Appearing before the Senate Committee on Banking, Housing, and Urban Affairs on September 14, 2021, U.S. Securities and Exchange Commission (“SEC”) Chair Gary Gensler testified to the burgeoning investor demand “for consistent, comparable, and decision-useful disclosures” around climate risk and human capital management, and stated his belief that “the SEC should step in when there’s this level of demand for information relevant to investors’ investment decisions.”
In two recent client Alerts, we discuss SEC activity with respect to climate change and human capital management and board diversity disclosure requirements for public companies. (Continue reading)
Listen: Energy, Climate, ESG & Environmental Matters in Congress and the Biden Administration Webinar
Kirkland recently hosted a live webinar that addressed current energy, climate, ESG and environmental matters in Congress and the Biden administration. The webinar focused on the Senate's bipartisan $1.2 trillion infrastructure bill and the reconciliation process being used to gain passage of a potential $3.5 trillion in spending on climate, energy, and other programs.
Click here to watch the event.
Massive Bipartisan Infrastructure Bill Includes Billions in Funding and Process Improvements for Energy and Infrastructure
On August 10, 2021, the U.S. Senate passed by a vote of 69-30 a sprawling $1.2 trillion bipartisan infrastructure bill, the Infrastructure Investment and Jobs Act (“Act”), which contains over $550 billion in new federal spending. If enacted, the Act would provide billions in support for energy and infrastructure across the commodity spaces and a number of important improvements in the federal permitting process. In this post, we offer our take on key portions of the Act that have the greatest potential to impact energy and infrastructure market participants and investors. (Continue reading)
Biden Administration Affirms Burgeoning Interest in Carbon Capture Investments
On June 30, 2021, the White House Council on Environmental Quality issued a Report to Congress on Carbon Capture, Utilization, and Sequestration (“CCUS”). The overall goal of the report is to outline the administration’s commitment to the responsible development and deployment of CCUS as needed to decarbonize the U.S. economy by mid-century. To that end, the report identifies opportunities to improve existing infrastructure and incentives relating to carbon capture. (Continue reading)
Listen: Raising and Investing Growth Capital in Energy Transition and Tech — Transaction Structures, Fundraising Dynamics and ESG Considerations
Kirkland partners Shubi Arora, Alexandra Farmer, Matthew Nadworny and Jhett Nelson led a conversation on raising and investing growth capital in the energy transition and tech market, including perspectives on transaction structures, fundraising dynamics and ESG considerations.
- Market Overview
- LP Appetite and Fundraising Environment
- Developing ESG Programs for Growth-Focused Sponsors
- Growth Equity Overview
- Unique ESG Due Diligence Considerations
- Growth Equity Investments - Structures, Protections and Exit Considerations
Listen to the full webinar here.
Texas Adopts Legislation to Better Prepare Energy Market for Extreme Weather
In response to Winter Storm Uri, the Texas legislature has adopted a number of bills that could have a significant impact on the energy industry and energy market participants. This post addresses key impacts of SB2 and SB3 — two of the most significant energy-related bills passed by the Texas legislature this session — as well as the status of other legislation awaiting Governor Abbott’s signature. (Continue reading)
Biden Administration Releases Budget and Green Book, Providing Details on Clean Energy Tax Proposals
On May 28, 2021, the Biden administration released its fiscal year 2022 budget proposal, which includes two major legislative plans previously released by the administration, the American Jobs Plan and the American Families Plan. On the same day, the Treasury Department released its highly anticipated “Green Book,” which provides additional detail around the administration’s tax proposals. In this post, we highlight those proposals most relevant to our infrastructure clients. (Continue reading)
Surging Sustainable Finance Market Presents Opportunities for Energy and Infrastructure
The sustainable finance market is experiencing rapid growth, driven by many factors including an increasing number of capital providers seeking to meet their own environmental, social and governance (ESG) goals. There is a sense we are now at an inflection point, with many investors, businesses and financial services providers keenly focusing on climate mitigation. While the COVID-19 pandemic disrupted many industries, it has not slowed down sustainable finance and in fact may have increased focus on social infrastructure and investor social responsibility, driving additional growth in this market.
