Articles, Alerts & Perspectives

FNREL Water Law Newsletter

(By Lisa M. Bruderly, Mackenzie Moyer and Evan M. Baylor)

On January 25, 2022, the Pennsylvania Department of Environmental Protection (PADEP) published a long-awaited technical guidance document, entitled “Pennsylvania  Function- Based Aquatic Resource Compensation Protocol,” PADEP Doc. No. 310-2137-001 (effective Mar. 1, 2022) (Mitigation Guidance), for evaluating and valuing aquatic resource compensatory mitigation.

As background, a draft version of the Mitigation Guidance was published in March 2014. PADEP revised that draft to in- corporate feedback from other federal and Pennsylvania agencies, PADEP’s Water Resources Advisory Committee, and public comments.

The Pennsylvania Dam Safety and Encroachments Act, 32 Pa. Stat. §§ 693.1–.27, and its implementing regulations, 25 Pa. Code ch. 105, require a person to obtain a permit from PADEP to construct, operate, maintain, modify, enlarge, or abandon a dam, water obstruction, or encroachment that alters the course, current, or cross section of a body of water. Mitigation Guidance at 1. A mitigation plan is typically required with the permit application, including, as applicable, a plan to compensate  for the impact to regulated waters as a result of the project. Id. at 2.

The stated purposes of the Mitigation Guidance are to:

1. provide an acceptable methodology to evaluate functional compensation offsets associated with proposed aquatic resource impacts and determine compensatory mitigation requirements;
2. assist in identifying measures that minimize proposed project impacts on aquatic resource functions to reduce subsequent compensation requirements; and
3. provide a means for evaluating compensation proposals performed on-site, at a mitigation bank, or through an in-lieu fee

Id.

The Mitigation Guidance is intended to ensure consistency in determining compensation requirements and valuing compensation projects.  …

Law360

(By Robert Stonestreet, Christopher (Kip) Power and Ben Clapp)

State and federal lawmakers are creating economic opportunities for the coal industry and landowners to support production of critical materials in high demand for technology products.

The term “critical materials” refers to a group of 50 minerals, elements, substances and materials, including substances known as rare earth elements, that the U.S. Department of Energy has identified as key components of products that are essential to the economic or national security of the U.S., and that are susceptible to supply chain disruption.

According to the U.S. Geological Survey, approximately 97% of rare earth elements are produced in China. The federal legislation known as the Infrastructure Investment and Jobs Act, or IIJA, seeks to reduce the risk of supply chain disruption by diversifying and domesticating production of these materials.

To that end, the act allocates over $1.3 billion to support a number of new and existing DOE initiatives directed toward research, development and production of critical materials generally — and in some cases, rare earth elements specifically.

Rare earth elements are essential for many high-tech products, such as smartphones and other sophisticated electronic devices. They are key components of important defense applications, such as guidance systems, sonar and radar. These elements also serve as important raw materials used in the manufacture of renewable energy equipment, such as solar panels and wind turbines.

Rather than being rare, these elements exist in many places throughout the U.S. and the rest of the world, although generally in very low concentrations that make them difficult to economically recover and process. …

The Legal Intelligencer

(by Lisa Bruderly)

The controversy continues over the hotly contested definition of “waters of the United States” (WOTUS), a phrase that determines the scope of federal jurisdiction over streams, wetlands and other waterbodies under the Clean Water Act (CWA). The U.S. Environmental Protection Agency (USEPA) and the U.S. Army Corps of Engineers (Corps) published a proposed revision to the WOTUS definition on December 7, 2021 (Rule 1), with the public comment period closing on February 7, 2022. Nearly 90,000 comments were received.

This proposed definition is similar to the pre-2015 definition of WOTUS, which is currently in effect, but it also includes updates to reflect relevant Supreme Court decisions (e.g., Rapanos v. United States) that occurred in the early 2000s. Much of the controversy surrounding the WOTUS definition relates to the two tests identified in the Rapanos decision. Justice Antonin Scalia issued the plurality opinion in Rapanos, holding that WOTUS would include only “relatively permanent, standing or continuously flowing bodies of water” connected to traditional navigable waters, and to “wetlands with a continuous surface connection to such relatively permanent waters.” Justice Anthony Kennedy, however, advanced a broader interpretation of WOTUS in his concurring opinion, which relied on the concept of a “significant nexus.” In his opinion, Justice Kennedy stated that wetlands should be considered as WOTUS “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered water.”

