December 19, 2019

As the Law and Zoning Trends Evolve, So Must Your Zoning Ordinance

The Legal Intelligencer

(by Blaine A. Lucas and Alyssa E. Golfieri)

Now is the optimal time for municipalities to take a fresh look at their zoning ordinances to ensure they not only comply with state law, but that they are positioned to handle the influx of new and currently trending land uses.

As 2019 comes to a close and a new wave of elected local officials get ready to take their seats, now is the optimal time for municipalities to take a fresh look at their zoning ordinances to ensure they not only comply with state law, but that they are positioned to handle the influx of new and currently trending land uses.

Municipalities derive most of their authority to regulate the use of land from the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., (the MPC). The MPC was first enacted in 1968 and expressly authorizes municipalities to enact zoning ordinances to permit, prohibit, regulate and determine uses of land; the size, height, bulk, location, erection, construction repair, maintenance, alteration, razing, removal and use of structures; the area and dimensions of land to be occupied by uses and structures; the density of populations and intensity of uses; methods for protecting and preserving natural and historic resources; and methods for protecting and preserving prime agricultural lands and activities, see Section 603(b) of the MPC, 53 P.S. Section 10603(b).

Since the adoption of the MPC and the enactment of hundreds of local zoning ordinances pursuant to the same, land use types and development patterns have continued to change and evolve. Some of these changes have prompted the General Assembly to implement legislative solutions, while others are left for navigation at the local level and ultimately in the courts. …

December 19, 2019

Babst Calland Expands Washington, D.C. Environmental Practice

Attorney Ben Clapp Joins Firm

Babst Calland announced today the lateral move of Ben Clapp, who joined as associate in the firm’s Washington, D.C. office in the Environmental, Energy and Natural Resources, and Emerging Technologies practice groups.

For the past decade, Ben Clapp has advised clients on environmental and transactional matters across a wide range of industries including the upstream, midstream, and downstream oil and gas sectors, renewable energy, real estate, utilities, chemicals, manufacturing, mining, pharmaceuticals, pulp and paper, and food and beverage.

“Ben’s move to Babst Calland further represents the firm’s commitment to continue to meet the environmental and regulatory needs of our clients,” said James Curry, Managing Shareholder of the D.C. office.  “Ben Clapp is well-known in industry and among key regulators. We’re very pleased that he has joined our team.”

Mr. Clapp has significant experience advising clients on the environmental components of complex transactions, including identifying and analyzing significant environmental liability and compliance issues arising in connection with mergers and acquisitions, asset sales, securities offerings, project financings, and corporate restructurings.  He works to manage, allocate or mitigate these environmental risks in the client’s best interest.

Mr. Clapp also advises project developers and investors as they encounter state and federal environmental review, facility siting, and permitting requirements, with a particular focus on providing advice on National Environmental Policy Act requirements to clients seeking government agency approvals for large-scale energy and infrastructure projects.

Mr. Clapp earned his J.D., cum laude, from American University Washington College of Law in 2008 and B.A. from the University of Richmond in 1996.

December 19, 2019

Illegal parts: The crackdown on aftermarket defeat devices on vehicles

Smart Business 

(by Jayne Gest with Julie Domike and Gina Falaschi)

Recent enforcement efforts by the Environmental Protection Agency (EPA) have resulted in a marked upswing in cases — civil and criminal — against parts manufacturers and installers of aftermarket defeat devices on vehicles, including some less than obvious targets.

Aftermarket parts are replacement or additional vehicle or engine parts not made by the original equipment manufacturer. Most aftermarket parts do not violate the Clean Air Act, but some are designed to reduce or eliminate the effectiveness of required emissions controls.

“Business owners need to ensure their company-owned vehicles and engines are legal,” says Julie Domike, shareholder at Babst Calland. “Many of these enforcement cases have been against companies or individuals that produce or install ‘tuners,’ engine control module reprogrammers that disable emission control systems with preloaded software (tunes). These defeat devices are obvious enforcement targets. However, other devices or software could also fall in this category; therefore, liability could extend to other aftermarket suppliers.”

Smart Business spoke with Domike and Gina Falaschi, associate at Babst Calland, about the EPA’s enforcement efforts.

Where might businesses be at risk?

