November 11, 2021

Small Businesses Need to Be Wary of Cyber Attacks (Opinion)

Charleston Gazette-Mail

(By Moore Capito)

Small-business owners have many roles to fill–from managing payrolls and marketing to customer service. But one area many small-business owners fail to plan for is their company’s cybersecurity.

According to a recent Small Business Administration survey, 88% of small-business owners feel their business was vulnerable to a cyberattack. Experts warn that small businesses, including those in West Virginia, are under constant attack by cybercriminals, be it from local, national or global actors.

We don’t have to dig deep for a local example of this threat. In 2017 Princeton Community Hospital, in Mercer County, was a victim of the Petya attack, costing the health system $27 million.

Yet, many businesses can’t afford professional IT solutions, have limited time to devote to cybersecurity or simply don’t know where to begin.

As a delegate, I am focused on supporting West Virginia small businesses through state and federal grants and providing critical resources and training to entrepreneurs across the state. Small businesses are the backbone of our economy and provide the greatest opportunity for job growth in our state. We need to do everything we can to encourage and support them. West Virginians are hard-working, dedicated people–they just need the right tools to succeed.

This is where programs like the one hosted by the National Cybersecurity Center come in. The National Cybersecurity Center is a nonprofit organization established to promote cyber innovation and awareness, and offers training for the public and private sector alike. I have the privilege of taking part in a key public education effort, Cybersecurity for State Leaders, which is training leaders in all 50 states on best practices in cybersecurity.

Best practices for maintaining good cyber hygiene apply equally to the government and to business across West Virginia. …

November 11, 2021

Governor Wolf’s Executive Order and Pennsylvania Legislature Emphasize Environmental Justice

Environmental Alert

(By Sean M. McGovern and Evan M. Baylor)

On October 28, 2021, Governor Tom Wolf issued an Executive Order (Order) addressing environmental justice in the Commonwealth (Executive Order 2021-07). In support of the Order, Pennsylvania legislators announced environmental justice actions that would reflect the directives of the Order.

Executive Order

Gov. Wolf’s Order largely focuses on the establishment of bodies within the Department of Environmental Protection (DEP) and an interagency council within the Executive Branch to better address environmental justice, which is addressed in further detail below. The Order also asserts:

  1. The Commonwealth’s duty to “ensure the rights and duties of Article I, Section 27 protect all the people of Pennsylvania” and the significance of environmental justice in President Biden’s Executive Order 14008 and his administration’s mission;
  2. That low-income communities and communities of color residents bear a disproportionate share of adverse climate and environmental impacts with accompanying adverse health impacts; and
  3. That all Pennsylvanians are entitled to meaningful involvement in decision-making that impacts their lives, environments, and health and that such involvement is critical to reduce adverse impacts.

Environmental Justice Advisory Board

The Order formally established the existing Environmental Justice Advisory Board (EJAB). The EJAB makes recommendations to the DEP Secretary concerning environmental justice policies, practices, and actions. The EJAB shall meet at least semi-annually.

Office of Environmental Justice

The Order formally establishes the existing Office of Environment Justice (OEJ) within the DEP. In 2002, the DEP established the Office of Environmental Advocate. …

November 5, 2021

Supreme Court of Appeals of West Virginia Accepts Certified Questions About Deductibility of Post-Production Expenses and the Viability of Tawney

Energy Alert

(by Timothy Miller, Jennifer Hicks and Katrina Bowers)

The West Virginia Supreme Court of Appeals has accepted four questions certified to it by The United States District Court for the Northern District of West Virginia in Charles Kellam, et al. v. SWN Production Company, LLC, et al., No. 5:20-CV-85. The Court will hear oral argument during the January 2022 term. The Court will address four questions: (1) Is Estate of Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) (Tawney) still good law in West Virginia; (2) What is meant by the “method of calculating” the amount of post-production costs to be deducted; (3) Is a simple listing of the types of costs which may be deducted sufficient to satisfy Tawney; and (4) If post-production costs are to be deducted, are they limited to direct costs or may indirect costs be deducted as well?

