy is able to be transported across the country and delivered to citizens, businesses, and public services.
The main topic was on Order No. 2023, which was published on 6 September 2023. Order No. 2023 introduced reforms to interconnection agreements and procedures which attempts to decrease the time it takes to progress electricity generation projects through queues and ultimately make the development of electricity generating facilities across the United States more efficient.
This is largely because the inefficiency of the development process and backlog of interconnection projects slow progress in reducing greenhouse gas emissions Through a more modern energy network.
Previously there was concern about a backlog of applications for interconnection sites. The development of new technologies is important for energy security and renewable energy development. There also needs to be willingness on the part of regional transmission organizations (RTOs) ("regional transmission organizations") Installing the interconnectors and financial commitments.
An RTO is a transmission system operator (TSO) ("power transmission") that coordinates, controls, and monitors an electric grid that spans multiple states in the United States, which requires it to be regulated by FERC under federal law.
Omar Martino, executive vice president of markets and regulation, Invenergy LLC, noted that it is important to focus on accountability on the part of RTOs. Martino spoke mainly from a business perspective, pointing out that unfortunately wind and solar have been too slow to develop.
To achieve decarbonization goals, a modernization of the energy grid is needed to bring renewable energy in line with modern technology.
Managing the promises and complexities of biomethane
The influx of operational renewable natural gas (RNG) facilities has led to lengthy proceedings at FERC regarding natural gas quality specifications in pipeline tariffs. RNG is a pipeline-grade gas that has been processed to purity standards and can be used in natural gas vehicles.
Although RNG use still remains at relatively low levels in the United States, it has been increasingly used as part of a transition to greenhouse gas emissions.
The panel discussion was moderated by Joseph Fagan, partner at Day Pitney LLP. The first speaker was Geoffrey Dietz, director of federal government affairs for the Renewable Natural Gas Coalition.
La Coalition for Renewable Natural Gas is a nonprofit trade association dedicated to advocating for the renewable natural gas industry.
Dietz spoke about theimportance of contracts and supply chain development To make possible the continued expansion of GNR.
Dietz also said that the Coalition is part of the process of expanding the use of sustainable aviation fuel and other bio-methane fuels. Also Mergers and acquisitions between companies in this economic sector will be important to keep an eye on, as they can influence economic growth, employment dynamics and government regulatory policies.
This was followed by the speech of Andrea Chambers, Of Counsel at DLA Piper US. He spoke about the role of the law firm DLA Piper and the pipeline. DLA Piper provides more renewable energy advice than any other firm worldwide, making the firm a major player in the RNG industry.
Chambers said interstate RNG pipelines are an important issue for producers and consumers to consider. In order to be used, RNG must be able to be provided to sources across the country.
It is also important that safety guidelines are followed and that interstate pipelines are able to meet the required supply requirements and align with the various laws and regulations set by the federal government and various states in the US.
Finally, Suzanne Clevenger, partner at Vinson & Elkins LLP, spoke about the need for employers to balance safety, reliability, and production delivery. It is also important that consumers are protected from production problems that can damage air quality and increase exposure to carcinogens or hazardous waste.
The energy dossier at the Supreme Court: where it has come and where it is going
On the second day, a Roundtable in which the cases of the upcoming 2023 term of the Supreme Court were discussed related to energy law and regulation.
The panelists also discussed how previous cases and litigation in the lower courts relate to the issues that will come before the Supreme Court. The Supreme Court is the highest court in the United States and makes decisions on the most important legal issues in the country.
Three main areas were discussed during the panel. The first is the Chevron test. The Chevron test is one of the most important principles of administrative law in the United States.
It was created in the Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. 468 U.S. 837 (1984). In this case, the Supreme Court established a legal test for when the court should defer to the agency's response or interpretation. In its decision, it articulated a two-part test.
The first part requires the court to examine the wording and context of the statute in question to see if the intent of Congress is clear. In the second part, if it is determined that the'intent of Congress in the statute is clear, the federal agency is obligated to follow the law. However, if it is determined that the statutory language may have two or more reasonable interpretations, the court must defer to the federal agency's choice on how to implement the law.
The second is the doctrine of big questions (MQD). The big questions doctrine is a principle of statutory interpretation in U.S. administrative law. It refers to theidea that courts assume that Congress does not delegate matters of major political or economic importance to executive agencies.
This tends to make change difficult because executive agencies have limited power in dealing with major regulatory issues. The third is the doctrine of non-delegation. The doctrine of non-delegation refers to the principle that Congress cannot delegate its legislative powers or ability to legislate to other entities.
This means that Congress usually delegates its powers to administrative agencies or private organizations.
