August 18, 2020

FTC Investigation of Twitter for Alleged Privacy Violations Reinforces Need for Strong Privacy Policies and Practices

Emerging Technologies Perspectives

(by Ashleigh Krick)

On August 3, 2020, Twitter disclosed in a regulatory filing that it is under investigation by the Federal Trade Commission (FTC) for allegations that the company used user phone numbers and email addresses for targeted advertising in violation of a 2011 Consent Agreement. Twitter estimates that it could face $150 to $250 million in losses due to legal fees and enforcement penalties resulting from this matter.

The 2011 Consent Agreement resolved charges that Twitter violated the Federal Trade Commission Act (FTC Act) when hackers obtained administrative control of Twitter allowing them access to non-public user information, private tweets, and the ability to send out fake tweets from any user’s account. The FTC found that Twitter’s actions neither upheld statements in its privacy policy, nor provided reasonable and appropriate security to prevent unauthorized access to nonpublic user data and honor the privacy choices of its users.

Click here for PDF. 

August 18, 2020

Report Sees Shale Poised For Growth

American Oil & Gas Reporter

PITTSBURGH–Despite challenges, a maturing shale industry is poised for growth as natural gas and oil producers have slashed the costs of production, concludes the law firm of Babst Calland in its 10th annual energy industry report.

The 2020 Babst Calland Report–The U.S. Oil & Gas Industry: Federal, State, Local Challenges & Opportunities; Legal and Regulatory Perspective for Producers and Midstream Operators covers topics ranging from the industry’s business outlook, regulatory enforcement and rule-making to developments in pipeline safety and litigation trends, Babst Calland says, adding that its attorneys’ collective legal experience and perspectives on these and related business developments are highlighted in the report.

“The U.S. natural gas and oil industry has experienced tremendous growth and change since we first published this report in 2011,” comments Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group. “Fast forward to an unprecedented 2020 with a pandemic, a corresponding economic slowdown, and an oversupply of natural gas and crude oil. With increased public and government pressure, sustained low prices, and less-reliable financing options, resiliency will continue to be the driving force of a dynamic energy market that continues to evolve.”

Reinhart says the past decade clearly has demonstrated the energy industry’s resilience amid price fluctuations, increasing regulation, opposition from nongovernmental organizations and policy changes. He says the industry has improved efficiencies, even as lower commodity pricing has squeezed margins, while also seeking new markets.

According to the Energy Information Administration, Reinhart cites, the United States exported more natural gas in 2019 by pipeline than it imported for the first time since 1985, mainly because of increased pipeline capacity to send natural gas to Canada and Mexico.

“Perhaps a more fossil fuel-friendly federal government and the promise of a predictable federal regulatory landscape helped boost capital spending and the prospects of growth through 2019,” Reinhard poses. …

August 13, 2020

Babst Calland Attorneys Target Oil and Gas Political Issues to Watch

Hart Energy

(by Joseph Markman and Len Vermillion featuring Kevin Garber and Jean Mosites)

In some presidential election years, voters have struggled to discern substantive differences between the positions of the major party candidates. Not this year.

The energy and environmental policies of President Donald Trump and former Vice President Joe Biden reveal “a night and day difference between the two approaches,” Kevin Garber, a shareholder in the Babst Calland law firm told Hart Energy’s Joseph Markman and Len Vermillion.

But oil and gas executives need to focus their attention beyond the presidential race.

“Looking at the real local level, there are task forces, there are climate plans, there are initiatives for electric vehicles and renewables and building codes—whether you can or cannot have gas hookup in new construction,” said Jean Mosites, also a Babst Calland shareholder who practices environmental law. “A lot of interesting things are going on and certainly not just federal.”

Watch video. 