At the time of the District Court’s certification in Kellam, defendants’ Motion for Judgment on the Pleadings asserting that the Kellams’ lease complied with Tawney and that the District Court was bound by the decision in Young v. Equinor USA Onshore Properties, Inc., 982 F.3d 201 (4th Cir. 2020) was pending. In Young, the 4th Circuit Court of Appeals reversed Judge Bailey and held the lease clearly and unambiguously allowed the deduction of post-production expenses and noted that “Tawney doesn’t demand that an oil and gas lease set out an Einsteinian proof for calculating post-production costs. By its plain language, the case merely requires that an oil and gas lease that expressly allocates some post-production costs to the lessor identify which costs and how much of those costs will be deducted from the lessor’s royalties.” Young, 982 F.3d at 208. …

November 4, 2021

Infrastructure Bill Would Resurrect Superfund Excise Taxes

The Legal Intelligencer

By Joe Yeager

On Aug. 10, the U.S. Senate passed President Joe Biden’s Infrastructure Investment and Jobs Act (HR 3684 or Infrastructure Bill) by a vote of 69-30. The $1 trillion Infrastructure Bill received bipartisan support with a proposed $550 billion in new infrastructure spending over the next five years that would be offset by a combination of tax and nontax provisions.

Among other proposals, the Senate bill includes a provision to resurrect a modified version of the long-expired Hazardous Substance Superfund Trust Fund (Superfund) excise tax on chemical manufacturing and imports (Superfund excise taxes). The bill reinstates certain excise taxes to replenish the Superfund, which provides the federal government with resources to respond to environmental threats related to managing hazardous substances.

Congress allowed the excise taxes to expire at the end of 1995, and this absence of funds has forced the Superfund to support cleanup efforts through general disbursements of other tax revenues. Although there have been multiple attempts to reinstate the Superfund excise tax over the course of the last 25 years, none garnered as much bipartisan support.

The new version of the Superfund tax would apply to the production of certain chemicals through Dec. 31, 2031, effective for periods after June 30, 2022. In addition, the Superfund tax will increase the rate of tax per ton on a list of taxable chemicals. Its proponents assert that over the course of 10 years, the new tax is estimated to raise approximately $14.4 billion (or $1.2 billion annually). In support of the Infrastructure Bill, the funds would be specifically aimed at shoring up the Superfund, addressing the overall goals of cleanup and protection of human health and the environment from historical contamination, and bolstering EPA efforts to conduct additional investigations and collect more data on newer sites. …

November 4, 2021

PHMSA Releases Long-Awaited Final Rule for Onshore Gas Gathering Lines

Pipeline Safety Alert

(by Keith Coyle, Jim Curry and Brianne Kurdock)

On November 2, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of its final rule for onshore gas gathering lines.  The final rule, which represents the culmination of a decade-long rulemaking process, amends 49 C.F.R. Parts 191 and 192 by establishing new safety standards and reporting requirements for previously unregulated onshore gas gathering lines.  Building on PHMSA’s existing two-tiered, risk-based regime for regulated onshore gas gathering lines (Type A and Type B), the final rule creates:

  • A new category of onshore gas gathering lines that are only subject to incident and annual reporting requirements (Type R); and
  • Another new category of regulated onshore gas gathering lines in rural, Class 1 locations that are subject to certain Part 191 reporting and registration requirements and Part 192 safety standards (Type C).

The final rule largely retains PHMSA’s existing definitions for onshore gas gathering lines but imposes a 10-mile limitation on the use of the incidental gathering provision.  The final rule also creates a process for authorizing the use of composite materials in Type C lines and prescribes compliance deadlines for Type R and Type C lines.  Additional information about these requirements is provided below.