We discuss a number of challenges and opportunities for energy and infrastructure investors and companies seeking to pursue sustainable finance strategies, (Continue reading)
Listen: Energy, Climate, ESG, Environmental & Tax Matters in the First 100 Days of the Biden Administration Webinar
Kirkland recently hosted a live two-panel webinar that addressed energy, climate, ESG, environmental and tax matters in the first 100 days of the Biden administration.
The two panels discuss executive orders, federal regulatory actions and legislation that the Biden administration has taken to date and what we anticipate the administration plans to do in the future. Listen to the recordings below:
Panel 2: Tax
Listen: ESG & Impact Webinar Series
Kirkland recently hosted a series of "sustainable" fireside chats with innovators in finance, investment and impact. Listen to the full recordings below:
- Innovation and Investments in Carbon Capture, Utilization, and Storage — A conversation opportunities in the CCUS market. highlighting the burgeoning interest in Carbon Capture, Utilization, and Storage ("CCUS"), driven by the critical role it is expected to play in attaining the goals of the Paris Agreement, and growing commercial
- Innovation and Investments in ESG through Green Bonds and Sustainable Finance — A discussion with Kenneth Graham Lay, known as “the architect of the modern bond market.” While Treasurer of the World Bank, Mr. Lay introduced some of the first green bonds and catastrophe bonds, and he also conceptualized and introduced the first global bonds for sovereign and supranational financing.
- The Future of Low-Carbon Hydrogen — A conversation with Andrew Marsh, CEO of Plug Power; John Lochner, VP Innovation at NYSERDA; and Janice Lin, Founder and President of the Green Hydrogen Coalition and Founder and CEO of Strategen, sharing their insights into the future of the rapidly expanding and evolving market for low-carbon hydrogen.
FERC Opens the Door to Carbon Pricing in Organized Wholesale Electricity Markets
On April 15, 2021, the Federal Energy Regulatory Commission (“FERC”) issued a policy statement on Carbon Pricing in Organized Wholesale Electricity Markets (the “Policy Statement”). It provides a non-binding policy framework for Regional Transmission Organizations (“RTO”) and Independent System Operators (“ISO”) to consider when submitting filings under section 205 of the Federal Power Act (“FPA”) to incorporate state-determined carbon prices in the wholesale electricity markets administered by the RTOs/ISOs. FERC’s framework will be applied on a case-by-case basis. Two Commissioners dissented in part, laying the groundwork for jurisdictional challenges to future section 205 filings that might be made by RTOs/ISOs on the basis of the Policy Statement. (Continue reading)
Public and Private Sector Commitments and Announcements from President Biden’s Leaders Summit on Climate
On April 22 and 23, President Joe Biden convened world leaders in a Leaders Summit on Climate, announcing on behalf of the U.S. a goal to reduce U.S. emissions by at least 50% from 2005 levels by 2030. In connection with the two-day event, dozens of other countries announced new climate initiatives — from reducing emissions to limiting coal consumption — and private sector leaders from world’s largest asset managers, banks and corporations formed coalitions to support climate finance and emissions reductions. Through President Biden’s statements and White House press releases issued over the course of the Summit, the U.S. announced new steps to strengthen its climate policy. (Continue reading)
Biden Charts Future of U.S. Infrastructure in Ambitious American Jobs Plan
by Brooksany Barrowes, William J. Benitez, P.C., Stephen Butler, P.C., Scott W. Cockerham, Robert S. Fleishman, Nicholas Gladd, Robert P. Goodin, Brian C. Greene, P.C., Jonathan E. Kidwell, Michael J. Masri, Kelann Brook Stirling, Paul D. Tanaka, P.C., Raya B. Treiser and David Wheat, P.C.
