Articles, Alerts & Perspectives

Pittsburgh, PA

PIOGA Press

(By Jean Mosites and Kevin Garber)

The Marcellus Shale Coalition v. Department of Environmental Protection and Environmental Quality Board, 573 M.D. 2016.

In April 2023, the Pennsylvania Supreme Court vacated the Commonwealth Court’s decision that had invalidated several “public resource” provisions in 25 Pa. Code Chapter 78a. The Supreme Court’s decision is an abrupt departure from its 2018 decision affirming the preliminary injunction on Count I that had been imposed by the Commonwealth Court in 2016. The Supreme Court’s latest ruling puts these regulations into effect in the well permit process for the first time.

There is no statutory right to judicial review of new regulations in Pennsylvania. Such challenges must proceed in the form of declaratory judgment action in the Commonwealth Court or “as applied” in an appeal before the Environmental Hearing Board on a case-by-case basis. The latter course is duplicative, lengthy and costly, offering only piecemeal relief. MSC challenged portions of the new Chapter 78a regulatory package through a declaratory judgment action in October 2016, seeking relief for its members from regulations beyond the scope of Environmental Quality Board’s (EQB) authority, regulations with high cost and little discernible benefit.

Count I of MSC’s Petition for Review challenged Sections 78a.15(f) and (g), and the related definitions contained in Section 78a.1 of the Chapter 78a regulations. The provisions created a new pre-permitting process for well permit applicants, requiring new notice and comment opportunities in addition to those expressly authorized by Act 13, as adopted in 2012. The relevant defined terms include:

Common areas of a school’s property—An area on a school’s property accessible to the general public for recreational purposes. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi Buchman and Christina Puhnaty)

On February 22, 2023, the Pennsylvania Supreme Court vacated and remanded a Pennsylvania Commonwealth Court decision affirming the Environmental Hearing Board’s (EHB) denial of legal fees to parties challenging environmental permits issued by the Pennsylvania Department of Environmental Protection (PADEP). Clean Air Council v. PADEP, Nos. 73 MAP 2021, 74 MAP 2021, slip op. (Pa. Feb. 22, 2023). In separate suits, environmental groups and landowners challenged permits issued to Sunoco Pipeline, L.P., for the Mariner East 2 pipeline and later sued for legal fees. The EHB ruled that the environmental groups and landowners could not compel reimbursement of their legal fees because such reimbursement is allowed only in cases in which a party’s bad faith in challenging or defending a PADEP permit is established and no such bad faith occurred. The commonwealth court affirmed. The supreme court disagreed, concluding that the bad-faith standard was incompatible with the Pennsylvania Clean Streams Law and that the EHB has taken an overbroad reading of applicable case law to support its position.

Section 307(b) of the Clean Streams Law, 35 Pa. Stat. § 691.307(b), provides that upon the request of any party, the EHB “may in its discretion order the payment of costs and attorney’s fees it determines to have been reasonably incurred by such party in proceedings pursuant to this act.” The supreme court concluded that the Clean Streams Law “neither limits nor guides the [EHB’s] discretion,” but that the EHB has “opted on its own to cabin that discretion.” Clean Air Council, slip op. …

Pittsburgh, PA

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Christina Puhnaty)

The Pennsylvania Department of Environmental Protection (PADEP) and Equitrans, L.P. (Equitrans), have reached a settlement regarding the administrative order issued by PADEP on December 8, 2022 (Order). See Stipulation of Settlement, Equitrans, L.P. v. PADEP, EHB Docket No. 2023-003-B (Apr. 12, 2023). As previously reported in Vol. 40, No. 1 (2023) of this Newsletter, PADEP issued the order in response to the November 2022 incident at Equitrans’ Rager Mountain Gas Storage Reservoir (Rager Mountain Facility) in Cambria County, Pennsylvania. The order required Equitrans to, inter alia, conduct mechanical integrity testing of its Rager Mountain storage wells, recondition and plug the wells as needed, and retain a third party to audit “all aspects of Equitrans’ storage field operations.” Equitrans ap-pealed the Order in early January, arguing that PADEP’s jurisdiction over the Rager Mountain Facility was preempted by the federal Natural Gas Act and Pipeline Safety Act, which grant certain exclusive jurisdiction to the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Federal Energy Regulatory Commission (FERC) with regard to interstate natural gas storage facilities.