Mechanics sometimes look to increase fuel economy, boost the performance of the vehicle, reduce maintenance costs, or reduce vehicle downtime associated with routine maintenance, such as regenerating diesel particulate filters. The illegal methods of doing this involve removing or disabling emissions control devices on vehicles, such as the diesel particulate filter, exhaust gas recirculation valve and selective catalytic reduction system. Because removing vehicle hardware will result in a check engine notification or may put the vehicle into ‘limp home’ mode, severely limiting power, these changes must be accompanied by an illegal alteration of the software to override its response to missing or disabled hardware. …

December 16, 2019

What the Business Roundtable can teach West Virginia

The State Journal

(by Mychal S. Schulz)

In early August 2019, the West Virginia Department of Environmental Protection (WVDEP) announced that oil and natural gas production in West Virginia reached record levels in 2018, the latest of 10 straight years of production increases.

Just a few weeks later, the Business Roundtable, an association of CEOs for some of the largest companies in the United States, released a new Statement on the Purpose of a Corporation (“Statement”) signed by 181 of the association’s members.

How are these events related? And how, together, can they significantly shape the future of West Virginia?

By now, the natural gas within the Marcellus and Utica formations no longer represents a “potential” source of energy. That potential is being tapped, as represented by the announcement from the WVDEP that over 1.8 trillion cubic feet (Tcf) flowed from wells drilled in West Virginia in 2018, a 17% increase over the previous year.

The scramble on what to do with all that natural gas continues to play out throughout the region, from increasing the capacity to carry the gas away through the Mountain Valley and Atlantic Sunrise Pipelines, to the construction of a cracker facility in Beaver County, Pennsylvania, and (perhaps) Belmont County, Ohio, to the continued efforts to build large underground storage areas such as the Appalachian Storage Hub and the Mountaineer Storage Facility.

Each of those efforts, however, assumes something that is already happening — the production of a tremendous amount of natural gas beneath West Virginia’s surface.

Even a casual observer of West Virginia history sees parallels between this moment in time and the period when West Virginia produced coal that fueled American industrialization starting in the late 19th Century. …

December 12, 2019

Pa. Allows Oil and Gas Operators to Drill Cross-Unit Wells

The Legal Intelligencer

(by Megan Mariani and Nicholas Habursky)

On Nov. 7, Pennsylvania Gov. Tom Wolf signed into law Senate Bill No. 694 that permits cross-unit drilling for unconventional oil and gas wells. This new law takes effect on Jan. 6, 2020. A cross-unit well (also known as an allocation well) is a lateral wellbore that crosses between two or more pooled units.

Benefits of Cross-Unit Wells

Standard oil and gas lease forms commonly contain acreage limitations regarding the maximum size of a pooled unit within which development can occur. As a result, prior to the passage of this new cross-unit well legislation, operators in Pennsylvania faced inefficiencies in the form of limitations on the length of laterals and required additional surface locations to develop the entirety of the resource. Operators may desire to utilize cross-unit wells because the wells can increase drilling efficiencies and allow for more strategic operations. Landowners also benefit from cross-unit wells because the use of longer lateral wellbores reduces the surface impact of horizontal drilling by limiting the number of surface locations and vertical wellheads needed to produce from the various units. Lawmakers hope this bill will allow operators to maximize the benefits of drilling technologies and practices. Additionally, legislators believe the passage of the bill will increase tax revenue and reduce the workload on the Department of Environmental Protection.

What Does the Law Do?

Senate Bill No. 694 amended the act of July 20, 1979 (P.L. 183, No. 60—known as The Oil and Gas Lease Act) by adding Section 2.2 that expressly allows an operator to drill a cross-unit well if two conditions are met. First, an operator may drill and produce a cross-unit well if the operator reasonably allocates production from the well to or among each unit the operator reasonably determines to be attributable to each unit. …

December 11, 2019

Lawmakers introduce the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act

The PIOGA Press

(by Kevin Garber and Jean Mosites)

On November 20, members of the Pennsylvania House and Senate referred bipartisan companion bills House Bill 2025 and Senate Bill 950, both known as the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act, to their respective Environmental Resources and Energy Committees for consideration.

