Articles, Alerts & Perspectives

Pipeline & Gas Journal 

A Conversation with Babst Calland Energy Attorney Keith Coyle.

P&GJ: What are you hearing from the pipeline industry in terms of its expectations on anticipated federal regulatory reforms resulting from President Trump’s executive actions? What are the financial and safety stakes at hand?

Coyle: The pipeline industry has been largely supportive of the actions taken by the new administration. The temporary regulatory freeze the White House imposed on Inauguration Day deferred several significant regulations that President Obama tried to issue at the end of his administration. President Trump’s approval of the Dakota Access and Keystone XL pipelines also fulfilled a key campaign promise and represented a sharp break from the policies pursued by his predecessor.

The recent executive orders on regulatory reform should have a positive impact on federal oversight of the pipeline industry during his administration. If President Trump is able to implement these reforms, the pipeline industry will be operating in a more efficient and effective regulatory environment, which should reduce unnecessary costs and encourage additional investment and development.

P&GJ: How could the Trump administration’s energy regulatory policies affect pipeline safety at the state level?

Coyle: The state agencies that regulate pipeline safety must adopt the minimum federal safety standards established by the Pipeline and Hazardous Materials Safety Administration (PHMSA). PHMSA initiated two rulemaking proceedings during the Obama administration that proposed significant changes to the safety standards for hazardous liquid and natural gas pipelines.

The new administration is going to have a lot of influence in determining whether and to what extent these regulatory changes become law in the near future. PHMSA is also required, under President Trump’s executive orders on regulatory reform, to identify obsolete or unnecessary regulations for revision or repeal. …

James D. Miller, a shareholder in the Litigation and Construction groups at law firm Babst Calland, was selected by The Legal Intelligencer as a “2017 Lawyer on the Fast Track” in Pennsylvania.

The Legal Intelligencer asked the Pennsylvania legal community to submit nominations for the annual Lawyers on the Fast Track honors. After reviewing their results, a six-member judging panel composed of evaluators from all corners of the legal profession and the state selected 32 attorneys as the 2017 Lawyers on the Fast Track. This recognition is only given to attorneys under the age of 40 who have demonstrated excellence in four categories: development of the law; advocacy and community contributions; service to the bar; and peer and public recognition.

For the full article, click here.

PIOGA Press

The opening days of the Trump administration have seen a flurry of activity focused on regulations affecting the oil and gas industry. President Donald Trump has issued a series of executive orders and presidential memoranda aimed at reducing regulations that impact the energy industry. Congress has also used its authority under the Congressional Review Act (CRA) to repeal several recently issued regulations. While the industry has largely applauded these moves, environmental groups have signaled they intend to challenge these actions aggressively in court.

Executive actions and presidential memoranda

On January 20, the new White House chief of staff issued a regulatory freeze memo instructing executive branch agencies to (1) withdraw rules that had been sent to the Federal Register but had not yet been published; (2) refrain from sending new rules to the Federal Register for publication until a senior official appointed by the administration had reviewed the contents of the rule; and (3) extend the effective date for those rules that had been published prior to Inauguration Day but had not yet taken effect.

On January 24, President Trump issued memoranda calling for the expedited review and approval of the Keystone XL Pipeline and Dakota Access Pipeline projects, which had been blocked or stalled during the previous administration. The president also directed the secretary of commerce to develop a plan within 180 days for using materials and equipment produced in the United States in all new, repaired or replaced pipelines.

On January 30, the president issued an executive order entitled “Reducing Regulations and Controlling Regulatory Costs” (informally known as “the Two-for-One Order”). The Two-forOne Order requires agencies to identify two regulations for repeal for every new regulation the agency proposes or promulgates. …

The State Journal

The “law.” We all agree we need laws to be a civil society, but like other cornerstones of America’s political and social house — such as “liberty” and “freedom” and “equality” — the “law” is complex and can mean many different things.

For example, the law can mean the statutes found in the United States Code or the West Virginia Code that represents the formal laws passed by the Legislature and signed by the head of the executive branch of government. In West Virginia, the state Legislature — both the Senate and House — just concluded 60 days of crafting, debating, amending, rejecting and passing laws that will either by signed into law or vetoed by Gov. Jim Justice. Those that become a law will become part of West Virginia Code.