Jennifer Fischell, an attorney with MoloLamken LLP, moderated the panel discussion. In his opening remarks, he discussed "Chevron deference," or the way in which federal government judges give government agencies leeway in interpreting a statute in the event of a dispute, before moving on to explain the Solar Energy Industries Association vs. FERC case.
In this case, the Solar Energy Industries Association, along with others, challenged Orders 872 and 872-A, rules adopted by FERC to modify facilities that qualify for benefits under the Public Utility Regulatory Policy Act (PURPA) and how such facilities would be compensated. The court found that FERC violated the National Environmental Policy Act (NEPA) by failing to prepare, at a minimum, an environmental assessment, but the panelists largely agreed that this case will not have much impact on the tradition of Chevron deference.
The big court cases
The ruling "Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc." is a landmark decision of the U.S. Supreme Court, issued in 1984. This ruling established an important legal principle known as "Chevron deference," which concerns how courts should treat the interpretation of federal laws by government agencies. According to this principle, when a law is ambiguous, the courts should defer to the interpretation of the government agency charged with administering that law, provided the interpretation is reasonable. This particular case involved the U.S. Environmental Protection Agency's (EPA) interpretation of the definition of "source of pollution" under the Clean Air Act. The Court held that the EPA's interpretation was a reasonable application of the law, thus setting a precedent for judicial deference to agencies in matters of regulatory interpretation.
Professor Emily Hammond, Glen Earl Weston Research Professor at George Washington University Law School, discussed the case of Loper Bright v. Raimondo (Docket no: 22-451). The main issue of importance in this case is. Whether the court should overrule Chevron v. Natural Resources Defense Council, or at least clarify that the law's silence regarding controversial powers expressly but strictly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.
La District court granted summary judgment in favor of the government based on its reasonable interpretation of its authority and adoption of the rule through the required notice and disclosure process, and was affirmed by the U.S. Court of Appeals for the D.C. Circuit.
Bernhard L. McNamee, former commissioner of the Federal Energy Regulatory Commission from 2018 to 2020 and currently a partner at McGuireWoods and a senior consultant at McGuireWoods Consulting, presented a intervention on agency adjudication and the non-delegation doctrine. McNamee first discussed the cases Axon Enterprises vs. FTC (598 U.S. 175) and SEC vs. Jarkesy (Docket no: 20-61007).
In the first case, the Supreme Court has ruled that the statutory review systems under the Securities Exchange Act and the Federal Trade Commission Act do not supersede the jurisdiction of the district court over claims challenging the unconstitutionality of the structure or existence of the federal agencies Securities Exchange Commission (SEC) or Federal Trade Commission (FTC).
In the second case, the Fifth Circuit Court of Appeals ruled that the SEC's actions were unconstitutional, reversing an SEC decision and Referring for further proceedings in line with this opinion.
The SEC decision concerned an agency enforcement action against petitioners for securities fraud. An SEC administrative law judge ruled that the petitioners were liable and ordered various remedies.
The Fifth Circuit Court of Appeals, however, ruled that.
1) the SEC's internal judgment in the petitioners' case violated their Seventh Amendment right to a jury trial,
2) Congress unconstitutionally delegated legislative power to the SEC in violation of Article I, which vests "all" legislative power in Congress, and
3) statutory restrictions on the removal of SEC members violate the Cure Clause of Article II. These cases are relevant because they concern the non-delegation of certain matters to federal agencies.
Finally, Bob Loeb, former acting deputy director of the Civil Division Appellate Staff at the U.S. Department of Justice and partner at Orrick, Herrington and Sutcliffe LLP, focused on "energizing dormant commerce." Loeb discussed the dormant commerce clause specifically in the cases National Pork Producers Council vs. Ross (Docket no: 21-468) and Lake vs. NextEra Energy (48 F.4th 306).
In the first case, The Supreme Court upheld the Ninth Court of Appeal's ruling that dismissed an appeal against California's Proposition 12 based on the dormant Commerce Clause argument that the law intentionally discriminates against out-of-state economic interests.
In the second case, was whether states can exercise the power to regulate utilities by recognizing a preference for the construction of new transmission lines by incumbent utilities. This case is expected to relate to energy policy, as it concerns the issue of the government's power to regulate public utilities by granting incumbent utilities the ability to build new transmission lines.
The idea of "energizing dormant trade" in the U.S. energy sector refers to the reactivation and enhancement of dormant or underdeveloped energy trade sectors. This concept emerged in response to the need to diversify energy sources, reduce dependence on fossil fuels and promote environmental sustainability. It includes investment in renewable technologies such as solar, wind and hydropower, as well as the development of infrastructure to support these technologies. It also involves modernizing electricity grids and increasing energy efficiency. This approach aims to stimulate the economy, create jobs and reduce environmental impacts, while contributing to national energy security. U.S. energy policy, in this context, plays a crucial role in setting incentives, regulations and initiatives to promote this "dormant trade" in the energy sector.
