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July 19, 2016

Governor Wolf signs Act 52 of 2016, erasing Chapter 78 revisions

The PIOGA Press On June 23, Governor Tom Wolf signed Act 52 of 2016, the Pennsylvania Grade Crude Development Act, formally Senate Bill 279. Act 52 abrogates the Environmental Quality Board’s (EQB) revisions to the Chapter 78 regulations concerning conventional oil and natural gas wells and creates the Pennsylvania Grade Crude Development Advisory Council. In February, the EQB approved the Chapter 78 (conventional wells) and Chapter 78a (unconventional wells) Subchapter C revisions by a vote of 15-4. The Chapter 78 revisions would have altered or created new obligations for permit applications and renewals, water supply replacement, predrilling surveys and reviews, erosion and sediment control, emergency response plans, wastewater management, disposal of drill cuttings, site restorations, spills and releases, and production reporting. The revisions also included 31 different requirements for electronic applications, notifications and submittals. Act 52 applies only to the conventional regulations. The Chapter 78a unconventional regulations are currently undergoing review at the Pennsylvania Office of Attorney General and are expected to be published in late summer. In addition to abrogating the pending revisions to Chapter 78, Act 52 specifies that any future rulemaking concerning conventional wells must be undertaken separately and independently of unconventional wells and other subjects. Future rulemakings concerning conventional wells must include a regulatory analysis form submitted to the Independent Regulatory Review Commission (IRRC) that is restricted to the subject of conventional wells. Act 52 addresses the primary criticism of PIOGA and other trade associations and the Department of Environmental Protection’s Conventional Oil and Gas Advisory Committee (COGAC) regarding EQB’s Chapter 78 revisions. Specifically, Act 126 of 2014 required EQB to promulgate proposed regulations relating to conventional wells separately from proposed regulations relating to unconventional wells, which should have removed pending revisions applicable to conventional operations proposed in 2013. Any regulatory revisions for conventional operations following Act 126 were required…

July 15, 2016

Congress and the FAA Ease the Way for Use of Drones by the Energy Industry

Pipeline Safety Alert The Federal Aviation Administration (FAA) recently issued regulations permitting the use, with certain limitations, of small unmanned aircraft systems (small drones) for non-hobby and non-recreational purposes. On July 13, 2016, Congress passed several provisions specific to drone use by the energy industry as part of the reauthorization bill for the FAA. FAA Reauthorization On July 13, 2016, Congress passed the “FAA Extension, Safety, and Security Act of 2016 (the Bill)”. The Bill, which authorizes a short-term extension of the funding for the FAA, includes several provisions covering the operation of unmanned aircraft systems (i.e., drones). Of particular interest to the energy industry, Congress– • Amends section 331 of the FAA Modernization and Reform Act of 2012. This particular statute previously defined “small unmanned aircraft” as weighing less than 55 pounds. The Bill amends this definition to clarify that the 55-pound limit “includ everything that is on board or otherwise attached to the aircraft. ” • Requires the Secretary of Transportation to establish a process within 180 days to allow applicants to petition the FAA to prohibit or restrict the operation of an unmanned aircraft “in close proximity to a fixed site facility.” A “fixed site facility” includes energy production, transmission, and distribution facilities and equipment, oil refineries, and chemical facilities. • Requires the FAA to allow a person to apply to operate an unmanned aircraft system during the day or at night beyond the visual line of sight of the individual operating the aircraft as long as the operator is conducting the unmanned aircraft operation to ensure compliance with (1) federal or state regulatory requirements including surveys associated with permit applications for new pipelines; (2) the pipeline safety regulations (49 C.F.R. Parts 192 and 195); or (3) the requirement of any federal, state, or local regulatory body or industry standard related to…

July 6, 2016

New OSHA Injury Reporting Rule Will Preclude Automatic Post-Incident Drug Screens

