March 24, 2017
State Must Push Harder to Capitalize on Natural Resource Development
The State Journal
West Virginia has a long history of watching most of its natural resources being harvested and sent to out-of-state users who add value to those resources. The same is happening with West Virginia’s natural gas, and we need to do something about it.
Whether it has been coal converted into electricity or timber fashioned into furniture, the value added to West Virginia’s natural resources has too often taken place outside of the state’s borders. Now, as noted in the 2017 Sustainable Energy in America Factbook, the United States has experienced a 79 percent increase in shale gas extraction since 2011, and a 12 percent jump in total gas production in the last five years. Much of this increase centers on the Marcellus and Utica shale plays, of which West Virginia is an important part.
Numerous groups rightly tout the potential for shale gas to provide a better future for both West Virginia and the region. As such, West Virginia must continue efforts to modernize its laws and regulations so natural gas can be economically and efficiently produced. Likewise, we must support the development and construction of intrastate and interstate pipelines that will only increase the demand for West Virginia’s natural gas and contribute to the country’s energy security.
But while production and transmission of natural gas are solid economic drivers for the state, each cubic foot of gas and each gallon of natural gas liquids that leaves West Virginia represents a lost opportunity to add value to that resource right here.
The only way to truly realize the full value of West Virginia’s natural gas is to adopt policies that attract and establish the activities that use — and add value to — that gas. For example, according to the Factbook, natural gas is now the largest source of power in…
March 10, 2017
The Act 142 amendments and altered landscape of the Pennsylvania Mechanics’ Lien Law for oil and gas construction projects
The Pennsylvania Mechanics’ Lien Law, 49 P.S. § 1101 et seq, provides contractors a powerful legal remedy for recovering payment owed for work performed on a construction project; they can impose a lien against the property on which their work was performed, clouding the owner’s title. As a result of Act No. 142’s amendments to the lien law, effective December 31, 2016, project owners, general contractors, and subcontractors have been evaluating their business practices to ensure compliance with the amended lien law and the subsequent launch of the online State Construction Notices Directory.
Prior to the creation of the directory, there was no streamlined system for owners and general contractors to track subcontractors and suppliers on a project site. This created a lack of certainty with respect to what parties may have lien rights against a property site. The directory (located at www.scnd.pa.gov) helps owners and general contractors track work performed by subcontractors, sub-subcontractors and suppliers.
Required notices under the act
The act creates a more structured notice procedure for owners and contractors on “searchable projects” (projects consisting of the construction, alteration or repair of an improvement costing at least $1.5 million). Specifically, the act permits four new types of filings within the directory: (1) Notice of Commencement, (2) Notice of Furnishing, (3) Notice of Completion and (4) Notice of Nonpayment.
An owner (or an agent of the owner) is required to file a Notice of Commencement to trigger compliance with the act. A Notice of Commencement should be filed before any labor, work or materials are furnished for the project and must contain: (1) the full name, address and email address of the contractor; (2) the full name and location of the project; (3) the county in which the project is located; (4) a “legal description” of the property, including the…
March 8, 2017
Early Moves in Trump Administration Reduce Regulation, Rouse Environmental Groups
This is the first in a series of Administrative Watch alerts to assist in understanding the significant regulatory actions arising out of the Trump administration, and the effect of legal challenges to those actions by environmental groups.
The first 60 days of the Trump administration have seen a host of executive and congressional actions impacting environmental regulations and the energy sector. Industry has largely applauded these moves, but environmental groups have signaled that they intend to aggressively challenge these actions in court:
• Regulatory Freeze Memo
. On January 20, 2017, White House Chief of Staff, Reince Priebus, issued a memo
to the heads of all departments and federal agencies imposing a temporary moratorium on most regulatory actions. The memo indicated that no new regulations should be sent to the Office of Federal Register (OFR) without the review and approval of the new administration; that any regulations awaiting publication by the OFR should be withdrawn; and that consideration should be given to postponing the effective date of any recently-published regulations for at least 60 days.
On January 24, 2017, the Acting Director of the Office of Management and Budget (OMB) issued guidance
to agencies implementing the Regulatory Freeze memo. OMB directed executive agencies to promptly identify effective dates that need to be extended. OMB also discussed the types of rules that would likely meet the exceptions laid out in the Regulatory Freeze memo. Examples include those rules that would frustrate statutory or judicial deadlines such as the civil penalty adjustments required to be filed as a result of the Federal Civil Penalties Inflation Adjustment Act of 1990.
• Presidential Pipeline Memoranda
. On January 24, 2017, President Donald J. Trump issued memoranda calling for the expedited review and approval of two pipeline projects that had been blocked or stalled during the…
March 3, 2017
Executive Order Aims to Roll Back Clean Water Rule
On February 28, 2017, President Donald Trump signed an executive order, Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States Rule” (the Order), directing his administration to withdraw and reconsider the Clean Water Rule (the Rule), 80 Fed. Reg. 37054 (June 29, 2015). The Order is the first step in following through with President Trump’s campaign pledge to eliminate the Rule, which he characterized as a “massive power grab,” and begins the lengthy process of rescinding or revising the Rule.