If promulgated, the December 2021 proposed WOTUS definition would incorporate Justice Kennedy’s significant nexus test into the regulations, by designating waters such as wetlands, lakes and streams as WOTUS if they “alone or in combination with similarly situated waters in the region, significantly affect the chemical, physical, or biological integrity” of traditionally navigable waters. …

Babst Calland announced the addition of two professionals to its Washington, D.C. office – former PHMSA Official Christopher Hoidal as Senior Director of Safety and former API Policy Advisor, Christopher Kuhman as an Associate.

Chris Hoidal recently joined Babst Calland as Senior Director of Safety in the Energy and Natural Resources, Environmental and Pipeline and HazMat Safety groups. Mr. Hoidal advises clients throughout the United States on the regulation of transportation pipelines, LNG facilities and other regulated energy facilities. He has over 30 years of experience in various leadership roles with the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA).

Mr. Hoidal has extensive knowledge of the pipeline safety regulations, industry codes and standards, and agency policy. He guides industry stakeholders seeking to improve regulatory compliance and safety performance, conducting transactional due diligence, and building remedial programs to address accidents and near-miss events. Mr. Hoidal also advises clients on special permits, inspection preparation, enforcement, rulemaking and policy development.

Mr. Hoidal worked for the United States Department of Transportation from 1990 to 2021, and the Pipeline and Hazardous Materials Safety Administration’s Office of Pipeline Safety since 1993.  Prior to joining the Firm, Mr. Hoidal served as a Senior Technical Advisor in PHMSA’s Office of Pipeline Safety between 2018 and 2021.  In this role, he supported PHMSA in the development of recent rules and guidance, including the 2019 Gas “Mega Rule.” Before this role, Chris served for 20 years as PHMSA’s Western Region Director for the Office of Pipeline Safety.

Mr. Hoidal has his Bachelor of Science in Geotechnical Engineering from the University of Nevada (1980), and Master of Business Administration from the University of Colorado (1983).

Chris Kuhman recently joined Babst Calland as an associate in the Energy and Natural Resources and Pipeline and HazMat Safety groups. …

PIOGA Press

(By Lisa Bruderly and Evan Baylor)

The U.S. Environmental Protection Authors: Agency (EPA) and the U.S. Army Corps of Engineers have recently issued updates regarding Nationwide Permits (NWPs) under Section 404 of the Clean Water Act (CWA) and Section 10 of the Rivers and Harbors Act of 1899, as well as a new proposed definition of waters of the United States (WOTUS). More developments on both subjects are anticipated in 2022 from these agencies, as well as from the U.S. Supreme Court.

On December 27, 2021, the Corps published a final rule reissuing 40 existing NWPs and issuing one new NWP (Water Reclamation and Reuse Facilities) (86 Fed. Reg. 73522). Broadly, NWPs authorize certain work in streams, wetlands and other WOTUS when those activities will result in no more than minimal individual and cumulative adverse environmental effects. This final rule rounds out NWP rulemaking activities that began in September 2020, when the Corps, under the Trump administration, proposed to reissue the 52 existing NWPs and issue five new NWPs.

As background, in January 2021, the Corps modified and reissued 12 of the existing NWPs and issued four of the five proposed NWPs. The January 2021 final rule also revised and reissued the NWP general conditions and definitions. The focus of that rule was largely to revise and reissue NWPs that relate to the energy industry, including the division of existing NWP 12 (Utility Line Activities) into three NWPs, depending on the type of utility line: oil and natural gas pipeline activities (NWP 12), electric utilities and telecommunications (NWP 57), and utility lines for water and other substances (NWP 58). The December 2021 rule does not address these 16 NWPs that were finalized in January 2021. …

The Legal Intelligencer

(by Anna Jewart and Blaine Lucas)