     Type R Lines

The final rule creates a new category of reporting-only regulated gathering lines.  These gathering lines, known as Type R lines, include any onshore gas gathering lines in Class 1 or Class 2 locations that do not meet the definition of a Type A, Type B, or Type C line.  …

November 4, 2021

Babst Calland Ranked in 2022 “Best Law Firms”

Babst Calland has been ranked in the 2022 U.S. News & World Report-Best Lawyers® “Best Law Firms” list nationally in eight practice areas and regionally in 32 practice areas:

  • National Tier 2
    • Environmental Law
    • Land Use & Zoning Law
    • Litigation – Environmental
    • Oil & Gas Law
  • National Tier 3
      • Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
      • Litigation – Construction
      • Mining Law
      • Natural Resources Law
  • Metropolitan Tier 1
    • Pittsburgh
      • Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
      • Bet-the-Company Litigation
      • Commercial Litigation
      • Construction Law
      • Corporate Law
      • Energy Law
      • Environmental Law
      • Information Technology Law
      • Land Use & Zoning Law
      • Litigation – Bankruptcy
      • Litigation – Construction
      • Litigation – Environmental
      • Litigation – Land Use & Zoning
      • Municipal Law
      • Natural Resources Law
      • Water Law
    • Charleston-WV
      • Commercial Litigation
      • Energy Law
      • Environmental Law
      • Litigation – Environmental
      • Oil & Gas Law
  • Metropolitan Tier 2
    • Pittsburgh, PA
      • Labor Law – Management
    • Charleston-WV
      • Mining Law
      • Natural Resources Law
    • Washington, D.C.
      • Oil & Gas Law
  • Metropolitan Tier 3
    • Pittsburgh, PA
      • Mediation
      • Mergers & Acquisitions Law
    • Charleston-WV
      • Bet-the-Company Litigation
      • Litigation –

    • …

November 1, 2021

WVDEP Working on Permitting Rules for Storage of Captured CO2

GO-WV News

By Christopher (Kip) Power

The West Virginia Department of Environmental Protection (WVDEP) is continuing work on rules for permitting of geologic storage of captured CO2 — a necessary (but not sufficient) element in developing a CCS industry.

As discussed in the August GO-WV News, the WVDEP released proposed amendments to its Underground Injection Control (UIC) permitting and related regulations (47 CSR 13) on June 23, 2021 and held a public hearing on the proposed rules on July 23, 2021. Although they include substantial changes to the rules for Class 1 permits (governing hazardous waste injection wells) and Class 2 permits (for enhanced recovery of oil and gas, and disposal of produced water), the rule changes primarily consist of an entirely new section establishing a permitting program for Class 6 wells (those used for injecting carbon dioxide for the purpose of permanent geologic sequestration). Those proposed new Class 6 rules are largely modeled on EPA’s detailed “Class VI” regulations promulgated under the federal Safe Drinking Water Act (40 CFR 146).

Ten organizations (including GO-WV and several environmental/citizen groups) filed comments on the draft amendments, and a few of their representatives spoke at the hearing. By letter dated July 23, 2021, the WVDEP released copies of the written comments it received, along with its responses. There was a total of 10 comments that the WVDEP considered to be meritorious enough to alter the proposed rule language in minor ways, almost all of which consisted of typographical errors (along with the elimination of the use of Roman numerals for identifying the “classes” of permits). The final agency-approved rule proposal was filed with the Legislative Rule-Making Review Committee on July 30, 2021 (incorporating most, but not all, of the edits mentioned in the WVDEP’s July 23 letter). …

October 27, 2021

How FinTech is Upending a Traditional Industry

Smart Business

(by Sue Ostrowski featuring Moore Capito)

For years, the banking industry has functioned in the same ways it always has. But FinTech — financial technology — is revolutionizing the way things are done and increasing access to financial tools for those who may not have previously had it.

“At its core, FinTech is when you have the convergence of an emerging technology and a financial service,” says Moore Capito, shareholder at Babst Calland. “It’s using innovation to compete with traditional methods of delivering financial services.”

Smart Business spoke with Capito about how FinTech is revolutionizing the financial industry, the opportunities it presents and challenges it poses.

How is Fintech Changing the Financial Industry?

There are a lot of unbanked, or underbanked, people that have difficulty accessing the traditional banking industry. FinTech products, sometimes in collaboration with a traditional bank, can provide better financial services to these individuals, especially in rural areas where there is less access to bricks-and-mortar banks.

