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June 23, 2020

The 2020 Babst Calland Report Highlights Legal and Regulatory Challenges for the U.S. Oil and Gas Industry

Oversupply and pandemic bring on need to adapt to a changing market

Babst Calland today published 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. 

In this Report more than 50 energy attorneys provide perspective on the current state of the U.S. natural gas and oil production industry and its growth to historic highs due to more than a decade of advances in on-shore horizontal drilling and high-volume hydraulic fracturing. It asserts that despite current challenges, a maturing shale industry is poised for future growth as natural gas and oil producers have driven down the costs of production. Transportation options for moving these natural resources from growing areas of production to customers continue to be built, even with new hurdles from regulators and other stakeholders.

Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group, said, “The U.S. natural gas and oil industry has experienced tremendous growth and change since we first published this Report in 2011. Fast forward to an unprecedented 2020 with a pandemic, a corresponding economic slow-down and 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.”

Report highlights

The Babst Calland Report is an annual review of the issues and trends at the federal, state and local level in the oil and gas industry over the past year. The 102-page Report covers a range of topics from the industry’s business outlook, regulatory enforcement and rulemaking to developments in pipeline safety and litigation trends. The Firm’s collective legal experience and perspectives on these and...

June 22, 2020

How to mitigate legal liability while reopening your business

Smart Business

(by Adam Burroughs with Molly Meacham)

As states begin to relax restrictions on social gatherings, businesses are trying to reopen in a manner that is safe for their employees, vendors, customers and clients. They’re also trying insulate themselves from the legal exposures they face as they work out a plan to get their business up and running.

“I’m getting a lot of questions from employers who want to do right on all of those fronts,” says Molly Meacham, a shareholder at Babst Calland. “They are really working hard, thinking through the issues, listening to state, local and federal government advice, all while trying to keep their businesses running.”

Smart Business spoke with Meacham about addressing the legal risks that come with operating during the pandemic.

What legal concerns do companies have as they reopen?

The most significant concern is that a company will have an outbreak at their workplace. If that happens, it means considering the company benefits employees should be entitled to, such as sick leave or short-term disability, if they are eligible for leave under the Family and Medical Leave Act (FMLA), if they are covered by Families First Coronavirus Response Act (FFCRA) and eligible for those leaves, or if they’re entitled to any accommodation under the Americans with Disabilities Act.

Another risk is that contracting the illness could lead to a lawsuit or workers’ compensation claim. In a classic workers’ compensation scenario, the employee would need to prove they contracted the virus at the workplace. Some states are reducing employees’ burden of proof, or covering COVID-19 illness for certain groups of employees. For those states that are not making changes, whether or not COVID-19 is covered by workers’ compensation is likely to be a hotly litigated issue.

The regulatory and legal burden on employers has increased dramatically with this pandemic. For example, the...

June 17, 2020

Ninth Circuit denies emergency motion for partial stay of Montana district court’s NWP 12 vacatur

The PIOGA Press

(by Lisa Bruderly and Ben Clapp)

On May 28, the Ninth Circuit denied the U.S. Army Corps of Engineers’ request for an emergency stay pending appeal of a Montana district court’s vacatur of Nationwide Permit (NWP) 12 in Northern Plains Resource Council, et al. v. Army Corps of Engineers, a challenge to the Keystone XL Pipeline. As a result of the denial, NWP 12 remains unavailable for the construction of new oil and gas pipelines. The ruling means continued permitting delays are likely for pipeline developers seeking federal authorization for stream and wetland crossings and any resulting discharge of dredged or fill material into waters of the United States under Section 404 of the Clean Water Act (CWA).

A Montana district court’s April vacatur of NWP 12 was based on the judge’s determination that the Corps failed to comply with the Endangered Species Act (ESA) when NWP 12 was last issued in 2017. The decision was interpreted as a broad vacatur of NWP 12, extending beyond permitting of the Keystone XL Pipeline. In a significant positive development for permittees proposing work on existing pipelines, on May 11 the district court narrowed the scope of its original vacatur “to the construction of new oil and gas pipelines” with NWP 12 remaining “in place during remand insofar as it authorizes non-pipeline construction activities and routine maintenance, inspection, and repair activities on existing NWP 12 projects.”

For pipeline developers, however, the stay sought by the Corps represented the final possibility of continuing to conduct work under NWP 12 during the long appellate process. The Ninth Circuit denied the Corps’ request on grounds that the Corps had not demonstrated a likelihood of success on the merits or probability of irreparable harm if the stay was not granted.

The likely consequences of the denial...

June 17, 2020

EQB publishes proposed rulemaking for control of VOC emissions from existing oil and natural gas sources

The PIOGA Press

(by Mike Winek, Gary Steinbauer and Gina Falaschi)

Pennsylvania’s Environmental Quality Board (EQB) published a proposed rulemaking in the May 23 Pennsylvania Bulletin entitled “Control of VOC Emissions from Oil and Natural Gas Sources.” 50 Pa.B. 2633 (www.pacodeandbulletin.gov/ Display/pabull?file=/ secure/pabulletin/data/ vol50/50- 21/684.html). This proposed rulemaking would have Pennsylvania adopt reasonably available control technology (RACT) requirements and RACT emission limitations for existing oil and natural gas sources of volatile organic compound (VOC) emissions.

