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In addition to the federal reentry into the Paris Agreement, state and local governments, non-governmental organizations, and financial institutions have made, and will likely continue to make, more aggressive efforts to reduce emissions and advance the objectives of the Paris Agreement.
−Removed: Executive orders from the federal administration, in addition to federal, state and local legislative and regulatory initiatives proposed or adopted in an attempt to limit the effects of climate change, including greenhouse gas emissions, could have significant impacts on the energy industry including government-imposed limitations, prohibitions or moratoriums on the use and/or production of gas and oil, establishment of a carbon tax and/or methane fee, lack of support for system modernization, as well as accelerated depreciation of assets and/or stranded assets.
+Added: Executive orders from the federal administration, in addition to federal, state and local legislative and regulatory initiatives proposed or adopted in an attempt to limit the effects of climate change, including greenhouse gas emissions, could have significant impacts on the energy industry including government-imposed limitations, prohibitions or moratoriums on the use and/or production of gas, establishment of a carbon tax and/or methane fee, lack of support for system modernization, as well as accelerated depreciation of assets and/or stranded assets.
For example, the U.S.
1 unchanged sentence
A number of states have adopted energy strategies or plans with goals that include the reduction of greenhouse gas emissions.
−Removed: For example, Pennsylvania has a methane reduction framework for the oil and gas industry which has resulted in permitting changes with the stated goal of reducing methane emissions from well sites, compressor stations and pipelines.
−Removed: With respect to its operations in California, the Company currently complies with California cap-and-trade guidelines, which increases the Company’s cost of environmental compliance in its Exploration and Production segment operation.
+Added: For example, Pennsylvania has a methane reduction framework for the natural gas industry which has resulted in permitting changes with the stated goal of reducing methane emissions from well sites, compressor stations and pipelines.
In addition, the NYPSC initiated a proceeding to consider climate-related financial disclosures at the utility operating level, and in 2019, the New York State legislature passed the CLCPA, which created emission reduction and electric generation mandates, and could ultimately impact the Utility segment’s customer base and business.
+Added: Pursuant to the CLCPA, New York's Climate Action Council issued for comment a draft scoping plan that includes recommendations to decommission substantial portions of the natural gas system and curtail use of natural gas and natural gas appliances.
The New York State legislature, in early 2021, proposed a bill known as the Climate and Community Investment Act, which proposed an escalating fee starting at $55 per short ton of carbon dioxide equivalent on any carbon-based fuels sold, used or brought into the state.
−Removed: That bill did not
−Removed: pass, but it, or something similar to it, may be proposed in the future.
−Removed: Legislation or regulation that aims to reduce greenhouse gas emissions could also include greenhouse gas emissions limits and reporting requirements, carbon taxes and/or similar fees on carbon dioxide, methane or equivalent emissions, restrictive permitting, increased efficiency standards requiring system remediation and/or changes in operating practices, and incentives or mandates to conserve energy or use renewable energy sources.
+Added: That bill did not pass, but it, or something similar to it, may be proposed in the future.
+Added: Legislation or regulation that aims to reduce greenhouse gas emissions could also include gas bans, greenhouse gas emissions limits and reporting requirements, carbon taxes and/or similar fees on carbon dioxide, methane or equivalent emissions, restrictive permitting, increased efficiency standards requiring system remediation and/or changes in operating practices, and incentives or mandates to conserve energy or use renewable energy sources.
NYDEC finalized its Part 203 Oil and Gas Sector Rule in March 2022, which significantly increases leak detection and repair (LDAR) inspections, recordkeeping, reporting, and notification requirements for multiple sources along city gates, transmission pipelines, compressor stations, storage facilities, and gathering lines.
−Removed: Additionally, the trend toward increased conservation, change in consumer behaviors, competition from renewable energy sources, and technological advances to address climate change may reduce the demand for natural gas.
+Added: Additionally, the trend toward increased energy conservation, change in consumer behaviors, competition from renewable energy sources, and technological advances to address climate change may reduce the demand for natural gas.
For further discussion of the risks associated with environmental regulation to address climate change, refer to Item 2, MD&A under the heading “Environmental Matters.”
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To the extent financial markets view climate change and greenhouse gas emissions as a financial risk, the Company’s cost of and access to capital could be negatively impacted.
−Removed: FINANCIAL RISKS
−Removed: Changes in interest rates may affect the Company’s financing and its regulated businesses’ rates of return.
−Removed: Rising interest rates may impair the Company’s ability to cost-effectively finance capital expenditures and to refinance maturing debt.
−Removed: In addition, the Company’s authorized rate of return in its regulated businesses is based upon certain assumptions regarding interest rates.
−Removed: If interest rates are lower than assumed rates, the Company’s authorized rate of return could be reduced.