August 13, 2020

Justine M. Kasznica – Emerging Technologies Attorney

Emerging Technologies Profile 

What motivated your desire to help start-ups and emerging technology companies with their legal matters? I was a litigator at a large firm in Philadelphia, fresh out of law school, when I started working with a good friend from undergrad to commercialize a robot designed to work with autistic kids. I was able to bring in my first client, and had the rare opportunity to work with a cross-disciplinary team of colleagues to support the legal needs of my friend’s start-up. This was a career turning point for me, as it was the moment when I discovered the rewards of working with start-ups. I saw the critical role that lawyers play in supporting the commercialization of advanced technologies and committed to doing my part in building a responsible future for robotics and artificial intelligence.

As an early adopter of the drone, what was the origin of your drone fascination and expertise? Growing up, my older brother and I spent a lot of time designing, building and flying model rockets, and other favorite aircraft (from balsa/rubber-powered Piper Cubs to radio-controlled Corsairs and B-25 Mitchells). When Jeff Bezos announced (circa 2012) that drones would be delivering all my future Amazon orders to my doorstep, I couldn’t resist learning about the regulatory hurdles facing unmanned aircraft systems (UAS, as we call them), and saw a great opportunity to connect my legal work with my interests in aviation and aerospace. Somewhere along this journey, I received my first drone “Quentin” – a DJI Phantom 4 – as a Valentine’s Day gift from my husband.

How do you effectively manage so many start-up client relationships at the same time? What’s your secret? The truth is, I’m still working on it… There aren’t enough hours in a day, and I am fortunate to work with an incredible team of partners and associates who are equally bought into the vision of an emerging technology/start-up legal practice. …

August 12, 2020

Climate change developments

The PIOGA Press

This article is an excerpt of The 2020 Babst Calland Report, which represents the collective legal perspective of Babst Calland’s energy attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. A full copy of the Report is available by writing info@babstcalland.com.

The momentum to propose and adopt new legislation, regulation, policies and programs to address climate change steadily increased during 2019 and only subsided in early 2020 as the nation struggled to address the COVID-19 pandemic. As described below, the Trump administration continued its regulatory reform, reducing various obligations related to greenhouse gas (GHG) emissions, while state and federal courts continue to evaluate claims against both the government and industry regarding their risks, roles and responsibilities to confront the impacts of climate change.

For the full article, click here.

August 11, 2020

$27 Million Available for Zero-Emission Trucks in California

Pittsburgh, PA

EmTech Law Blog

(by Gina Falaschi)

applications for fundingSignificant funding will soon be available in California to support the expansion of zero-emission trucks in the heaviest weight class that has previously relied on diesel engine technologies.  On August 18, 2020, California will start to parcel out $27 million in funding from the Volkswagen (VW) Environmental Mitigation Trust program to replace higher polluting trucks with zero-emission vehicles.

The VW Environmental Mitigation Trust provides about $423 million for California to mitigate the excess nitrogen oxide emissions caused by VW’s use of emissions defeat devices in certain of its diesel passenger vehicles.  The trust is a component of partial settlements with VW and provides earmarked funding opportunities for actions like “scrap and replace” projects for the heavy-duty sector, including on-road freight trucks, transit and shuttle buses, school buses, forklifts and port cargo handling equipment, commercial marine vessels, and freight switcher locomotives.  As required by the settlement, California developed a Beneficiary Mitigation Plan that was approved by the trustee in June 2018.

As part of the Beneficiary Mitigation Plan, $90 million was made available for the Zero-Emission Class 8 Freight and Port Drayage Trucks category to replace freight trucks (including drayage), waste haulers, dump trucks, and concrete mixers.  The first $27 million installment of the total $90 million has been approved and applications for funding will be available on August 18.  Eligible applicants will be awarded funding on a first-come, first-served basis.

To qualify, existing vehicles must be powered by engine built in model years 1992 to 2012, in compliance with all applicable regulations, and scrapped in exchange for a zero-emission replacement vehicle certified or approved by the California Air Resources Board or eligible under the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. …

August 11, 2020

U.S. Army Corps of Engineers Proposes to Reissue Nationwide Permits and Split NWP 12

Environmental Alert

(by Lisa Bruderly and Ben Clapp)

The U.S. Army Corps of Engineers (Corps) has recently pre-published a proposed rule to issue and modify its Nationwide Permits (NWPs) in a move aimed at clarifying the NWPs and reducing the regulatory burden associated with certain authorized activities.  NWPs are issued pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899.  They authorize an array of activities that result in a discharge of dredged and fill material into waters of the United States, provided that the activities meet the threshold criteria and fulfill the general and specific conditions of the particular NWP.