As proposed, the rule would apply to owners and operators of any of the following oil and natural gas sources of VOC emissions that were in existence on or before the effective date of this rulemaking: storage vessels (in all segments except natural gas distribution), natural gas-driven pneumatic controllers, natural gas-driven diaphragm pumps, centrifugal compressors and reciprocating compressors, and fugitive emission components.

This proposal is based on EPA’s October 2016 Control Techniques Guidelines (CTG) for the Oil and Gas Industry, which provide RACT requirements for VOC emissions from existing oil and gas sources. Pursuant to the federal Clean Air Act, EPA established National Ambient Air Quality Standards (NAAQS) for six “criteria pollutants,” which includes ground-level ozone. Ground level ozone is created in a photochemical reaction of oxides of nitrogen (another criteria pollutant) and VOCs in the presence of sunlight.

The federal statute requires any (i) existing major source of VOC emissions (generally more than 50 tons per year of VOC depending on location) in an ozone nonattainment area and (ii) any other source (i.e., minor sources) for which EPA has issued a CTG to implement RACT to control emissions, consistent with the issued CTG. Pennsylvania is in the northeast ozone transport region, which makes the Commonwealth nonattainment for ozone, and thus triggers RACT under federal law.

The Clean Air Act requires states to revise their State Implementation...

June 16, 2020

Appalachian Trail Not a Barrier to Atlantic Coast Pipeline

Energy Alert

(by Robert Stonestreet and Jim Curry)

The United States Forest Service may grant permission for a natural gas pipeline to go underneath the Appalachian Trail, so says the United States Supreme Court in an opinion released on June 15, 2020.  Seven of the nine justices voted to reverse a decision by the Fourth Circuit Court of Appeals that had concluded the Forest Service lacked authority to do so for the Atlantic Coast Pipeline (ACP).  Only Justice Sonia Sotomayor and Justice Elena Kagan dissented from the decision.

The ACP is a proposed 604-mile pipeline stretching from West Virginia to North Carolina.  Approximately 16 miles of the pipeline route goes through the George Washington National Forest, which requires approval from the Forest Service.  The Appalachian Trail, a 2,200-mile federally designated footpath from Mount Katahdin in Maine to Springer Mountain in Georgia, also passes through the George Washington National Forest with permission from the Forest Service.  The National Park Service administers the Appalachian Trail through various arrangements with the Forest Service.  At issue in this case is a 0.1-mile segment of the pipeline that would pass under the Appalachian Trail at a depth of approximately 600 feet.  Both the entry and exit locations for this segment of the pipeline would be on private land, would not be visible from the Appalachian Trail, and would not disturb the surface of the trail.

In 2018, the ACP developers obtained the necessary authorizations from the Forest Service to place the pipeline through the National Forest and under the Appalachian Trail.  Several organizations challenged these authorizations by arguing that the Forest Service lacked authority to authorize a pipeline to cross under the trail.  The Fourth Circuit agreed and vacated the authorizations issued by the Forest Service.

In an opinion by Justice Clarence Thomas, the Court concluded that...

June 11, 2020

Pa. Proposes Changes for Permitting Projects With Stream, Wetland Impacts

The Legal Intelligencer

(by Lisa Bruderly and Daniel Hido)

The Pennsylvania Department of Environmental Protection (PADEP) is proposing significant revisions to its regulations and guidance regarding the permitting of obstructions and encroachments of waters of the commonwealth under 25 Pa. Code Chapter 105. The regulatory revisions, if promulgated, are expected to significantly change the Chapter 105 permitting process by increasing the level of required effort to complete an individual (joint) permit application and potentially increasing the time for the PADEP to review such applications.

The PADEP has presented the regulations and guidance to several of its advisory committees, including, most recently, the Water Resources Advisory Committee (WRAC) on May 28. Later this year, the proposed revisions are expected to be presented to the Environmental Quality Board, with a public comment period to follow. The PADEP’s “draft final” technical guidance document (TGD) on alternatives analysis requirements is expected to be finalized and published in coordination with the proposed regulatory revisions.

Proposed Regulatory Changes to Chapter 105

Proposed revisions to Chapter 105 include the following:

Permit Waivers—Addition of six new permit waivers to 25 Pa. Code Section 105.12, including new waivers for temporary environmental investigation activities and for temporary mats and pads used to minimize erosion and sedimentation at wetland crossings.

Alternatives Analysis—Addition of criteria to the alternatives analysis requirements at 25 Pa. Code Section 105.13(e)(viii), including identification of the effects of “reasonably foreseeable future development” within the wetland or watercourse upstream and immediately downstream of the proposed project and demonstration that project alternatives impacting other regulated waters would meet the requirements of 25 Pa. Code Section 105.16, regarding environmental, social and economic balancing.

Impacts Analysis—Addition of requirements for impacts analyses under 25 Pa. Code Section 105.13(e)(x), including detailed analysis of the “potential secondary impacts” (undefined) of a proposed project on an expanded list of resources, including public water supplies,...

June 10, 2020

Regulatory Challenges to Fully Utilizing Existing Technology

Emerging Technologies in a Time of Pandemic

(by Ben ClappJulie DomikeGina FalaschiJustine Kasznica and Boyd Stephenson)

On May 1st, Amazon Prime premiered Upload, the story of a software engineer whose consciousness is transferred to the cloud after his fully autonomous vehicle (AV) rear-ends another car. The accident takes place in 2033. By then, the show imagines, vehicles that drive themselves will be the default. We won’t spoil the ending. But, in the fictional 2033—only 13 years from now—the public is astounded when the vehicle is involved in a wreck. It is an entertaining take on the future. In reality, however, we’ve got a lot of regulations to update if autonomous vehicles (AVs) are going to play the role imagined in Upload.