The Clean Water Rule sought to clarify the definition of “waters of the United States” (WOTUS) and the extent of federal authority to regulate these waters under the Clean Water Act (CWA) after years of differing interpretations. The Rule was widely regarded by industry as having expanded the extent of waters to be regulated under the CWA. As a result, the Rule was generally considered to broaden the jurisdictional reach of the United States Army Corps of Engineers (the Corps) and United States Environmental Protection Agency (the USEPA) with regard to issues such as permitting for wastewater discharges and dredge and fill activities in navigable waters. The Rule was challenged by numerous industry groups, as well as 31 state attorney generals, including Scott Pruitt, the newly-appointed Secretary of the USEPA. Amid questions as to whether the court of appeals or the federal district court is the appropriate forum to hear challenges to the Rule, the United States Supreme Court granted review of this jurisdictional issue in January 2017. The Rule has been stayed in light of these ongoing challenges.
The recent Order lays out the following policy: “It is in the national interest to ensure that the Nation’s navigable waters are kept free from pollution, while…
February 24, 2017
Established Evidentiary Standards for Special Exception Applications
The Legal Intelligencer
The Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101, et seq., (MPC), the state law establishing the framework for zoning and land use development regulations in Pennsylvania, authorizes a municipality to adopt a zoning ordinance containing provisions permitting uses of land by special exception administered by the zoning hearing board. Pennsylvania courts have consistently explained that a “special exception is neither special nor an exception,” but rather a use of property expressly contemplated by a local governing body to be consistent with the overall zoning plan and the health, safety and welfare of the community, as in Freedom Healthcare Services v. Zoning Hearing Board of New Castle, 983 A.2d 1286
The law in Pennsylvania concerning the evidentiary standards applicable to special exception applications is well-settled. An applicant for a special exception has both the initial presentation duty and the ultimate persuasion burden as to whether the application: falls within the special exception provision of the zoning ordinance; and satisfies the specific objective criteria set forth in the zoning ordinance, as in Bray v. Zoning Board of Adjustment, 410 A.2d 909
Once the applicant establishes that the objective criteria of the zoning ordinance have been met, “a presumption arises that the use is consistent with the health, safety and general welfare of the community,” as in MarkWest Liberty Midstream & Resources v. Cecil Township Zoning Hearing Board, 102 A.3d 549
(Pa. Commw. Ct. 2014). At this point, the burden shifts to objectors to present evidence and persuade the zoning hearing board that there is a high degree of probability that the proposed use will have a detrimental impact on the surrounding community above and beyond that which is normally generated by the type of use proposed. Thus, an applicant does…
February 16, 2017
EPA Final Rule Adds Vapor Intrusion to Hazard Ranking System
The United States Environmental Protection Agency (EPA) published a final rule, effective February 8, 2017, adding vapor intrusion as an exposure pathway for consideration under the Hazard Ranking System. 82 Fed. Reg. 9754 (Jan. 9, 2017). The Hazard Ranking System is the screening mechanism used by the EPA to determine whether to place sites on the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) National Priorities List—the list of priority sites warranting further investigation and possible remediation under the Superfund program. The rule and its potential implications at current and future sites are addressed in this article.
Vapor intrusion occurs when vapor-forming chemicals from a subsurface source, such as soil or groundwater, migrate into an overlying building through cracks in the foundation or utility lines. Volatile chemicals are most susceptible to vapor intrusion because they evaporate easily. Common examples of vapor-forming chemicals include volatile organic compounds (i.e., trichloroethylene and benzene), semivolatile organic compounds (i.e., naphthalene), and pesticides.
The New Rule
Adding vapor intrusion to the Hazard Ranking System arose out of a May 2010 report of the Government Accountability Office (GAO) concluding that if vapor intrusion is not assessed, there is a concern that sites posing a serious human health risk will not be addressed. The GAO asked the EPA to consider adding vapor intrusion and the effect that it may have on the number of sites that it might add to the National Priorities List. On January 31, 2011, the EPA published a notice asking for public comments on the potential addition of vapor intrusion. In the rationale, the EPA noted that there are contaminated sites that did not qualify for listing on the National Priorities List under the current Hazard Ranking System, but they may be listed if the exposure threat from vapor intrusion is included in the…
February 15, 2017
An ounce of prevention: Employer-employee agreements
Your company has worked hard to stay competitive in the oil and gas industry—developing a robust customer list, inventing cutting-edge industry techniques and strategizing to ensure successful reactions to rapidly-changing market conditions. Jane is a valued member of your organization, an important leader in your sales group and a part of your strategic planning team. One day, Jane walks into your office and asks for a few minutes of your time. Jane informs you that she is pursuing other opportunities and gives her two weeks’ notice.
You thank Jane for her efforts on behalf of the company and wish her well, but after she leaves you begin to feel panicked. You’ve trusted Jane with your customers and with confidential company information. What happens if she goes to work with a competitor? If she then calls your customers and asks them to move their business to her new employer? If she discloses confidential information, allowing her new employer to steal your competitive advantage?