Employment Bulletin Many employers have implemented policies mandating employees involved in an accident at the workplace to undergo drug and alcohol screening. Effective August 10, 2016 such blanket, automatic policies will likely run afoul of the injury reporting requirements of the Occupational Safety and Health Act (Act). On May 12, 2016, the Occupational Safety and Health Administration (OSHA) issued its Final Rule amending employers’ obligations to report and record injuries, and clarifying its interpretation of the injury reporting requirements of the Act. 29 CFR §1904.35(b)(1)(i) requires the employer to establish a “reasonable procedure for employees to report work-related injuries and illnesses ….” OSHA “clarified” this requirement by adding the following: “A procedure is not reasonable if it would deter or discourage a reasonable employee from accurately reporting a workplace injury or illness …” In the comments accompanying the Final Rule, OSHA noted that many commenters to the proposed rule complained that employer policies requiring automatic post-injury drug and alcohol testing were a form of adverse action that discouraged reporting. The comments state that: Although drug testing of employees may be a reasonable workplace policy in some situations, it is often perceived as an invasion of privacy, so if an injury or illness is very unlikely to have been caused by employee drug use, or if the method of drug testing does not identify impairment but only use at some time in the recent past, requiring the employee to be drug tested may inappropriately deter reporting. OSHA concluded that “the evidence in the rulemaking record shows that blanket post-injury drug testing policies deter proper reporting.” OSHA did not ban all post-incident reporting, but the comments set forth the agency’s view that it should be severely limited: his final rule does not ban drug testing of employees. However, the final rule does prohibit employers from using drug testing (or the threat of drug testing) as a form of adverse action against employees who report injuries or illnesses….

June 29, 2016

Final Rule Alters Salary Threshold for Overtime Pay

The Legal Intelligencer The Rolling Stones said it best: “Time is on my side, yes it is.” This has never been more accurate after the publication of the much-anticipated final rule updating overtime regulations, as an estimated 4.2 million workers who were previously exempt from receiving overtime pay may be eligible for overtime starting Dec. 1, 2016. On May 18, President Obama and Department of Labor Secretary Thomas E. Perez announced the publication of the Department of Labor’s Final Rule titled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.” The final rule updated overtime regulations, including an update on the salary and compensation levels needed for employees to be considered exempt, (29 CFR Part 541). The Fair Labor Standards Act Pursuant to the Fair Labor Standards Act (FLSA), an employee is entitled to overtime of one and one-half times the employee’s regular rate of pay for hours worked over 40 in a workweek. However, certain executive, administrative, and professional employees are exempt from this rule. These employees are commonly referred to as “exempt employees.” To be considered exempt, three tests must be met: The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (salary basis test); the amount of salary paid must meet a minimum specified amount (salary level test); and the employee’s job duties must primarily involve executive, administrative or professional duties as defined by the regulations (duties test). Combination of ‘Long’ and ‘Short’ Duties Test Prior to 2004, the regulations implemented both a “long” and “short” duties test. The long test paired a lower salary requirement with a more stringent duties test—meaning that to qualify a worker could perform no more than 20 percent of their time on nonexecutive, administrative,…

What Constitutes a Zoning Map Change for Notice Requirements

The Legal Intelligencer On March 2, the Commonwealth Court rendered a decision in Embreeville Redevelopment v. Board. of Supervisors of West Bradford Township, 134 A.3d 1122 (Pa. Commw. Ct. 2016), which clarified when a zoning ordinance amendment, although solely textual on its face, constitutes a zoning map change and triggers the additional notice requirements under Section 609(b) of the Municipalities Planning Code, 53 P.S. Section 10609(b). The Municipalities Planning Code, 53 P.S. Section 10101 et seq., (MPC), which establishes the framework for zoning and land use regulation in Pennsylvania, sets forth the detailed procedure a municipality must follow when adopting or amending a zoning ordinance. In pertinent part, a municipality intending to amend its zoning ordinance, regardless of whether the proposed amendment is a text amendment or a zoning map change, must: transmit a copy of the proposed amendment to the county planning agency (if one has been created) for review and comment; transmit a copy of the proposed amendment to the municipality’s planning commission for review and comment (if the planning commission did not prepare the amendment); hold a public hearing on the proposed amendment; and publish notice of the public hearing on the proposed amendment twice, in two successive weeks, in a newspaper of general circulation in the municipality no more than 30 and no less than seven days before the public hearing, (see MPC Sections 304(a)(3) and 609; 53 P.S. Sections 304(a)(3) and 609). In addition to the foregoing requirements, if a proposed amendment involves a zoning map change, Section 609(b) of the MPC requires that a municipality also conspicuously post notice of the public hearing on the properties affected by the proposed map change; and mail notice of the public hearing to the owners of property affected by the proposed map change. The MPC…