That’s too bad, given the current state of affairs. As industry commentators have noted, in this time of pandemic AVs could have provided much needed assistance with long-haul shipments, non-contact deliveries of food and other goods, and contact-free transportation of the sick or elderly to and from medical appointments. Some have predicted that the benefits AVs provide during public health crises will help propel them to wider acceptance and regulatory approval. And while there is still much work to be done on that front, there is a solid foundation to build on.

Click here for the PDF. 

 

 

 

June 10, 2020

PHMSA Proposes Regulatory Reforms for Natural Gas Pipelines

Pipeline Safety Alert

(by Keith Coyle and Ashleigh Krick)

On June 9, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Notice of Proposed Rulemaking (NPRM) proposing amendments to the gas pipeline safety regulations at 49 C.F.R. Parts 191 and 192.  PHMSA explained that the purpose of the NPRM is to ease regulatory burdens identified through internal agency review, petitions for rulemaking, and public comments.  The Agency estimates that the proposed amendments will result in approximately $129 to $132 million in annualized cost savings, with the largest cost savings due to amendments related to farm taps and atmospheric corrosion inspections.  Comments are due August 10, 2020.

The NPRM covers the following topics:

Proposed Exemptions from the Distribution Integrity Management Program Requirements

PHMSA is proposing to codify the policy announced in its March 2019 Exercise of Enforcement Discretion by allowing operators of farm taps to maintain pressure regulating devices on farm taps under either the distribution integrity management program (DIMP) requirements or 49 C.F.R. § 192.740.  While not defined in the proposed Part 192 amendments in the NPRM, the preamble describes a farm tap as “individual gas service line directly connected to a gas transmission, production, or gathering pipeline.”  PHMSA estimates that, based on information submitted by distribution operators, the proposal to allow operators to manage farm taps under DIMP or § 192.740 will result in nearly $42 million in annualized cost savings. PHMSA is also proposing to exempt farm taps originating from unregulated production and gathering pipelines from the DIMP requirements, the overpressure protection inspection requirements in § 192.740, and the annual reporting requirements in Part 191.  PHMSA’s current position, recently reiterated in the Agency’s proposed farm tap Frequently Asked Questions posted on April 20, 2020, is that farm taps are regulated as...

June 5, 2020

USEPA Significantly Revises Section 401 Water Quality Certification Process

Environmental Alert

(by Lisa Bruderly and Daniel Hido)

The United States Environmental Protection Agency (USEPA) has pre-published a final rule that streamlines the water quality certification requirements under Section 401 of the Clean Water Act (CWA), 33 U.S.C. § 1341 (the 401 Rule).  Section 401 requires any applicant for a federal license or permit which will, or may, result in a discharge to waters of the United States (WOTUS) to obtain a certification that the discharge will comply with applicable water quality requirements from the applicable state, authorized tribe or interstate agency (Certifying Authority).

The rulemaking, found at 40 CFR Part 121, is in response to President Donald Trump’s April 10, 2019 Executive Order 13868, which identified Section 401 as “one source of confusion and uncertainty hindering the development of energy infrastructure” and directed USEPA to update its regulations and guidance.  USEPA characterizes the 401 Rule as the agency’s first “holistic” analysis of Section 401 since the 1972 Federal Water Pollution Control Act amendments (i.e., the CWA).

The 401 Rule is expected to benefit applicants for federal permits or licenses which will, or may, result in a discharge from a point source to WOTUS, including applicants seeking National Pollutant Discharge Elimination System (NPDES) and Section 404 permits, as well as hydropower and pipeline licenses issued by the Federal Energy Regulatory Commission (FERC) by (1) narrowing and streamlining the certification process, (2) limiting the scope of Certifying Authority review/response, and (3) capping the amount of time that Certifying Authorities can review a certification.  The Rule comes in response to state attempts to delay natural gas pipelines and other energy-related facilities through extended Section 401 certification processes, requiring applicants to address a number of considerations unrelated to water quality, including climate change.

Key takeaways from the 401 Rule include the following:

The scope of...

June 4, 2020

What to Expect When You’re Expecting OSHA to Visit Your Reopened Workplace

The Legal Intelligencer

(by Brian Lipkin)

The Occupational Safety and Health Administration (OSHA) is the federal agency that enforces workplace safety and health rules. On May 19, OSHA issued two enforcement memos outlining its plans to inspect workplaces during the COVID-19 pandemic. These memos took effect on May 26.

As workplaces reopen, here is what employers can expect:

High Exposure Workplace Inspections

When employees go back to work, OSHA anticipates an influx of COVID-19-related complaints. As a result, OSHA will prioritize inspections of workplaces with “high” and “very high” risks of COVID-19 exposure, including medical facilities, nursing homes and clinical laboratories.

OSHA is less likely to visit workplaces with medium- and low-risk levels, meaning that employees have less frequent and less close contact with the public. So, retail stores and offices are unlikely to have an OSHA compliance officer pay a visit. If OSHA receives a complaint about a medium- or low-risk workplace, it will typically send a letter, ask the employer to respond in writing and close the inspection without any in-person contact.

