Energy Takes A Hit in DC with Ouster of Kevin McCarthy

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Today’s Key Takeaways:  MT appeals youth climate victory. Oil falls on demand fears. Exxon picks BlackRock as LNG buyer. Donlin Mine sued over state water permits. Energy implications from removing Speaker McCarthy.


Montana appeals landmark youth climate victory
Lesley Clark, Climatewire, October 4, 2023

“We look forward to the argument before the Montana Supreme Court,” a state official said.

Montana is appealing a first-of-its-kind U.S. climate ruling that rebuked state regulators for violating young people’s constitutional right to a clean and healthful environment.

In notices filed Friday and Monday, Republican Gov. Greg Gianforte urged the state’s highest bench to overturn the August ruling that rejected revisions to the Montana Environmental Policy Act that prevent state agencies from considering planet-warming emissions.

“We look forward to the argument before the Montana Supreme Court,” said Emily Flower, a spokesperson for Republican Attorney General Austin Knudsen.

The state — which has denounced as “absurd” the ruling from 1st District Court Judge Kathy Seeley in favor of the young climate activists — is expected to detail its arguments for appeal within the next 60 days.

Seeley’s verdict in the nation’s first youth-led climate trial found that state lawmakers flouted Montana’s constitutional right to a “clean and healthful environment” when they passed measures to bar state agencies from looking at the climate effects of fossil fuel projects.

Attorneys for the young people said they are confident the high court will uphold Seeley’s ruling in Held v. Montana.

“The trial record that will be reviewed by the Supreme Court contains undisputed evidence of harms to the 16 youth plaintiffs as a result of defendants’ fossil fuel policies,” said Nate Bellinger, senior staff attorney for Our Children’s Trust, the Oregon-based law firm that represents the young people.

Though the Held ruling may have little practical effect outside Montana and several states with similar constitutional protections, it is expected to provide momentum for a burgeoning raft of climate litigation — including what is likely to be the second-ever youth climate trial next year in Hawaii.

In a separate filing posted Monday, Seeley agreed to certify her decision as final, saying the parties agree that doing so would advance “judicial economy and public policy.” She wrote that she believes the youths’ case “presents pressing fundamental constitutional issues of statewide concern.”

Seeley added that the young people had demonstrated during a seven-day trial in Helena in June that they are disproportionately harmed by fossil fuels and that the “uncontested evidence presented at trial conclusively demonstrated that youth plaintiffs’ injuries increase and compound each passing day.”

She also noted that the state and youth attorneys had agreed that reviewing the case before all issues are settled is “necessary given other cases currently pending before the Supreme Court that present overlapping legal questions and related issues.”

At least one other case in Montana challenges the constitutionality of the provision that prevents the state agencies from considering climate change or greenhouse gas emissions.

Seeley held off on deciding whether the youths’ legal team is entitled to attorneys’ fees and costs.

The Montana Supreme Court is not unfamiliar with the Held case, having rejected the state’s effort to quash the lawsuit a week before trial was scheduled to begin. The nonpartisan court has long been viewed as progressive and has emerged as a key target for Republicans, who hold the Montana governor’s mansion, both chambers of the state Legislature and most of the state’s elected offices.

Georgetown Law professor William Buzbee said the case is “fundamentally an issue of Montana law and is likely to remain Montana specific,” though he added that it could serve as a “template” for challenges in other states with similar constitutional protections.

If the Montana Supreme Court upholds the decision, “it would make it an even more powerful and important precedent,” Buzbee said.

He noted Seeley’s decision painted the Montana legislation as an “ostrich-like law” that ignored climate science.

That could mean Held could be influential in other states if legislatures seek to prevent “close scrutiny of environmental effects and the realities of climate change,” he said.

The appeal comes as the state Department of Environmental Quality this week began holding a series of listening sessions it says will help the agency revamp the Montana Environmental Policy Act (MEPA). The law is similar to the National Environmental Policy Act, which requires regulators to take a “hard look” at the impact of major federal actions.

Montana DEQ Director Chris Dorrington, who testified at the Held trial on the state’s behalf, said in a statement that MEPA rules that were written in the 1908s are “showing their age” and that it’s time for an update.

He noted that the Held decision had put the state law in the spotlight and that DEQ hopes to “start a thoughtful dialogue about greenhouse gas emissions and other topics, and we are seeking input that is balanced and driven by sound science.”


Oil falls more than $3 on demand fears, Saudi confirms cuts to year-end
Robert Harvey, Reuters, October 4, 2023

Oil fell by over $3 a barrel on Wednesday, as demand fears stemming from macroeconomic headwinds offset pledges by Saudi Arabia and Russia to continue crude output cuts to the end of 2023.

Brent crude oil futures were down $3.30, or 3.63%, to $87.62 a barrel at 1456 GMT, while U.S. West Texas Intermediate crude (WTI) fell $3.29, or 3.69%, to $85.94.

Brent traded at its lowest since Sept. 1 during the session, with an intraday low of $87.55 a barrel by 1456 GMT. WTI’s intraday low of $85.86 was the lowest since Sept. 5.


Exxon Picks BlackRock As Buyer Of Its 71% Stake In Italian LNG Terminal
Tsvetana Paraskova, OilPrice.Com, October 4, 2023

ExxonMobil has selected the world’s largest asset manager, BlackRock, as a buyer for its 70.7% stake in Adriatic LNG, Italy’s first regasification import terminal, the U.S. supermajor told Reuters on Wednesday.