In recent years, public support for renewable energy generation has increased across the United States. According to a recent article published by the National Agricultural Law Center, 89% of Americans support expanding solar power generation and 83% support wind power expansion. See, Peggy Kirk Hall, Whitney Morgan and Jesse Richardson, “Land Use Conflicts Between Wind and Solar Renewable Energy and Agricultural Uses,” Nat’l Ag. Law Center (Jan. 10, 2022). National approval, however, often fails to translate into local support.  Those seeking to site wind or solar projects are frequently met with opposition from neighbors, many of whom may be generally supportive of renewable energy, but when it comes time to decide where generation will occur, they repeat the well-known adage, “Not in my back yard.” In fact, local objection to renewable projects frequently mirrors that which has been levied for decades against traditional energy development. Concerns over aesthetics, noise, storm water, or traffic can be expected whether an applicant proposes an oil and gas well or a wind farm. In either instance, broad concerns over impacts on the community often devolve into highly technical debates over compliance with not only the local ordinances, but the validity or reliability of different scientific methods or standards. As a result, zoning hearings on any energy project may become full-blown battles of the experts. In Atlantic Wind v. Zoning Hearing Board of Penn Forest Township, No. 585 C.D. 2020, No. 591 C.D. 2020, No. 20 C.D. 2021, No. 242 C.D. 2021, (Pa. Cmwlth. Jan. 12, 2022), the Pennsylvania Commonwealth Court considered whether a zoning hearing board properly handled competing expert testimony over what metrics to use in calculating maximum noise levels. …

Pennsylvania Business Central

Tim Schoonover is a shareholder in the Energy and Natural Resources, Litigation and Public Sector groups of law firm Babst Calland. Tim has practiced law in the Centre County region since 1997. He currently serves as Solicitor for Haines Township, and is the former Solicitor to Benner Township and counsel to AccuWeather, Inc. Tim has significant experience with Marcellus Shale related issues, including contract matters and land use litigation issues. His practice also focuses on the areas of real estate, corporate/business law, municipal law, litigation, and estate planning and administration.

Tim received his J.D. from the Ohio Northern University Pettit College of Law in 1995. He is an active volunteer in Centre County having held board positions for the Centre County Bar Association, State College Jaycees, Infant Evaluation Program, Habitat for Humanity of Greater Centre County, Centre County Housing and Land Trust, and YMCA of Centre County.

To view the article, click here.

Smart Business

(by Sue Ostrowski featuring Mary Binker)

While the COVID-19 pandemic has had a significant negative impact on downtown Pittsburgh’s commercial leasing market, it has also created new opportunities for both tenants and landlords.

“While the pandemic changed a lot in the commercial real estate market in Pittsburgh, increasing vacancy rates and creating other challenges, it has also provided the chance for tenants and landlords to negotiate better terms,” says Mary Binker, a shareholder in the Real Estate, Corporate and Commercial, and Energy and Natural Resources groups of Babst Calland. “It has also allowed new tenants, who previously may not have been able to access the downtown commercial real estate market, to more seriously look into the downtown space.”

Smart Business spoke with Binker about how landlords and tenants can adjust to an evolving commercial real estate market.

How has the pandemic impacted downtown Pittsburgh commercial real estate?

Rates, lease terms and tenants’ concerns have changed, and vacancy rates have increased. Before the pandemic, the commercial real estate vacancy rate downtown was in the mid to low teens, but in January 2022, it was just over 20 percent, which is higher than in recent years. We are also seeing more tenants attempting to sublease all or part of their space.

Employers are grappling with how the pandemic is impacting office space, with many moving to remote work or, more recently, a hybrid model. What does that look like? Will the number of desks be limited? If everyone is in the office on the same days, how will that work? How do you accommodate a cleaning schedule and provide storage if different people use the same workspace on different days? …

The Wildcatter

(By Nikolas Tysiak)

Hello MLBC friends and family! As we survive the freezing cold of winter, there are only a few things to report to you. This time of year, with its proximity to the holidays, tends to be a judicial legislative “slow time.” As always, the Legislative and Regulatory Committee looks forward to hearing from anyone with an idea or suggestion of something to include in our newsletter updates.

