November 28, 2016

Pipelines are safe

They already are the safest way to transport energy – and getting safer

Pittsburgh Post-Gazette
By Keith J. Coyle

In a recent op-ed published in the Post-Gazette, “Gas Pipelines Represent Prosperity” (Sept. 5 Perspectives), David Spigelmyer and James Kunz described the many benefits that Pennsylvanians could see from the expansion of natural-gas pipelines and related energy infrastructure in the commonwealth. That op-ed prompted a response from Art Wegweiser (Oct. 3), who wrote that Mr. Spigelmyer and Mr. Kunz “seem[ed] to deftly dance around the issue of safety, with only a passing reference to this vitally important aspect” of natural-gas development.

Mr. Wegweiser is right to draw attention to pipeline safety. There are thousands of miles of pipelines in Pennsylvania, and the people of the commonwealth expect these lines to operate safely. He also is right to remind the industry about the effect that significant pipeline accidents can have on people, property and the environment. These events, while extremely rare, demonstrate the importance of continuing to pursue the industry’s goal of zero incidents.

The good news, according to a 2015 report from the American Gas Foundation, “Natural Gas Pipeline Safety and Reliability: An Assessment of Progress,” is that pipelines are safe — and getting safer. As the AGF observes:

• Pipelines are the safest means of transporting energy products. Data compiled by the Bureau of Transportation Statistics show that pipelines have been the cause of fewer fatalities and injuries than the trucking and rail industries over the past decade. Data compiled by the Pipeline and Hazardous Materials Safety Administration show a significant reduction in the number of pipeline incidents involving fatalities or injuries over the past two decades. Reports from the U.S. Government Accountability Office and nongovernmental entities reach similar conclusions. …

November 23, 2016

United States District Court Enjoins Enforcement of New Overtime Rule

As discussed in Babst Calland’s Employment Bulletin on May 20, 2016, the United States Department of Labor (DOL) published a Final Rule titled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees (the “Final Rule”). Among other things, the Final Rule more than doubled the salary threshold required for employees to qualify for the executive, professional, or administrative exemptions allowed by the Fair Labor Standards Act (FLSA) and contained automatic updates to the salary thresholds. The Final Rule was set to go into effect on December 1, 2016.

On November 22, 2016, however, the United States District Court for the Eastern District of Texas granted an emergency injunction to enjoin the application of the Final Rule. The injunction was filed against the DOL by twenty-two states and requested that the DOL be enjoined from enforcing the Final Rule. In granting the injunction request, the district court reasoned that the DOL was without statutory authority to issue and implement the Final Rule. Accordingly, the court enjoined application of the Final Rule, on a nationwide basis. Specifically, the court ruled that the DOL is enjoined from implementing and enforcing the Final Rule. Accordingly, until further notice, employers do not have to change overtime practices to comply with the DOL’s Final Rule.

Babst Calland’s Employment and Labor Group will continue to keep employers apprised of further developments related to this and other employment and labor topics.If you have any questions or need assistance in addressing the above-mentioned area of concern, please contact John A. McCreary, Jr. at (412) 394-6695 or jmccreary@babstcalland.com, Stephen A. Antonelli at (412) 394-5668 or santonelli@babstcalland.com, or Christopher M. Helms at (412) 394-6477 or chelms@babstcalland.com. …

November 22, 2016

PHMSA increases civil penalties and commits to providing detailed calculations in individual cases

The PIOGA Press

The following first appeared as a Pipeline Safety Alert issued by law firm Babst Calland.

On October 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a General Policy Statement on Civil Penalties in the Federal Register. Representing the most recent step in the evolution of PHMSA’s enforcement process, the policy  statement is significant for several reasons.