The law also means the regulations created by government agencies that are supposed to control the way something is done or the way people behave in order to ensure that the intent of the statute is followed. This law, which has the force and effect of a statute, is not considered or voted upon by elected legislators, which is why some believe that the proliferation of regulations from federal agencies must be checked.

The law also means the common law that forms the basis for many civil lawsuits. Whether a party is “negligent” or a product is “defective” is based upon the common law that has developed through court decisions over the years. The common law of West Virginia has been developed by the Supreme Court of Appeals of West Virginia since we became a state in 1863, and even then, West Virginia adopted the common law of Virginia, which had in turn adopted the common law of England. …

Oil & Gas Journal

Air emissions data from actual monitoring and testing contradict articles based on different methods claiming to have found health hazards related to oil and gas work. Data collected by objective parties in the northeastern US over the past 6 years indicate that air quality around oil and gas operations is, in fact, safe. This observation contrasts starkly with arguments made in a variety of published studies cited by opponents of domestic shale development.

Click here to read the full article.

Pennsylvania Business Central
By R. Brock Pronko

Historically, one of the biggest policy differences between Republicans and Democrats has been over labor issues such as unions vs. “right-to-work”, minimum wage, the overtime rule, graduate students’ right to unionize, limiting litigation in EOEC cases, pay transparency, equal pay for women, employee health care benefits, retirement payouts and class action waivers.

As a businessman, sometimes Donald Trump has had an strained relationship with labor unions during the construction of his hotels and golf resorts, occasionally resulting in regulatory disputes and legal battles. A probusiness president and Republican-majority Congress are now in a position to “repeal and replace” pro-labor laws enacted by President Obama and Congressional Democrats.

The President appointed as acting chairman of the National Labor Relations Board Phillip Miscimarra, who has been characterized by Democrats as an “an anti-union lawyer.” The NLRB consists of three members from the President’s party and two members from the opposition. The board currently has two vacancies that will be filled by the President, giving pro-business members the majority.

In 2007, VP Mike Pence, then a U.S. representative from Indiana, voted against the Employee Non-Discrimination Act, which aimed to prevent job discrimination based on sexual orientation. He also voted against raising the minimum wage.

Republican governors have signed “right-to-work” laws. Last month, Missouri became the 28th state to pass a “right-to-work” law. “Right-to-work” laws prohibit labor unions from requiring workers to pay dues as a condition of employment, but by federal law unions are required to provide fair representation to all workers covered by a contract regardless if they pay dues.

If confirmed, Supreme Court justice nominee Neil Gorsuch will likely vote in favor of conservative Republican policies on labor cases that come before the court. …

Breaking Ground

On Thursday, March 9, 2017, the Construction Services group of the law firm of Babst Calland Clements & Zomnir, P.C. held its annual Year in Review Seminar. Attended by over 100 construction professionals, Babst Calland’s Year in Review Seminar summarized and addressed the implications of the most noteworthy construction-related legal developments of 2016, including the latest amendments to Pennsylvania’s Mechanics’ Lien Law, labor and employment issues, cases interpreting Pennsylvania’s payment acts, construction claim damages, and a recent decision involving a jurisdictional dispute on a public construction project.

MECHANICS’ LIEN LAW AMENDMENTS

On October 14, 2014 then-Governor Tom Corbett approved legislation amending Pennsylvania’s Mechanics’ Lien Law. Commonly referred to as Act 142, the amendments established a structured procedure for owners, contractors, and subcontractors to receive and give notice of mechanics’ lien claims, as well as a central electronic repository under which these notices must be filed (the “Directory”). Act 142 was widely supported by both owners (along with construction lenders) and contractors as a means to better identify all subcontractors and material suppliers with lien rights on a project.

Act 142 became effective on December 31, 2016, and the new notice requirements apply only to “searchable projects” beginning after that date and costing at least $1.5 million. Specifically, Act 142 allows the following four notices to be filed with the Directory: (1) Notice of Commencement; (2) Notice of Furnishing; (3) Notice of Completion; and (4) Notice of Nonpayment. Use of the Directory is discretionary, but an owner must file a Notice of Commencement before any labor, work, or materials are furnished for the project if the owner wishes to avail itself of the Directory’s protections. If an owner files a Notice of Commencement, a subcontractor (defined as including first and second tier subcontractors or material suppliers) must file a Notice of Furnishing detailing the work it performed within 45 days of first performing that work or delivering materials to preserve its lien rights. …

The State Journal 

West Virginia has a long history of watching most of its natural resources being harvested and sent to out-of-state users who add value to those resources. The same is happening with West Virginia’s natural gas, and we need to do something about it.