Advance planning increases business protection and employer control
Now imagine that in response to Jane’s resignation you thank her and wish her well, and then remind her of her post-employment obligations as contained in the non-compete and confidentiality agreement she signed when she began working at the company. Jane may respond that she’s moving forward with the agreement in mind and tell you about her exciting new opportunity in a different field.
If instead Jane expresses her intent to violate the agreement or gives a non-committal response, you are prepared. You immediately develop a course of action to protect your company, by engaging with Jane and/or her new employer and enforcing your rights under the agreement.
Having an agreement like Jane’s in place requires advance planning. In Pennsylvania, restrictive covenants such as noncompetition and non-solicitation agreements are enforceable if they are…
February 10, 2017
Pennsylvania Governor Signs Act Authorizing Municipalities to Provide Fire and EMS Volunteers with Tax Credits
The Public Record
On November 21, 2016, Governor Tom Wolf signed Act 172 of 2016 (Act 172) into law. Act 172 authorizes municipalities to offer tax credits against the earned income and real estate tax liability of certified fire company and nonprofit emergency medical services agency (EMS) volunteers. The purpose of the law is to incentivize current fire and EMS volunteers to remain active and increase recruitment of new volunteers.
Under Act 172, municipalities may establish, by ordinance, an earned income tax credit up to the full amount of the volunteer’s municipal income tax liability, and a real property tax credit up to 20 percent of the volunteer’s municipal real estate tax liability. In this ordinance, the municipality must, among other things, set forth the total amount of the tax credit that will be offered to a volunteer, a process to reject a request by a volunteer who does not satisfy the criteria for a tax credit, and a procedure by which a volunteer can appeal a rejected request.
In order to qualify for a tax credit authorized by Act 172, a volunteer must be an active volunteer, subject to the tax of a municipality that has authorized a credit pursuant to Act 172, and certified pursuant to the municipality’s established “volunteer service credit program.”
Once a municipality authorizes an earned income and/or real estate tax credit, it must create a “volunteer service credit program” with annual volunteer certification requirements. Pursuant to this program, municipalities must consider the following factors when determining a volunteer’s certification eligibility: (1) the number of emergency calls to which the volunteer responds; (2) the volunteer’s level of training and participation in formal training and drills; (3) the amount of time the volunteer spends on administrative and other support services in aid of the fire company or EMS; and…
February 9, 2017
Employment Law Issues in Pennsylvania’s Medical Marijuana Act
The Legal Intelligencer
Act 16 of 2016, the Medical Marijuana Act (MMA), 35 Pa.C.S.A. §10231.101, et seq., effective May 17, 2016, puts Pennsylvania among the growing number of states permitting the use of marijuana for prescribed medicinal purposes. The MMA, like all state laws purporting to “legalize” marijuana use, squarely conflicts with federal law, which still considers marijuana to be a Schedule 1 substance under the Controlled Substances Act with no legitimate medical uses, see 21 U.S.C. Sections 812(b)(1)(A)-(C); 844(a). The MMA acknowledges: “Nothing in this act shall require an employer to commit any act that would put the employer or any person acting on its behalf in violation of federal law.” The MMA creates uncertainty with respect to the application and enforceability of employer “zero tolerance” and similar policies against the use of illegal drugs, injects new risks into the workplace and adds still more potential claims to the ever-growing list of employment-related causes of action.
The MMA permits appropriately credentialed physicians to prescribe and certify marijuana treatment in various forms—but not in dry leaf or plant for—to patients for any one of 17 chronic “serious medical conditions,” most being debilitating. MMA also establishes the licensing criteria for becoming a certified grower/processor and dispenser of medical marijuana; criminal and civil penalties for diversion of medical marijuana by a grower, dispensary, patient or care giver; and an advisory board to oversee operation of the act. The Pennsylvania Department of Health has issued interim regulations to implement some of the provisions of the MMA and is in the process of drafting more permanent rules.
Employment Provisions of the MMA
Although many of the conditions for which marijuana may be prescribed are disabling, the act addresses the rights and obligations of employees who may be able to work while certified to receive medicinal marijuana. These…
February 3, 2017
Pennsylvania DEP Invites Public Comment on Controversial Air General Permits for Oil and Gas Industry
The Pennsylvania Department of Environmental Protection (DEP) has announced the beginning of a public comment period regarding two draft general permits that, if finalized, would result in significant changes to the air permitting regime for oil and gas industry sources. According to a notice published in the Pennsylvania Bulletin on February 4, 2017, DEP also proposes to revise the Air Quality Permit Exemptions document (DEP Doc. No. 275-2101-003) as it relates to oil and gas exploration, development, and production activities. The draft permits and proposed revisions to the exemption document present a number of timing, cost, and other implementation considerations for oil and gas operators.
The first draft permit is a revised version of the existing general plan approval/operating permit known as “GP-5” for compressor stations and processing facilities. The draft revised GP-5 would be available for natural gas compressor stations, processing plants, and, for the first time, transmission stations. It includes a number of conditions that would expand on existing obligations for midstream operators who are accustomed to dealing with GP-5. For example, the revised GP-5 includes specific requirements for the control of methane emissions from storage vessels and other sources.