First, PHMSA is making a public commitment to release its proposed civil penalty calculation for individual enforcement cases. While standard practice for many other federal agencies, PHMSA has not historically provided the regulated community with its methodology for calculating proposed civil penalty amounts. Second, PHMSA is acknowledging the adoption of a Civil Penalty Framework as the agency’s policy for calculating proposed penalties, and will publish that Civil Penalty Framework on its website. Under PHMSA’s previous policy, operators received that document only upon request. Finally, and perhaps most significantly, the policy statement confirms that PHMSA will be assessing higher civil penalties (within the statutory maximums) in future enforcement cases, and that greater weight will be afforded to certain factors in determining penalty amounts.

The statutory framework

The pipeline safety laws require PHMSA to consider several factors in determining the amount of any civil penalty assessed for a particular violation. Three mandatory factors must be considered in all cases: (1) the nature, circumstances and gravity of the violation, including adverse impact on the environment; (2) the degree of the violator’s culpability, any history of prior violations and any effect on ability to continue doing business; and (3) the violator’s good faith in attempting to comply. Two other factors may be considered as a matter of discretion: (1) the economic benefit gained from the violation without any reduction because of subsequent damages, and (2) any other matters that justice requires. …

November 17, 2016

Supreme Court of Appeals of West Virginia Sides with Landowners in Eminent Domain/Pipeline Decision

Administrative Watch

On November 15, 2016, the Supreme Court of Appeals of West Virginia in Mountain Valley Pipeline, LLC v. McCurdy (W. Va. No. 15-0919, Nov. 15, 2016), held that a private company may not enter private land for the purposes of surveying in preparation for an eminent domain action unless that company establishes that it is entitled to assert eminent domain over the private property.

Mountain Valley Pipeline retained surveyors to survey certain private property in Monroe County, West Virginia, over which it intended to build a natural gas pipeline to transport natural gas from Wetzel County, West Virginia, to Pittsylvania County, Virginia.  Mountain Valley Pipeline intended to condemn the private property pursuant to West Virginia’s eminent domain statute, which allows condemnation by a private company if the land is going to be used for a “public use,” and claimed that the surveying work was necessary to prepare for the construction of the pipeline.  The McCurdys, who owned some of the property, sought an injunction to prevent the surveyors from entering their land, which the Circuit Court of Monroe County, West Virginia, granted.

Writing for the West Virginia Supreme Court, Justice Robin Davis found that an individual may not enter onto private property to survey for the purpose of eminent domain unless the condemned property was going to be put to a “public use” as defined by West Virginia law.  As used in the eminent domain context, West Virginia law requires that the “public use” be “use” by residents and entities inside West Virginia’s boundaries.  As Mountain Valley Pipeline had not presented any evidence indicating that any residents or entities (other than itself and associated affiliates) would benefit from the construction of the pipeline to be constructed, representatives of Mountain Valley Pipeline were not permitted to enter the McCurdys’ land for the purpose of surveying that land in preparation for condemnation. …

November 9, 2016

NLRB Reinstitutes Employer’s Obligation to Bargain Before Disciplining Employees

The Legal Intelligencer

Employers who are currently negotiating an initial collective bargaining agreement should be mindful that the National Labor Relations Board (NLRB) recently reaffirmed its analysis in Alan Ritchey, 359 NLRB 396 (2012), regarding an employer’s obligation to bargain before disciplining individual employees when a union has been certified, but has not yet entered into a collective bargaining agreement with the employer.

On Aug. 26, in Total Security Management Illinois 1 & International Union Security Police Fire Professionals of America (SPFPA), 364 NLRB 106 (2016), the NLRB reiterated that an employer may not impose discretionary discipline when it is engaged in negotiations for an initial collective bargaining agreement with a recently certified union. Rather, the NLRB held, before imposing discipline on an employee within the bargaining unit, an employer must provide the union with notice and an opportunity to bargain unless the employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel. The NLRB’s ruling in Total Security essentially revived the legal principles asserted in Alan Ritchey, which the U.S. Supreme Court invalidated on procedural grounds in 2014.