Scope of Proposed Rule

The Corps typically reissues the NWPs approximately every five years, with the last publication in 2017, when 52 NWPs were issued. The Corps is proposing to reissue the permits after only three years to incorporate modifications identified in response to Executive Order 13783, which directed federal agencies to review existing regulations that “potentially burden the development or use of domestically produced energy resources.”  Nine NWPs were identified as result of this review and are modified in the proposed rule.  Modifications generally pertain to changes in thresholds for requiring pre-construction notifications or Corps approvals, elimination of linear foot thresholds for certain NWPs, and expansion of criteria for using certain NWPs.

In addition, five new NWPs are being proposed. The remainder of the existing NWPs are being reissued, without change, to keep all permits on the same five-year cycle.

Proposed Modifications to NWP 12

Of particular interest to the oil and gas industry and utilities is the Corps’ proposal to split NWP 12 (Utility Line Activities) into three NWPs, depending on the type of utility line: oil and gas (NWP 12), electric utilities and telecommunications (Proposed NWP C) and water, sewage and other substances (Proposed NWP D). …

August 11, 2020

West Virginia DHHR Proposes New TENORM Rules, Federal Grand Jury in Kentucky Indicts TENORM Shipper for Violations of Federal DOT Regulations

Environmental Alert

(by Kip Power and Varun Shekhar)

Appalachian oil and gas operators were recently reminded that proper handling, management, disposal and transportation of technologically enhanced naturally occurring radioactive material (TENORM) wastes that are generated in connection with shale gas production activities remain the focus of significant regulatory and enforcement efforts.

W.Va. DHHR TENORM Regulation. On the regulatory side, the West Virginia Department of Health and Human Resources, Bureau of Public Health (DHHR), an agency primarily involved with protecting the public and employees from radiological health risks associated with the healthcare industry, recently released proposed revisions to its legislative rule, “Radiological Health,” 64 W. Va. C.S.R. 23 (Proposed Rule). The Proposed Rule includes an entirely new Section 16, entitled “Radiation Safety Requirements for Technologically Enhanced Naturally Occurring Radioactive Material.”

In some respects, DHHR’s proposal follows the recommendations in Part N (2014) of the Conference of Radiation Control Program Directors, Inc.’s (CRCPD) “Suggested State Regulations for Control of Radiation.” However, it also varies from the CRCPD recommendations in ways that may prove troublesome, such as the inclusion of inconsistent levels of risk-based exposure limits (allowing a total effective dose equivalent of 100 mrem/year for a maximally exposed individual in one provision but limiting exposure to 50 mrem/year and 25 mrem/year in other parts). Of equal concern, the Proposed Rule appears to exceed DHHR’s legislative mandate and allows for regulation of activities in a manner that is duplicative of existing rules administered by the West Virginia Department of Environmental Protection.

The West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association of West Virginia recently filed detailed joint comments expressing these and other concerns about this proposed new TENORM regulation. …

August 10, 2020

US Fish and Wildlife Services Proposes Definition of “Habitat” under Endangered Species Act

Environmental Alert

(by Robert Stonestreet)

On August 5, 2020, the United States Fish and Wildlife Service (Service) published a proposed regulation in the Federal Register to define the term “habitat” for purposes of the Endangered Species Act (ESA). 85 FR 47333.  The ESA already defines the term “critical habitat,” which in general means areas designated as essential to preserve or promote recovery of threatened or endangered species regardless of whether those species are actually present in the area.  The term “habitat,” however, is not itself defined in the ESA or existing regulations.  The Service has been involved in years of litigation over efforts to designate as “critical habitat” certain areas where the listed species do not presently exist and could not survive under current conditions.  This proposed definition of “habitat” follows a ruling by the United States Supreme Court that an area must first qualify as “habitat” for a listed species in order for the area to be designated as “critical habitat.” Weyerhaeuser Co. v. United States Fish and Wildlife Service, 139 S. Ct. 361 (2018).