In a televised speech from a union hall in Pittsburgh on March 31, 2021, President Biden pitched his $2-trillion-plus infrastructure-focused American Jobs Plan (the “Plan”) as a “once-in-a-generation investment in America.” The Plan is a bold proposal designed to transform the future of infrastructure in the United States. Yet, as members of the Biden administration have acknowledged, the Plan is a framework and will be subject to significant and perhaps transformative revisions through the legislative process.
This post addresses highlights of the Plan, the Biden administration’s proposal for tax increases to pay for its costs and potential market opportunities the Plan would create if enacted. (Continue reading)
Listen: Investment Opportunities in Energy Transition & Technology: Q&A With Trilantic North America and EIV Capital
Kirkland partners Shubi Arora and Matt Nadworny recently led a discussion with Glenn Jacobson of Trilantic North America and David Finan of EIV Capital on the current state of energy transition and technology, including perspectives on:
- Increased investor interest in energy transition and technology strategies
- Differentiation amongst sponsors focusing on energy transition and technology
- Measuring carbon footprint of current portfolios
- Short- and long-term investment opportunities
- Key differences compared to traditional energy investing
- Impact of SPACs on new investments and potential exitsGeneral perspectives on future of energy
Webinar Recording: Carve-Out Transaction Considerations in the Energy Sector
- Overview of Carve-out Transactions and Key Considerations
- Shared Contracts, Guarantees and Regulatory Matters
- Tech & Intellectual Property
- Information Technology
- Transition Services Agreements
- Employment Matters
- Other Separation Specifics
Changing Course: FERC Adopts New Policy on Its Consideration of Certain Climate Impacts in Reviewing Proposed Interstate Pipeline (and LNG?) Infrastructure
On March 22, 2021, the Federal Energy Regulatory Commission (“FERC”), in an order approving a certificate of public convenience and necessity for an interstate natural gas pipeline project (“Order”), affected a significant policy shift by formally considering climate change impacts in its approval. The vote on the order was 3-2, with two Commissioners issuing strong dissents raising concerns about the legality of the new policy and its impact on a pending generic proceeding in which FERC currently is accepting public comments. (Continue reading)
Biden Administration’s Energy, Environmental, and Climate Policies: Latest Updates and Actions (March 29, 2021)
This post summarizes noteworthy developments regarding federal energy, environmental, and climate policies in the past several weeks, including: the White House's announcement of a “whole-of-government” approach to jumpstarting the U.S. offshore wind sector; the Department of the Interior's return to regular order of business for reviews of new oil and gas permits on federal lands; remaining uncertainty over the future of the 2020 revisions to NEPA’s implementing regulations; Federal Energy Regulatory Commission limits on the ability of states and other retail electricity regulatory authorities to limit the participation of demand response resources in wholesale electricity markets; and President Biden's upcoming announcement about his planned infrastructure package. (Continue reading)
FERC’s Broadview Reversal Restores and Expands Opportunities for Qualifying Facilities under PURPA
In a March 19, 2021, order, the Federal Energy Regulatory Commission (“FERC”) reversed, on rehearing, its September 2020 order in Broadview Solar, LLC. The reversal restores longstanding FERC precedent for determining qualifying facility (“QF”) eligibility pursuant to the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and extends it to projects with integrated battery energy storage. (Continue reading)
Innovation and Investments in Carbon Capture, Utilization, and Storage
Kirkland recently hosted the first “sustainable” fireside chat in our ESG & Impact Webinar Series. The topic was Innovation and Investments in Carbon Capture, Utilization, and Storage (CCUS). The webinar was hosted by Kirkland ESG & Impact practice leader Alexandra Farmer with special guest Dr. Julio Friedmann, Senior Research Scholar at the Center for Global Clean Energy Policy at Columbia University. The conversation highlighted the burgeoning interest in CCUS, driven by the critical role it is expected to play in attaining the goals of the Paris Agreement, and potential opportunities in the CCUS market. (Continue reading)
Biden Administration’s Energy, Environmental and Climate Policies: Week In Review