The hope and promise of licensing reform
Energy act 2020
The forum concluded with a panel focused on exploring how energy transition developments and policies have affected to date, and will affect in the future, the construction of electric transmission and interstate oil pipelines. In addition, they discussed how permitting reforms could accelerate the growth of the national energy infrastructure, similar to the Forum's opening panel.
The closing session was moderated by Alex Herrgott, president of the Permitting Institute. He noted that permitting for energy infrastructure development has been characterized by problems, delays and numerous regulations that have led to a sense of chaos in permitting.
Among the problems encountered are the Lack of modernization of the system, a process that is too slow, taking up to 10 yearsas well as confusion over who has jurisdiction over certain permits and the lack of experienced staff in the bureaucracy. Despite this, both Democrats and Republicans want to solve the permit problem. But how can this be achieved?
Much of this is related to recent changes in U.S. legislative acts, such as the Energy Act of 2020 and the USE IT Act of 2020. L'Energy Act focused on competitive and innovative clean energy solutions driven by basic and early stage research. The goal was to advance research and development in support of energy grid modernization, critical minerals security, and next-generation energy technologies.
The USE IT Act was passed by Congress in 2020 as part of legislation to fund government. It extended tax credits for carbon capture projects for two years while supporting research on carbon use and direct air capture. Specifically, Made carbon capture, utilization and storage (CCUS) projects and CO2 pipelines eligible for simplified permits under the FAST Act and a legal guide has been created to increase the spread of CCUS.
Authorization also remained important, with reforms under the Fiscal Responsibility Act of 2023 (FRA), such as the consolidation of multiple federal agencies' projects into a single lead agency for review, time limits for federal agencies to produce review statements, exclusions to exempt certain projects from review, and an online portal to simplify the review process.
Manisha Patel, deputy executive director of the Federal Permitting Improvement Steering Council, then spoke about FAST 41 and the Permitting Council. As noted, historically there have been complaints about inefficiency, lack of predictability, and lack of clarity about accountability. FAST 41 was designed to address these complaints. Patel explained how FAST 41 was implemented to address these complaints by creating a federal permit calendar which is posted publicly on an online permitting dashboard and contains all environmental reviews and federal permits required to initiate a project.
USE IT Act
The National Environmental Policy Act (NEPA) is a U.S. environmental law aimed at improving the environment and establishing the President's Council on Environmental Quality (CEQ). Enacted in 1970, NEPA requires federal agencies to evaluate the environmental effects of their proposed actions before making decisions. It covers a wide range of federal actions, such as the construction of highways, buildings, military complexes, parkland acquisitions and other federal activities. It has three main sections: the first outlines national environmental policies and goals; the second establishes provisions for federal agencies to enforce those policies and goals; and the third establishes CEQ in the Executive Office of the President. NEPA is "compel action" legislation, which means that it does not provide criminal or civil penalties, but is enforced through the court system.
Jomar Maldonado, director of the National Environmental Policy Act. (NEPA) at the White House Council on Environmental Quality, spoke about the role of the Council on Environmental Quality and NEPA. NEPA was signed on January 1, 1970, and requires federal agencies to evaluate the environmental effects of proposed actions before making decisions.
This covers a wide range of actions, including decisions on permit applications, federal land management, and construction of highways or other publicly owned facilities.
Kim Smaczniak, special advisor to FERC, concluded the opening statements of the Forum's last panel by talking about FERC and the location of transmission facilities. Transmission location refers to the determination of the route of the transmission line, with permits and approval required for the construction of a transmission line.
Smaczniak also spoke about theInfrastructure and Jobs Act 2021 and how FERC serves as the backstop authority for locating transmission projects when they cannot be granted by the state. Smaczniak noted that this is based on the Energy Policy Act of 2005, which provides for Two key criteria for transmission projects that must receive federal authorization. First, transmission projects must be located in a specific land corridor. Second, permits must be ineligible or denied by the state previously.
Overall, the hope is that the implementation of a pre-submission process and the requirement for applicants to apply with the intention of completing projects will be important for the efficiency and proactivity of submitted applications.
Dan Ziebarth
PhD candidate in the Department of Political Science at George Washington University. Editor-in-chief of the Greater European Journal, affiliated with the Institute for a Greater Europe and part of the Young Thinkers initiative of the Centre for European Policy Studies (CEPS). Author of numerous peer-reviewed research papers, policy reports and articles for news sites including the Brussels Times and The New Europe.
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