Sponsors Senator Joe Pittman (R-Armstrong) and Representative Jim Struzzi (R-Indiana) announced the bills in a press conference on November 19 in response to Governor Tom Wolf’s October 3 Executive Order 2019-07. That order directed the Environmental Quality Board to propose, by July 31, 2020, a carbon dioxide cap-and-trade program for fossil fuel-fired electric power generators which is at least as stringent as that developed under the Regional Greenhouse Gas Initiative (RGGI). (For more detail on RGGI, see the October issue of The PIOGA Press.)

The bills each provide a declaration of policy, procedures for the proper introduction of any program governing carbon dioxide emissions by the Pennsylvania Department of Environmental Protection and the process for submitting that program to the General Assembly for approval.

No current authority to regulate CO2 emissions

Section 2 of the bills finds there is currently no statutory or constitutional authority allowing a state agency to regulate or impose a tax on carbon emissions, and therefore the General Assembly, in consultation with DEP and other agencies, must determine whether and how to do so.

No rulemaking without specific statutory authority
Other than a measure required by federal law, Section 4 prohibits DEP from adopting any measure or taking any action to abate, control or limit carbon dioxide emissions (including joining or participating in RGGI or other state or regional greenhouse gas cap-and-trade program) or establishing a greenhouse gas cap-and-trade program unless the General Assembly specifically authorizes it by statute. …

December 11, 2019

Carl A. Ronald – Intellectual Property Attorney

Emerging Technologies Profile 

What do you do? As an intellectual property attorney, I get to work with amazing and creative people to identify and protect what they have imagined and created. Some of these people are also business owners and I work with them to protect and enforce the reputational goodwill that they have earned with their customers and in the marketplace.

Why do you do what you do? I have always been interested in how things work and as an IP practitioner, I get to learn about new and developing technologies on a daily basis.

Describe your most memorable client interaction. Testing a semi-robotic bone shaver to be used in partial knee replacement on a disembodied leg in a cadaver lab.

Describe a client project (transaction/negotiation/dispute) that you are proud of. I handled a trade dress dispute relating to after-market grip tape for tennis rackets, in which a competitor was claiming they “owned” a large spectrum of the color blue for any grip tape. Facing an insurance coverage rejection, we were able to convince the carrier to reverse course and provide a defense in the infringement case. At the conclusion of a non-jury trial, the case resolved with a much narrower scope of protection for the competitor than they were claiming, which was a win for the client.

When you are not at work, you can be found… Working on house projects, exploring other cities, watching my kids play sports, or playing paddle.

Tell us something about yourself that most people wouldn’t know or guess. A few years ago, I had my own startup called “Othovibe”, which developed a shoe insert that helped train children not to walk on their toes. …

December 5, 2019

Deferring to U.S. EPA’s Interpretive Statement, Court Finds That Groundwater Discharges are Not Regulated by Clean Water Act

Environmental Alert

(by Lisa Bruderly and Gary Steinbauer)

Another district court has weighed in on the continuing debate as to whether the Clean Water Act (CWA) regulates discharges to groundwater that then flow into a surface water. However, unlike previous decisions, the federal district court in Massachusetts has deferred to EPA’s Interpretive Statement on the subject, 84 Fed. Reg. 16810 (April 23, 2019), as its basis for holding that releases of pollutants to groundwater are categorically excluded from the CWA’s permitting requirements. Conservation Law Foundation v. Longwood Venues & Destinations, Inc., Civil Action No. 18-11821 (D. Mass. Nov. 26, 2019).

The Longwood Venues decision comes less than one month after the U.S. Supreme Court heard oral argument in the County of Maui v. Hawai’i Wildlife Fund matter, a pending case addressing this same subject. With the highly anticipated County of Maui decision expected in the summer of 2020, the decision in Longwood Venues provides defendants in citizen suits with a new basis for contesting alleged CWA liability for discharges that travel through groundwater before reaching a jurisdictional surface water. Neither the United States nor any other party in the Supreme Court’s County of Maui case has argued that EPA’s Interpretive Statement is entitled to deference as a reasonable interpretation of the CWA. Rather, these parties contend that the CWA unambiguously provides that discharges to groundwater are not within its scope.   Reliance on the Interpretive Statement injects new fodder into the ongoing debate and litigation over the scope of the CWA’s National Pollutant Discharge Elimination System (NPDES) permit program.