This post summarizes noteworthy recent developments regarding federal energy, environmental and climate policies, including: Jennifer Granholm's confirmation as Secretary of the U.S. Department of Energy (“DOE”); DOE's announcement that clean energy industry veteran Jigar Shah will lead its Loan Programs Office, which has $40 billion of existing loan and loan guarantee authority that it can utilize for clean energy projects; and the Senate Committee on Energy and Natural Resources' vote to advance Deb Haaland’s nomination as secretary of the U.S. Department of Interior. (Continue reading)
Industry Efforts to Scale Voluntary Carbon Markets Advance
Industry initiatives are underway to bring scale, standardization and transparency to voluntary carbon offset markets, which are increasingly used as a tool by corporations looking to achieve climate commitments. The Taskforce on Scaling Voluntary Carbon Markets (“TSVCM”) is a private sector-led initiative to standardize and scale the voluntary carbon credit market to help meet the goals of the Paris Agreement. Following a public consultation, on January 27, 2021, the TSVCM published its blueprint (the “Blueprint”) that is intended to serve as a roadmap for creating this market. (Continue reading)
FERC Resumes Review of Key Policies Concerning Interstate Natural Gas Pipeline Certificates(Continue reading)
Webinar Recording: Innovation and Investments in Carbon Capture, Utilization and Storage (ESG & Impact Webinar Series)
Kirkland ESG & Impact partner Alexandra Farmer hosted the first in a series of “sustainable” fireside chats with innovators in finance, investment and impact. This inaugural ESG chat featured Dr. Julio Friedmann, who honed his views on carbon capture, utilization and storage ("CCUS") over decades spent in business, government and academia. Dr. Friedmann is now sought after by some of the world’s largest corporations for his advice on their “carbon wrangling” strategies.
Listen to the full webinar here.
Biden Administration’s Energy, Environmental and Climate Policies: Week In Review (February 19, 2021)(Continue reading)
Industry Update: Texas Mandates All Texas-Produced Natural Gas Be First Made Available for Sale to Power Producers Before Export Out-of-State
On February 17, 2021, Texas Governor Greg Abbott, citing emergency powers, issued a mandate directing the Texas Railroad Commission (“RRC”), the state’s oil and gas regulator, to require “all [Texas] sourced natural gas be made available for sale to local power generation opportunities before leaving the state” temporarily through Sunday, February 21, 2021. In response, the RRC issued a formal Notice to Operators (the “Notice”) the next day restating (verbatim) the Governor’s mandate but did not otherwise issue any rules or provide any formal guidance to the industry.
The lack of specificity in the Notice has left natural gas producers, shippers, marketers, customers and end-users questioning how to interpret the mandate, what the penalties will be for non-compliance (if any), and how (or whether) the RRC will enforce it, if it is enforceable at all. (Continue reading)
Biden Administration’s Energy, Environmental and Climate Policies: Latest Updates and Actions (February 12, 2021)
Real-world impacts of President Biden’s day one Executive Orders and the Administration’s policy shift on energy, the environment and climate have begun. In the last two weeks, the Biden administration has taken actions ranging from the revocation of certain oil and gas permit authorizations to moving forward with a large-scale solar project on federal land in California. The Department of Justice has begun seeking to stay litigation over Trump-era regulatory rollbacks (such as the Navigable Waters Protection Rule) pending review of rules put in place by the Trump administration.
This post summarizes noteworthy developments regarding federal energy, environmental and climate policies in the past two weeks. (Continue reading)
Biden Administration’s Energy, Environmental, and Climate Policies: Week in Review
After the flurry of activity on January 20, 2021, the Biden administration continued to define its energy, environmental and climate policy agenda in its first full week in office. Among the most significant actions announced this week, the Biden administration suspended issuance of new oil and gas leases on federal lands and waters pending completion of a comprehensive review of the federal government’s oil and gas leasing and permitting program. Another important development this week is the U.S. Environmental Protection Agency ("EPA") letter to the U.S. Department of Justice ("DOJ") requesting that DOJ seek to stay all pending litigation over rules promulgated during the Trump administration.
