June 2022

The guidance sends a signal that carbon capture and sequestration remains a focus of the current administration’s decarbonization efforts.

By Janice Schneider, Nikki Buffa, Josh Bledsoe, Nathaniel Glynn, and Kevin Homrighausen

On June 8, 2022, the US Department of the Interior’s (Interior) Bureau of Land Management (BLM) issued new guidance[1] that outlines the use of federal public lands for geologic sequestration of carbon dioxide (CO2). This widely anticipated guidance updates previous interim guidance on exploration and site characterization for CO2 sequestration that BLM issued in 2012.

Public agencies prevailed in 71% of CEQA cases analyzed.

By James L. Arnone, Daniel P. Brunton, Nikki Buffa, Marc T. Campopiano, Peter J. Gutierrez, John C. Heintz, Lauren E. Paull, Aron Potash, Lucas I. Quass, Natalie C. Rogers, Jennifer K. Roy, and Winston P. Stromberg

Latham & Watkins is pleased to present its fifth annual CEQA Case Report. Throughout 2021 Latham lawyers reviewed each of the 51 California Environmental Quality Act (CEQA) appellate cases, whether published or unpublished. Below is a compilation of the information distilled from that annual review and a discussion of the patterns that emerged.

In 2021, the California Courts of Appeal issued 51 opinions that substantially considered CEQA while the US District Court for the Northern District of California issued one opinion. Notably, 2021 saw an increased focus on CEQA wildfire analysis. In cases like Sierra Watch v. County of Placer, the Court of Appeal ruled that the County of Placer failed to adequately analyze wildfire risks by wrongly assuming first responders would provide traffic control in the event of an emergency. And in Newtown Preservation Society v. County of El Dorado, the Court upheld a mitigated negative declaration in the face of public concerns that a bridge reconstruction project would result in significant impacts on resident safety and emergency evacuation in case of a wildfire.

Also notable in 2021 was the rare occurrence of a Court of Appeal partially affirming the denial of an anti-SLAPP motion following a CEQA lawsuit. In Dunning v. Johnson, the Court found that a project developer had established a probability of demonstrating lack of probable cause for the underlying CEQA petition, as well as a probability of demonstrating that the petitioners pursued the CEQA litigation with malice.

The Claims Code seeks to ensure the integrity of voluntary carbon markets to support achievement of the Paris Agreement goals.

By Jean-Philippe Brisson, Paul A. Davies, Sarah E. Fortt, Betty M. Huber, Alicia Robinson, and Deric Behar

The Voluntary Carbon Markets Integrity (VCMI) Initiative is “a multi-stakeholder platform to drive credible, net-zero aligned participation in voluntary carbon markets.” The VCMI Initiative, for which the UK government announced its support in March 2021, is co-funded by the Children’s Investment Fund Foundation and the UK Department for Business, Energy, and Industrial Strategy. A central objective of VCMI is to issue guidance for companies and other non-state actors on how carbon credits can be voluntarily used and claimed as part of credible net zero decarbonization strategies. To further this objective, VCMI published for public consultation a Provisional Claims Code of Practice (Claims Code) on June 7, 2022.

The agency will use the information to take further steps to address climate risks in the commodity derivatives markets.

By Jean-Philippe Brisson, Yvette Valdez, Douglas Yatter, Joshua Bledsoe, Michael Dreibelbis, Qingyi Pan, and Deric Behar

On June 2, 2022, the Commodity Futures Trading Commission (CFTC) issued a Request for Information (RFI) to inform its understanding and oversight of climate-related financial risk relevant to the derivatives markets and underlying commodities market. The CFTC is seeking public feedback on all aspects of climate-related financial risk that “may pertain to the derivatives markets, underlying commodities markets, registered entities, registrants, and other related market participants.”

According to the RFI, public response may be used to inform new or amended guidance, interpretations, policy statements, regulations, or other potential CFTC action. The information will also inform CFTC’s response to the recommendations of the Financial Stability Oversight Council 2021 Report on Climate Related Financial Risk (see Latham’s blog post on the FSOC Report) and inform the work of the CFTC’s Climate Risk Unit (CRU) (see Latham’s blog post on the CRU). Comments on the RFI were originally due by August 8, 2022. On July 18, 2022, the CFTC extended the deadline by an additional 60 days; comments are therefore due by October 7, 2022. 

The action marks the clearance of another significant hurdle toward BOEM’s offshore wind lease sales in federal waters offshore California, anticipated to occur this fall.

By Nikki Buffa, Jennifer K. Roy, Janice M. Schneider, Brian McCall, and Julie Miles

In the first half of 2022, the Bureau of Ocean Energy Management (BOEM) has moved swiftly toward the first offshore wind lease sales in California, currently anticipated to occur in the fall. BOEM has identified a total of five proposed leases across two areas — the Humboldt Wind Energy Area (WEA) and the Morro Bay WEA. In April 2022, BOEM issued a Consistency Determination for the Morro Bay WEA — as required by the National Oceanic and Atmospheric Administration Federal Consistency Regulations — and, just last week, the California Coastal Commission (the Commission) conditionally concurred with this determination.

The record-low health advisories form part of the EPA’s 2021 PFAS Strategic Roadmap, which forecasts further regulatory action at both state and federal levels.

By Julia Hatcher, Kegan A. Brown, Thomas C. Pearce, Taylor West, Andy Landolfi, and Phil Sandick

On June 15, 2022, the United States Environmental Protection Agency (EPA) issued interim, updated drinking water health advisories (HA) for two of the most common per- and polyfluoroalkyl substances (PFAS): perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS).[1] EPA also issued two final HAs for perfluorobutane sulfonic acid and its potassium salt (PFBS) and hexafluoropropylene oxide and its ammonium salt (GenX).[2]