OHIO

Hein Bros., LLC v. Reynolds, 2021-Ohio-4633 (7th Dist. Ct. App.). Owners of severed mineral interest brought an action to have a prior judgment divesting them of such severed minerals deemed void for failure of notice. In 2013, the surface owners of this property in Belmont County brought an action to have previously-severed minerals under their lands declared vested with the surface estate. Service of notice of the lawsuit was attempted by certified mail, with the surface owners’ attorney stating that various methods were attempted to locate the severed mineral owners. Certified mail having failed, notice was served by publication in accordance with Ohio law. In 2020, the same severed mineral owners sought the judgment overturned due to failure of notice, claiming that no reasonable person would not have been able to locate their addresses for service by certified mail if applying due diligence in 2013. Under Ohio law, there is a rebuttable presumption that the reasonable diligence exercised in issuing notice by mail has been followed, and to counterbalance the presumption evidence of a substantial nature must be presented. The severed mineral owners presented evidence from an identity investigator, working in 2021, to prove that they were locatable with reasonable diligence in 2013. The trial court was not swayed by this evidence, and the Court of Appeals followed the lead of the trial court and affirmed their judgment, denying the claims by the severed mineral owners in favor of the surface owners. …

GO-WV News

(By Katrina Bowers)

The West Virginia Supreme Court has accepted certified questions from the United States District Court for the Northern District of West Virginia concerning whether the seminal decision in Estate of Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) (“Tawney”) regarding the deductibility of post-production expenses remains the law of West Virginia, and if so, the proper interpretation of Tawney.

In Charles Kellam, et al. v. SWN Production Company, LLC, et al., No. 5:20-CV-85, a case filed as a class action but not yet certified, the United States District Court for the Northern District of West Virginia, Judge John Preston Bailey, certified on his own motion whether Tawney remains the law of West Virginia, whether the lease in question allowed the deductions, and the proper application of Tawney. At the time of the District Court’s certification in Kellam, pending before the District Court was the defendants’ Motion for Judgment on the Pleadings which argued the Kellam’s lease complied with Tawney and the District Court was bound by the decision in Young v. Equinor USA Onshore Properties, Inc., 982 F.3d 201 (4th Cir. 2020). The Kellam’s lease states the lessee agrees to pay the lessor “as royalty for the oil, gas, and/or coalbed methane gas marketed and used off the premises and produced from each well drilled thereon, the sum of one-eighth (1/8) of the price paid to Lessee per thousand cubic feet of such oil, gas, and/or coalbed methane gas so marketed and used . . . less any charges for transportation, dehydration and compression paid by Lessee to deliver the oil, gas, and/or coalbed methane gas for sale.”

The Kellam lease is very similar to the lease considered in Young, where the 4th Circuit Court of Appeals reversed Judge Bailey and held the lease clearly and unambiguously allowed the deduction of post-production expenses. …

Christina Manfredi McKinley recently joined Babst Calland as a shareholder in the Litigation, Energy and Natural Resources, and Environmental groups.

Ms. McKinley provides business-oriented solutions to her clients and routinely serves as a general advisor, counseling clients on day-to-day legal and business matters on any number of issues. Her business-focused, proactive approach to problem-solving allows her to provide solutions to clients in a variety of industries, including manufacturing, retail, energy, chemicals, and environmental.

As a litigator who focuses on complex commercial matters, Ms. McKinley’s trial practice encompasses all phases of litigation, from early alternative dispute resolution through post-trial motions. She has concentrated experience in complex purchase agreement and commercial contracts disputes, protection of competitive interests (e.g., Lanham Act, unfair competition, tortious interference, trade secret protection, restrictive covenants), technology disputes (e.g., software services and license agreements), and director and officer defense.

An experienced appellate litigator, Ms. McKinley has practiced before the United States Supreme Court at every stage of the process, including the briefing and preparation of two merits cases that were argued before the Court. She also has briefed and prepared cases for argument before the United States Courts of Appeals for the Second, Third, Sixth, and D.C. Circuits, and she has argued numerous cases before the Pennsylvania intermediate appellate court.

Prior to joining Babst Calland, Ms. McKinley was a shareholder with Dentons Cohen & Grigsby. She is a graduate of The Catholic University of America, Columbus School of Law.