There are potentially endless applications, from insurance to mobile banking, cryptocurrency, investment apps, and financial products including mortgages — the most well-known being PayPal. The onset of COVID accelerated the necessity and the willingness to adapt with FinTech, doing more transactions remotely from phones and bringing finance directly to individuals, instead of individuals going to a physical banking location.

On the economic development side, entrepreneurs are coding programs that create the functionality behind the apps. And states such as West Virginia have created regulatory sandboxes for FinTech entrepreneurs. These let participants apply to come in and test their products in the marketplace without going the traditional regulatory route, allowing them to become viable and ready for commercialization before becoming regulated by state agencies. …

October 28, 2021

2021 PFAS Strategic Roadmap Outlines EPA’s Whole-of-Agency Approach to Addressing “Forever Chemicals” through 2024 and Beyond

Environmental Alert

(by Matt Wood and Mackenize Moyer)

On October 18, 2021, the U.S. Environmental Protection Agency (EPA) released its comprehensive strategy for addressing per- and polyfluoroalkyl substances (PFAS), “PFAS Strategic Roadmap: EPA’s Commitments to Action 2021–2024” (Roadmap).  PFAS are a large group of manmade chemicals that have been widely used in various consumer, commercial, and industrial applications since the around 1940s and more recently have been discovered in environmental media (e.g., groundwater), as well as in plants, animals, and humans.  PFAS do not tend to break down naturally, and evidence suggests that exposure to PFAS can lead to adverse health effects.  As such, the EPA Council on PFAS, established by EPA Administrator Michael S. Regan in April 2021, developed the Roadmap to “pursue a rigorous scientific agenda to better characterize toxicities, understand exposure pathways, and identify new methods to avert and remediate PFAS pollution.”[1]

The Roadmap highlights EPA’s “whole-of-agency” approach, that includes proposed actions across program offices, as well as the PFAS “lifecycle” (i.e., activities that occur prior to PFAS entering the environment, such as manufacturing).  EPA’s “Key Actions” illustrate this approach and are informed by one or more of the Roadmap’s three central directives: (1) Research; (2) Restrict; and (3) Remediate. A selection of the Roadmap’s Key Actions is summarized below.

 Office of Water

  • Establish a National Primary Drinking Water Regulation (NPDWR) for PFOA and PFOS – In March 2021, EPA published the Fourth Regulatory Determinations, which included a final determination to regulate PFOA and PFOS in drinking water. EPA expects to issue a proposed NPDWR for PFOA and PFOS in fall 2022. A final regulation is anticipated in fall 2023.

    • …

October 28, 2021

NextEra Announces Record Renewables, Pushing Major ‘Green’ Hydrogen Project

Pittsburgh, PA

Renewables Law Blog

(By Bruce Rudoy)

NextEra Energy Inc.’s CEO, Jim Robo, has pushed Congress to extend clean energy tax credits as the company announced record renewables contracts and a major hydrogen project yesterday. Robo said odds are “reasonably high” of an extension if a consensus can be reached on what would be in the reconciliation bill. There is wider support in Congress to expand clean energy tax credits compared to the proposed $150 billion Clean Electricity Performance Program or carbon pricing. Other proposals have included a broad clean energy tax overhaul that some large energy companies say they support. “If something happens there, we feel good about the fact that there will be a long-term extension of the credits,” Robo said, adding that he foresees tax policy support for hydrogen and energy storage investments. “It would be very constructive for us.” As one of the world’s largest renewable energy developers, NextEra has a lot to gain if the Biden administration is successful in financially encouraging wind, solar and other technologies to cut U.S. power sector emissions in half by 2030. President Biden has set the goal of decarbonizing the grid by 2035. “We are increasingly thinking about ourselves as the company that’s going to lead not only the clean energy transformation of the electric grid but really the clean energy transformation of the U.S. economy and the decarbonization of the U.S. economy,” he said. The way Robo sees it, a low-emissions grid is critical to decarbonizing the transportation and industrial sectors. The falling costs of renewable resources combined with utility, corporate and state goals aimed at cutting emissions are driving large-scale projects nationwide. NextEra’s renewable energy unit signed a record 2,160 megawatts of solar, wind and storage projects during the third quarter, the company said during a conference call with Wall Street analysts. …

October 23, 2021

Challenges and Opportunities for the Pennsylvania Gas Pipeline Industry

Pittsburgh Business Times

(by Daniel Bates featuring Keith Coyle and Blaine A. Lucas)

Even as opposition grows for energy pipelines, and government agencies toughen their regulation of the industry, pipelines remain the most safe, efficient and effective means to transport much-needed natural gas and other energy products from wells to end users to generate power, manufacture goods and heat homes.