The second draft permit, known as “GP-5A,” represents an even greater departure from the status quo, as it would require operators to obtain an air permit for “unconventional natural gas well site operations” and “remote pigging stations” for the first time. Production facilities are currently authorized pursuant to the air permitting exemption known as “Exemption 38” in DEP Doc. No. 275-2101-003. DEP treats oil and gas exploration, development, and production activities which fall under Exemption 38 as exempt from the obligation to obtain an air permit.
The Pennsylvania Bulletin notice indicates that DEP intends to divide Exemption 38 into two separate categories, Exemption 38a and Exemption 38b. Exemption 38a…
January 19, 2017
The Pennsylvania Storage Tank and Spill Prevention Act and oil and gas operations
As we begin the New Year, many of us in the environmental sector automatically look at our new calendars and realize that this is the beginning of a new season of annual regulatory requirements. These requirements range from annual emissions statements and waste reporting to various certification and registration renewals. For those that have containers at one or more sites, you may be (or should be) asking yourself whether any of those containers must be registered pursuant to Pennsylvania’s Storage Tank and Spill Prevention Act, 35 P.S. § 6021, et seq.
What is the Tank Act?
The Tank Act was enacted on July 6, 1989, to: (i) protect surface waters and soil from releases of regulated substances from storage tanks; (ii) provide a statutory mechanism for the cleanup of such releases; and (iii) provide a statutory mechanism to fund the cleanups of releases from underground storage tanks. The regulations promulgated pursuant to the Tank Act can be found in 25 Pa. Code Chapter 245. These regulations cover both aboveground storage tanks (ASTs) and underground storage tanks (USTs).
How the Tank Act applies
Like many environmental statutes, applicability of the Tank Act is dependent on definitions, most notably the definitions of an AST and a UST. Without directly quoting 25 Pa. Code Chapter 245.1 for the definition of an AST, which is too long for this article, there are five main requirements to meet the definition of an AST. The tank must: (i) be aboveground; (ii) be stationary; (iii) have a capacity greater than 250 gallons; (iv) contain a regulated substance; and (v) the tank does not meet any of the 19 exemptions from the definition of an AST.
Similarly, the four main requirements in the definition of a UST are: (i) the tank must be below ground; (ii) the tank must have a…
January 18, 2017
As Obama Administration Draws to a Close, PHMSA Releases Final Rule for Hazardous Liquid Pipelines
Pipeline Safety Alert
On January 13, 2017, one week before the end of the Obama administration, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a final rule
amending the federal safety standards for hazardous liquid pipelines in 49 C.F.R. Part 195 (Final Rule). The Final Rule is the latest step in a lengthy rulemaking process that began with the issuance of a wide-ranging request for public comment in October 2010, followed by the publication of a rulemaking proposal in October 2015 that contained a number of changes and additions to the Part 195 regulations. While still a significant regulatory action, PHMSA narrowed the Final Rule to address public comments, the recommendations of the Liquid Pipeline Advisory Committee (LPAC), and concerns raised by the Office of Management and Budget (OMB). PHMSA established a general effective date of six months from publication
in the Federal Register
, and various effective dates
for specific changes to Part 195.
If previous transfers of presidential power serve as a guide, PHMSA’s decision to release the Final Rule in the last days of the Obama administration may not mark the end of the rulemaking process. To avoid the possibility of being returned to PHMSA for further review by the Trump administration, the Final Rule must be published in the Federal Register
by January 20, 2017. Even if that deadline is met, the Trump administration could extend the effective date of the Final Rule, reopen the public comment period, or take other actions.
What’s Changing (For Now)?
In the Final Rule, PHMSA adopts the following changes to Part 195:
• Reporting Requirements for Gravity and Unregulated Gathering Lines.
Operators of certain gravity lines and unregulated gathering lines must submit annual, accident, and safety-related condition reports to PHMSA. The accident and safety-related condition reporting requirements go into effect six months after…
January 12, 2017
Coming to a Stream Near You? Fourth Circuit Imposes Water Quality Standard Based on Conductivity
On January 4, 2017, the U.S. Court of Appeals for the Fourth Circuit issued a significant decision addressing the scope of obligations owed by a permittee under the Clean Water Act’s National Pollutant Discharge Elimination System (NPDES) program. Ohio Valley Environ. Coalition v. Fola Coal Company, LLC (Appeal No. 16-1024). The case involves discharges from a surface coal mine in West Virginia, governed by a NPDES permit issued by the West Virginia Department of Environmental Protection (WVDEP) pursuant to its authority under an EPA-approved state permitting program. Although some aspects of the ruling are based upon a regulatory provision that was formerly a part of coal-specific NPDES regulations, the principles approved by the court could be applied to virtually any NPDES permit held by any industrial discharger.
