The Texas House of Representatives and Senate are considering three similar, but not identical, legislative drafts that could impose substantial grid charges directly on renewable generation businesses. The Legal Update at the link below provides further detail.
On March 31, 2021, the Biden administration released the American Jobs Plan (the “Infrastructure Plan”), which is a proposal that, if ultimately enacted, aims to modernize outdated infrastructure, create additional jobs and increase the United States’ global competitiveness. Alongside the Infrastructure Plan, the Biden administration released a Made in America Tax Plan (the “Tax Plan”), which is designed to reward US investment, eliminate profit shifting and ensure other nations will not gain a competitive edge by becoming tax havens. Taxpayers should carefully monitor both the Infrastructure Plan and the Tax Plan and evaluate the impact that such plans may have on investments, operations and strategic decisions.
On March 26, 2021, the Mexican House of Representatives published in the Parliamentary Gazette an initiative to amend certain provisions of the Hydrocarbons Law, an amendment directly proposed by President Andrés Manuel López Obrador.
This Legal Update details the content of such initiative and the next steps for its approval.
On March 17, 2021, U.S. Senators Chris Coons (D-Del.) and Bill Cassidy, M.D. (R-La.) and U.S. Representatives Marc Veasey (D-Texas) and David McKinley (R-W.Va.) introduced the Storing CO2 And Lowering Emissions (SCALE) Act. The bill is intended to help develop infrastructure buildout to transport CO2 from the capture site to be used as feedstock for the manufacture of other products, to oilfields where it is injected to enhance oil recovery, or to underground storage locations. CO2 capture projects are expensive and the EPA permitting process for storage facilities is lengthy. Thus, project financing and permitting are key drivers to determine the speed and scope at which global climate goals with respect to greenhouse gas reduction are achieved. The 45Q tax credit for carbon capture and sequestration incentivizes carbon capture but is not by itself economically sufficient to provide the necessary equipment and transportation infrastructure.
The energy industry continues to evolve as sectors converge and as demand, supply and consumer preferences change. The global economy is shifting to lower-carbon sources of energy, coinciding with (or resulting from) a renewed focus on environmental, social and governance (ESG) issues. “Energy transition” is commonly used to describe the recent full-court press towards cleaner energy; however, energy evolution, energy progression, energy advancement and a host of other terms have all been used to describe achievement towards a net-zero carbon world. The recent policy focus on renewable and clean energy, which has trickled down to capital preferences, consumer demand and other forces, is driving discussions and decisions towards “cleaner” energy, and, in certain instances, away from traditional fossil fuels. Companies are analyzing whether to pivot or to expand, or a combination thereof, as the continued shift towards greener or cleaner energy sources progresses. These topics are further discussed in the Legal Update at the link below.
The Polar Vortex 2021 Fallout continues to be in the news in Texas. In the Legal Update below you will see the most recent developments.
Join Mayer Brown on April 6, 2021, for our Carbon Capture Use and Sequestration Boot Camp – from Feasibility to Execution. This comprehensive, interactive event will discuss the CCUS market, how to qualify for the Section 45Q tax credit, how to finance and structure CCUS projects, and the underlying commercial contracts that will be vital to the success of the project. Topics include:
- General Overview of ESG, Energy Transition, and the Role of CCUS
- CCUS Opportunities for Multiple Stakeholders
- Section 45Q Tax Credits
- Traditional and Alternative Financing and Attracting Capital Overview
- Tax Equity Financing
- Equipment Acquisition and Facility Access Arrangements
- Transportation of CO2 from the Emissions Source to its End Use
- CO2 Storage Land Rights and Other Considerations / EOR
A federal district court suspends, with general effects, President López Obrador’s amendments to the Electricity Industry Law.
This Legal Update details the content of the decision on the injunction or amparo.
The Resolution That Establishes the Goods Whose Import and Export Are Subject to Regulations Issued by the Ministry of Energy was officially suspended by the Ministry of Economy and the Ministry of Energy through a publication in the Federal Official Gazette.
This Legal Update details the content of such publication.
The Senate discussed and approved the draft of the Amendment of the Electrical Industry Law, now only awaiting President López Obrador’s approval before it can enter into force.
This Legal Update details the session of the Senate and the content of the amendment.