The Service proposes to define “habitat” as follows:

The physical places that individuals of a species depend upon to carry out one or more life processes.  Habitat includes areas with existing attributes that have the capacity to support individuals of the species. (emphasis added)

The Service also requests comments on the following alternative definition of “habitat”:

The physical places that individuals of a species use to carry out one or more life processes.  Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist. …

August 5, 2020

EPA Establishes Deadlines for Closing Certain CCR Surface Impoundments

Environmental Alert

(by Donald Bluedorn, Gary Steinbauer and Casey Snyder)

On July 29, 2020, United States Environmental Protection Agency (EPA) Administrator Andrew Wheeler signed a pre-publication version of a final rule (the Rule) revising portions of EPA’s 2015 coal combustion residuals (CCR) landfill and impoundment regulations. The Rule becomes final 30 days after publication in the Federal Register.

In 2015, EPA promulgated regulations implementing national minimum criteria for new and existing CCR landfills and surface impoundments. A federal appellate court partially vacated and remanded portions of these regulations on August 21, 2018 (the court’s decision is covered in more detail in our prior Alert). Following the court’s decision, EPA published proposed rules in the Federal Register on December 2, 2019 and August 14, 2019, to address the court’s remand order and make other changes (the Proposed Rules).

The Rule includes the following key changes for CCR units:

  • Reclassifies compacted-soil lined or “clay-lined” surface impoundments to “unlined,” meaning these structures must be retrofitted or closed;
  • Establishes a revised date, April 11, 2021, by which CCR units must cease receiving waste and initiate closure or retrofit because: (1) they are unlined or were formerly “clay-lined” CCR surface impoundments; or (2) they failed the minimum depth to aquifer location standard;
  • Revises the alternative closure provisions that would grant certain facilities additional time to develop alternative capacity to manage their CCR and non-CCR waste streams;
  • Updates the annual groundwater monitoring and corrective action report requirements to make the data easier to understand for public review, including adding an executive summary requirement;

    • …

July 30, 2020

New Clean Transportation Initiatives Coming to Pennsylvania

The Legal Intelligencer

(by Julie Domike and Gina Falaschi)

The transportation sector is the nation’s largest source of greenhouse gas emissions. To reduce these emissions, cleaner transportation initiatives are on the rise nationwide, with new state programs being announced almost daily. While California has always been in the forefront of these enterprises, other states, including Pennsylvania, are not far behind. This is especially true of the new clean transportation initiatives for the medium- and heavy-duty vehicle market, which produces 25% of the transportation sector emission but only represents 4% of the vehicles on the road.

At a public hearing on June 25, the California Air Resources Board adopted a long-awaited Advanced Clean Trucks Regulation. California Air Resources Board, Notice of Decision (June 25, 2020). This program builds on California’s 2012 Advanced Clean Cars Regulation to further reduce emissions from the transportation sector by requiring truck manufacturers to sell a certain percentage of zero-emission vehicles beginning in model year 2024. The percentage will increase annually, meeting the ultimate goal of phasing out new diesel trucks by 2045.