−Removed: If interest rates are higher than assumed rates, the Company’s ability to earn its authorized rate of return may be adversely impacted.
−Removed: Loans to the Company under its committed credit facility may be alternate base rate loans or term SOFR loans.
−Removed: SOFR is a reference rate (the Secured Overnight Financing Rate) published by the Federal Reserve Bank of New York.
−Removed: The Company’s prior committed credit facilities used LIBOR (the London Interbank Offered Rate) as a reference rate, but the U.K.’s Financial Conduct Authority, which regulates LIBOR, is phasing it out as a benchmark.
−Removed: The change from LIBOR to SOFR could expose the Company’s borrowings to less favorable rates.
−Removed: If the change to SOFR results in increased interest rates or if the Company's lenders have increased costs due to the change, then the Company's debt that uses benchmark rates could be affected and, in turn, the Company's cash flows and interest expense could be adversely impacted.
−Removed: The Company has significant transactions involving price hedging of its oil and gas production as well as its fixed price sale commitments.
−Removed: To protect itself to some extent against unusual price volatility and to lock in fixed pricing on oil and gas production for certain periods of time, the Company’s Exploration and Production segment regularly enters into commodity price derivatives contracts (hedging arrangements) with respect to a portion of its expected production.
−Removed: These contracts may extend over multiple years, covering a substantial majority of the Company’s expected energy production over the course of the fiscal year, and lesser percentages of subsequent years' expected production.
−Removed: These contracts reduce exposure to subsequent price drops but can also limit the Company’s ability to benefit from increases in commodity prices.
−Removed: The nature of these hedging contracts could lead to potential liquidity impacts in scenarios of significant increases in natural gas or crude oil prices if the Company has hedged its current production at prices below the current market price.
−Removed: Hedging collateral deposits represent the cash, letters of credit, or other eligible instruments held in Company funded margin accounts to serve as collateral for hedging positions used in the Company’s Exploration and Production segment.
−Removed: A significant increase in natural gas prices may cause the Company’s outstanding derivative instrument contracts to be in a liability position creating margin calls on the Company’s hedging arrangements, which could require the Company to temporarily post significant amounts of cash collateral with our hedge counterparties.
−Removed: That collateral could be in excess of the Company’s available short-term liquidity under its committed credit facility and other uncommitted sources of capital, leading to potential default under certain of its hedging arrangements.
−Removed: That interest-bearing cash collateral is returned to us in whole or in part upon a reduction in forward market prices, depending on the amount of such reduction, or in whole upon settlement of the related derivative contract.
−Removed: Use of energy commodity price hedges also exposes the Company to the risk of nonperformance by a contract counterparty.
−Removed: These parties might not be able to perform their obligations under the hedge arrangements.
−Removed: In the Exploration and Production segment, commodity derivatives contracts must be confined to the price hedging of existing and forecast production.
−Removed: The Company maintains a system of internal controls to monitor compliance with its policy.
−Removed: However, unauthorized speculative trades, if they were to occur, could expose the Company to substantial losses to cover positions in its derivatives contracts.
−Removed: In addition, in the event the Company’s actual production of oil and gas falls short of hedged forecast production, the Company may incur substantial losses to cover its hedges.
−Removed: The Dodd-Frank Act increased federal oversight and regulation of the over-the-counter derivatives markets and certain entities that participate in those markets.
−Removed: Although regulators have issued certain regulations, other rules that may be relevant to the Company have yet to be finalized.
−Removed: For discussion of the risks associated with the Dodd-Frank Act, refer to Item 2, MD&A under the heading “Market Risk Sensitive Instruments.”
OPERATIONAL RISKS
3 unchanged sentences
These labor agreements are negotiated periodically, and therefore, the Company is subject to the risk that such agreements may not be able to be renewed on reasonably satisfactory terms, on anticipated timelines, or at all.
−Removed: For example, a collective bargaining agreement covering employees in one Pennsylvania collective bargaining unit expired on April 12, 2022.
−Removed: Although the Company has been negotiating with the union representing such employees to enter into a new collective bargaining agreement, the Company cannot predict the extent or duration of negotiating efforts or actions taken by the union.
−Removed: In connection with the negotiation of such collective bargaining agreement, or in future matters involving collective bargaining units representing the Company’s workforce, the Company could experience, among other things, strikes, work stoppages, slowdowns or lockouts, which could cause a disruption of the Company's operations and have a material adverse effect on the Company's results of operations and financial condition.
+Added: In connection with the negotiation of such collective bargaining agreements, or in future matters involving collective bargaining units representing the Company’s workforce, the Company could experience, among other things, strikes, work stoppages, slowdowns or lockouts, which could cause a disruption of the Company's operations and have a material adverse effect on the Company's results of operations and financial condition.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.