So said Keith Coyle, a shareholder with law firm Babst Calland whose practice areas include energy law and pipeline and hazmat safety.

“We’re in a moment right now where we’re seeing some growing opposition to natural gas pipeline infrastructure,” Coyle said in making his case for the importance of supporting and protecting the nation’s energy pipeline infrastructure. “We’re seeing efforts to encourage governmental authorities to ban the construction of new pipelines or to delay the issuance of permits that are necessary for projects to move forward. We’re also seeing litigation that’s being used as a tool to try to block new pipelines or stop the operation of existing pipelines.”

Coyle and his colleague, Babst Calland shareholder Blaine Lucas, took their stand in favor of safe and efficient pipeline infrastructure as part of a recent discussion with the Pittsburgh Business Times on “The Challenges and Opportunities for the Pennsylvania Gas Pipeline Industry.”

Coyle and Lucas are quick to suggest that the current political climate, as well as the growing opposition from environmental activists and others, are problematic not just for the energy industry, but for people, the economy – and safety.

“One of the things that concerns me is if we remove pipelines from the equation, everything about the energy transportation network becomes less safe,” Coyle said. …

October 22, 2021

Court Addresses Limitations on Approval of Planned Residential Developments

The Legal Intelligencer

(by Anna Jewart)

The requirements of a municipal zoning ordinance are strictly applied, and landowners must comply with the express use and dimensional limitations applicable in the zoning districts in which their properties are located. Landowners wishing to stray from the regulations of that district are usually forced to request relief in the form of a variance, the standards for the granting of which are quite rigorous. However, Article VII of the Pennsylvania Municipalities Planning Code, (MPC), 53 P.S. Sections 10701-10713, authorizes municipalities to enact, amend and repeal provisions within a zoning ordinance fixing standards and conditions for a “planned residential development” (PRD), a form of land development intended to offer an alternative to traditional, cookie-cutter zoning. The opinion of the Commonwealth Court in Gouwens v. Indiana Township Board of Supervisors (Gouwens II), offers an opportunity to revisit the foundations of PRD regulation and to explore the requirements for the tentative approval of a PRD. See Gouwens v. Indiana Township Board of Supervisors, Nos. 544, 992-994 C.D. 2020, 2021 (Pa. Cmwlth. July 8, 2021), publication ordered (Sept. 7, 2021)(Gouwens II), on appeal following remand of Gouwens v. Indiana Township Board of Supervisors, Pa. Cmwlth., No. 1377 C.D. 2018, (filed June 25, 2019), publication ordered (Sept. 7, 2021) (Gouwens I).

A PRD is a larger, integrated residential development that may not meet the use and dimensional standards normally applicable in the underlying zoning district. The idea behind PRD regulations is to create a method of approving large developments which overrides traditional zoning controls and permits the introduction of flexibility into their design. …

October 21, 2021

EPA’s Proposed New Oil and Gas Methane Requirements: Where We Are and Where We Are Going

Energy Alert

(by Mike Winek, Gary Steinbauer, Gina Falaschi and Christina Puhnaty)

The U.S. Environmental Protection Agency (EPA) has pledged to issue, within days from now,  proposed new Clean Air Act (“CAA” or “Act”) regulations for methane emissions from the oil and gas sector.  EPA’s forthcoming proposal is expected to broaden the scope of its current methane requirements for new, modified, or reconstructed sources within the oil and gas sector.  In addition, for the first time, EPA will propose nationwide methane emission guidelines for existing sources within the sector that individual states will be responsible for implementing.  As the oil and gas sector awaits the new proposed methane requirements, this Alert summarizes the important and rare developments that have unfolded in the relatively brief history of EPA regulating methane emissions from the oil and gas sector.