The April 12 stipulation of settlement between PADEP and Equitrans provides that the Rager Mountain Facility is “subject to the jurisdiction of FERC under the Natural Gas Act pursuant to a certificate of public convenience and necessity, and to the jurisdiction of PHMSA under the Pipeline Safety Act.” The stipulation of settlement further provides that PADEP would rescind its order and that Equitrans would withdraw its appeal and negotiate a final safety order with PHMSA regarding the Rager Mountain Facility. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi Buchman and Christina Puhnaty)

As previously reported in Vol. 39, No. 2 (2022) of this Newsletter, the Pennsylvania Department of Environmental Protection’s (PADEP) CO2 Budget Trading Program rule, or RGGI Rule, which links the commonwealth’s cap-and-trade program to RGGI, was published in the Pennsylvania Bulletin in April 2022. See 52 Pa. Bull. 2471 (Apr. 23, 2022). RGGI is the country’s first regional, market-based cap-and-trade program designed to reduce carbon dioxide (CO2) emissions from fossil fuel-fired electric power generators with a capacity of 25 megawatts or greater that send more than 10% of their annual gross generation to the electric grid.

Three legal challenges were filed in response to the publication of the final rule. On April 25, 2022, owners of coal-fired power plants and other stakeholders filed a petition for review and an application for special relief in the form of a temporary injunction, which was granted. See Bowfin KeyCon Holdings, LLC v. PADEP, No. 247 MD 2022 (Pa. Commw. Ct. filed Apr. 25, 2022); Vol. 39, No. 3 (2022) of this Newsletter. Briefing has been filed and the court heard 30 minutes of oral argument in the case on November 16, 2022. On March 24, 2023, the Supreme Court of Pennsylvania granted requests to dismiss the preliminary injunction because the petitioners had failed to pay the bond required to secure the preliminary injunction. Petitioner Bowfin KeyCon Holdings, LLC, which has an interest in some of the subject coal-fired power plants, filed an appeal of the bond amount in summer 2022, claiming that the bond was infeasible or impossible to pay and asked the court to reduce it to a negligible amount. …

Pittsburgh, PA

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Christina Puhnaty)

On March 16, 2023, the Pennsylvania Public Utility Commission (PUC) entered an order (Order) denying a petition for reconsideration (Petition) of its December 8, 2022, implementation order (Implementation Order), under which the PUC asserted jurisdiction over Class 1 natural gas gathering pipelines, including Type R intrastate pipelines, and certain liquid natural gas facilities. To reach this conclusion, the PUC relied on the Gas and Hazardous Liquids Pipelines Act (Act 127), 58 Pa. Stat. §§ 801.101–.1101, and amendments to regulations made in the final Gas Gathering Rule of the Pipeline and Hazardous Materials Safety Administration (PHMSA), 86 Fed. Reg. 63,266 (Nov. 15, 2021) (to be codified at 49 C.F.R. pts. 191, 192). As de-scribed in the Implementation Order, the PUC determined that Type R lines were subject to Act 127 registration and assessment, meaning that as issued, the Implementation Order would have required operators of Type R lines to register with the PUC on an annual basis and pay annual assessments.

In its Petition, the Pennsylvania Independent Oil & Gas Association (PIOGA), a trade association representing Pennsylvania oil and natural gas interests, challenged the PUC’s conclusion. It argued that the PUC had committed an error of law because Type R lines are subject only to annual and incident reporting requirements under 49 C.F.R. Part 191, which governs annual, incident, and other reporting requirements, but not subject to safety requirements under 49 C.F.R. Part 192, which governs minimum federal safety standards. PIOGA contended that because Type R lines are not subject to the Part 192 safety regulations, they do not implicate the PUC’s pipeline safety program. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi Buchman and Christina Puhnaty)

In April 2023, the Pennsylvania Department of Environmental Protection’s (PADEP) Energy Programs Office, local partners, and its contractor, Preservation Design Partnership, hosted meetings with leaders and residents of environmental justice (EJ) communities around the state. The meetings were intended as listening sessions to learn how PADEP can assist Pennsylvania’s EJ communities become more sustainable and prepare for the effects of climate change. The meetings also provided information on the Energy Programs Office’s Climate Action for Environmental Justice Communities Program and provided information on additional available resources. Sessions were held in Meadville, Pittsburgh, Scranton, Reading, Harrisburg, Norristown, and Philadelphia, and also provided for virtual attendance. Discussions covered a wide range of topics including fuel source strategies, land use regulations and building codes, infrastructure, and public health.