Exxon currently holds 70.7% of Adriatic LNG via its subsidiary ExxonMobil Italiana Gas. The other shareholders in Italy’s main LNG import terminal off the Adriatic coast in northern Italy are a unit of QatarEnergy with a 22% stake and Italian state-controlled gas grid operator Snam with 7.3%.

According to anonymous sources who spoke to Reuters, Snam could raise its stake in Adriatic LNG to 30% to obtain governance rights on the LNG import terminal.



Donlin Mine project in Southwest Alaska facing legal challenges over water impacts
Yereth Rosen, Alaska Beacon, October 4, 2023

State permits allowing water use by the proposed Donlin Gold mine face new legal challenges from opponents of the huge project in Southwest Alaska.

The most recent challenge was lodged on Monday, when two Tribal governments appealed to the state Supreme Court to overturn a lower court decision upholding state-issued permits. Those permits to withdraw water had been approved in April 2022 by the Alaska Department of Natural Resources; they were affirmed on Aug. 31 by Anchorage Superior Court Judge Dani Crosby.

The appeal of the ruling on the DNR permits follows a separate challenge to an Aug. 18 action by the Alaska Department of Environmental Conservation that certified the mine project as meeting state water quality standards. The department’s action renewed what is known as a 401 certificate, named after a section of the federal Clean Water Act. This certificate is required before a project can discharge wastewater, under the act. 

The Orutsararmiut Native Council, one of the Tribal governments involved in the appeal to the Supreme Court, filed a motion in state Superior Court on Sept. 11 that seeks to overturn the certification.

The Donlin Gold project, located about 145 miles northeast of Bethel, would be one of the biggest open-pit gold mines in the world. It has deposits estimated at 33.8 million ounces. Because it is located on Native land with Native-owned mineral rights, revenues would be shared among all Alaska Native corporations. But opponents argue that the mine would damage the ecosystem of the Kuskokwim River, including important salmon runs.

Those potential impacts are the reason for the legal challenges, the plaintiffs said in a statement released by Earthjustice, the environmental law organization representing them.

“The impacts from this proposed open pit mine, which would be the largest pure gold mine in the world, must be taken seriously and considered comprehensively,”Orutsararmiut Native Council Executive Director Brian Henry said in the statement. “The State has an obligation to protect the Kuskokwim River and its tributaries from possible environmental damage caused by the Donlin Gold Mine. Our very existence and ways of life depend on it.

But state officials believe that agency actions have been proper.

“The state is confident that the Superior Court reached the correct result in affirming that DNR acted appropriately in approving Donlin’s water appropriation applications, and we look forward to defending the decision on appeal to the Supreme Court,” Department of Law spokesperson Patty Sullivan said by email.



ENERGY IMPLICATIONS OF SPEAKER VOTE: The historic ouster of Kevin McCarthy from his speakership sent shockwaves through Washington – but left a number of questions unanswered on how House Republicans plan to govern themselves. With a government spending deadline looming and several bills on the burner, the move to boot McCarthy is likely to affect every legislative corner until a new speaker is picked – and that includes energy.

To get you caught up: Before Tuesday’s drama, the House was set to begin debate on an Energy and Water Development appropriations bill. After the vote on the motion to vacate occurred, the chamber was abruptly adjourned for a week.

Here’s what’s being held-up by the speakership debacle: 

Appropriations bills: We are 43 days away from the next government funding deadline – but only 4 spending bills have passed out of the lower chamber. The House was on its way to vote on an Energy and Water Development funding bill that would fund projects and related agencies, passing a rule to begin debate on the bill. But debate could not begin after the speaker was vacated from his position.

McCarthy’s ejection, and the subsequent adjournment of the House, increases the chances of a government shutdown by putting pause on valuable floor time. It goes without saying that a shutdown negatively affects Washington – agencies shut down, employees are furloughed, and institutions lose revenue. However, the larger issue of spending will still be in question even after the Nov. 17 deadline, with many wondering whether Congress is able to pass all 12 appropriation bills before an automatic, overall 1% cut is implemented if a continuing resolution is still in place come Jan. 1, 2024.

Johnson’s LNG bill: A bill that would change the procedures for approval of the import and export of natural gas was pulled from floor consideration after conservatives tanked a vote that would allow the bill, along with a defense appropriations measure and a bill that would condemn the New Mexico governor, to move forward earlier this month. Since then, the bill has not come back onto the schedule.

The bill, dubbed “Unlocking Our Domestic LNG Potential Act,” would repeal certain restrictions on the import and export of natural gas under the Natural Gas Act, which include restrictions related to free trade agreements. The bill would also grant the Federal Energy Regulatory Commission the exclusive authority to approve or deny applications for liquified natural gas terminals to import or export natural gas.

The White House issued a statement of administrative policy two weeks ago, stating that it “strongly opposes the legislation” because the bill, in their view, would eliminate important checks on imports and exports of natural gas.

Just last week, Republican Rep. Bill Johnson of Ohio, who introduced the measure, was advocating for passage of his bill in a brief interview with the Washington Examiner. 

“But if we really want to address the issue of emissions, and clean up emissions, let’s start putting America’s liquid natural gas on the global market with my LNG expansion bill,” he told Nancy. When asked when the bill would be scheduled to be put back onto the floor, the Ohio Republican said, “It’s going to be soon. That’s what I’m told.”

But a lot has changed in the seven days since we’ve spoken with Johnson. Ben Keeler, Johnson’s communications director, said it’s unclear when the bill will be rescheduled for a vote.

From the Washington Examiner, Daily on Energy