June 23, 2016

EPA Issues Technical Guidance For Assessing Environmental Justice In Regulatory Analysis

Administrative Watch The United States Environmental Protection Agency’s (“EPA’s”) latest publication demonstrates that issues relating to environmental justice will have a significant impact on regulatory actions in the near future and will be an important topic during the public comment period for proposed rules. On June 7, 2016, EPA issued the publication Technical Guidance for Assessing Environmental Justice in Regulatory Analysis (“Guidance”), which recommends technical approaches that EPA analysts can use to incorporate environmental justice concerns during the rulemaking process. 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.” When evaluating proposed regulatory actions, EPA recommends analysts conduct an initial screening of environmental justice concerns to determine the appropriate level of analysis through the rulemaking process. Specific consideration should be given to “proximity of sources to low-income populations, minority populations, and/or indigenous peoples, unique exposure pathways, and a history of environmental justice concerns associated with the pollutant being regulated.” With respect to evaluating the environmental justice issues in Human Health Risk Assessments that are conducted to support a regulatory action, EPA’s new Guidance provides factors to consider when designing various assessments during the planning, scoping, and problem formulation portions of the rulemaking process. These assessments stress the importance of considering disproportionate impacts on certain population groups or demographics due to a potential for increased vulnerability and susceptibility to environmental stressors. This Guidance complements EPA’s existing Environmental Justice Action Development Process Guide and is a significant component of “EJ 2020,” which is a broader strategy to advance and address issues of environmental justice by the year 2020. EPA is currently seeking comments until July 7, 2016 on its draft EJ 2020 Action Agenda, which proposes integrating environmental justice concerns to all EPA actions, including the rulemaking considerations found in the Guidance, as well as permitting and enforcement actions. Babst Calland attorneys…

Babst Calland Regulatory Update for Drillers & Midstreamers

Marcellus Drilling News The legal beagles of top energy law firm Babst Calland recently released their sixth annual energy industry report called, “The 2016 Babst Calland Report – An Unprecedented Time for the Oil & Gas Industry: Price Down, Supply Up, Reform Ahead; Legal and Regulatory Perspective for Producers and Midstream Operators.” This annual review of energy and natural resources development activity acknowledges the continuing evolution of this industry in the face of economic, regulatory, legal and local government challenges. In an MDN exclusive, we have the first six pages of the 68-page report (see below), along with details on how you can request a full copy. Worth the read!… Read more.

The Aliso Canyon Effect: Underground Gas Storage Incident Influences Pipeline Safety Reauthorization

Pipeline Safety Alert

On June 22, 2016, President Obama signed into law the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016” (PIPES Act, S.2276). The PIPES Act reauthorizes the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) federal pipeline safety program through fiscal year 2019, provides PHMSA with significant new authority, and requires the agency to prioritize the completion of outstanding mandates from the previous reauthorization in 2011. Of note, the PIPES Act requires PHMSA to develop underground gas storage standards, provides PHMSA with significant new authority to issue industry-wide emergency orders, and requires PHMSA to update its regulations for Liquefied Natural Gas (LNG) facilities. Babst Calland’s Pipeline and HazMat Safety team provides the following observations on these key provisions.

Click here for PDF.

June 21, 2016

Understanding rights, opportunities as a creditor or asset purchaser in bankruptcy proceedings

The PIOGA Press This article is an excerpt of the 2016 Babst Calland Report – “An unprecedented Time for the Oil & Gas Industry: Price Down, Supply Up, Reform Ahead. Legal and Regulatory Perspective for Producers and Midstream Operators. In 2015, 42 North American oil and gas exploration and production companies filed for bankruptcy protection.  At least another 29 have filed in 2016, and continuing price pressure may result in more bankruptcy filings.  Given this state of affairs, companies operating in the oil and gas sector should understand how their rights and obligations are affected when their contractual counterparties become bankruptcy debtors, and how to take advantage of business opportunities presented through the bankruptcy process. Assumption or Rejection of Contracts One of the main purposes of the Bankruptcy Code is to afford a commercial debtor the opportunity to rehabilitate and reenter the stream of commerce as a productive enterprise.  One tool afforded to debtors is the right under Section 365 of the Bankruptcy Code to determine which of its “executory contracts” dating from prior to the bankruptcy filing are beneficial, and which are burdensome, and to reject those that are burdensome, thereby relieving the debtor of the obligation to perform burdensome contracts going forward.  The Bankruptcy Code does not define the term “executory contract,” but the term is generally understood to encompass those contracts where the obligations of both parties are unperformed to the degree that the failure of either party to complete performance would constitute a material breach.  Section 365 also permits a debtor to reject its unexpired leases. The question of whether a debtor can reject particular sorts of contracts can hinge on issues determined under state law.  More specifically, the treatment of oil and gas leases, gathering agreements and transportation agreements can vary, depending on the treatment of those agreements…