During its Philadelphia session, the Energy Programs Office representative indicated that PADEP plans to be more intentional about the inclusion of EJ in the Pennsylvania Climate Action Plan, which is updated every three years (the last update was released in 2021). In addition, what they learn from the meetings will inform other program development, such as grants. Lastly, the Energy Programs Office plans to incorporate community feedback from the meetings in the Guide to Climate Action for Environmental Justice Communities that is currently under development. The guide is intended to inform PADEP’s climate action planning to ensure that strategies produce meaningful benefits in EJ communities and adequately prioritize state and federal funding. PADEP anticipates releasing the guide in summer 2023.

Copyright © 2023, The Foundation for Natural Resources and Energy Law, Westminster, Colorado

Pittsburgh, PA

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Christina Puhnaty)

On February 17, 2023, the Clean Air Council (CAC) and the Environmental Integrity Project (EIP) sent a letter to the Pennsylvania Department of Environmental Protection (PADEP) requesting that the agency issue an order to Shell Chemical Appalachia LLC (Shell) to temporarily halt operations at the Shell Polymers Monaca Plant in Beaver County, Pennsylvania (Plant). See Letter from EIP & CAC to PADEP (Feb. 17, 2023). Specifically, CAC and EIP alleged that people living near the Plant had been exposed to volatile organic compounds (VOCs), nitrogen oxide (NOx), and other pollutants emitted in violation of Shell’s plan approval, the federal Clean Air Act, and the Pennsylvania Air Pollution Control Act (APCA). CAC and EIP cited PADEP’s February 2023 notice of violation (NOV) documenting the Plant’s exceedances of the 12-month rolling total emission limitations for VOCs in November and December 2022 and the 12-month rolling total emission limitations for NOx in December 2022, as well as the agency’s December 2022 NOV for the same VOCs emissions violations during September and October 2022. CAC and EIP also highlighted multiple malfunction reports submitted to PADEP by Shell documenting alleged violations of the visible emissions limitations of the Clean Air Act and Shell’s plan approval related to emissions from the Plant’s flares.

CAC and EIP urged PADEP to immediately act using the authority granted to it under the APCA, arguing that the statute allows the agency to issue orders to facilities to cease operations in violation of the APCA, plan approvals, or permits, citing as precedent a stop construction order PADEP issued in 2018 related to incidents during the construction of the Mariner East 2 pipeline. …

Charleston, WV

Employment and Labor Alert

(by Mychal Schulz)

The West Virginia Supreme Court issued a decision in a closely watched case where the estate of a motorcyclist killed by an employee after she left work, and who was found to have numerous prescription drugs in her system at the time of the accident, sought to impose liability on the employer.

Facts.
Brandy Liggett began her employment with Speedway on September 13, 2015, and she received training while working at a Speedway store on September 13, 14, and 15. On September 15, Ms. Liggett worked the 6 a.m. to 2 p.m. shift. During that shift, her manager, Bobby Jo Maguire, and another employee, Jennifer Wells, observed Ms. Liggett nod off to sleep. Specifically, Ms. Maguire observed Ms. Liggett appearing to fall asleep a couple of times while watching training videos. Ms. Maguire sent Ms. Liggett outside, believing that the fresh air would wake her up, but then Ms. Maguire and Ms. Wells observed Ms. Liggett nodding her head and appearing to fall asleep while standing next to a trash can outside. Ms. Wells remarked to Ms. Maguire that “something was going on” and that “something might be wrong with” Ms. Liggett.

Nonetheless, as Ms. Liggett approached the end of her shift, she was asked if she would work an extra hour as Speedway needed another person from 2 p.m. to 3 p.m. because of a call off.  Neither Ms. Maguire nor Ms. Wells could stay, so Ms. Liggett volunteered to stay that extra hour.