In upholding the district court’s January 27, 2015 decision, the Fourth Circuit panel agreed that a NPDES permittee may be required to meet limits on the conductivity of its effluent (i.e., the ability of water to transmit electricity, based on the number and types of ions) even when no specific conductivity limits are set forth in its permit. It based this conclusion on general language in Fola’s permit, incorporating by reference a WVDEP regulation specifying that the discharges covered by a NPDES permit “are to be of such quality as not to cause a violation of applicable water quality standards.” Included among West Virginia water quality standards is a narrative standard that prohibits any discharge of pollutants that “materially contributes” to “a significant adverse impact to the chemical, physical, hydrologic, or biologic components of aquatic ecosystems….” Though conductivity is a property rather than a pollutant, the court held that Fola’s high-conductivity discharges led to conditions that violate this narrative water quality standard and therefore violate its permit.
The district court based its ruling…
January 10, 2017
Ohio Jury Awards $17.5M in Damages to Ohio Resident Who Alleged DuPont’s Disposal of C-8 Caused His Cancer
A jury in federal court in the Southern District of Ohio recently issued a verdict in the class action litigation related to DuPont’s release of perfluorooctanoic acid and/or ammonium perfluorooctanoate (C-8). The jury awarded Kenneth Vignernon a total of $17.5 million in compensatory and punitive damages after finding that DuPont acted with actual malice in discharging C-8, and that such action caused Plaintiff’s testicular cancer.
The recent verdict is the third to be reached in the lawsuits that have been filed against DuPont due to water allegedly contaminated with C-8, chemicals used by DuPont at its Washington Works plant located in West Virginia. Following the initiation of a class action lawsuit in 2001, DuPont and potential plaintiffs entered into an agreement in which independent epidemiologists (the “Science Panel”) would analyze blood samples of individuals residing near the plant to determine whether C-8 was harmful to humans (the “Agreement”). Under the terms of the Agreement, if the studies established a causal link between exposure to C-8 and any particular disease, DuPont agreed not to contest causation in any subsequent litigation involving that disease.
Between 2004 and 2011, the Science Panel studied approximately 40,000 samples obtained pursuant to the Agreement. In December of 2011, the Science Panel released its results, which concluded there was a probable link between exposure to C-8 and various diseases, including kidney and testicular cancer.
Following the release of the Science Panel’s study results, approximately 3,500 individual lawsuits were brought against DuPont by plaintiffs diagnosed with a linked disorder. In an effort to streamline the litigation, the District Court moved forward with six test cases, two of which ultimately went to trial. In March of 2016, a jury awarded Carla Bartlett $1.6 million in damages. Approximately four months later, a jury…
December 19, 2016
Release of draft permits marks beginning of new era in air permitting
On the eve of Thanksgiving, the Pennsylvania Department of Environmental Protection released two draft general permits that, if finalized, would result in significant changes to the air permitting regime for oil and gas industry sources.
The first general permit is a revised version of the existing plan approval/operating permit known as GP-5 for compressor stations and processing facilities. Although the draft revised GP- 5 includes a number of conditions that would create more burdensome obligations for industry, midstream operators are already accustomed to dealing with a general permit. GP-5 (in some form) has been around for a decade. The second draft general permit, known as GP-5A, represents an even greater departure from the status quo, as it would require operators to obtain an air permit for production facilities for the first time. Production facilities are currently authorized pursuant to an air permitting exemption known as Exemption 38.
DEP released the draft permits in anticipation of an Air Quality Technical Advisory Committee (AQTAC) meeting scheduled for Decem – ber 8. AQTAC advises DEP on the technical, economic and other social impacts of major program changes like this one, and typically reviews a DEP proposal before the formal public comment period begins.
A lot can be said about how this program shift may impact day-to-day operations and possibly increase the cost of doing business in Pennsylvania. But keep things in perspective: these permits are still in draft form and therefore remain subject to change. Although major concepts such as whether to even have a general permit for well sites are unlikely to change, the finer details of the permits will be worked out through a future public comment process. Nevertheless, operators would be wise to obtain a copy of the permits (available at www.dep.pa.gov/Business/Air/BAQ/AdvisoryGroups/AirQuality-Technical-Advisory-Committee/Pages) and take a closer look at the proposed conditions….
December 15, 2016
PHMSA Issues Interim Final Rule on Underground Natural Gas Storage
Pipeline Safety Alert On December 14, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of an interim final rule (IFR) establishing minimum federal safety standards for underground natural gas storage facilities. The IFR takes effect 30 days from publication in the Federal Register. Since this rule is styled as an IFR, PHMSA will not be providing a public comment period before the rule takes effect.
Comments on the IFR are due 60 days from the date of publication. PHMSA may consider making changes to the rule based on the comments filed. Comments on the new PHMSA information collection request contained in the IFR (related to new reporting requirements for storage) are on a shorter timeframe and are due 30 days from publication.
• Downhole Regulation: PHMSA will regulate the downhole portions (wells and reservoirs) of underground gas storage facilities for the first time. Although PHMSA has had statutory authority to regulate storage since 1968, the agency declined to use that authority for policy reasons. The 2015 Aliso Canyon natural gas storage leak prompted changes to the Pipeline Safety Laws earlier this year, and those changes require PHMSA to regulate storage.