Allowances for Unavailable Equipment

OSHA requires all businesses to provide workers with personal protective equipment. Depending on the type of workplace, equipment to protect against COVID-19 can include masks, gloves and hand sanitizer.

Having shopped at Target recently, OSHA compliance officers understand many businesses can’t purchase these items because they are in limited supply. OSHA will use its discretion in citing employers that have acted in good faith, so employers should document their attempts to purchase any equipment that is unavailable.

If a business can’t purchase the right protective equipment, it should consider changing workplace rules to limit exposure risks. For example, capacity controls or schedule changes could limit the number of people who come close into close contact with each other.

Next, the enforcement memos suggest that businesses should consider the pros...

June 1, 2020

Federal Court in West Virginia Rejects NPDES Permit Modifications through WVDEP Administrative Orders

Environmental Alert

(by Kip Power)

Companies holding National Pollutant Discharge Elimination System (NPDES) permits issued by the West Virginia Department of Environmental Protection (WVDEP) (known as WV/NPDES Permits) should take note that any adjustments to the effluent limits in those permits that are made through WVDEP administrative orders (as part of enforcement settlements or otherwise) may provide less than complete protection against future enforcement actions. On March 24, 2020, the federal District Court for the Northern District of West Virginia issued yet another decision in a line of cases establishing that WV/NPDES Permits may only be modified through a regulatory process that involves public notice, an opportunity for comments, and compliance with all of the other procedures mandated by WVDEP regulations for such permit changes. Ohio Valley Environmental Coalition and The Sierra Club v. Eagle Natrium, LLC, Civil Action No. 5:19-cv-00236 (March 24, 2020 Memorandum Opinion and Order) (Bailey, J.) (updated and revised, April 13, 2020).

In Eagle Natrium, Plaintiffs filed a citizen suit under the federal Clean Water Act (CWA) based on numerous self-reported discharges from the Defendant’s chlor-alkali plant located in Natrium, West Virginia that allegedly exceeded the effluent limits for (among other parameters) mercury and benzene hexachloride (BHC) found in the Defendant’s WV/NPDES Permit. The Defendant sought summary judgment on the basis that the WVDEP had previously commenced and was diligently prosecuting an enforcement action against it for the same violations, which serves as a statutory bar to CWA citizen suits.

In ruling against the Defendant with respect to the alleged violations of its mercury limits, the Court found that the WVDEP’s pending civil action sought to enforce interim mercury limits that had been established by that agency through an administrative order (and two subsequent extensions of that order) that had not been the subject of public notice and...

May 29, 2020

Ninth Circuit Denies Emergency Motion for Partial Stay of Montana District Court’s NWP 12 Vacatur

Environmental Alert

(by Lisa Bruderly and Ben Clapp)

Yesterday, the Ninth Circuit denied the U.S. Army Corps of Engineers’ (Corps) request for an emergency stay pending appeal of a Montana district court’s vacatur of Nationwide Permit (NWP) 12 in Northern Plains Resource Council, et al. v. Army Corps of Engineers, a challenge to the Keystone XL Pipeline. As a result of the denial, NWP 12 remains unavailable for the construction of new oil and gas pipelines. The ruling means continued permitting delays are likely for pipeline developers seeking federal authorization for stream and wetland crossings and any resulting discharge of dredged or fill material into waters of the United States under Section 404 of the Clean Water Act (CWA).

As discussed in detail in a prior Alert, a Montana district court’s April vacatur of NWP 12 was based on the judge’s determination that the Corps failed to comply with the Endangered Species Act (ESA) when NWP 12 was last issued in 2017. The decision was interpreted as a broad vacatur of NWP 12, extending beyond permitting of the Keystone XL Pipeline. In a significant positive development for permittees proposing work on existing pipelines, on May 11, 2020, the district court narrowed the scope of its original vacatur “to the construction of new oil and gas pipelines” with NWP 12 remaining “in place during remand insofar as it authorizes non-pipeline construction activities and routine maintenance, inspection, and repair activities on existing NWP 12 projects.”

For pipeline developers, however, the stay sought by the Corps represented the final possibility of continuing to conduct work under NWP 12 during the long appellate process. The Ninth Circuit denied the Corps’ request on grounds that the Corps had not demonstrated a likelihood of success on the merits or probability of irreparable harm if the...

May 28, 2020

Project Labor Agreements Continue to Cause Controversy

The Legal Intelligencer

(by John McCreary and Benjamin Wright)

The Community College of Allegheny County (CCAC) recently decided to proceed with construction on its campus. In order to facilitate this project, CCAC entered into a project labor agreement (a PLA) with the Pittsburgh Regional Building and Construction Trades Council of Pittsburgh, AFL-CIO on Feb. 15, 2011. The Associated Builders Association of Western Pennsylvania (ABC) filed a lawsuit on behalf of multiple contractors who operate open shop in Western Pennsylvania seeking to enjoin the CCAC from enforcing the PLA. This suit is the latest in a long series of contentious disputes regarding the utilization of PLAs in the public sector.

In its complaint, the ABC alleges that the terms of the PLA effectively preclude nonunion workers and workers who belong to unions other than those affiliated with the Pittsburgh Regional Building Trades Council from performing construction work, and that the PLA compels workers to associate, join or pay dues to these unions as a condition of employment.