The federal Clean Air Act affords California the ability to pass historic initiatives and to be at the forefront of setting new, more stringent, environmental standards. While Section 209 of the federal Clean Air Act generally preempts state and local emission standards for new motor vehicles, there are a few exceptions. See 42 U.S.C. Section 7543(a). The EPA can waive preemption for any state that had adopted standards for control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966. The only state that qualifies to receive such waivers is California, the only state to have adopted motor vehicle emission standards prior to March 1966. …

July 29, 2020

New PHMSA Rule Allows Rail LNG Transport

Pipeline Safety Alert

(by James Curry and Boyd Stephenson)

On July 24, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Final Rule (Rule) in the Federal Register allowing railroads to transport liquefied natural gas (LNG) in modified DOT-113C120W (DOT-113) railcars designed to hold cryogenic flammable liquids.  The rule was prompted by a 2017 Association of American Railroads (AAR) rulemaking petition to allow LNG transport by rail and Executive Order 13868, directing PHMSA to conduct a rulemaking allowing LNG to travel by rail tank car.  In developing the Rule, PHMSA relied on safety data from other cryogenic flammable liquid shipments and from an existing special permit that already allows limited transportation of LNG by rail to demonstrate LNG could safely be transported.  The Rule follows PHMSA’s October 24, 2019,  Notice of Proposed Rulemaking (NPRM).  It takes effect on August 24, 2020, and PHMSA is allowing immediate voluntary compliance.

The rulemaking attracted significant attention from industry eager to meet increased natural gas demand, safety organizations such as the National Transportation Safety Board that raised concerns about transporting LNG, and from environmental groups.  Numerous media reports on the Executive Order also increased public attention.  Over 450 individuals and organizations submitted comments on the NPRM.  In the NPRM and in the Rule, PHMSA noted that it lacks data about how many LNG rail shipments are likely to occur under the new rules.  Currently, cryogenic flammable gases are transported rarely by railcar, but most commenters expect LNG rail shipments to quickly outstrip shipments of other cryogenic flammable gases.

Previously, LNG could only be transported by rail tank car with a special permit, or in smaller, portable tanks loaded onto a railcar.   …

July 28, 2020

New rules mean foreign investments in U.S. real estate fall under government review

Smart Business

(by Sue Ostrowski with Boyd Stephenson)

The rules of international investment in U.S. real estate have changed, and failure to understand these new rules — issued by the Committee on Foreign Investments in the United States (CFIUS) in February — could cause huge headaches.

“If you’re not aware of or don’t understand the rules, that could cause a real estate deal to be undone by CFIUS, potentially resulting in financial harm or making a business liable to a foreign entity,” says Boyd A. Stephenson, an attorney at Babst Calland.

The president has the authority to reverse certain business transactions involving a foreign entity if it is determined they pose a national security risk. CFIUS advises the president on when to do that. In February 2020, that authority was extended to real estate ownership.

Smart Business spoke with Stephenson about the impact of the new rules.

What is CFIUS, and how does it work?

CFIUS is an interagency committee of the federal government that advises the president about mergers and acquisitions, financings, and real estate transactions that involve foreign actors. If a foreign entity wants to invest in or buy a cardboard box manufacturer, it’s generally not a concern. But if it wants to invest in a U.S. startup that’s developing technology with better AI, such an investment would result in a review from CFIUS to determine whether the deal should be cancelled based on national security concerns. This authority is retroactive, so if your deal consummates on April 15 and the transaction is reversed on May 1, you lose that equity stake.

How does the new rule extend into real estate transactions? …

July 27, 2020

Babst Calland Joins the Solar Energy Industries Association (SEIA)

Babst Calland is a member of the Solar Energy Industries Association (SEIA). A national trade association within the electric power industry, SEIA facilitates education, research, standards and collaboration with utilities, solution providers, and other energy industry leaders.

July 24, 2020

Land use regulations and validity challenges to zoning ordinances persist

The PIOGA Press

This article is an excerpt of The 2020 Babst Calland Report, which represents the collective legal perspective of Babst Calland’s energy attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. A full copy of the Report is available by writing info@babstcalland.com.

Increasing industry headwinds have resulted in a slowdown of new permitting activity and an increase in ordinance restrictions on oil and gas development. Substantive validity challenges to zoning ordinances seeking to limit development to industrial areas have continued despite Pennsylvania Commonwealth Court’s clear pronouncements that local considerations control legislative decisions as to the location of development. Pennsylvania courts have also dealt with issues such as the legal standing and the timing of ordinance challenges.

For the full article, click here.

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