• Incorporation of API Recommended Practices (API RP): PHMSA will incorporate by reference the API recommended practices for underground natural gas storage (RP 1170 for salt caverns and RP 1171 for depleted reservoirs) covering reservoir and well design, integrity and monitoring, risk management, recordkeeping, integrity verification, site security and safety, emergencies, procedures, training and other subjects. Notably, the IFR mandates compliance with the “should” statements and other permissively worded provisions in the API RPs.
• Reporting: PHMSA will require storage operators to file annual, incident and safety-related condition reports, and file 60-day notices for certain construction activities (new storage facilities,…
December 12, 2016
EPA Issues Regulations for Substitutes to Ozone Depleting Substances under Clean Air Act Title VI
The United States Environmental Protection Agency (EPA) has recently finalized rulemakings that extend standards promulgated under Title VI of the Clean Air Act (CAA) to substitutes for ozone depleting substances (ODS). The use of such substitutes will now potentially trigger new compliance obligations for many industries.
A final rule published by EPA in November will subject certain substitute refrigerants to new requirements, such as leak rate thresholds, inspection, reporting and corrective action requirements associated with leaks, and sales restrictions of such substances. Under Section 608 of the CAA and 40 CFR 82, subpart F, EPA had previously imposed such requirements exclusively for substances listed as a class I or class II ODS under CAA Section 602. However, within this rulemaking, EPA interpreted its authority under CAA Section 608 to include regulation of many non-ODS, including hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs), based in part on its estimation of such substances’ potential to contribute to global warming. Therefore, use of ODS substitute refrigerants that are not exempted from the “venting” prohibition in 40 CFR 82.154 may now trigger additional compliance requirements under Title VI of the CAA, even if such substances are not ODS.
EPA has also finalized a rule pending publication that further restricts the use of many ODS alternatives under its Significant New Alternatives Policy (SNAP) program. Under Section 612 of the CAA, EPA’s latest SNAP rule will restrict the use of several HFCs, hydrofluoroolefins (HFOs), and other refrigerant types within many applications based upon their high global warming potential.
These recent rulemakings indicate that companies should not assume CAA Title VI-related regulations to be limited to ODSs. Rather, even the exclusive use of non-ODS substances may nonetheless incur additional compliance obligations under Title VI.
If you have questions related to these rulemakings or EPA’s regulations pertaining to refrigerants, please contact Michael…
December 1, 2016
Pennsylvania Mechanics’ Lien Law Amendments: DGS Online Construction Notices Directory in Effect January 1, 2017
On December 20, 2016 Babst Calland will present an informative and timely session on using the Pennsylvania Department of General Services (DGS) online “State Construction Notices Directory,” which lien claimants will be required to use on all construction projects greater than $1.5 million beginning January 1, 2017.
Attendees will receive hands-on training from Babst Calland construction attorneys in navigating the new online directory, as well as learn about the Mechanics’ Lien Law Amendments and how these changes will significantly impact the rights of contractors, subcontractors and suppliers in filing mechanic’s lien claims. This seminar is endorsed and recommended by the following construction trade associations: Master Builders’ Association Of Western Pennsylvania, Inc., Constructors Association of Western Pennsylvania, Pennsylvania Builders Exchange, Associated Builders and Contractors, Inc., American Subcontractors Association of Western PA, and Keystone Contractors Association.
For more information or to register click here
November 28, 2016
Pipelines are safe
They already are the safest way to transport energy – and getting safer
By Keith J. Coyle
In a recent op-ed published in the Post-Gazette, “Gas Pipelines Represent Prosperity” (Sept. 5 Perspectives), David Spigelmyer and James Kunz described the many benefits that Pennsylvanians could see from the expansion of natural-gas pipelines and related energy infrastructure in the commonwealth. That op-ed prompted a response from Art Wegweiser (Oct. 3), who wrote that Mr. Spigelmyer and Mr. Kunz “seem to deftly dance around the issue of safety, with only a passing reference to this vitally important aspect” of natural-gas development.
Mr. Wegweiser is right to draw attention to pipeline safety. There are thousands of miles of pipelines in Pennsylvania, and the people of the commonwealth expect these lines to operate safely. He also is right to remind the industry about the effect that significant pipeline accidents can have on people, property and the environment. These events, while extremely rare, demonstrate the importance of continuing to pursue the industry’s goal of zero incidents.
The good news, according to a 2015 report from the American Gas Foundation, “Natural Gas Pipeline Safety and Reliability: An Assessment of Progress,” is that pipelines are safe — and getting safer. As the AGF observes:
• Pipelines are the safest means of transporting energy products. Data compiled by the Bureau of Transportation Statistics show that pipelines have been the cause of fewer fatalities and injuries than the trucking and rail industries over the past decade. Data compiled by the Pipeline and Hazardous Materials Safety Administration show a significant reduction in the number of pipeline incidents involving fatalities or injuries over the past two decades. Reports from the U.S. Government Accountability Office and nongovernmental entities reach similar conclusions.