This post summarizes the noteworthy developments impacting the federal energy, environmental and climate policies in the past week. (Read more)
Industry Update: Biden Administration Issues Moratorium on New Federal Oil and Gas Leasing
On January 27, 2021, President Joe Biden signed an Executive Order imposing a moratorium (the “Moratorium”) on new federal oil and gas leasing following the previous issuance of a 60-day suspension of the Department of Interior’s authority to issue federal oil and gas drilling permits. The Moratorium will temporarily prohibit new leasing auctions on federal lands and in the Gulf of Mexico while the Biden administration reviews the existing leasing program (including royalty rates associated with oil and gas production) and its expected environmental impacts. (Read more)
Watch: 2021 U.S. DOE Energy Storage Financing Summit
Kirkland recently co-hosted the 2021 U.S. DOE Energy Storage Financing Summit with Mustang Prairie Energy. The two-part event focused on operating experience and how that translates into unit and portfolio strategy, providing greater transparency to financial institutions, and promoting deeper insights into this emerging asset class to facilitate further investment. Workshops, panels and keynotes featured topics including “Energy Storage — Increased Resiliency and Grid Decarbonization,” “Energy Storage Market Outlook” and more.
Listen to the event here:
Summit Part 1
Summit Part 2
Biden Administration is Off to a Fast Start: Day One Actions on Energy, Environmental, and Climate Issues
by Brian C. Greene, P.C., Brooksany Barrowes, Robert S. Fleishman, Andrew L. Stuyvenberg, Paul D. Tanaka, P.C., Alexandra N. Farmer, Jonathan E. Kidwell, Raya B. Treiser, Tyler Burgess, Aaron J. Newell, Maddy Foote, Madison Erin McMurray and Courtney Tibbetts
President Biden moved quickly to implement his climate agenda on his first day in office, ordering numerous actions in furtherance of his administration’s climate agenda that will have a dramatic impact on the energy and infrastructure sectors. Among his most highly publicized first day actions, Biden announced that the U.S. will rejoin the Paris Climate Agreement. President Biden’s other day one actions on climate included new Executive Orders, the repeal of certain Executive Orders and the freezing of “midnight regulations” issued by the Trump administration, along with sweeping directives to agencies that will result both in changes to how existing laws and regulations are enforced and the issuance of new regulations.
This post covers these day one actions and their impact on energy and infrastructure sectors, as well as other policies expected within the coming weeks. (Read more)
Final Carbon Sequestration Tax Credit Regulations Shorten Recapture Period, Provide Guidance on “Utilization”
The U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) issued final regulations for the carbon sequestration tax credit under section 45Q of the Internal Revenue Code on January 6, 2021. The regulations make a number of important clarifications and technical changes, including by (1) shortening the tax credit recapture period from five years to three, and (2) providing needed guidance on tax credit eligibility for carbon oxide that is “utilized” in a chemical process or put to commercial use.
The regulations finalize, with modifications, an initial set of proposed regulations that was issued in May 2020 and leave project sponsors and investors with a much clearer and complete set of rules than they had in January 2020. (Continue reading)
IRS Relaxes Tax Credit Qualification Rules for Renewable Energy Projects Located Offshore or on Federal Land
by Scott W. Cockerham
IRS guidance released on December 31, 2020, makes it easier for developers of renewable energy projects located offshore or on federal land to qualify for tax credits by giving them an extended 10-year runway to place the projects in service after construction begins. Prior guidance required such projects to be placed in service within four years after the year in which construction began unless the developer could show that it continuously incurred costs and/or performed physical work on a project throughout the construction period.
The extension provides welcome certainty to developers of large-scale projects offshore or on federal lands, particularly offshore wind projects that have been facing permitting and other delays and were pushing up against a four-year deadline. (Read more)