Specifically, the ABC alleges that all contractors have a right under the First and Fourteenth Amendments to determine whether or not to unionize and with which unions to associate. The complaint alleges that the PLA’s requirement that contractors hire their employees through the signatory unions’ hiring halls is a violation of these constitutionally protected rights. The ABC also alleges that this requirement violates the National Labor Relations Act as Section 7 of the Act, 29 U.S.C. Section 157, gives employees the right to decide whether they want union representation. It alleges that the PLA violates the National Labor Relations Act because it requires nonunion members to become union members as the unions will not refer nonmembers through their hiring halls, effectively creating a compulsory union shop in violation of 29 U.S.C. Section 158(a)(3). Finally, the...

May 27, 2020

EQB Publishes Proposed Rulemaking for Control of VOC Emissions from Existing Oil and Natural Gas Sources

Environmental Alert

(by Michael Winek, Gary Steinbauer, Gina Falaschi)

Pennsylvania’s Environmental Quality Board (EQB) published a proposed rulemaking in the May 23, 2020, Pennsylvania Bulletin entitled “Control of VOC Emissions from Oil and Natural Gas Sources.”  50 Pa.B. 2633.  This proposed rulemaking would have Pennsylvania adopt reasonably available control technology (RACT) requirements and RACT emission limitations for existing oil and natural gas sources of volatile organic compound (VOC) emissions.  As proposed, the rule would apply to owners and operators of any of the following oil and natural gas sources of VOC emissions that were in existence on or before the effective date of this rulemaking: storage vessels (in all segments except natural gas distribution), natural gas-driven pneumatic controllers, natural gas-driven diaphragm pumps, centrifugal compressors and reciprocating compressors, and fugitive emission components.

This proposal is based on EPA’s October 2016 Control Techniques Guidelines (CTG) for the Oil and Gas Industry, which provide RACT requirements for VOC emissions from existing oil and gas sources.  Pursuant to the federal Clean Air Act, EPA established National Ambient Air Quality Standards (NAAQS) for six “criteria pollutants,” which includes ground-level ozone. Ground level ozone is created in a photochemical reaction of oxides of nitrogen (another criteria pollutant) and VOCs in the presence of sunlight. The federal statute requires any (i) existing major source of VOC emissions (generally more than 50 tons per year of VOC depending on location) in an ozone nonattainment area and (ii) any other source (i.e., minor sources) for which EPA has issued a CTG to implement RACT to control emissions, consistent with the issued CTG.  Pennsylvania is in the northeast ozone transport region, which makes the Commonwealth nonattainment for ozone, and thus triggers RACT under federal law.

The Clean Air Act requires states to revise their State Implementation Plans to include RACT...

May 26, 2020

Why useful public/private partnerships often go undiscovered

Smart Business

(by Adam Burroughs with Moore Capito)

Governments offer many funding and other partnership opportunities to assist private enterprises. Businesses can benefit greatly from these public/ private partnerships, but first they need to be aware of what funding is out there. Awareness is often driven by government agencies, and industry and trade associations. However …

“There is no substitute for having a relationship with a trusted adviser who is well educated on both public and private funding mechanisms,” says Moore Capito, a shareholder at Babst Calland.

Smart Business spoke with Capito about public/private partnerships and strategies to better connect businesses with potentially helpful government opportunities.

Why isn’t there more participation in public programs by businesses?

How often or how readily businesses take advantage of government programs can depend on the type of program and the market sector. For example, agricultural businesses are heavy users of government programs — subsidies, for instance — because that’s been inculcated into that business segment. Many recent partnership opportunities have been geared toward the small business sector (i.e. Small Business Administration (SBA) programs; programs for Disadvantaged Business Enterprises; Minority-owned Businesses Enterprises; Women-Owned business Enterprises; and 8(a)/Minority or Women Owned Small Businesses; as well as SBA loans, including recent high-profile SBA loan programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan that were designed to support small businesses through the COVID-19 pandemic). However, there are plenty of existing government programs available to established businesses that are willing to take the time to look.

While lack of awareness can be a barrier, the administrative burden can also discourage participation. There tends to be significant paperwork necessitated by regulations designed for oversight. That takes time, and that can mean time away from day-to-day operations, something that not many businesses are positioned to absorb. Such regulations can frustrate...

May 18, 2020

West Virginia DEP Receives Notice of Intent to Sue Under SMCRA Based on Deficiencies in Mine Reclamation Fund

Environmental Alert

(by Kip Power and Robert Stonestreet)

For many years, national and regional environmental interest groups have objected to the alternative bonding system (ABS) administered by the West Virginia Department of Environmental Protection (WVDEP) as a part of WVDEP’s approved coal mine regulatory program under the federal Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. 1201, et seq., (SMCRA). Unlike other bonding programs that require full-cost bonds to secure performance of reclamation requirements under mining permits, the West Virginia ABS involves two components: (1) site-specific bonds posted by mine permittees based on the anticipated costs of reclamation, limited to a maximum of $5,000 per acre; and (2) a Special Reclamation Fund (SRF), funded by a tax on coal production (currently set at 27.9 cents per clean ton). The SRF is intended to fund reclamation expenses in the event WVDEP revokes a permit and the proceeds of site-specific bonds are insufficient to cover the costs to reclaim a disturbed area governed by the revoked permit.

