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Lawsuit seeks to stop federal rule on oil, gas exploration | National

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www.thecentersquare.com – By Steve Wilson | – 2024-08-29 11:51:00

(The Center Square) – A is challenging a federal rule that three states and trade say could hamper oil and gas exploration and production for small, independent operators on the outer continental shelf.

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The rule could result in billions in compliance costs for the operators, according to the plaintiffs.

The lawsuit also says the rule will destroy 36,000 , take away $10 billion in gross domestic product and cost the government more than $500 million in oil and gas royalties in 10 years. The complaint also says the Biden Administration’s agenda has been to “throttle the production (of oil and gas) on multiple fronts since day one.”

The Department of Interior, through the of Energy Management, issued a rule requires oil and gas companies without investment-grade credit rating operating on the outer continental shelf to acquire additional financing to potential decommissioning costs for old wells. The rule went into effect June 29. 

The plaintiffs, which include the states of , and Mississippi along with several oil and gas trade associations, filed a lawsuit June 17 in the U.S. District Court for the Western District of Louisiana asking for a stay on the effectiveness of the rule or an injunction stopping its implementation. 

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The government says the rule is needed to prevent taxpayers from having to cover potential decommissioning costs for these operators.

In the complaint, the plaintiffs counter that in 75 years of offshore leasing, the government has assumed $58 million in decommissioning liabilities, less than 0.03% of the $208 billion in royalties and related revenue the government has received in the past 40 years. 

The plaintiffs say in their complaint the rule would require $6.9 billion in additional financing for the smaller operators. 

“But BOEM knows — or should know — that nobody will be able to those bonds, so the lessees will be unable to meet the Rule’s requirement,” the complaint says. “The upshot? Those small and mid-size lessees — which produce over a third of the oil and natural gas from the Outer Continental Shelf — will face potentially existential consequences.

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“When they cannot meet the government’s demand for additional bonds, they can be subjected to civil penalties, forced to stop oil and gas production, and banned from operating in the .”

According to the complaint, surety bond companies told BOEM that they didn’t have the capacity to provide such bonds. 

Mallory Wynne, a partner in Jones Walker’s Corporate Practice Group and a member of the commercial transactions team, told The Center Square that the oil and gas companies posting bonds to secure liabilities and the BOEM’s requirement for supplemental bonds is nothing new. 

Wynne said the new rule may increase the cost doing business in the Gulf of Mexico for smaller lessees and operators. 

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Seth Levine is a partner in Jones Walker’s Corporate Practice Group and co-chair of the Industrial, Petrochemical and Advanced Manufacturing Industry Team.

“The rule may result in increased costs of compliance for many lessees,” Levine told the Center Square. “The rule might cause oil and gas companies to reassess and restructure the allocation of risk in transactions involving acquisitions and divestitures of lease interests.”

The American Petroleum Institute has requested to join the lawsuit, along with the Center for Biological Diversity, Healthy Gulf, the Ocean Conservancy and Louisiana Mid-Continent Oil and Gas Association, which have all filed amicus briefs. Wynne said additional intervenors are possible. 

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The Center Square

Twenty-three states ask Supreme Court to reverse energy-related decision | National

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www.thecentersquare.com – By Steve Wilson | – 2024-09-05 15:18:00

(The Center Square) – Twenty-three states are asking the U.S. Supreme Court to overturn a lower court decision that the attorneys general say could be a threat to the energy industry. 

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A brief filed this week by  Attorney General Liz Murrill and 22 other attorneys general wants the U.S. Supreme Court to throw out the decision, saying that it is as much about “federalism and sovereignty as it is about environmental .”

The case, Seven County Infrastructure Coalition v. Eagle County, Colorado, involves a proposed rail line in Utah’s Uinta Basin that would transport crude oil. Despite being authorized by the Surface Transportation Board, the rail line was halted in a decision by the U.S. Court of Appeals District of Columbia Circuit, the court which handles many administrative law cases. 

The court cited the National Environmental Policy Act as its primary reason for halting the rail line, saying that the environmental impact statement failed to “quantify reasonably foreseeable upstream and downstream impacts on vegetation and special-status species of increased drilling in the Uinta Basin and increased oil-train traffic along the Union Pacific Line, as well as the effects of oil refining on environmental justice communities the Coast.” 

It also said the environmental didn’t closely examine potential impacts to resources and risks. 

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“This is another example of federal bureaucratic overreach that will harm Louisiana and other States whose economies depend on energy, and all Americans who depend on those products,” Murrill said in a release. “We’ll continue to defend Louisiana and fight the Biden-Harris administration’s disastrous energy policies every step of the way.”

The brief also says that the decision “undermines the federal and state regulatory schemes that already govern a barrel of Utah oil that may travel to Louisiana. As a result, the decision below threatens the foundation of cooperative federalism on which our environmental law is built.

“And even more fundamentally, the red tape demanded by the D.C. Circuit will only harm states whose economies depend on the energy industry and every American who depends on the products refined by such states.”

The state are Louisiana, Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, , Virginia, West Virginia and Wyoming.

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Entergy Mississippi to build its first new power plant in 50 years | Mississippi

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www.thecentersquare.com – By Steve Wilson | – 2024-09-05 11:54:00

(The Center Square) – Entergy Mississippi is going to do something it hasn’t done in five decades: Build a new power plant.