Federal Regulatory Eyes New Rules for Gas Gathering Lines

Pipeline & Gas Journal The department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency charged with administering the nation’s pipeline safety program, published a long-awaited notice of proposed rulemaking (NPRM) for gas transmission and gathering pipelines Under development for more than four years, the NPRM proposes significant changes to PHMSA’s safety standards for gas pipeline facilities in 49 C.F.R., Part 192. Of particular importance to the upstream and midstream sectors, the NPRM includes a proposal to modify the federal safety standards for onshore gas gathering lines in four significant ways. Read more on page 41.

Managing Our Production Potential

West Virginia Executive Located in the heart of the Appalachian Basin, at the crossroads of the Marcellus and Utica shales, West Virginia sits atop one of the world’s most prolific deposits of hydrocarbons. Recent technological advances, particularly the emergence of horizontal drilling and hydraulic fracturing, have left the oil and gas industry well positioned to develop these resources for decades to come. However, the use of advanced drilling techniques is only the first step in the commercial development of these energy products. A safe and efficient transportation network is necessary to move hydrocarbons from production areas to end users. Data compiled by the U.S. Department of Transportation and the results of several studies confirm that pipelines are generally the safest and most effective means of transporting the country’s energy products, particularly when compared to other modes of transport. According to the American Gas Association, the natural gas industry spends more than $20 billion annually to ensure the safety of the more than 2.5 million miles of gas pipelines located in the United States. The American Petroleum Institute and Association of Oil Pipe Lines report that the liquids pipeline industry spends at a similar rate—more than $2 billion annually— to maintain the integrity of the nation’s nearly 200,000 miles of pipeline that transport crude oil, natural gas liquids (NGLs) and other petroleum products. Recognizing that safety is a shared responsibility, the pipeline industry works closely with the Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency that regulates the safety of this vast and growing network of pipelines. The PHMSA’s primary charge is to establish and enforce minimum federal safety standards for pipeline facilities. It also administers a certification program that allows state authorities to regulate certain kinds of pipelines within their jurisdictions. Participating states receive federal grant funding to offset the costs of implementing these pipeline safety programs. In West Virginia, pipeline safety is regulated by the Public Service Commission of West Virginia. The commission’s Gas Pipeline Safety Division oversees nearly 14,000 miles of gas pipeline in the state, as well as almost 200…

June 17, 2016

South Fayette battles over ordinance despite low demand for gas rights

Pittsburgh Post-Gazette No one wants to drill for oil and gas in South Fayette anymore. That’s not part of a new settlement that aims to put to bed a years-long conflict between the township and a group of landowners who felt South Fayette was trying to exclude drilling from its borders. But it’s a loud unsaid. The low price of natural gas has likely dampened the appetite of Range Resources, the Texas-based shale operator that once leased land from the Kosky family and their business interests, and of the landowners who continue to spend hundreds of thousands of dollars fighting the township. Read more. 

June 16, 2016

The 2016 Babst Calland Report – An Unprecedented Time for the Oil & Gas Industry: Price Down, Supply Up, Reform Ahead; Legal and Regulatory Perspective for Producers and Midstream Operators

