June 14, 2021 Legislative Update – International Methane Measurements Advancing

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The International Energy Forum is working with France-based satellite data company Karryos to create a standard for measuring methane emissions from the energy industry ahead of the United Nations climate change conference in November.

The Methane Measurement Methodology Project will allow countries access to satellite data from the Copernicus constellation of satellites operated by the European Space Agency, with artificial intelligence and advanced algorithms, to detect and measure methane emissions, according to the IEF. The group said in a press release the information would help countries “present credible plans for reducing their methane emissions” as part of emissions reductions commitments.

House to Act on Methane Resolution  

The U.S. House will vote on the companion resolution to the Senate one passed several weeks ago that repeals the Trump Administration’s methane “policy” rule during the week of June 22. The announcement came shortly after the House Energy and Commerce Committee reported the resolution out of committee on a party-line vote of 30-22. Once signed into law, the action would effectively reinstate Obama-era methane standards on the oil and gas industry, though the Biden administration is working to expand methane limits – an announcement on those actions expected in September  – on the oil and gas industry.

It is important to note that passage of this resolution will not result in  regulation of stripper wells. They remain exempt under a separate Trump Administration rule on methane known as the “technical” rule.    

Oil and Gas Royalty Valuation Rule Set To be Repealed

The Interior Department’s Office of Natural Resources Revenue (ONRR) will propose repealing most or all of the valuation rule finalized in the final days of the Trump administration that eased royalty payments for fossil fuels extracted from public lands.

The Trump Administration’s rule, finalized in January, made a suite of changes that ONRR estimated would save the industry $28.9 million a year in royalty payments for coal, oil, and gas pulled from federal lands.

It brought to a close four years of discussions to redefine how fossil fuels from public lands were valued after the Obama administration made the first update to the algorithm in decades. Part of that Obama rule dealing with coal valuation was blocked by a federal judge in 2019.

In a federal notice published the week of June 11, ONRR proposes to withdraw the Trump rule “because the process used for its adoption arguably was without observance of procedure required by law, as well as in excess of ONRR’s statutory authority.” The notice cites alleged issues with the public comment period and said the agency failed to properly justify the policy shift in its proposal.

The agency said it is considering options besides a full withdrawal, including keeping in place some combination of the suite of amendments contained in the Trump rule. That includes several amendments related to index-based methods for “arm’s-length” oil and gas sales the Trump administration estimated would increase royalty payments by $26.7 million annually.

The notice also asks for comment on other amendments that decreased revenues by overall greater amounts. One added deductions for deepwater gathering costs. Another created an “extraordinary processing allowance,” which the notice indicated was targeted to help “two major gas processing facilities in Wyoming that treat challenging gas streams,” including one with recoverable amounts of helium. Those two amendments alone totaled $44 million in lost royalties.

ONRR will take public comment on the proposal through Aug. 10.

Highway Bill Advances – In the House 

The House Transportation & Infrastructure Committee (T&I Committee) released and marked up its five-year authorization bill. The “Investing in a New Vision for the Environment and Surface Transportation in America Act (INVEST), the counterpart to the Senate’s Transportation Authorization Act of 2021, provides $547 billion in three areas: roads, bridges, and safety ($343 billion), transit ($109 billion), and rail ($95 billion). A Committee fact sheet is here, a copy of the bill (an amendment in the nature of a substitute) is here, and a section-by-section summary of the bill is here. “Thematic summaries” are located here

Section 1303 of the INVEST Act would establish a state formula grant to deploy electric vehicle (EV) charging equipment and hydrogen fueling infrastructure along Department of Transportation (DOT) designated Alternative Fuel Corridors. The formula program would be funded at $1 billion annually for fiscal year (FY) 2023 through 2026. This is a change from the INVEST Act as passed by the House last Congress and similar provisions included in the bipartisan Senate surface transportation bill, which was passed by the Environment & Public Works (EPW) Committee last month and would have created a DOT grant program to deploy EV, hydrogen, propane, and natural gas fueling infrastructure along Alternative Fuel Corridors. Public power and other government entities are eligible to apply for grants under the Senate bill.

Chairman Peter DeFazio (D-OR) intends to bring the bill to the House Floor by the end of June,  have a formal conference with the Senate, and get the bill to the president’s desk before the current transportation authorization law – the FAST Act – expires on September 30.

The T&I Committee also marked up  the Water Quality Protection and Job Creation Act of 2021 (H.R. 1915), which authorizes $50 billion over the next five years to address America’s  wastewater infrastructure and local water quality challenges — including $40 billion for the Clean Water State Revolving Fund.

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