Pipeline Safety Alert
(by Keith Coyle and Ashleigh Krick)
On December 21, 2020, the U.S. Congress passed the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020 (the Act) as part of a larger year-end spending and COVID-19 relief package. The Act reauthorizes the federal pipeline safety program through September 30, 2023, and establishes annual funding levels for the 2021, 2022, and 2023 fiscal years. The Act also makes other important changes to the federal pipeline safety laws administered by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency).
The Act requires PHMSA to issue new rules for gas pipeline leak detection and repair programs and idle pipelines, update the operations and maintenance standards for certain large-scale liquefied natural gas facilities, and finalize outstanding rulemakings for gas gathering lines, class location changes, and the definition of unusually sensitive areas. The Act establishes additional due process protections for PHMSA enforcement actions, authorizes a new declaratory order proceeding, and obligates PHMSA to consider an operator’s self-report in assessing a civil penalty. Other noteworthy provisions in the Act include authorizing the implementation of a new pipeline safety testing program, the performance of various research and development studies, and the creation of a National Center of Excellence for Liquefied Natural Gas Safety. Lastly, the Act contains various new requirements for distribution lines in response to the 2018 incident in Merrimack Valley, Massachusetts.
The Act does not include several provisions that Congress proposed in earlier versions of the legislation. For example, the Act does not eliminate PHMSA’s obligation to consider the costs and benefits of changes to the pipeline safety regulations or prohibit the use of direct assessments as part of a pipeline operator’s integrity management program. The Act does not change the mens rea (or mental state) requirement in the criminal statute or expand the list of prohibited activities covered under the criminal provision. Nor does the Act authorize the use of administrative law judges in PHMSA enforcement actions, increase the amount of civil penalties that can be imposed for violations of the pipeline safety laws or regulations, or authorize the filing of mandamus actions challenging PHMSA’s failure to perform non-discretionary duties. The elimination of these provisions likely reflects the compromises that became necessary to achieve the Act’s passage before of the end of the current Congress.
The passage of the Act represents the culmination of a multi-year effort to reauthorize the federal pipeline safety program, which expired on September 30, 2019, under the terms of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016. While significant progress has been made in recent years, PHMSA is still working to satisfy certain outstanding rulemaking mandates from the 2016 legislation and the prior reauthorization of the federal pipeline safety laws, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011.
Babst Calland intends to release another client alert in early January 2021 that provides additional insights on the Act and the upcoming transition to a new presidential administration.
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Environmental Alert
(by Robert Stonestreet)
On December 16, 2020, the United States Fish and Wildlife Service (Service) adopted a final regulation to define the term “habitat” for use when designating “critical habitat” areas under the Endangered Species Act (ESA). 85 Fed Reg 81411. The ESA already defines the term “critical habitat,” which in general means areas designated as essential to preserve or promote recovery of threatened or endangered species regardless of whether those species are actually present in the area. The term “habitat,” however, is not itself defined in the ESA or pre-existing regulations. As detailed in the Environmental Alert published on August 10, 2020 (available here), the Service proposed two potential “habitat” definitions on August 5, 2020 for public comment. 85 Fed Reg 47333. In the final rulemaking, the Service chose to adopt a “habitat” definition that is markedly different than the two definitions proposed for public comment back in August. The adopted definition reads as follows:
For the purposes of designating critical habitat only, habitat is the abiotic and biotic
setting that currently or periodically contains the resources and conditions necessary to support one or more life processes of a species.
According to the Service, “[a]biotic means derived from non-living sources such as soil, water, temperature, or physical processes” and the term “biotic” means “derived from living sources such as a plant community type or prey species.” The preamble portion of the Federal Register entry notes that the phrase “resources and conditions” is intended to clarify that habitat “is inclusive of all qualities of an area that can make that area important to the species.”
Compare that definition to the two definitions proposed for public comment on August 5, 2020, which appear below:
Primary Proposed Definition: The physical places that individuals of a species depend upon to carry out one or more life processes. Habitat includes areas with existing attributes that have the capacity to support individuals of the species.
Alternate Proposed Definition: The physical places that individuals of a species use to carry out one or more life processes. Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist.
The Service noted that the revised version of the adopted definition takes into account the approximately 48,000 public comments submitted to the agency.
This rulemaking was a response to litigation over what areas the Service could designate as critical habitat that is not occupied by a listed species. Weyerhaeuser Co. v. United States Fish and Wildlife Service, 139 S. Ct. 361 (2018). In Weyerhaeuser, the Service designated an area as critical habitat for a species even though that species could not survive in the area under current conditions. The Service reasoned that the area was once occupied by the species, and certain modifications could be made in the future that would allow the species to return to the area. The United States Supreme Court ruled that the Service could not designate an area as critical habitat for a listed species that was not “habitat” for that species in the first place – i.e. an area where the species could survive.