Babst Calland released its sixth annual energy industry report called, “The 2016 Babst Calland Report – An Unprecedented Time for the Oil & Gas Industry: Price Down, Supply Up, Reform Ahead; Legal and Regulatory Perspective for Producers and Midstream Operators.” This annual review of energy and natural resources development activity acknowledges the continuing evolution of this industry in the face of economic, regulatory, legal and local government challenges. To request a copy of the Report, contact info@babstcalland.com. In this Report, Babst Calland attorneys provide insights on shale development in the Appalachian Basin and beyond with a focus on issues, challenges, opportunities and recent developments relevant to producers and operators. In general, the shale industry is challenged more than ever to operate smarter through efficiencies, improvements in technology and prudent business strategies in order to protect margins and profitability. With production of natural gas in the United States reaching record highs at the beginning of this year, and with the price of gas generally at a five-year low, natural gas producers, particularly in the Appalachian Basin, face significant challenges. The Report also highlights key business opportunities emerging, including the long-awaited announcement by Shell Chemical on June 7, 2016 that it will construct an ethane cracker plant near Monaca, Pennsylvania, a positive development for the U.S. chemical industry and for downstream business opportunities resulting from shale development. Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group, said, “This Report underscores the many dynamics at play for the oil and gas industry, including sustained low commodity pricing, increased operating costs driven by federal and state regulation, inadequate pipeline capacity, environmental and litigation challenges, and a growing number of bankruptcies and asset transactions that have taken place during the past year.” The 68-page Report contains six sections, each addressing key challenges…

June 9, 2016

Your Company’s “TO DO” List for Chemical Substances Regulation and Compliance

Administrative Watch Now that the House of Representatives has passed Toxic Substances Control Act (TSCA) reform legislation, which is the Frank R. Lautenberg Chemical Safety for the 21st Century Act (H.R. 2576), on May 24, 2016 followed by Senate passage on June 7, 2016, the reconciled legislation is finally on its way for President Barack Obama’s signature. The president is expected to quickly sign it. So what does this mean for your company? Although this is by no means complete, here is a “to do” list to frame your company’s TSCA reform efforts. 1. PROMOTE SOUND SCIENCE: Take advantage of public comment opportunities for your company and its scientific and legal advisors to weigh in on the USEPA’s Year 1 mandate to establish a risk-based chemical screening process and criteria for designating chemicals as low or high priority substances, as well as guidance for submitting risk assessments through the new chemical review PMN process. In preparing comments, look to USEPA’s 2014 TSCA Work Plan as an indicator of what USEPA’s work product is likely to look like and consider weaving in real world examples of sound and proven risk assessment methodologies. The TSCA Work Plan program is the USEPA’s current blueprint for conducting safety assessments, prioritizations, and risk management evaluations. So the USEPA is likely to build upon what it has already developed. Many non-rulemaking policies, procedures, and guidance must also be reviewed, revised as warranted or newly developed by the end of Year 2 so do not miss comment opportunities as they arise. 2. LOOK FOR DATA GAPS: Because all new and existing chemical substances actively being made, sold and/or distributed will ultimately be evaluated/re-evaluated by the USEPA under the risk evaluation standards that are developed, now is a good time for your company to look at the existing/available exposure data and develop new data for any information gaps. 3. FILE ROBUST PMNs AND SNUNs: With the lifting of the “least burdensome” requirement, the USEPA faces…

June 7, 2016

Roadblocks present for pertrochemical expansion in region

Pittsburgh Tribune Review

Attracting companies such as Royal Dutch Shell to build their petrochemical plants along the Ohio River was the easy part, as far as Keith Burdette is concerned.

The challenge will come in accommodating a related manufacturing complex that officials in three states hope to establish around ethane crackers, said Burdette, executive director of the West Virginia Development Office.

“We’re not trying to build a facility anymore. We’re trying to build an industry,” he told several hundred people Monday at a petrochemical conference in Downtown Pittsburgh. “Building an industry is a lot more complicated.”

As Shell prepares to start construction of a multibillion-dollar facility in Beaver County, and two other companies weigh building crackers in Ohio and West Virginia, officials at the conference said they must make sure the region has the infrastructure, workforce and real estate that the industry needs to expand.

“We have to work that much harder with respect to what our next steps are,” said Dennis Davin, secretary of Pennsylvania’s Department of Community and Economic Development.

Shell this month said it made the decision to go ahead with construction, nearly five years after it started looking in the region. The cracker, which will convert ethane liquids from Marcellus shale wells to the building blocks of plastics, is expected to attract manufacturers interested in using its products.

Davin said those companies will need a place to build.

“Our issue right now is that in Western Pennsylvania … we don’t have enough construction-ready sites for things that we know are going to happen in follow-on investment from this,” he said. “We know that there are going to be plastics manufacturers, fertilizer manufacturers … and downstream companies that are going to look for sites.”