Whether it has been coal converted into electricity or timber fashioned into furniture, the value added to West Virginia’s natural resources has too often taken place outside of the state’s borders. Now, as noted in the 2017 Sustainable Energy in America Factbook, the United States has experienced a 79 percent increase in shale gas extraction since 2011, and a 12 percent jump in total gas production in the last five years. Much of this increase centers on the Marcellus and Utica shale plays, of which West Virginia is an important part.

Numerous groups rightly tout the potential for shale gas to provide a better future for both West Virginia and the region. As such, West Virginia must continue efforts to modernize its laws and regulations so natural gas can be economically and efficiently produced. Likewise, we must support the development and construction of intrastate and interstate pipelines that will only increase the demand for West Virginia’s natural gas and contribute to the country’s energy security.

But while production and transmission of natural gas are solid economic drivers for the state, each cubic foot of gas and each gallon of natural gas liquids that leaves West Virginia represents a lost opportunity to add value to that resource right here.

The only way to truly realize the full value of West Virginia’s natural gas is to adopt policies that attract and establish the activities that use — and add value to — that gas. …

PIOGA Press

The Pennsylvania Mechanics’ Lien Law, 49 P.S. § 1101 et seq, provides contractors a powerful legal remedy for recovering payment owed for work performed on a construction project; they can impose a lien against the property on which their work was performed, clouding the owner’s title. As a result of Act No. 142’s amendments to the lien law, effective December 31, 2016, project owners, general contractors, and subcontractors have been evaluating their business practices to ensure compliance with the amended lien law and the subsequent launch of the online State Construction Notices Directory.

Prior to the creation of the directory, there was no streamlined system for owners and general contractors to track subcontractors and suppliers on a project site. This created a lack of certainty with respect to what parties may have lien rights against a property site. The directory (located at www.scnd.pa.gov) helps owners and general contractors track work performed by subcontractors, sub-subcontractors and suppliers.

Required notices under the act

The act creates a more structured notice procedure for owners and contractors on “searchable projects” (projects consisting of the construction, alteration or repair of an improvement costing at least $1.5 million). Specifically, the act permits four new types of filings within the directory: (1) Notice of Commencement, (2) Notice of Furnishing, (3) Notice of Completion and (4) Notice of Nonpayment.

An owner (or an agent of the owner) is required to file a Notice of Commencement to trigger compliance with the act. A Notice of Commencement should be filed before any labor, work or materials are furnished for the project and must contain: (1) the full name, address and email address of the contractor; (2) the full name and location of the project; …

SNL Energy

The Trump administration is expected to scale back at least one major safety rulemaking for the natural gas transmission and gathering industries, and possibly alter other recent proposals from the U.S. Pipeline and Hazardous Materials Safety Administration.

“Elections have consequences. These guys are going to be more averse to aggressive regulation than the previous [administration],” said Jeff Wiese, former associate administrator of PHMSA.

PHMSA’s 550-page proposed gas gathering and transmission pipeline safety rule is primed for revision under the new administration, Wiese and other pipeline safety experts familiar with the inner workings of PHMSA said in recent interviews. The sprawling regulation, which has been in the works for years, incorporates congressional mandates, National Transportation Safety Board recommendations and other initiatives. The parts that are not statutorily ordered may be the first to go.

“I do believe there will be adjustments made to the gas rule. … A lot of those parts are NTSB items,” said Wiese, who left PHMSA in 2016 and is now consulting group TRC Companies Inc.’s vice president and national practice leader for pipeline integrity services. “I think there are going to be some compromises made on items that are not statutory mandates.”

Keith Coyle, an attorney with Babst Calland, said he expects PHMSA to substantially walk back the gas transmission and gathering rule proposal under the Trump administration. He agreed that fulfilling NTSB recommendations, although they often form the basis for congressional mandates, will likely drop on PHMSA’s priority list. For instance, the proposed rule’s guidance for verifying the maximum allowable operating pressures and materials of pipelines goes beyond what is covered under Congress’ mandate to the agency, Coyle said.

PHMSA’s decision to regulate gathering lines was not also congressionally mandated, and Coyle said the agency may set that aspect of the rulemaking aside entirely for the time being. …