• The natural-gas industry invests more than $19 billion annually in pipeline safety…
November 23, 2016
United States District Court Enjoins Enforcement of New Overtime Rule
As discussed in Babst Calland’s Employment Bulletin
on May 20, 2016, the United States Department of Labor (DOL) published a Final Rule
titled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees
(the “Final Rule”). Among other things, the Final Rule more than doubled the salary threshold required for employees to qualify for the executive, professional, or administrative exemptions allowed by the Fair Labor Standards Act (FLSA) and contained automatic updates to the salary thresholds. The Final Rule was set to go into effect on December 1, 2016.
On November 22, 2016, however, the United States District Court for the Eastern District of Texas granted an emergency injunction to enjoin the application of the Final Rule. The injunction was filed against the DOL by twenty-two states and requested that the DOL be enjoined from enforcing the Final Rule. In granting the injunction request, the district court reasoned that the DOL was without statutory authority to issue and implement the Final Rule. Accordingly, the court enjoined application of the Final Rule, on a nationwide basis
. Specifically, the court ruled that the DOL is enjoined from implementing and enforcing the Final Rule. Accordingly, until further notice, employers do not have to change overtime practices to comply with the DOL’s Final Rule.
Babst Calland’s Employment and Labor Group will continue to keep employers apprised of further developments related to this and other employment and labor topics.If you have any questions or need assistance in addressing the above-mentioned area of concern, please contact John A. McCreary, Jr. at (412) 394-6695 or email@example.com
, Stephen A. Antonelli at (412) 394-5668 or firstname.lastname@example.org
, or Christopher M. Helms at (412) 394-6477 or email@example.com
Click here for PDF
November 22, 2016
PHMSA increases civil penalties and commits to providing detailed calculations in individual cases
The PIOGA Press
The following first appeared as a Pipeline Safety Alert issued by law firm Babst Calland.
On October 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a General Policy Statement on Civil Penalties in the Federal Register. Representing the most recent step in the evolution of PHMSA’s enforcement process, the policy statement is significant for several reasons.
First, PHMSA is making a public commitment to release its proposed civil penalty calculation for individual enforcement cases. While standard practice for many other federal agencies, PHMSA has not historically provided the regulated community with its methodology for calculating proposed civil penalty amounts. Second, PHMSA is acknowledging the adoption of a Civil Penalty Framework as the agency’s policy for calculating proposed penalties, and will publish that Civil Penalty Framework on its website. Under PHMSA’s previous policy, operators received that document only upon request. Finally, and perhaps most significantly, the policy statement confirms that PHMSA will be assessing higher civil penalties (within the statutory maximums) in future enforcement cases, and that greater weight will be afforded to certain factors in determining penalty amounts.
The statutory framework
The pipeline safety laws require PHMSA to consider several factors in determining the amount of any civil penalty assessed for a particular violation. Three mandatory factors must be considered in all cases: (1) the nature, circumstances and gravity of the violation, including adverse impact on the environment; (2) the degree of the violator’s culpability, any history of prior violations and any effect on ability to continue doing business; and (3) the violator’s good faith in attempting to comply. Two other factors may be considered as a matter of discretion: (1) the economic benefit gained from the violation without any reduction because of subsequent damages, and (2) any other matters that justice requires. As recently adjusted for inflation under…
November 17, 2016
Supreme Court of Appeals of West Virginia Sides with Landowners in Eminent Domain/Pipeline Decision
On November 15, 2016, the Supreme Court of Appeals of West Virginia in Mountain Valley Pipeline, LLC v. McCurdy (W. Va. No. 15-0919, Nov. 15, 2016), held that a private company may not enter private land for the purposes of surveying in preparation for an eminent domain action unless that company establishes that it is entitled to assert eminent domain over the private property.
Mountain Valley Pipeline retained surveyors to survey certain private property in Monroe County, West Virginia, over which it intended to build a natural gas pipeline to transport natural gas from Wetzel County, West Virginia, to Pittsylvania County, Virginia. Mountain Valley Pipeline intended to condemn the private property pursuant to West Virginia’s eminent domain statute, which allows condemnation by a private company if the land is going to be used for a “public use,” and claimed that the surveying work was necessary to prepare for the construction of the pipeline. The McCurdys, who owned some of the property, sought an injunction to prevent the surveyors from entering their land, which the Circuit Court of Monroe County, West Virginia, granted.
Writing for the West Virginia Supreme Court, Justice Robin Davis found that an individual may not enter onto private property to survey for the purpose of eminent domain unless the condemned property was going to be put to a “public use” as defined by West Virginia law. As used in the eminent domain context, West Virginia law requires that the “public use” be “use” by residents and entities inside West Virginia’s boundaries. As Mountain Valley Pipeline had not presented any evidence indicating that any residents or entities (other than itself and associated affiliates) would benefit from the construction of the pipeline to be constructed, representatives of Mountain Valley Pipeline were not permitted to enter the McCurdys’ land for…
November 9, 2016
NLRB Reinstitutes Employer’s Obligation to Bargain Before Disciplining Employees
The Legal Intelligencer
Employers who are currently negotiating an initial collective bargaining agreement should be mindful that the National Labor Relations Board (NLRB) recently reaffirmed its analysis in Alan Ritchey, 359 NLRB 396 (2012), regarding an employer’s obligation to bargain before disciplining individual employees when a union has been certified, but has not yet entered into a collective bargaining agreement with the employer.