Obama Administration Issues Initial Regulations of Methane Emissions from Oil and Gas Sector.  EPA issued its first set of oil and gas methane-specific emission regulations in 2016 during the Obama administration.  The 2016 regulations amended the then-current new source performance standards (NSPS) and promulgated new standards to directly regulate emissions of methane, as well as volatile organic compounds (VOC), from new, modified, and reconstructed equipment, processes, and activities across the entire oil and gas sector.  The 2016 amendments to the NSPS were codified at 40 C.F.R. Part 60, Subpart OOOOa (Subpart OOOOa).

Subpart OOOOa included specific limits on methane emissions for new, modified, and reconstructed sources within the production and processing segments of the oil and gas sector.  It also included VOC and methane standards for emission sources in the transmission and storage segments, which were previously unregulated.   …

October 8, 2021

Groups petition for massive increases in oil & gas well bonds

The PIOGA Press

(by Kevin J. Garber, Sean M. McGovern and Jean M. Mosites)

On September 14, the Sierra Club, PennFuture, Clean Air Council, Earthworks and other groups submitted two parallel rulemaking petitions to Pennsylvania’s Department of Environmental Protection (DEP) asking the Environmental Quality Board (EQB) to require full-cost bonding for conventional and unconventional oil and gas wells, for both new and existing wells. The petitions do not address or consider the permit surcharges and other funding mechanisms for plugging wells, including the federal infrastructure bill that is expected to provide millions of dollars to plug abandoned wells.

Background

The Pennsylvania General Assembly addressed and increased bonding in 2012. Under Act 13, well owners/operators are required to file a bond for each well they operate or a blanket bond for multiple wells. Currently, the bond amount for conventional wells is $2,500 per well, with the option to post a $25,000 blanket bond for multiple wells. 72. P.S. §1606-E. For unconventional wells, the current bond amount required varies by the total well bore length and the number of wells and is limited under the statute to a maximum of $600,000 for more than 150 wells with a total well bore length of at least 6,000 feet. 58 Pa.C.S. §3225(a)(1)(ii). EQB has statutory authority to adjust these amounts every two years to reflect the projected costs to the Commonwealth of plugging the well.

Proposed changes to bond amounts

The petitioners contend that a lack of full-cost bonding has resulted in the abandonment of thousands of wells and that such wells pollute the environment and adversely affect the health of communities, and allege that the EQB has an obligation to increase bond amounts pursuant to the petition under the Environmental Rights Amendment. …

October 7, 2021

Now might be time to appeal your commercial real estate assessment

Smart Business

(by Sue Ostrowski featuring Peter Schnore)

COVID-19 has had a dramatic impact across the board, creating economic uncertainty and having an adverse effect on commercial property values that continues to this day. In Allegheny County, effects are perhaps most pronounced in the office market, and in particular in Class B downtown Pittsburgh office space, but no commercial property type with indoor space has been immune, says Peter Schnore, shareholder at Babst Calland.

“Tenants’ initial response to COVID was a wait-and-see holding pattern with respect to whether they were going to renew leases or move to new space,” says Schnore. “As a result, many landlords have had to dig deep to keep and attract tenants by offering unprecedented periods of free rent or tenant improvement allowances, creating an adverse impact on net operating income. The unknowns surrounding COVID are still affecting nearly all commercial property types, not just office properties.”

Smart Business spoke with Schnore about how COVID is impacting the value of commercial real estate and why it may be a good idea to review your recent tax assessment.

What is the current situation for owners of commercial real estate?

Future uncertainty while we remain in the throes of COVID is driving up risk of commercial property investment, driving down commercial property values. Landlord concessions — in some cases multiple years of free rent or triple-digit tenant improvement allowances — are increasing operating expenses and reducing short-term income, resulting in an immediate and substantial adverse impact on value. As a result, many properties that house office, retail, restaurants, hospitality and others now have assessments that are higher than the current value of the real estate merits. …

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