At 3 p.m., Ms. Liggett left the Speedway and drove to her son’s middle school to drop off football equipment. Thereafter, she drove home, but on her way home and about five miles from the school, she crossed the center line and struck a motorcycle, killing the driver, Kevin Jarrett. …

Pittsburgh, PA

Legal Intelligencer

(by Gary Steinbauer and Christina Puhnaty)

In the nearly decade-long saga to regulate greenhouse gas (GHG) emissions from fossil fuel-fired power plants, the U.S. EPA recently began the rulemaking process for a new set of regulations that would impose restrictions on emission units at new and existing power plants. On May 23, 2023, the U.S. EPA published a proposed rule entitled “New Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse Gas Emissions From Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule” (Proposed Rule), starting a comment period that ends on July 24, 2023. 88 Fed. Reg. 33,240 (May 23, 2023). EPA’s Proposed Rule relies heavily on hydrogen co-firing and carbon capture and sequestration (CCS) deployment as part of the decarbonization of the power-producing sector.

In the Proposed Rule, EPA proposes five distinct actions under section 111 of the Clean Air Act (CAA). First, EPA is proposing to amend existing New Source Performance Standards (NSPS) for GHG emissions from new and reconstructed fossil fuel-fired stationary combustion turbine EGUs. Second, EPA is proposing to amend existing NSPS for GHG emissions from fossil fuel-fired steam generating units that undergo a large modification. Third, EPA is proposing emissions guidelines for GHG emissions from existing fossil fuel-fired steam generating EGUs (including coal, oil, and gas-fired steam generating EGUs). Fourth, EPA is proposing emissions guidelines for GHG emissions from the “largest, most frequently operated” existing stationary combustion turbines. Lastly, EPA is proposing to repeal the Affordable Clean Energy (ACE) Rule promulgated by the Trump administration in 2019 because “the emissions guidelines established in ACE do not reflect the Best System of Emissions Reduction (BSER) for steam generating EGUs and are inconsistent with section 111 of the CAA in other respects.” 88 Fed. …

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Alyssa Golfieri)

There are common pitfalls related to zoning and land use that can occur in real estate transactions. When acquiring a property with the intent to develop, redevelop, or continue an existing use, there are simple, inexpensive steps buyers can take to get ahead of and navigate these issues during the due diligence process.

“Local regulation and municipal cooperation can be a big hurdle,” says Alyssa E. Golfieri, a shareholder at Babst Calland. “But the zoning due diligence process doesn’t have to be complicated and can be started before buyers execute a letter of intent.”

Smart Business spoke with Golfieri about zoning and land use due diligence in real estate transactions.

What documents need to be acquired, reviewed and analyzed?

Before a buyer’s due diligence period expires, the buyer should confirm what, if any, zoning, land use and condemnation-related matters are or were pending, initiated, or approved that affect the subject property. Relying on the seller to provide relevant zoning and land use records is a major pitfall buyers fall into. It is rare that a seller can produce such records, especially when the seller isn’t the original developer. Buyers should take advantage of their state’s public disclosure laws because it is an easy, inexpensive process that can yield significant results. Submit the records request early in the process because municipalities have a generous range of time for response.

What should buyers know about existing permits and approvals?

Failure to confirm conditions or obligations that are imposed through existing permits and approvals is a common pitfall for buyers. Buyers need to understand what permits and approvals exist for the property and use as early as possible because they often contain conditions or ongoing obligations that become the buyer’s responsibility upon closing. …

Pittsburgh, PA and Washington, DC

GO-WV

(By Christina Manfredi McKinley and Keith Coyle)

On May 16, 2023, the D.C. Circuit issued a decision vacating in its entirety a challenged piece of a rule related to safety valve requirements for gas gathering lines.  That decision, GPA Midstream Association and American Petroleum Institute v. United States Department of Transportation and Pipeline and Hazardous Safety Administration, held that the agency violated the Administrative Procedure Act and acted arbitrarily and capriciously when it failed to explain, let alone consider, why the rulemaking’s safety standard would practicable and make sense for regulated gathering lines until issuing the final rule, when there could be no peer review or public comment.