As his boss, Gov. Tom Wolf, goes into another state budget deadline…

June 2, 2016

Court: Oil and Gas Operations Compatible with Agricultural Uses

The Legal Intelligencer Editor’s note: The authors represented Cardinal before the township, trial court and Commonwealth Court. On Jan. 7, the Pennsylvania Commonwealth Court rendered a decision in Kretschmann Farm v. Township of New Sewickley, 2016 Pa. Commw. LEXIS 33 (Pa. Commw. 2016), which addressed the heated debate over the compatibility of oil and gas operations and agricultural uses. In 2014, Cardinal PA Midstream, (Cardinal) applied to the board of supervisors of New Sewickley Township, Beaver County for conditional use approval to construct and operate a natural gas compressor station in the township’s A-1 agricultural district. Pursuant to the township’s zoning ordinance “compressor station” is permitted as a conditional use in the A-1 agricultural district, provided that the use meets certain express standards and criteria. The township board of supervisors held a public hearing on Cardinal’s application, during which Cardinal presented testimony on: (1) its experience in the natural gas industry; (2) its operations; (3) compliance with the zoning ordinance’s express standards and conditions; (4) review and approval by the Pennsylvania Department of Environmental Protection of its erosion and sediment control plan and air permit; (5) incorporation of landscaping to block the site’s visibility from neighboring landowners and roads; (6) conformity to the township’s noise standards; (7) proposed driveway construction, traffic generation and road improvements. Adjacent property owners, who operate an organic farm, and others opposed Cardinal’s application. During the public hearing, the property owners expressed concern over potential impacts of the compressor station on their produce, water and air, and the compatibility of natural gas drilling operations with agricultural uses. Township residents also expressed concern over the potential placement of pipelines in the township, light pollution from flares, the compatibility of compressor stations with uses in residential/agricultural areas, and the potential long-term effects of emissions generated by oil and gas…

June 1, 2016

U.S. Supreme Court Finds Clean Water Act Jurisdictional Determinations Reviewable

Administrative Watch On May 31, 2016, the Supreme Court of the United States unanimously ruled in U.S. Army Corps of Engineers v. Hawkes Co. that approved jurisdictional determinations (JDs) issued by the U.S. Army Corps of Engineers (USACE) under the federal Clean Water Act are final agency actions subject to judicial review. Like the Court’s 2012 landmark opinion in Sackett v. EPA (finding that an Administrative Order to Comply is immediately appealable), the Hawkes decision effects a fundamental change in the framework for addressing jurisdictional disputes under the statute. The Clean Water Act regulates the discharge of pollutants into “waters of the United States,” imposing substantial criminal and civil penalties for unpermitted discharges. Because it is often difficult for an owner to determine whether a specific parcel contains jurisdictional waters, the USACE issues two types of JDs on a case-by-case basis. “Preliminary” JDs are expressly non-binding, merely advising a property owner that jurisdictional waters may be present on a parcel. “Approved” JDs, on the other hand, convey the Corps’ definitive position as to the presence or absence of jurisdictional waters. Moreover, the USACE and the U.S. Environmental Protection Agency (USEPA) are parties to a Memorandum of Agreement (MOA) that makes Approved JDs binding on both agencies for five years. In Hawkes, the plaintiffs received an Approved JD that found a peat wetland (that plaintiffs sought to mine) constituted jurisdictional waters because of its “significant…

May 26, 2016

Federal Court Invalidates Portions of a Pennsylvania Local Ordinance

OOGA Bulletin On October 14, 2015, the United States District Court for the Western District of Pennsylvania invalidated several sections of a Grant Township, Indiana County, Pennsylvania local ordinance that was enacted to prevent an oil and gas operator from operating an underground injection well that had been permitted by the United States Environmental Protection Agency. In Pennsylvania General Energy Company, L.L.C. v. Grant Township, Civil Action No. 14-209, 2015 U.S. Dist. LEXIS 139921 (W.D. Pa. Oct. 14, 2015), Pennsylvania General Energy Company, L.L.C. filed a complaint in federal court against Grant Township to challenge the constitutionality, validity and enforceability of a Grant Township ordinance that sought to establish a self-described Community Bill of Rights Ordinance (the Ordinance). PGE drills for and produces natural gas in Grant Township and other municipalities in Pennsylvania. PGE took steps to reclassify an existing vertical gas well located in Grant Township as an underground injection well.  As background, in Pennsylvania, most produced fluid from natural gas operations, particularly unconventional operations, is recycled by using it down-hole to complete other wells.  Produced fluid that is not recycled is commonly treated at centralized wastewater treatment facilities or injected into permitted disposal wells.  Most of the injected material is brine and other produced fluid that returns to the surface after drilling and during operation of a well.  However, there are many fewer commercial and captive injection wells in Pennsylvania than there are in Ohio at this time. In Pennsylvania, EPA is responsible for implementing the Underground Injection Control Program under the federal Safe Drinking Water Act, and for regulating the construction, operation, permitting, and closure of injection wells.  When reviewing a UIC permit application, EPA evaluates whether the proposed injection will protect underground sources of drinking water from the subsurface injection of fluids.  UIC permits, including the permit issued…