In Total Security, the employer, a provider of security planning and security services, discharged three of its security guards without providing their union any notice or opportunity to bargain. The union had been certified as the exclusive representative of a bargaining unit that included the three discharged guards. At the time of the discharges, the employer and the union had not reached an initial collective bargaining agreement. As a result of the discharges, the employer was charged with allegedly violating Section 8(a)(5) of National Labor Relations Act (NLRA), which makes it an unfair labor practice for an employer to refuse to bargain collectively.

The NLRB administrative law judge, relying on Alan Ritchey, found the employer’s discharge of the guards to be unlawful. …

October 31, 2016

EPA Releases New Environmental Justice Action Agenda

Administrative Watch

On October 27, 2016, the United States Environmental Protection Agency (EPA) released the Environmental Justice 2020 Action Agenda (EJ 2020), which outlines the EPA’s environmental justice strategic plan for 2016 to 2020. This most recent publication builds off the EPA’s previous environmental justice strategic plan for 2010 to 2014 (EJ 2014), which developed basic guidance and tools for integrating environmental justice into EPA’s programs and policies. EJ 2020 is the agency’s latest effort to focus on environmental and public health issues confronting the country’s minority, low-income, tribal, and indigenous populations.

EPA defines “environmental justice” as “the fair and meaningful treatment of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The vision of EJ 2020 is to integrate environmental justice into the agency’s actions, cultivate partnerships to improve on-the-ground results, and create a path of achieving better environmental outcomes and reducing disparities in overburdened communities.

EJ 2020 has three primary goals. The first goal of EJ 2020 is to deepen environmental justice practices within EPA programs to improve the health and environment of overburdened communities. This will involve further integrating environmental justice into EPA’s rulemaking, permitting, compliance and enforcement, and scientific efforts. EJ 2020’s second goal is to work with partners to expand its positive impact within overburdened communities. This includes working with state and local governments, collaborating with federal agencies, deploying community-based resources, and partnering with tribes and indigenous peoples. The third goal of EJ 2020 is to demonstrate progress on significant national environmental justice challenges. EPA has identified lead disparities, drinking water, air quality, and hazardous waste sites as the four major national environmental justice challenges to be addressed by EJ 2020. …

October 24, 2016

Higher Penalties, Greater Transparency: PHMSA Increases Civil Penalties and Commits to Providing Detailed Calculations in Individual Cases

Pipeline Safety Alert

On October 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a General Policy Statement on Civil Penalties (Policy Statement) in the Federal Register. Representing the most recent step in the evolution of PHMSA’s enforcement process, the Policy Statement is significant for several reasons. First, PHMSA is making a public commitment to release its proposed civil penalty calculation for individual enforcement cases. While standard practice for many other federal agencies, PHMSA has not historically provided the regulated community with its methodology for calculating proposed civil penalty amounts. Second, PHMSA is acknowledging the adoption of a Civil Penalty Framework as the agency’s policy for calculating proposed penalties, and will publish that Civil Penalty Framework on its website. Under PHMSA’s previous policy, operators only received that document upon request. Finally, and perhaps most significantly, the Policy Statement confirms that PHMSA will be assessing higher civil penalties (within the statutory maximums) in future enforcement cases, and that greater weight will be afforded to certain factors in determining penalty amounts.

The Statutory Framework

The pipeline safety laws require PHMSA to consider several factors in determining the amount of any civil penalty assessed for a particular violation. Three mandatory factors must be considered in all cases, i.e., (1) the nature, circumstances, and gravity of the violation, including adverse impact on the environment; (2) the degree of the violator’s culpability, any history of prior violations, and any effect on ability to continue doing business; and (3) the violator’s good faith in attempting to comply. Two other factors may be considered as a matter of discretion, i.e., (1) the economic benefit gained from the violation without any reduction because of subsequent damages, and (2) any other matters that justice requires. …