In February 2016, the Ohio Valley Environmental Coalition and other groups filed a petition with the U.S. Department of the Interior’s Office of Surface Mining Reclamation and Enforcement (OSM - the oversight agency under SMCRA), asking that OSM take over the bonding program for mining permits in West Virginia. That petition (which also raised concerns about allowing large companies to self-bond) was never acted upon prior to the change in presidential administrations in January 2017. Long before that, a SMCRA citizens suit was brought in early 2000 in the federal District Court for the Southern District of West Virginia, challenging OSM’s failure to invalidate the West Virginia ABS and impose a federal mine permit bonding system. In response to that suit, the court declined to order OSM to take the requested actions in...

May 12, 2020

Opportunities: Leveraging Technology to Meet New Demands

Emerging Technologies in a Time of Pandemic

(by Ben Clapp, Julie Domike, Gina Falaschi, Justine Kasznica and Boyd Stephenson)

Most of the world is staying home, but businesses must still pay their bills. In late April the federal government estimated the U.S. economy contracted by 4.8 percent in the first quarter of 2020, mostly due to the Coronavirus pandemic. Because the real economic consequences of social distancing occurred in April, future numbers will likely be as bleak, if not worse.

Yet, some businesses are taking bold steps, innovating in communications with their customers, and leveraging pre-existing tools to retool how their customers interact with the company and its product. Companies that never before offered delivery are experimenting with last mile logistics. Farms whose regular restaurant or hotel customers are closed due to public health orders are retooling their supply chains to supply local households. And companies that previously relied on face-to-face interactions are turning to virtual solutions to bring their product to market, even in a field like wine production—where taste is an essential part of the purchasing decision. These companies described here provide just a few examples of how creatively leveraging existing technologies can allow a company to maintain operations.

Last Mile Logistics

The Coronavirus pandemic has shined a spotlight on last-mile delivery, with demand for food, medicine, and other deliveries skyrocketing due to social distancing requirements. While pandemic-driven demand has unquestionably strained existing last-mile delivery resources, retail suppliers that never before relied on delivery have developed their own solutions, provided by a number of companies with technology-based delivery systems and logistics platforms to demonstrate how emerging technologies can be employed to safely and efficiently bridge gaps between suppliers and their customers.

A sharp increase in food delivery orders from homebound individuals combined with the need to...

May 11, 2020

Babst Calland Lands 2024 Space Mission Legal Work for Astrobotic

Firm to Develop Legal/Commercial Framework for Payload Service for NASA’s Artemis Human Landing System

Babst Calland today announced that under a recently announced NASA award, Astrobotic Technologies, Inc. (Astrobotic) has selected the firm to develop what could become the first-of-its-kind blueprint for commercial payload delivery to space for the Artemis human missions as well as future human-crewed space missions.

Pittsburgh-based Astrobotic will be developing the commercial payload service for Dynetics (a Leidos subsidiary), one of three prime contractors (alongside SpaceX and Blue Origin) selected by NASA to design and build a commercial Human Landing System (HLS) and compete to build a privately-developed system to take the first woman and next man to the lunar surface in 2024 as part of the NASA Artemis program.

“As the leading lunar payload delivery provider, we are thrilled to begin setting up this new business model onboard the Dynetics human lander,” said Astrobotic CEO John Thornton. “With payload expertise from our Peregrine and Griffin lunar lander programs, we are well-positioned to extend our payload services to include the new lunar lander. We’re helping to develop and set the standard for the commercial payload market, and that is very exciting,” added Thornton.

Dynetics is leading a broad coalition of industry partners, including Astrobotic, to not only send humans back to the lunar surface, but to also help companies, governments, universities, and nonprofits across the globe send non-human payloads onboard the Artemis Human Lander System. Such payloads can include critical instruments, project and infrastructure products and materials that can support human activities on the lunar surface.

“Helping to launch this new mission to the Moon and to develop the commercial, policy and regulatory framework for its payload delivery business is an exciting opportunity for Astrobotic, all of its partners, and for our team of attorneys at Babst Calland, “ said...

May 11, 2020

Potential Clean Water Act Liability extends to discharges to groundwater that reach surface water

The PIOGA Press

(by Lisa Bruderly and Kevin Garber)

On April 23, the Supreme Court, in a landmark decision, ruled that in certain circumstances discharges of pollutants through groundwater to navigable waters could be required to have an NPDES permit under the Clean Water Act (CWA). While the court remanded the Hawai’i Wildlife Fund v. County of Maui litigation to the Ninth Circuit to reconsider the specific issue of injected wastewater that reached the Pacific Ocean through lava tubes, it more broadly provided a new “functional equivalent” test to address whether the CWA requires an NPDES permit when pollutants originating from a point source are conveyed to navigable waters by a nonpoint source, such as groundwater.

Justice Stephen Breyer, writing for the 6-3 majority, held that an NPDES permit is required “when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge” (emphasis added). The court’s new test for CWA liability has far-reaching implications, creating potential exposure for agency permitting and enforcement and citizen suit pressure under many scenarios where pollutants may intentionally or unintentionally enter surface water by way of groundwater through Class V injection wells, pipeline leaks, spills and releases to ground, waste impoundments/ lagoons, existing groundwater contamination, leaking underground storage tanks and even septic tanks.

