News of the Day:
ConocoPhillips raises capital budget 17% for 2021, maintains production outlook
S & P Global Platts, February 2, 2021
Fresh from closing a major corporate acquisition, ConocoPhillips has set a 2021 capital budget of $5.5 billion, 17% higher than last year, that will maintain its production flat at 1.5 million boe/d pro forma, the company’s top executives said Feb. 2.
More than half, or 55%, of its $5.5 billion capex this year is allocated for the Lower 48, with the rest spread across a set of diverse global assets that include Alaska, Canada, Europe, North Africa, Asia-Pacific and the Middle East, ConocoPhillips CEO Ryan Lance said during the company’s fourth-quarter earnings call.
Today’s Rasmussen Poll:
Two weeks after President Joe Biden was sworn into office, most voters say reporters are not questioning the new president as aggressively as they questioned former President Donald Trump.
A new Rasmussen Reports national telephone and online survey finds that 55% of Likely U.S. Voters think the news media are less aggressive in questioning Biden than they were in questioning Trump. Only 13% say the media are more aggressive with Biden; 27% percent believe the aggressiveness of the media is about the same.
OIL & GAS:
Legal commentary: Federal statute will underpin challenges to Biden’s executive orders
Offshore Oil & Gas Journal, February 3, 2021
Orders can be challenged as inconsistent with the Outer Continental Shelf Lands Act.
One week after his inauguration, on January 27, 2021, President Biden issued an executive order titled, “Tackling the Climate Crisis at Home and Abroad.” Section 208 of that order, pertaining to “Oil and Natural Gas Development on Public Lands and in Offshore Waters,” directs the Secretary to pause offshore leasing pending what will likely be a comprehensive overhaul of federal permitting and leasing. Offshore permits remain suspended for 60 days under a January 21 order signed by Acting Interior Secretary Scott de la Vega.
Biden’s executive order is unwelcome news for the offshore oil and gas industry and may be an initial step towards a complete ban on offshore leasing. Biden is, after all, on the record saying that there should be “no more drilling on federal lands … including offshore.” Moreover, President Biden’s nominee to lead the Department of the Interior, Representative Deb Haaland, supported the Green New Deal and has publicly proclaimed her goal to stop all oil and gas leasing on federal lands.
These bold moves can expect to see legal challenges. Biden’s executive order can be challenged as inconsistent with the federal statute governing offshore production—the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C. §§ 1331-1356(b) which provides, “The Secretary … shall prepare and periodically revise and maintain an oil and gas leasing program to implement the policies of this subchapter.” Id. § 1344. The Secretary’s ending of offshore leasing entirely would likely violate the statutory duty to “prepare … and maintain an oil and gas leasing program.” Id. To the extent the Secretary’s actions are construed to completely end offshore leasing, it is likely subject to challenge as contrary to law, or an agency action “unlawfully withheld,” under the Administrative Procedure Act (APA). 5 U.S.C. § 706.
Pebble releases appeal to Corps permit denial
Elwood Brehmer, Alaska Journal of Commerce, February 3, 2021
Pebble Limited Partnership leaders argue Army Corps of Engineers Alaska District officials ignored their own findings and set arbitrary wetlands protection requirements when they rejected the company’s hotly contested mine plan, according to Pebble’s appeal documents published Jan 27.
Pebble’s parent company, Vancouver-based Northern Dynasty, released the 91-page appeal days after the State of Alaska filed its appeal, in which officials in Gov. Mike Dunleavy’s administration argued the Corps’ decision prevents the state from fulfilling its obligation to develop its mineral resources. Pebble previously announced it had filed its appeal with Army Corps of Engineers Pacific Division leadership but had not made the details of its arguments public.
The company insists the Nov. 20, 2020, record of decision, or ROD, signed by Corps Alaska District Commander Damon A. Delarosa denying Pebble the wetlands fill permit for its project directly contradicts what the agency’s regulatory officials wrote in the final Pebble environmental impact statement, or EIS, published last July.
The Army Corps of Engineers administers Clean Water Act Section 404 wetlands permits nationwide, but the EPA has final say over whether a wetlands fill permit is issued.
The appeal states that the ROD “speculates” that the project — primarily the mine site in the Koktuli River watershed, which would permanently lose 22 miles of stream habitat — would likely degrade stream productivity.
From the Washington Examiner, Daily on Energy:
REGAN LIKELY TO WIN GOP SUPPORT: Republican senators, though raising alarm at Biden’s aggressive climate policies, generally seemed pleased with Michael Regan, Biden’s nominee to lead the EPA, during his confirmation hearing before the Senate Environment Committee yesterday.
Regan, currently the top environment official in North Carolina, said several times during the hearing he didn’t view regulation as the sole method of slashing emissions consistent with Biden’s climate goals.
He also sought to assure Republicans angry over Biden’s decisions on the Keystone XL pipeline and oil and gas leasing that he didn’t want to kill jobs in energy-producing states. Regan said he believes many of the skill sets of energy workers “can move quickly” to jobs securing methane leaks from oil and gas pipelines, building out water infrastructure, or modernizing the power grid.
Hints on policy: Regan largely dodged most policy-related questions, including on the scope of EPA’s authority to regulate power plant greenhouse gas emissions and how he’d handle contentious small refinery waivers under the Renewable Fuel Standard.
He did suggest, however, that the EPA would seek to undo Trump-era revisions to the Obama administration waters of the U.S., or WOTUS, rule, but Regan didn’t fully commit to reinstating the Obama standards without change. Republicans have long complained the WOTUS rule overstretched the EPA’s authority to regulate even puddles on farmers’ lands.
The Trump rule “was a rollback that went even further back” than administrations of either party, Regan said, adding he is seeking “common ground” to give both environmental activists and farmers certainty.
Regan also said he is already looking for resources within the EPA’s budget to appoint both an agricultural adviser and an environmental justice adviser who would report directly to him. In addition, Regan, who is poised to be a key player in implementing Biden’s environmental justice commitments, said he would install staff at every EPA office focused specifically on minority and low-income regions most affected by pollution and restructure the EPA’s Office of Civil Rights.
Is Bipartisan Climate Action Possible?
Rich Powell, Center on Global Energy Policy, February 2, 2021
President Biden’s first days in office mark a sharp shift in US climate and energy policy, with a slew of executive orders reversing several Trump actions and directing federal agencies to pursue a wide range of new regulations in what’s been framed as “a whole-of-government approach” to the climate crisis. Combined with Democrats now in control of both houses of Congress by the slimmest of majorities, the raft of executive orders raises the question of how climate policy will advance going forward. To what extent will it advance through legislation versus executive action? To what extent will legislative action be on party lines? Will there be opportunities for bipartisan cooperation on climate?
In this edition of Columbia Energy Exchange, host Jason Bordoff is joined by Rich Powell to discuss what to expect in climate policy moving forward, particularly on the Republican side of the aisle.
Rich Powell is the Executive Director of ClearPath and ClearPath Action, the DC-based organizations developing and advancing conservative policies that accelerate clean energy innovation. Rich frequently testifies before Congress on climate change and energy innovation. He served as a member of the 2019 Advisory Committee to the Export Import Bank of the United States and is on the Atlantic Council’s Global Energy Center’s Advisory Group. Previously, Rich was with McKinsey & Company in the Energy and Sustainability practices. He holds a B.A. from Harvard College in Environmental Science and Public Policy, and a J.D. from New York University.