On Aug. 26, in Total Security Management Illinois 1 & International Union Security Police Fire Professionals of America (SPFPA), 364 NLRB 106 (2016), the NLRB reiterated that an employer may not impose discretionary discipline when it is engaged in negotiations for an initial collective bargaining agreement with a recently certified union. Rather, the NLRB held, before imposing discipline on an employee within the bargaining unit, an employer must provide the union with notice and an opportunity to bargain unless the employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel. The NLRB’s ruling in Total Security essentially revived the legal principles asserted in Alan Ritchey, which the U.S. Supreme Court invalidated on procedural grounds in 2014.
In Total Security, the employer, a provider of security planning and security services, discharged three of its security guards without providing their union any notice or opportunity to bargain. The union had been certified as the exclusive representative of a bargaining unit that included the three discharged guards. At the time of the discharges, the employer and the union had not reached an initial collective bargaining agreement. As a result of the discharges, the employer was charged with allegedly violating Section 8(a)(5) of National Labor Relations Act (NLRA), which makes it an unfair labor practice for an employer to refuse to bargain collectively.
The NLRB administrative law judge, relying on Alan Ritchey, found the employer’s discharge of…
October 31, 2016
EPA Releases New Environmental Justice Action Agenda
On October 27, 2016, the United States Environmental Protection Agency (EPA) released the Environmental Justice 2020 Action Agenda (EJ 2020), which outlines the EPA’s environmental justice strategic plan for 2016 to 2020. This most recent publication builds off the EPA’s previous environmental justice strategic plan for 2010 to 2014 (EJ 2014), which developed basic guidance and tools for integrating environmental justice into EPA’s programs and policies. EJ 2020 is the agency’s latest effort to focus on environmental and public health issues confronting the country’s minority, low-income, tribal, and indigenous populations.
EPA defines “environmental justice” as “the fair and meaningful treatment of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The vision of EJ 2020 is to integrate environmental justice into the agency’s actions, cultivate partnerships to improve on-the-ground results, and create a path of achieving better environmental outcomes and reducing disparities in overburdened communities.
EJ 2020 has three primary goals. The first goal of EJ 2020 is to deepen environmental justice practices within EPA programs to improve the health and environment of overburdened communities. This will involve further integrating environmental justice into EPA’s rulemaking, permitting, compliance and enforcement, and scientific efforts. EJ 2020’s second goal is to work with partners to expand its positive impact within overburdened communities. This includes working with state and local governments, collaborating with federal agencies, deploying community-based resources, and partnering with tribes and indigenous peoples. The third goal of EJ 2020 is to demonstrate progress on significant national environmental justice challenges. EPA has identified lead disparities, drinking water, air quality, and hazardous waste sites as the four major national environmental justice challenges to be addressed by EJ 2020.
EPA intends EJ 2020 to be an action document, providing the basis…
October 24, 2016
Higher Penalties, Greater Transparency: PHMSA Increases Civil Penalties and Commits to Providing Detailed Calculations in Individual Cases
Pipeline Safety Alert
On October 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a General Policy Statement on Civil Penalties
(Policy Statement) in the Federal Register
. Representing the most recent step in the evolution of PHMSA’s enforcement process, the Policy Statement is significant for several reasons. First, PHMSA is making a public commitment to release its proposed civil penalty calculation for individual enforcement cases. While standard practice for many other federal agencies, PHMSA has not historically provided the regulated community with its methodology for calculating proposed civil penalty amounts. Second, PHMSA is acknowledging the adoption of a Civil Penalty Framework as the agency’s policy for calculating proposed penalties, and will publish that Civil Penalty Framework on its website
. Under PHMSA’s previous policy, operators only received that document upon request. Finally, and perhaps most significantly, the Policy Statement confirms that PHMSA will be assessing higher civil penalties (within the statutory maximums) in future enforcement cases, and that greater weight will be afforded to certain factors in determining penalty amounts.
The Statutory Framework
The pipeline safety laws require PHMSA to consider several factors in determining the amount of any civil penalty assessed for a particular violation. Three mandatory factors must be considered in all cases, i.e., (1) the nature, circumstances, and gravity of the violation, including adverse impact on the environment; (2) the degree of the violator’s culpability, any history of prior violations, and any effect on ability to continue doing business; and (3) the violator’s good faith in attempting to comply. Two other factors may be considered as a matter of discretion, i.e., (1) the economic benefit gained from the violation without any reduction because of subsequent damages, and (2) any other matters that justice requires. As recently adjusted for inflation under the Federal Civil Penalties Inflation Adjustment Act of 2015, PHMSA’s administrative civil penalties are capped at $205,638 per violation per day, not to exceed $2,056,380 million for any related series of violations. PHMSA…