In Longwood Venues, an environmental group sued the owner of a beach club located in southern Cape Cod, claiming that sanitary wastewater released to the groundwater from the club’s onsite wastewater treatment plant was an unpermitted discharge under the CWA. …

December 5, 2019

A proactive approach: How to prepare for California’s sweeping privacy law

Emerging Technologies Legal Perspective

(by Justine Kasznica)

In 2018, California signed into law the first state-level comprehensive privacy act, the California Consumer Privacy Act of 2018 (CCPA), which will go into effect Jan. 1, 2020. In part due to the CCPA’s broad scope and reach beyond California, as well as the large fines and penalties for CCPA noncompliance, the law is influencing and setting a high bar for data protection practices nationwide. Since the CCPA was signed into law, several states have proposed or enacted similar legislation, turning privacy and cybersecurity into a patchwork of state-led experimentation.

We are seeing more states joining California and developing their own privacy laws, which will make it difficult for companies to track and comply with every state’s privacy act, not to mention the privacy regimes in non-U.S. jurisdictions, such as Europe’s General Data Protection Regulation (GDPR).

While some states are beginning to enact or consider uniform approaches to privacy and cybersecurity, such as the NAIC Model Law for Cybersecurity, it will take time for such models to emerge and achieve the requisite consensus. In the absence of a uniform federal and state approach to privacy, businesses need to take the initiative now and be aware of the various state, federal and foreign laws being introduced and enacted — even if their operations may not yet affected.

How does California’s privacy act work?

The California Consumer Privacy Act of 2018 (CCPA) protects consumers who are residents of California by giving them rights to disclosure, access, deletion, control (opt-out and portability rights) as well as imposing a prohibition on antidiscrimination. It also addresses the data privacy rights of children under the ages of 13 and 16. …

November 25, 2019

The Pennsylvania General Assembly Introduces the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act

Environmental Alert

(by Kevin Garber and Jean Mosites)

On Wednesday, November 20, 2019, members of the Pennsylvania House and Senate referred bipartisan companion bills HB 2025 and SB 950, both known as the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act, to their respective Environmental Resources and Energy Committees for consideration.

Sponsors Senator Joe Pittman (R-41) and Representative Jim Struzzi (R-62) announced the bills in a press conference on November 19, 2019 in response to Governor Tom Wolf’s October 3, 2019 Executive Order 2019-07.  That Order directed the Environmental Quality Board to propose, by July 31, 2020, a carbon dioxide cap and trade program for fossil-fuel-fired electric power generators which is at least as stringent as that developed under the  Regional Greenhouse Gas Initiative (RGGI). For more detail on RGGI, see Wolf Administration Announces Plan to Join Northeast Carbon Market.

The bills each provide a declaration of policy, procedures for the proper introduction of any program governing carbon dioxide emissions by the Pennsylvania Department of Environmental Protection, and the process for submitting that program to the General Assembly for approval.

No Current Authority to Regulate CO2 Emissions

Section 2 of the bills finds there is currently no statutory or constitutional authority allowing a state agency to regulate or impose a tax on carbon emissions, and therefore the General Assembly, in consultation with DEP and other agencies, must determine whether and how to do so.

No Rulemaking Without Specific Statutory Authority

Other than a measure required by federal law, Section 4 prohibits DEP from adopting any measure or taking any action to abate, control or limit carbon dioxide emissions (including joining or participating in RGGI or other state or regional greenhouse gas cap-and-trade program) or establishing a greenhouse gas cap-and-trade program unless the General Assembly specifically authorizes it by statute. …

November 22, 2019

A proactive approach: How to prepare for California’s sweeping privacy law

Smart Business

(by Jayne Gest with Justine Kasznica)

In 2018, California signed into law the first state-level comprehensive privacy act, the California Consumer Privacy Act of 2018 (CCPA), which goes into effect Jan. 1, 2020. Due to the CCPA’s broad scope and reach beyond California, as well as its large fines and penalties for noncompliance, the law is influencing and setting a high bar for data protection practices nationwide. Since the CCPA was signed, several states have proposed or enacted similar legislation, turning privacy and cybersecurity into a patchwork of state-led experimentation.