New “test” creates more questions than clarity Subjective, conflicting interpretations of the new “functional equivalent” test are inevitable. Focusing primarily on considerations of time and distance, Justice Breyer offered the following two contrasting examples of how the test might be applied: (1) “where a pipe ends a few feet from navigable waters and the pipe emits pollutants that travel those few feet through groundwater (or over the beach), the permitting requirement clearly applies; and (2) “if a pipe ends 50 miles...

May 11, 2020

PHMSA proposes new guidance for farm taps

The PIOGA Press

(by Keith Coyle and Ashleigh Krick)

On April 20, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a request for comments on proposed frequently asked questions (FAQs) for the regulation of farm taps under 49 C.F.R. Parts 191 and 192. The proposed FAQs come nearly two years after the agency posted, and then withdrew, an earlier set of farm tap FAQs on its website. Consistent with the Department of Transportation’s policy on guidance documents, PHMSA is seeking public comment before finalizing the latest version of the farm tap FAQs. The deadline for submitting comments is June 19.

Why did PHMSA issue the proposed FAQs?

The regulatory status of farm taps has generated significant controversy in the past decade. In 2010, PHMSA issued FAQs for the new Distribution Integrity Management Program (DIMP) regulations stating that the DIMP requirements applied to farm taps, even though that issue had not been specifically discussed or addressed during the rulemaking process. The agency defended that position in the years that followed, but eventually allowed operators to choose to include farm taps in a DIMP plan or follow the three-year periodic inspection requirement for regulators and overpressure protection equipment.

In January 2018, PHMSA published a set of new FAQs for farm taps on its website. The FAQs addressed a range of topics, including the new three-year periodic inspection requirements, annual reporting requirements, operator identification number (OPID) requirements, regulatory status of existing farm taps and those installed prior to 1960, operator qualification, definitional clarifications, and excess flow valve installation. After receiving significant adverse feedback, the agency withdrew the farm tap FAQs for further review and development. Then in March 2019, the agency issued an Announcement of Enforcement Discretion stating that owners and operators could choose whether to address farm taps under the three-year periodic...

May 7, 2020

Litigation Challenges Before the Pa. Environmental Hearing Board

The Legal Intelligencer

(by James Corbelli)

Pennsylvania employs a unique judicial mechanism to resolve legal disputes which arise from final decisions made by the Pennsylvania Department of Environmental Protection (DEP or department). The Environmental Hearing Board (EHB or board) has been hearing appeals from department decisions for almost 50 years. During that time, the EHB has had the exclusive authority to hear and decide appeals from DEP actions. This article will summarize what can be expected in EHB legal proceedings, and highlight certain unique features of EHB litigation. While matters before the board are similar in many ways to matters litigated in state and federal courts, there are written and unwritten aspects of litigation in front of the Board that can only be fully appreciated through experience in matters before the Board.

An initial limitation of the board is that it has limited jurisdiction, as the board can only consider final actions of the department. As a general matter, the department’s issuance of an order, permit or any other DEP final action can be appealed to the board. The DEP action must be a “final” action, which has been the subject of substantial EHB case law.

The final actions before the board can be quite varied and address a wide range of environmental matters, such as DEP decisions that involve oil and gas rights, landfills, mining of coal and noncoal minerals, dams and encroachments, air, drinking water, storage tanks, stormwater management and more. The EHB can hear actions commenced by the DEP, a member of the regulated community, individuals or citizens groups. Matters that are brought before the EHB may involve an appeal of a permit denial, permit approval, order by the DEP for an operator to take a certain action, a penalty assessment for an alleged violation of law, etc. The board...

May 4, 2020

Montana District Court’s Vacatur of NWP 12 Impacts Pipeline Projects Across United States

Environmental Alert

(by Lisa Bruderly and Ben Clapp)

Repercussions of a Montana District Court’s vacatur of the U.S. Army Corps of Engineers (Corps) Nationwide Permit (NWP) 12 continue to unfold. NWP 12 is widely utilized by pipeline developers, other energy project proponents, and utilities to authorize certain stream and wetland crossings, and any resulting discharge of dredged or fill material into waters of the United States under Section 404 of the Clean Water Act (CWA).

NWP 12 was cast into a state of confusion in mid-April, when a federal judge in Montana, presiding over a challenge to the Keystone XL Pipeline, vacated the nationwide permit, asserting that the Corps failed to comply with the Endangered Species Act (ESA) when the NWPs were last issued in 2017. The court enjoined the Corps from authorizing any activities under the permit, pending completion of Corps consultations with the U.S. Fish and Wildlife Service and National Marine Fisheries Service (collectively, Services) regarding the permit’s impact on listed species or critical habitat. The order, issued in Northern Plains Resource Council, et al. v. Army Corps of Engineers, has resulted in an immediate halt to the review of thousands of pending NWP 12 requests and, unless stayed, is expected to result in lengthy delays and increased costs for companies engaged in the construction and maintenance of pipelines and other utility lines throughout the country.

NWP 12 Scope and Authorization

NWPs are general permits that the Corps issues under Section 404 for certain regulated activities, under certain thresholds of disturbance, which the Corps has determined will have minimal adverse environmental effects. The NWPs are published by the Corps approximately every five years, with the last publication in 2017, when 52 NWPs were issued. Obtaining coverage under a NWP is typically more efficient and less costly than obtaining an individual...