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The Mississippi investor-owned utility that serves 459,000 customers in 45 of the ‘s 82 counties says it intends to build a combined-cycle power plant by 2028 that can be fueled by either natural gas or by hydrogen. 

The plant will replace the Gerald Andrus Steam Electric Station, which is nearly 50 years old and located in Greenville in the Mississippi Delta. 

The new power plant will be the first combined cycle power plant built from the ground up for Entergy Mississippi, which has bought three natural gas power plants in the past 20 years.

The three plants – Attala Plant in Sallis (2006), Hinds Energy Facility in (2012) and Choctaw Energy Facility in French Camp (2019) – along with Entergy’s Grand Nuclear Station and the Sunflower Solar Station located near Ruleville make up the utility’s generation portfolio. 

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“As our customers’ needs and environmental factors evolve, so must our fleet. We’re investing in cleaner, more efficient power generation now, to us keep bills lower for customers than they otherwise would be in the future,” said Haley Fisackerly, president and of Entergy Mississippi, in a release.

Entergy’s parent company was sued over its purchase of power plants formerly owned by independent operators in Mississippi and Arkansas. The U.S. Department of Justice said the utility didn’t buy power from the independent producers and bought the plants cheaply once their owners couldn’t find a market for their electricity. 

The company and the federal reached a settlement in 2012 where Entergy’s power distribution network was divested and the utility joined a regional transmission provider, the Midwest Independent Transmission System Operator.

Regional transmission providers connect the grids of multiple utilities and MISO covers Arkansas, Illinois, Indiana, Iowa, Kentucky, , Michigan, Minnesota, Mississippi, Missouri, Montana, North Dakota, South Dakota, and Wisconsin. 

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Op-Ed: Mississippi votes conservative, but state policy is often watered down | Opinion

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www.thecentersquare.com – By Douglas Carswell | Mississippi Center for Public Policy – 2024-09-03 10:34:00

Waiting for my suitcase in the arrivals hall at Jackson airport the other evening, I realized that the luggage carrousel was a pretty good metaphor for Mississippi . Like suitcases on a carousel, many leaders simply sit on the conveyor belt of politics, waiting their turn to get moved along to the next role.

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Too often, leaders are carried along by time and , rarely offering any vision as to what our state should do differently.

This explains why Mississippi conservatives have achieved less in 12 years than Arkansas, Louisiana and Alabama have accomplished in the past 12 months. Louisiana did not even have a Republican governor this time last year, yet they’ve already passed universal school choice.

Things could be about to change if House Speaker Jason White has his way.

This , White announced that he will be hosting a Tax Policy Summit on Sept. 24 to take a deep dive into the prospects for Tax Reform.

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My friend, Grover Norquist, will be speaking, as will Gov Tate Reeves, as well leading conservative figures from the .

a conversation in public matters because in the past the leadership in our state Senate has done what it can to head off tax cuts. Bringing the facts of what can and cannot be done into the open makes it far harder for anyone to keep finding new excuses to oppose actual conservative policy.

Sunshine is the best disinfectant against the putrid politics of backroom deals. We have seen far too many backroom maneuvers used to kill off good conservative policy in this state.

Back in 2022, Mississippi passed a law to cut the state income tax to a flat 4 percent. This $525 million tax cut, driven forward by Speaker Philip Gunn and Gov Reeves, benefited 1.2 million taxpayers and their families. But we must not forget how some in the Senate fought against it – not in the open, of course.

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Weak Senate leadership has a history of opposing conservative proposals in our state. Seldom do they have the courage to out and explicitly kill off conservative measures. Instead, they do it on the sly.

The Senate leadership maneuvered to stop anti-DEI legislation in 2024. I don’t recall anyone coming out and explaining why they opposed anti-DEI law. They just killed it in committee with a nudge and wink.

For three years in a row, the Senate leadership has killed off attempts to restore the ballot initiative. Again, those against resorting the ballot lack the courage to say they are against it. They killed that, too, on the sly.

Rep Rob Roberson’s excellent school reform bill, perhaps the only big strategic achievement of this year’s , passed despite attempts to scupper it by some in the Senate. (Part of the backroom deal to get the bill passed was to change its name. It really was that petty.)

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When the Senate leadership wants to oppose an authentically conservative policy, they follow a now familiar pattern.

A reason is cited as to why what is being proposed can’t be done. School choice, we were once told, would be unconstitutional. An anti-DEI law, it was implied, was unnecessary because there was no DEI on campus.

Once that excuse is shown to be nonsense (there is no constitutional bar to school choice, DEI is rampant on campus), another excuse is promptly conjured up. And on it goes.

Each time the Senate leadership opposes conservative policy this way, I wonder what their alternatives are. The answer is that most of the time there are none. It is pretty low grade to oppose ideas simply because they are not your own.

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Eventually, of course, a suitcase that sits on the carousel for too long ends up in lost luggage.

As a direct consequence of the 2022 Reeves-Gunn tax cuts, Mississippi is now starting to see a flood of investment into the state.

Every time you hear about a new factory opening up in our state, remember who and what helped make it happen. I am very optimistic that this Tax Summit could see further progress to make our state more competitive.

Douglas Carswell is the President and of the Mississippi Center for Public Policy.

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