“More states are developing privacy laws, which will make it difficult for companies to track and comply with every state’s privacy act, not to mention the privacy regimes in non-U.S. jurisdictions, such as Europe’s General Data Protection Regulation (GDPR),” says Justine Kasznica, shareholder at Babst Calland.

In the absence of a uniform approach to privacy and cybersecurity, businesses need to be aware of the state, federal and foreign laws being introduced and enacted — even if their operations are not yet affected.

Smart Business spoke with Kasznica about how California’s privacy law, and others, will impact companies.

How does California’s privacy act work?

The CCPA protects consumers who are residents of California, giving them rights to disclosure, access, deletion and control (opt-out and portability rights), as well as imposing a prohibition on antidiscrimination. It also addresses the data privacy rights of children under the ages of 13 and 16.

The CCPA is modeled on the GDPR, articulating similar consumer rights (even if terms differ) and imposing business obligations and enforcement mechanisms. While compliance with GDPR may facilitate CCPA compliance, the two privacy regimes deviate in their definitions of personal information/data, scope of the rights protected, affected organizations, and penalties and enforcement. …

November 20, 2019

Smarter Produced Water Management Options: Can the Regulatory Landscape Keep Pace?

Natural Resources & Environment

(by Gary Steinbauer and Kevin Garber)

Unconventional natural gas development in the Marcellus and Utica shale plays has seen unprecedented growth since 2012. Ohio, Pennsylvania, and West Virginia are now among the top gas-producing states, with Pennsylvania emerging as the second-largest natural gas producer in 2018, behind Texas. U.S. Energy Information Administration, Natural Gas Marketed Production, www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_VGM_mmcf_a.htm (last visited Aug. 8, 2019). The historic rise in production comes with increased volumes of produced water and waste streams that must be managed by natural gas operators. Produced water is naturally occurring brine brought up to the surface from the hydrocarbon reservoir during extraction of natural gas. Although the volume of produced water varies by well and formation, produced water is by far the largest water source by volume generated in the gas production process. U.S. Environmental Protection Agency (EPA), Management of Exploration, Development and Production Wastes: Factors Informing a Decision on the Need for Regulatory Action (Apr. 2019), at 3–11, www.epa.gov/sites/production/files/2019-04/documents/management_of_exploration_development_and_ production_wastes_4-23-19.pdf. Many unconventional natural gas operators treat, reuse, and recycle produced water to increase their water usage efficiency, cut down on the costs of disposal, and recover valuable materials.

Implementing the most effective strategy for produced water management requires compliance with a complex web of interrelated federal and state laws, which include state oil and gas-related laws, local laws and ordinances, and environmental laws. This article explores the most commonly used management strategies for produced water in the Marcellus and Utica shale plays in these three states and analyzes the federal and state environmental regulatory regimes governing such management alternatives. It begins by examining the chemical characteristics and volume of produced water from an unconventional natural gas well. It then analyzes the federal and state environmental regulatory landscape for the most common ways that produced water is managed: (1) reuse or recycling within or outside the gas field; …

November 14, 2019

EPA’s Initiative Against Illegal Aftermarket Parts: Deleting Defeat Devices

Emerging Technologies Alert 

(by Julie Domike and Gina Falaschi)

One of the hottest topics of discussion at the November 12, 2019, National Enforcement Conference held by the American Bar Association’s Section on Environment, Energy and Resources was enforcement concerning aftermarket defeat devices. The Environmental Protection Agency’s (EPA) recent efforts have resulted in a marked upswing in cases – both civil and criminal – against parts manufacturers and installers of the devices, including some entities that are less than obvious targets.

Aftermarket parts are replacement or additional vehicle or engine parts not made by the original equipment manufacturer.  Most aftermarket parts do not violate the Clean Air Act, but some are designed to reduce or eliminate the effectiveness of required emissions controls on vehicles and engines.  These are defeat devices, and there is a market for such devices as they can dramatically increase fuel efficiency or boost engine power.  Among the most common users of these defeat devices are truck fleet owners and the shops that service them.  Many of the recent enforcement cases have been against companies or individuals that produce or install “tuners” – engine control module reprogrammers that disable emission control systems with preloaded software (“tunes”).  These defeat devices are obvious enforcement targets. However, other devices or software could also fall in this category, and therefore liability could extend to other aftermarket suppliers.