April 30, 2020

PHMSA Proposes Regulatory Reforms for Hazardous Liquid Pipelines

Pipeline Safety Alert

(by Brianne Kurdock and Varun Shekhar)

On April 16, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) released a Notice of Proposed Rulemaking (NPRM) to amend the facility response planning, reporting, and external corrosion control requirements for hazardous liquids pipelines in 49 C.F.R. Parts 194 and 195.  PHMSA also proposes modifications to the inspection and investigation requirements in Part 190 which would impact all regulated operators (hazardous liquid, natural gas, underground natural gas storage, and LNG).  PHMSA’s proposal is intended to reduce regulatory burdens, as identified in internal agency reviews and stakeholder comments collected in 2017.  Comments are due June 15, 2020.

Proposed Revisions to Inspection and Investigation Procedures

Under 49 C.F.R. § 190.203, operators are required to provide to PHMSA, upon request, all records and information during an inspection or that pertain to an accident or incident involving a pipeline facility.  The NPRM would amend this regulation to formally allow operators to submit such records and information electronically as long as the records (1) can be downloaded and printed by PHMSA from any U.S. internet access point without watermarks, redaction or alteration, (2) have functionality which matches the original document, and (3) are associated with a contact person of the submitter who will be responsible for addressing any issues with the system or record displayed.  In addition, if documents are made available through an access system provided by the submitter, the operator must disable activation or access codes, internet connectivity requirements, document tracking features, or any pre-access conditions such as log-in agreements.  In addition, any time-out functionality must be set at a reasonable amount of time.

These proposals would prohibit common data security measures, such as access codes, “view only” document portals that restrict printing or downloading, watermarking, and access date and time...

April 30, 2020

Recent and Proposed Changes to Pa.’s Water Quality Standards

The Legal Inteligencer

(by Daniel Hido and Hannah Baldwin)

There have been several notable developments recently regarding the Pennsylvania Department of Environmental Protection’s (PADEP) water quality standards regulations at 25 Pa. Code Chapter 93. First, on Jan. 31, the Pennsylvania Independent Regulatory Review Commission (IRRC) approved updates set forth as part of PADEP’s triennial review of the state’s water quality standards. Second, significant changes to the water quality standard for manganese moved closer to becoming law when the Pennsylvania Environmental Quality Board (EQB), a 20-member independent board that reviews and adopts PADEP proposed regulations before publication for public comment, approved PADEP’s proposed rulemaking on Dec. 17, 2019. Finally, PADEP continues work on a final rulemaking with respect to several proposed Class A stream redesignations after receiving comments from the IRRC on June 6, 2019.

PADEP implements the Chapter 93 instream water quality standards by first setting designated uses of surface waterbodies in Pennsylvania, and then by implementing water quality-based effluent limitations in NPDES permits to achieve or maintain the instream water quality of the receiving water, where applicable. Thus, changes to the Chapter 93 water quality standards may result in new or revised effluent limits for any facility that holds an NPDES permit.

Updated Triennial Water Quality Standards

Under Section 303(c) of the Clean Water Act, 33 U.S.C. Section 1313(c), PADEP is required to review and modify, as appropriate, the state’s water quality standards at least every three years. The Chapter 93 water quality standards were last updated in July 2013. The current updates were first proposed in October 2017.

The revised water quality standards make several changes to Table 3 (specific water quality criteria) and Table 5 (human health and aquatic life criteria for toxic substances) in Chapter 93. First, PADEP updated the aquatic life water quality criteria for bacteria and ammonia...

April 28, 2020

Recent Climate Change Developments in Pennsylvania: DEP Meeting on RGGI Modeling and Update to Climate Impacts Assessment

Client Alert

(by Kevin Garber, Jean Mosites and Casey Snyder)

RGGI Rulemaking Special Informational Meeting

On April 23, 2020, DEP presented modeling results of Pennsylvania’s potential participation in the Regional Greenhouse Gas Initiative (RGGI) cap and trade program at a special joint information meeting with the Air Quality Technical Advisory Committee and the Citizens Advisory Council.

DEP utilized consulting firm ICF International’s Integrated Planning Model to estimate the effects joining RGGI would have on Pennsylvania’s electricity generation, CO2 emissions and the PJM Interconnection. DEP is proposing an initial CO2 baseline budget allowance of 78 million short tons of CO2. If Pennsylvania’s regulation becomes effective in January 2022 as proposed by Governor Tom Wolf, the 78 million short ton CO2 budget would decrease annually by approximately 2.5 tons a year, arriving at a budget of 58 million tons in 2030, which is a 25 percent decrease from 2020. DEP proposed setting aside 9.3 million allowances annually for waste-coal-fired generators.

DEP asserted during the presentation that by joining RGGI:

Pennsylvania would realize “significant CO2 reductions” immediately beginning in 2022 and continuing through 2030 but DEP did not quantify the reductions. Pennsylvania would remain a leading electricity exporter at roughly historic generation levels. Wholesale energy prices would increase only slightly. Pennsylvania’s generation mix over the next decade would favor gas over coal but generation from renewables will not increase significantly. Pennsylvania would take a critical step toward meeting unspecified GHG reduction goals.

DEP offered relatively little data to substantiate the above claims. Its presentation did not address to any meaningful degree the effects joining RGGI will have on Pennsylvania’s economy and job market, how RGGI proceeds will be reinvested, or the estimated price of electricity at the household level. DEP did not disclose the initial proposed cost for CO2 allowances although the ICF model predicted...