October 21, 2016

Commonwealth Court Reiterates Standards When Interpreting Zoning Ordinances

The Legal Intelligencer 

In Pennsylvania, municipal governing bodies and zoning hearing boards are entitled to considerable deference when interpreting and applying their own zoning ordinances. This deference is based largely on the premise that municipal bodies and boards charged with drafting and administering zoning ordinances possess an unparalleled knowledge of and expertise in their own ordinances, as in In re Thompson, 896 A.2d 659, 669 (Pa. Commw. Ct. 2006). However, this deference is not without limit. The General Assembly and Pennsylvania courts have established the following statutory construction standards to guide municipal bodies and boards in their interpretations:

• Governing bodies and boards must construe the words and phrases of a local zoning ordinance according to rules of grammar and according to their common and approved usage, Section 1903(a) of the Statutory Construction Act, 1 Pa.C.S. Section 1903(a).

• Governing bodies and boards have an obligation to construe the words of an ordinance as broadly as possible to give the landowner the benefit of the least restrictive use, as in Albert v. Zoning Hearing Board of North Abington Township, 854 A.2d 401, 405 (Pa. 2004).

• Any doubt as to undefined words or terms in a local zoning ordinance must be resolved in favor of the landowner and the least restrictive use of the land, as in Kissell v. Ferguson Township Zoning Hearing Board, 729 A.2d 194, 197 (Pa. Commw. Ct. 1999).

• When attempting to define an undefined ordinance term, governing bodies and boards may look to statutes, regulation or dictionaries for assistance, as in Hartman v. Zoning Hearing Board of Cumru Township, 133 A.3d 806, 810 (Pa. Commw. Ct. 2016).

• A ordinance’s plain language generally provides the best indication of legislative intent and thus statutory construction begins with an examination of the text itself, as in Malt Beverages Distribution v. …

October 17, 2016

The new Chapter 78a regulations have arrived

The PIOGA Press

After years of rulemaking activity, the Pennsylvania Department of Environmental Protection’s new Chapter 78a regulations for surface activities associated with unconventional wells became effective on October 8. This article will review the status of the regulations and the next steps for implementing Chapter 78a across the Commonwealth.

 Timing

The Chapter 78 (conventional wells) and 78a (unconventional wells) Subchapter C rulemaking was adopted in February by the Environmental Quality Board (EQB). However, as discussed in the July issue of The PIOGA Press, the passage of Act 52 of 2016 abrogated the portion of rulemaking applicable to conventional oil and gas development. After review by the Attorney General’s Office and the Commonwealth Joint Committee on Documents, DEP withdrew all proposed amendments applicable to conventional oil and gas wells, making changes in Chapter 78 only to clarify its scope and remove all references to unconventional wells. Chapter 78a will be published in substantially the same form as approved by EQB in February and the Independent Regula – tory Review Commission in April.

DEP published the final Chapter 78a rules, titled “Environmental Protection Performance Standards at Oil and Gas Well Sites,” in the Pennsylvania Bulletin on Saturday, October 8. The new rules became effective upon publication, with some provisions for future registration and modification of permitting facilities, such as fresh water and centralized impoundments. DEP was required to complete all the new forms and guidance referenced in Chapter 78a before publication.

Training

In August and September, DEP presented training webinars on topics associated with the final Chapter 78a rulemaking for operators, contractors and any other interested parties. Training topics included pipelines and horizontal directional drilling, waste management, emergency response, secondary containment, spills and releases, well permits and reporting, water management plans, area of review, erosion control, and site restoration. …

October 17, 2016

Old Quiet Title Making New Racket

Oil and Gas Committee Newsletter
(ABA Section of Environment, Energy, and Resources)

The growth of the U.S. economy in recent decades, along with contemporaneous expansion in industrialization and energy use abroad, has caused an explosion in demand for oil and natural gas. During that same time, oil and natural gas exploration and production companies have innovated new methods and techniques for extracting natural resources that were once considered inaccessible. New geologic reserves of hydrocarbons are being discovered at a rapid pace and the ability to develop new reserves has improved dramatically.