In 2020, PHMSA published a notice of proposed rulemaking to comply with a Congressional directive to the agency to consider the use of valve, or automatic shutoff technology, on gas transmission lines.  But the notice of proposed rulemaking and risk assessment said nothing about the costs and benefits of applying the standard to gathering pipelines. Nevertheless, because of certain pre-existing rules, new or replaced regulated gathering lines would have been subject to the proposed standard unless expressly carved out by the rule.

As such, in their comments to the proposed rule, the Petitioners sought an exemption for gathering pipelines. Among other things, they argued the risk assessment lacked the cost-benefit data needed to justify applying the rule to gathering pipelines.  Knowing these objections, PHMSA proceeded with the rulemaking anyway.  In the final rule’s preamble, PHMSA addressed some of the objections.  It pointed out that the proposed rule never said regulated gathering lines would be exempt—which is correct because the proposed rule said nothing at all—and it included some data about gathering lines in the final rule’s risk assessment.  …

Pittsburgh, PA

GO-WV

(By Lisa Bruderly)

On May 25, 2023, the U.S. Supreme Court issued a highly-anticipated decision that significantly narrows the extent of wetlands within the definition of “waters of the United States” (WOTUS), and, therefore, within the jurisdiction of the federal Clean Water Act (CWA). Under the majority opinion in Sackett v. EPA, the Court held that “waters” are limited to “only those relatively permanent standing or continuously flowing bodies of water” that are described as “streams, oceans, rivers, and lakes” and to “adjacent” wetlands that are “indistinguishable” from those bodies of water. Therefore, a wetland is only a WOTUS (and subject to CWA jurisdiction) if: (1) the adjacent body of water is a WOTUS (i.e., “a relatively permanent body of water connected to a traditional interstate navigable water”); and (2) the wetland has a “continuous surface connection” with that water “making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” As Justice Samuel Alito stated: Federally regulated wetlands “must be indistinguishably part of a body of water that itself constitutes ‘waters’ under the CWA. . . .  Wetlands that are separate from traditional navigable waters cannot be considered part of those waters, even if they are located nearby.”

The Sackett litigation involves Michael and Chantell Sackett, who have been unable to build a house because the U.S. Environmental Protection Agency (USEPA) and the U. S. Army Corps of Engineers (the Corps) determined that a wetland on their Idaho property was a WOTUS, requiring CWA Section 404 permitting.  Both the U.S. District Court for the District of Idaho and the Ninth Circuit sided with the Agencies’ WOTUS determination, citing the “significant nexus” test introduced by Justice Anthony Kennedy in his concurring opinion in the U.S. …

Washington, DC and Pittsburgh, PA

GO-WV

(Brianne Kurdock, Jim Curry, Gary Steinbauer, Lee Banse)

On May 5, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released the pre-publication version of a notice of proposed rulemaking (NPRM) titled “Gas Pipeline Leak Detection and Repair.” PHMSA published the NPRM in response to section 113 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020 (PIPES Act). Section 113 of the PIPES Act directed PHMSA to promulgate final regulations by December 27, 2021, requiring operators of gas transmission, distribution pipelines, and certain gathering lines to conduct leak detection and repair programs.

PHMSA proposes to amend 49 CFR Parts 191, 192, and 193 to: increase the frequency of leakage survey and patrolling requirements; introduce leakage survey and repair requirements for liquefied natural gas (LNG) facilities; require grading and repairs of leaks; reduce the use of blowdowns and intentional venting; impose design, configuration, and maintenance requirements for relief devices to reduce emissions; expand reporting requirements; and require that Type A, B, and C gathering lines submit geospatial pipeline location data to the National Pipeline Mapping System (NPMS). PHMSA proposes a six-month effective date for this rulemaking.

Comments on the NPRM are due on July 17, 2023.

Scope

Among other notable features of the proposal, the scope of this NPRM extends beyond the Section 113 congressional mandate by including Type C gathering lines, underground natural gas storage facilities, and LNG facilities. The statutory mandate was limited to regulated gathering lines in a Class 2, 3, or 4 location, and new and existing gas transmission and distribution pipelines. …