EPA’s Enforcement Against Aftermarket Defeat Devices

The EPA released its Fiscal Year 2020 – 2023 National Compliance Initiatives on June 7, 2019.  The memorandum from Assistant Administrator for Enforcement and Compliance Assurance Susan Parker Bodine explains the agency’s selection of “Stopping Aftermarket Defeat Devices for Vehicles and Engines” as a new compliance initiative.  The memorandum emphasizes that the Clean Air Act prohibits “tampering with emissions controls, as well as manufacturing, selling, and installing aftermarket devices intended to defeat those controls. …

November 11, 2019

PHMSA proposes allowing liquefied natural gas transport by rail

The PIOGA Press

(by Boyd Stephenson and James Curry)

On October 24, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice of proposed rulemaking (NPRM) amending the Hazardous Materials Regulations (HMR) to allow the bulk transport of liquefied natural gas (LNG) in DOT-113C120W (DOT-113) specification railcars.

PHMSA issued the NPRM in response to a petition for rulemaking filed by the Association of American Railroads (AAR). Also, an April 10 Executive Order directed PHMSA to issue a final rule on bulk transportation of LNG by rail by May 2020. Comments on the NPRM are due by December 23.

Over the last decade, the number of LNG facilities and total storage and vaporization capacities have drastically increased. And, according to PHMSA, total liquefaction capacity increased by 939 percent due to new LNG export terminals. With this growth, PMHSA has recognized there may be a need for greater flexibility in the modes of transporting LNG.

While LNG is already authorized for transportation by highway and in maritime vessels, LNG may be transported by railcar only with a special permit from PHMSA or in smaller, portable tanks loaded onto a railcar. However, other cryogenic liquids that are chemically similar to LNG already are authorized to be transported by rail under the HMR.

Currently, there is a pending special permit renewal application to transport bulk LNG in DOT-113 specification railcars using requirements identical to those proposed in the NPRM. The comment period ended August 7, with PHMSA receiving nearly 3,000 comments. The agency has not yet acted on the application.

Proposed changes

In the NPRM, PHMSA proposes to:

• Amend the LNG entry on the Hazardous Materials Table (UN 1972, Methane, refrigerated liquid (cryogenic liquid), 2.1) to allow transportation of bulk LNG in rail tank cars under the terms of 49 C.F.R. …

November 11, 2019

PHMSA publishes three final rules substantially amending the federal pipeline safety regulations

The PIOGA Press

(by Ashleigh Krick and Boyd Stephenson)

On October 1, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published three long-awaited final rules amending the federal pipeline safety regulations. The first rule amends the federal safety standards for gas transmission lines. The second amends the federal safety standards for hazardous liquid pipelines. The third updates procedures for issuing emergency orders. These rules are summarized below.

Safety of gas transmission pipelines

The gas transmission rule, commonly referred to as the “Mega Rule,” is the first in a three-part series of rules that PHMSA will be issuing to substantially revise the current federal safety standards and establish new requirements for gas pipeline facilities. This rule responds to congressional mandates and National Transportation Safety Board recommendations that arose from the investigation a 2010 gas transmission line incident in San Bruno, California. The rule adopts new requirements for verifying pipeline materials, reconfirming maximum allowable operating pressure (MAOP) and performing periodic assessments of pipeline segments located outside of high consequence areas (HCAs). The rule also amends the integrity management (IM) requirements, establishes requirements for reporting MAOP exceedances, for using inline inspection (ILI) launcher and receivers, as well as related recordkeeping requirements. The rule takes effect on July 1, 2020, but includes staggered compliance deadlines that extend as far out as 15 years.

  • Materials verification. Operators will be required to conduct destructive and nondestructive tests to verify pipeline attributes when they do not have traceable, verifiable and complete records for such attributes in certain situations, such as MAOP reconfirmation, IM or repair requirements. The new requirements allow for collection of missing pipe attributes over time, whenever a pipeline segment is exposed for maintenance or repairs, until a minimum number of excavations are performed.

    • …

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