American Oil and Gas Reporter - October 2017 - 27

Federal Update

Appropriations Bill Blocks Regulations
WASHINGTON-The U.S. House of
Representatives approved a consolidated
appropriations package to fund the Department of Interior and Environmental
Protection Agency in September that included provisions to block several regulations opposed by the oil and gas industry.
HR 3354, the Make America Secure
and Prosperous Appropriations Act of 2018,
passed the House 211-198 on Sept. 14.
According to various association and media
reports, among its provisions, the $1.2
trillion fiscal 2018 spending bill would:
* Prevent the EPA from enforcing
its New Source Performance Standards
for methane emissions from new and
modified oil and gas sources;
* Block the Bureau of Land Management's venting and flaring regulations;
* Prohibit federal agencies from using
the Obama-era social cost of carbon calculation when formulating new rule makings; and
* Stop EPA from using any funds to
expand greenhouse gas regulations under
Section 115 of the Clean Air Act.
The Independent Petroleum Association
of America and the Texas Independent
Producers & Royalty Owners Association
note that the methane and social cost of
carbon amendments both were introduced
by Representative Markwayne Mullin,
R-Ok. The methane amendment was approved 218-195 and the social cost of
carbon amendment passed 225-186.
Published reports quote Mullin saying
during floor debate that, "Methane emissions from oil and natural gas have declined
significantly in recent decades without
multiple, overlapping federal regulations.
Congress must act to block this job-killing
regulation estimated to cost the U.S. economy $530 million annually."
Mullin also pointed out that the House
of Representatives had voted at least 11
times previously to block, defund or oppose
the social cost of carbon, reports say.
According to those reports, the amendment to stop BLM from enforcing its
Waste Prevention, Production Subject to
Royalties, and Resource Conservation
Rule was introduced by Representative
Steve Pearce, R-N.M., and passed 216186. The amendment to keep EPA from
expanding Section 115 GHG regulations
was offered by Representative Scott Perry,
R-Pa., and passed on a voice vote.
In addition to those provisions, the Na-

tional Ocean Industries Association says
HR 3354 "allows for the continued development of a new five-year Outer Continental
Shelf leasing plan, the timely consideration
of permit applications for much-needed
Atlantic seismic surveys, prevents costly
inspection fee increases for offshore drilling,
prohibits the enforcement of the outdated
Arctic drilling rule, and protects Pacific
energy production."
However, NOIA does express concern
regarding an amendment offered by Representative Andy Harris, R-Md., that
would prevent Interior from administering
offshore wind leases within 24 nautical
miles of Maryland and Delaware, and
which the association says would affect
all or a majority of three leased areas
offshore Maryland.
"The language would violate lease
and contract sanctity, setting a dangerous
precedent for all forms of offshore energy
development," NOIA worries.
New Legislation
A couple new bills introduced in September that received industry endorsements
were S 1844, the Coordinating Interagency
Review of Natural Gas Infrastructure Act
introduced by Senators Jim Inhofe, ROk., and Angus King, I-Maine, and HR
3761, the Carbon Capture Act, which was
brought by a 30-member coalition led by
Representative Mike Conaway, R-Tx.
The American Petroleum Institute says
S 1844 will "increase certainty, transparency and efficiency in the permitting
process for natural gas pipelines at the
Federal Energy Regulatory Commission."
It also was praised by Don Santa, president and chief executive officer of the Interstate Natural Gas Association of America,
who commented, "Despite the clear need
for new pipelines, the permitting process
has become more protracted and challenging.
While FERC acts in a timely manner on
most proposed applications, roadblocks and
delays are becoming commonplace at other
federal and state permitting agencies."
According to Senator Inhofe's office,
S 1844 also has the support of the Natural
Gas Supply Association and the Center
for LNG. It establishes FERC as the lead
agency for National Environmental Policy
Act reviews for all natural gas infrastructure projects, sets timelines for conducting
federal reviews, and requires that the
NEPA review coordinated by FERC and
participating agencies "is usable by the

participating agencies in carrying out
(their) obligations with respect to each
federal authorization for the project."
HR 3761 would extend and increase
the existing Section 45Q income tax
credit for capturing and sequestering carbon dioxide, according to the National
Enhanced Oil Recovery Initiative. NEORI
co-Director Brad Crabtree calls it "smart,
bipartisan energy policy that should be
enacted quickly."
26 U.S. Code § 45Q provides a $10
per metric ton tax credit on CO2 captured
at a qualified facility and used as a tertiary
injectant in a qualified crude oil or natural
gas recovery project. The tax credit increases to $20 a metric ton for CO2 disposed in secure geological storage and
not used for EOR.
NEORI says HR 3761 also "expands
eligibility for the credit" and "extends
CO2 capture and use to new beneficial
commercial applications beyond oil recovery."
Although the text of HR 3761 had not
yet been posted on congress.gov, TIPRO
notes that U.S. Senator Heidi Heitkamp,
D-N.D., introduced a similar bill in July. S
1535, the Furthering Carbon Capture, Utilization, Technology, Underground Storage
and Reduced Emissions (FUTURE) Act
would gradually increase the credit for
CO2 used in EOR from $12.83 to $35.00 a
metric ton between 2016 and 2027, and
would increase the credit for CO2 not used
in EOR from $22.26 to $50.00.
Onshore Energy
TIPRO also mentions three bills related
to oversight of onshore energy production
that were the subject of hearings by the
House Subcommittee on Energy and Mineral Resources on Sept. 6. Specifically,
TIPRO says:
* HR 3565, the Federal Lands Freedom Act introduced in July by Representative Diane Black, R-Tn., would delegate primary authority to states for regulating oil and gas development on federal
lands.
* HR 2907, the Planning for American
Energy Act of 2017, introduced in June
by Representative Scott Tipton, R-Co.,
directs DOI to develop an all-of-theabove energy production strategy for onshore federal lands every four years.
* HR 2661, the State Mineral Revenue
Protection Act, introduced in May by
Representative Liz Cheney, R-Wy., enables
OCTOBER 2017 27
http://www.congress.gov
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