Read more.

 

October 14, 2016

PHMSA Releases Emergency Order Interim Final Rule

On October 14, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published its Interim Final Rule (IFR) entitled “Pipeline Safety: Enhanced Emergency Order Procedures” in the Federal Register.  The agency had previously issued a pre-publication version of this rule on October 4.  See Babst Calland’s Pipeline Safety Alert.  PHMSA will use these new regulations to implement its emergency order authority conferred by Congress in the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016” (PIPES Act).  PHMSA may issue an emergency order to address an unsafe condition or practice, or a combination of unsafe conditions or practices that pose an imminent hazard to public health and safety or the environment.   The IFR contains administrative procedures that PHMSA must follow in determining if an imminent hazard exists, the factors that must be considered before PHMSA issues an emergency order, and the content of those orders, including a description of the persons subject to the restrictions, prohibitions, or safety measures and the standards and procedures for obtaining relief. The IFR also creates a process for administrative review of an emergency order that is largely patterned on the statutory text in 49 U.S.C. § 60117(o), including the referenced procedural rules for HazMat emergency orders in 49 C.F.R. § 109.19.

PHMSA may use this authority starting today, October 14.  Interested parties may file comments on this final rule until December 13, 2016. …

October 13, 2016

State Courts Are Clarifying Legal Authority of Local Governments to Regulate Oil and Gas Activities

The Foster Report

As opponents of oil and gas development increasingly look for ways to exert local control, key state court rulings over the last few years have attempted to clarify, in so-called preemptive challenge cases, what the role of local governments actually is in regard to regulating oil and natural gas activities, explained panelists at the recent Shale Insight Conference in Pittsburgh, Pennsylvania.

Driven by citizen pressure or their own volition, local governments throughout the Appalachian Basin in West Virginia, Ohio, and Pennsylvania are increasingly attempting to limit or ban unconventional shale development through the adoption of ordinances or referenda.

The question in West Virginia and Ohio appears to be a bit clearer, due to court rulings confirming that local governments do not have the authority to regulate oil and gas activities. However, in Pennsylvania, a state that may one day be the nation’s largest producer of gas, the legal authority remains murky, said conference presenter Krista-Ann Staley, an attorney at Babst Calland.

Staley told the Foster Report October 5, that the Pennsylvania Supreme Court’s ruling on September 28 didn’t change the scope of local authority to regulate oil and gas development. Rather, the court ruled to strike provisions concerning the PUC’s and Commonwealth Court’s ability to review ordinances and related penalty provisions. With those provisions of Act 13 stricken, along with the related provisions stricken in the Robinson II decision, the scope of local regulatory authority and the ordinance review process fall back to existing statutes. The existing statutes, interpreted in the 2009 Huntley and Range cases, allow local governments limited powers to regulate oil and gas development in MPC (i.e., zoning, subdivision and land development) and floodplain ordinances. …

October 11, 2016

PADEP’s Chapter 78a Rulemaking Goes into Effect for Unconventional Operations in Pennsylvania

Administrative Watch

On Saturday October 8, 2016, the Pennsylvania Department of Environmental Protection’s new Chapter 78a regulations associated with unconventional wells went into effect when they were published in the Pennsylvania Bulletin. For unconventional well operators, there are substantial changes from prior law affecting operations over the entire life of the well, from permitting to site construction, waste handling, impoundments, pipelines, site restoration and spill remediation.