May 25, 2016

ACCESS ACT to be heard in House subcommittee

West Virginia Record WASHINGTON, D.C. — The House Judiciary Committee’s Subcommittee on Constitution and Civil Justice will be holding a hearing today on the ACCESS (ADA Compliance for Customer Entry to Stores and Services) Act, which aims to protect small businesses from the widespread abuse of the Americans with Disabilities Act (ADA). Congressman Ken Calvert (R-CA), who is sponsoring the bill, will testify before the committee in support of the bill he says will help prevent plaintiffs’ lawyers from “trying to enrich themselves on the backs of the disabled.” The ACCESS Act, also known as H.R 241, would require an aggrieved person to notify a business of an ADA violation in writing, and give the business owner 60 days to provide the aggrieved individual a detailed description of improvements to remedy the violation. Then, the owner would have 120 days to remove the infraction. Failure to meet these conditions would be grounds to further the lawsuit. Calvert told the West Virginia Record that as a property owner himself, he has had to deal with complaints from people who find minor discrepancy in a building or in following the regulations, and instead of being given time to correct the infraction, owners get slapped with lawsuits and “lawyers get rich.” “We all want to have access (for) the disabled, we just don’t want to make this an excuse for lawyers to sue small business owners,” he said. “Nobody is objecting to making sure that we have access for the disabled.” Calvert said some of the infractions are very minor, like not having a sign in the right location or neglecting to paint a line in the right way. Instead of rushing to file lawsuits, Calvert said business owners should be given an opportunity to fix infractions and comply with the law. West Virginia has seen a wave of ADA…

Proposed Rule Impacts Gas Gathering

American Oil & Gas Reporter WASHINGTON–A pipeline safety regulation published in April by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration goes beyond traditional natural gas transmission to have serious implications for onshore gas gathering. PHMSA published its long-awaited notice of proposed rule making for natural gas transmission and gathering pipelines on April 8. Under development for more than four years, the NOPR proposes significant changes to the regulations for gas pipeline facilities in 49 CFR Part 192, including regulations for onshore gas gathering lines. Adopted a decade ago, the current regulations rely, in large part, on American Petroleum Institute Recommended Practice 80, Guidelines for the Definition of Onshore Gas Gathering Lines, which is a voluntary consensus standard for classifying onshore production operations and gas gathering lines. Current regulations contain an exemption for gas gathering lines in rural, Class 1 locations–i.e., areas where 10 or fewer buildings intended for human occupancy are located in the vicinity of a gathering line. The NOPR proposes to change these regulations by: • Modifying the requirements for determining whether a pipeline qualifies as an onshore gas gathering line; • Applying portions of the Part 192 regulations to certain previously unregulated Class 1 gas gathering lines; and • Applying federal reporting requirements to all gas gathering lines (whether regulated or not). (more…)

May 24, 2016

Robert M. Stonestreet presents proposed changes by WV DEP governing classification of state waters

Robert M. Stonestreet served as a panelist addressing environmental regulatory reform issues in Charleston at the West Virginia Chamber of Commerce Environmental and Energy Conference on May 24, 2016. The panel provided an overview and evaluation of recent revisions to West Virginia’s regulatory programs along with ideas for additional changes to further improve the programs. Robert’s presentation focused on changes to further improve the programs. Robert’s presentation focused on changes proposed by the West Virginia Department of Environmental Protection to the policy and procedure governing classification of state waters as drinking water sources, and how those proposed changes will affect the regulated community.

The Environmental and Energy Conference is the most comprehensive, informative and practical seminar on the significant state, regional and national issues that may affect operations and business activities in the state of West Virginia. The day-long event is well attended by professionals from almost every segment of the regulated and energy-production community.