The Service seems to acknowledge that the adopted “habitat” definition would preclude the type of designation at issue in Weyerhaeuser. In response to comments that the proposed definition would improperly preclude areas that require restoration from being designated as critical habitat, the Service noted that “habitat, whether occupied or unoccupied, must still have (currently or periodically) the resources and conditions necessary to support one of the life processes for the species.” According to the Service, “the definition respects the statutory text by distinguishing between habitat and areas that are not habitat (but can become habitat in the future, whether by virtue of restoration activities or because of other changes).”
The regulation becomes effective on January 15, 2021 and will apply only to proposed critical habitat rulemakings that are published in the Federal Register after that date.
If you have any questions about the regulation, or the Endangered Species Act in general, please contact Robert M. Stonestreet at rstonestreet@babstcalland.com or 681.265.1364.
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Environmental Alert
(by Lisa Bruderly and Tim Bytner)
On December 10, 2020, U.S. EPA issued for public comment its draft guidance (Draft Guidance) regarding the U.S. Supreme Court’s County of Maui “functional equivalent” analysis within the Clean Water Act (CWA) National Pollutant Discharge Elimination System (NPDES) program (85 Fed. Reg. 79489). The comment period closes on January 11, 2021.
In County of Maui v. Hawaii Wildlife Fund, 140 S. Ct. 1462 (2020), the Supreme Court held that a NPDES permit is required in instances when a point source discharge of a pollutant through groundwater to a navigable water is the “functional equivalent” of a direct pollutant discharge from a point source into a navigable water. Babst Calland discussed the Supreme Court’s April 23, 2020 decision, and its far-reaching implications, in its May 11, 2020, PIOGA Press article titled “Potential Clean Water Act Liability Extends to Discharges to Groundwater That Reach Surface Water.”
The Supreme Court offered a non-exclusive list of seven factors to consider on a case-by-case basis:
- Transit time;
- Distance traveled;
- Nature of the material through which the pollutant travels;
- Extent to which the pollutant is diluted or chemically changed as it travels;
- Amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
- Manner by or area in which the pollutant enters the navigable waters; and
- Degree to which the pollution (at that point) has maintained its specific identity.
Emphasis on Threshold Requirements for NPDES Permits
The Draft Guidance stresses that the County of Maui decision did not change the structure of the NPDES permit program, and, at most, only adds another step in determining whether a NPDES permit is required under a limited number of scenarios. In fact, U.S. EPA devotes much of the eight-page Draft Guidance to discussing the following two threshold conditions that trigger NPDES permitting:
- An actual discharge of a pollutant to a water of the United States must occur; and
- The discharge of a pollutant must be from a point source.
The Draft Guidance emphasizes that, unless both of these thresholds are met, the “functional equivalent” analysis is not necessary, concluding that, “[o]nly after it is established that an actual discharge of pollutants from a point source to waters of the United States via groundwater occurs (or will occur) would there be a need to consider the Supreme Court’s ‘functional equivalent’ analysis.”
Consideration of Identified Factors
Although the seven factors in the County of Maui decision were not extensively discussed, the Draft Guidance does briefly address how transit time and distance traveled may affect the “functional equivalent” evaluation. For example, U.S. EPA reaffirmed that permitting authorities cannot assume that all releases “near a water of the United States” are the functional equivalent of a direct discharge to that water. Instead, the Draft Guidance suggests that, where there are indications that a discharge of pollutants through groundwater has reached navigable waters, the permitting authority should consider conducting a technical analysis (e.g., an evaluation of hydraulic conductivity and/or hydraulic gradient) to understand whether there is either an actual discharge of a pollutant to a navigable water or the functional equivalent of such a discharge.
The Draft Guidance recognizes that what happens to the discharged pollutant over time and distance is also “critical” to the “functional equivalent” analysis. For example, the pollutant composition and/or concentration that reaches the navigable water may differ from the composition/concentration of the discharge “through chemical or biological interaction with soils, microbes, plants and their root zone, groundwater, or other pollutants, or simply through physical attenuation or dilution,” such that the discharge through groundwater may not be the functional equivalent of a direct discharge.
Introduction of an Eighth Factor
U.S. EPA introduces an eighth factor to consider in performing a “functional equivalent” analysis: the design and performance of the system or facility from which the pollutant is released. U.S. EPA includes this factor because a facility or system may be designed or operated in a way that significantly changes the composition and/or concentration of pollutants that reach navigable water, thereby affecting whether the pollutant released by the point source is the “functional equivalent” of the pollutant that enters the surface water. For example, a system may be designed to “promote dilution, adsorption or dispersion of the pollutant, thereby affecting the extent to which the pollutant is chemically changed, the amount of pollutant entering the water of the United States relative to the amount of the pollutant that leaves the point source, and the degree to which the pollutant has maintained its specific identity at the point it reaches a water of the United States.” Facilities with a storage or treatment system (e.g., a septic system or settling pond) may be less likely to require a NPDES permit because the function of the system could prevent the functional equivalent of a discharge of pollutants to waters of the United States.
“Functional Equivalent” Test Still Evolving
The “functional equivalent” analysis is factually-dependent and can only be determined on a case-by-case basis. The Draft Guidance does not provide any “hard and fast” rules that the regulated community can rely on to assess whether a point source discharge that enters a navigable water through groundwater would require a NPDES permit. Continued uncertainty and differences in the application of the analysis among the regulatory agencies and/or jurisdictions are nearly certain, especially with the possibility that the incoming Biden administration may revise or rescind the Draft Guidance.