Critical New Provisions in Chapter 78a

One major revision to the rules arises in sections 78a.15(f) and (g), which set out the pre-application requirements for a well permit at a location that “may impact a public resource.” This provision requires operators who propose to drill a well in such locations to notify the public resource agency, which now by definition includes schools, municipalities, and owners of playgrounds or water supplies, and provide additional information to DEP. The regulation applies if the limit of disturbance of the well site is located in any of eight specified areas, including “in a location that will impact other critical communities” and “within 200 feet of . . . a playground.” The public resource agency must be notified at least 30 days prior to the submission of the well permit application to DEP to allow the agency to provide written comments to DEP and the applicant. The applicant may provide a response to the comments. DEP will then consider various factors, including the comments submitted by both the public resource agency and the applicant, before setting conditions for the well permit based on impacts to public resources.

Pipeline operators are for the first time within the scope of oil and gas regulations promulgated under Act 13. Under section 78a.68a, pipeline operators conducting horizontal directional drilling (HDD) beneath a body of water or a watercourse are subject to notification requirements. …

October 11, 2016

PHMSA Releases a Final Rule Expanding the Required Use of Excess Flow Valves

Pipeline Safety Alert

On October 7, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of its Final Rule entitled “Expanding the Use of Excess Flow Valves in Gas Distribution Systems to Applications Other Than Single-Family Residences” (EFV Final Rule).  In response to statutory changes and a National Transportation Safety Board recommendation, PHMSA is expanding the existing requirement that operators install an excess flow valve (EFV) on certain natural gas distribution pipelines to additional types of new or replaced service lines.  The agency is also requiring curb valves or other manual shut-off valves on new or replaced service lines with meter capacities above 1,000 standard cubic feet per hour (SCFH) and requiring operators to notify customers of their right to request the installation of an EFV on certain types of service lines.  The EFV Final Rule will become effective six months after the date of publication in the Federal Register, which is expected within 7—10 days.

An EFV is a safety device installed inside a distribution service line between the main and the meter which can reduce the risk of an incident in the event of damage to the line by shutting off excessive gas flows.  Since 2010, PHMSA has required operators to install EFVs on new or replaced gas service lines servicing single-family residences (SFRs) unless the service line meets certain exceptions.

EFVs must now be installed on the following service lines: 

  • Branched service lines to a SFR installed concurrently with the primary SFR service line (a single EFV may be installed to protect both lines);
  • Branched service lines to a SFR installed off a previously installed SFR service line that does not contain an EFV;

    • …

October 4, 2016

Robinson Township Revisited: The Pennsylvania Supreme Court Addresses Remaining Challenges to Act 13

Administrative Watch

The Pennsylvania Supreme Court declared the last remaining challenged sections of Act 13 of 2012 to be invalid in an opinion issued September 28, 2016 in the Robinson Township v. Commonwealth line of cases (“Robinson IV”). The Supreme Court agreed with the Commonwealth Court that the portions of Act 13 giving the Public Utility Commission (“PUC”) and the Commonwealth Court jurisdiction to (1) review local zoning ordinances, (2) withhold impact fee payments and (3) award attorneys’ fees against municipalities were not “severable” from the sections of Act 13 imposing statewide zoning standards for oil and natural gas development previously invalidated by the Supreme Court in December 2013 (“Robinson II”).

Regarding Chapter 32 of Act 13, the Supreme Court reversed the Commonwealth Court and held that Act 13’s provisions for the disclosure of hydraulic fracturing additives in a medical context and notice of spills to public drinking water suppliers but not to owners of private wells were unconstitutional “special laws.” Finally, the Supreme Court reversed the Commonwealth Court and held that the grant of eminent domain powers to companies for gas storage purposes violated the constitutional prohibitions against takings in the Fifth Amendment of the U.S. Constitution and Article I, Section 10 of the Pennsylvania Constitution.

With respect to the plurality opinion in Robinson II, the PUC asked the Court to disavow its analysis of Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (“ERA”), as not precedential and “out of step” with the wisdom of prior existing law. Because the question had not been preserved, the Court declined to consider it.

In its discussion of the questions presented by the PUC appeal, the Supreme Court also addressed the viability of Section 3215, which has been the subject of both controversy and litigation with the Department of Environmental Protection (“DEP”). …

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