May 21, 2016

Robinson Township arguments continue to reverberate

The PIOGA Press Three years after the Pennsylvania Supreme Court rendered its controversial decision in Robinson Township v. Commonwealth, the plurality opinion is still front-and-center in battles over local regulation of oil and gas activities. The 2013 Robinson Township case, in which a three-justice plurality of the Supreme Court relied on a new and much more extensive interpretation of the Pennsylvania Environmental Rights Amendment (ERA) to invalidate certain provisions of Act 13, made its way back to the Supreme Court for consideration of new issues in 2016. In the intervening time, the Commonwealth Court, county courts of common pleas and local zoning hearing boards grappled with the meaning of the 2013 decision and its impact on local zoning authority. These cases continue to work their way through the appeals process. Robinson Township Returns to the Pennsylvania Supreme Court In March 2016 the Supreme Court heard argument in the Robinson Township challenge to Act 13, the General Assembly’s 2012 comprehensive update to the former Oil and Gas Act. When it first decided the case in 2013, a three-justice plurality of the Supreme Court relied on a novel and broad interpretation of the ERA (i.e. that the ERA imposes on the Commonwealth and its municipalities a fiduciary duty to “conserve and maintain” natural resources) to invalidate several sections of Act 13, including two key sections of Chapter 33 which placed limits on local government authority to regulate the oil and gas industry. The Court remanded several undecided issues to the Commonwealth Court, including whether the remaining local government provisions of Act 13 could stand alone as “severable” from the invalidated ones, or whether they must fail alongside them. The remanded sections address the conferral upon the Pennsylvania Public Utility Commission (PAPUC) and Commonwealth Court of original jurisdiction to review local ordinances regulating the industry…

PA DEP Secretary John Quigley Resigns – Governor Tom Wolf Names Patrick McDonnell Acting Secretary

On Friday, May 20, 2016 Pennsylvania Governor Tom Wolf announced that he had accepted the resignation of Pennsylvania Department of Environmental Protection Secretary John Quigley. The resignation occurred in connection with controversy surrounding an alleged email scandal. The Governor announced that Patrick McDonnell will serve as the Acting Secretary of the Department. The Governor’s press release is available at https://www.governor.pa.gov/wolf-administration-provides-personnel-update-at-dep/.  

May 20, 2016

Department of Labor Issues Final Rule Doubling Salary Threshold

Employment Bulletin On May 18, 2016, the United States Department of Labor (DOL) published a longexpected final rule that more than doubles the salary threshold required for employees to qualify for the executive, professional, or administrative exemptions allowed by the Fair Labor Standards Act (FLSA). Under the current law, for an employee to be exempt from the FLSA’s overtime provisions, he or she must earn at least $23,660 per year ($455 per week) on a “salary basis” and perform the job duties described in the Executive, Administrative, Professional and other exemption categories recognized by DOL. Effective December 1, 2016, however, that salary threshold will rise to $47,476 ($913 per week). The job duties tests will not change. This salary increase will mark the first increase in the salary threshold since 2004. The updated final rule is expected to enable approximately 4.2 million additional employees to earn overtime pay. In addition to doubling the overtime salary threshold, the final rule also: • increases the total annual compensation requirement for highly compensated employees (HCE) from $100,000 to $134,004; • establishes a mechanism for automatically updating the salary and compensation levels every three years, beginning on January 1, 2020; and • amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level. The full text of the final rule can be accessed beginning May 23, 2016 at http://federalregister. gov/a/2016-11754. 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, or Stephen A. Antonelli (412) 394-5668 or santonelli@babstcalland.com.

May 17, 2016

EPA Issues Final Rules to Reduce Oil and Natural Gas Sector Emissions and Clarify Air Permitting Standards

Administrative Watch On May 12, 2016, the U.S. Environmental Protection Agency (EPA) unveiled final rules intended to reduce greenhouse gas emissions from the oil and natural gas sector and to clarify when pollutant-emitting activities are considered “adjacent” for air permitting purposes. The rules finalized on May 12 will impact primarily new, modified, and reconstructed sources, including but not limited to sources at well sites, processing plants, and compressor stations. In conjunction with these final rulemakings, EPA also took the first step in the process of developing a proposed rule to reduce methane emissions from existing sources. Read more.