Should you have questions regarding the Draft Guidance or would like the Firm’s assistance in preparing any comments to the Draft Guidance, please contact Lisa Bruderly at (724) 910-1117 or lbruderly@babstcalland.com or Tim Bytner at (412) 394-6404 or tbytner@babstcalland.com.
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Environmental Alert
(by Lisa Bruderly)
On December 5, 2020, the Pennsylvania Environmental Quality Board (EQB) published in the Pennsylvania Bulletin proposed revisions to more than 30 provisions of the dam safety and waterway management regulations under 25 Pa. Code Chapter 105. The public comment period will remain open until February 3, 2021.
The revisions will significantly amend the Pennsylvania Department of Environmental Protection (PADEP) regulations regarding the permitting of obstructions and encroachments of waters of the Commonwealth under Chapter 105. The proposed revisions are expected to create expansive new requirements, almost certainly increasing the time and effort required to complete individual/joint Chapter 105 permit applications. These new requirements, if promulgated, will also likely increase PADEP application review times, particularly at the outset when the agency and the regulated community are becoming familiar with the new requirements. Additionally, revised compensatory mitigation criteria could expand the extent of mitigation required for a project. On the other hand, the addition of six new permit waivers means that certain projects may no longer be required to obtain a Chapter 105 permit.
According to the public comment notice, other revisions include adding or changing 18 definitions, adding antidegradation and cumulative impact subsections to the applicant information requirements, providing a new option for dam owners to satisfy proof of financial responsibility obligations, amending the wetland replacement criteria regarding compensatory mitigation for unavoidable impacts to aquatic resources, and adding new structures and activities that may be exempt from submerged lands licensing charges.
The proposed revisions to Chapter 105 have been anticipated for more than one year. In anticipation, PADEP solicited input from multiple Commonwealth agencies and commissions. It also consulted its Agricultural Advisory Board, Water Resources Advisory Committee and Citizens Advisory Council. The EQB adopted the proposed revisions on July 21, 2020. The last comprehensive revisions to the wetland permitting provisions of Chapter 105 were promulgated in October 1991.
For additional information, please refer to the two articles published by Babst Calland earlier this year: PADEP Proposes Significant Changes to Permitting Process for Stream and Wetland Impacts (Rocky Mountain Mineral Law Foundation Water Law Newsletter, July 14, 2020) and PA Proposes Changes for Permitting Projects with Stream, Wetland Impacts (The Legal Intelligencer, June 11, 2020).
Babst Calland continues to analyze the practical effects of these proposed regulatory revisions and other water law-related developments. Please contact Lisa M. Bruderly at (724) 910-1117 or lbruderly@babstcalland.com if you have questions regarding how these Chapter 105 revisions may affect your operations and/or plans for development.
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Environmental Alert
(by Matt Wood and Colleen Grace Donofrio)
On November 25, 2020, Governor Tom Wolf signed ACT 127 of 2020 (House Bill 1808), which, when effective on January 24, 2021, will amend Pennsylvania’s Solid Waste Management Act (SWMA) to support advanced plastics recycling operations in the Commonwealth by exempting qualifying operations from the waste management requirements. ACT 127 accomplishes this by amending the SWMA to exempt the conversion of plastics at facilities with advanced recycling processes from the waste “processing” and “treatment” requirements under the SWMA and its implementing regulations. These facilities turn hard-to-recycle plastics (e.g., plastic bags, wrappers, PVC 3, LDPE 4, PP 5, PS 6, Other 7) into useable raw materials and products.
Specifically, ACT 127 amends the SWMA to define:
- “Post-use polymers” – post-use plastics from residential, municipal, or commercial sources that would not otherwise be recycled and, when converted using advanced recycling, are not considered waste.
- “Advanced recycling” – a manufacturing process whereby post-use polymers are converted into basic hydrocarbon raw materials, feedstocks, chemicals, liquid fuels, waxes, lubricants, and other related products. Conversion processes include, but are not limited to, pyrolysis, gasification, depolymerization, catalytic cracking, reforming, and hydrogenation.
- “Advanced recycling facility” – receives, separates, stores, and converts post-use polymers into raw materials and products.
Facilities coming under the exclusion are not regulated as waste “processing” or “treatment” facilities but still need to comply with all other applicable environmental requirements (e.g., air, water). Facilities that only perform a portion of these services (e.g., segregation facilities) do not qualify for the exemption from the waste requirements.
ACT 127 is likely to attract new advanced recycling businesses to Pennsylvania and thereby foster job creation, drive investment and innovation, and create regulatory certainty, with the added benefit of recycling more plastics. Conversely, many of the products developed from the conversion process are fossil fuels that may contribute to climate change.
Babst Calland is tracking the SWMA amendments and can assist you in evaluating how these changes may affect your operations and/or plans for development. If you have questions about ACT 127 or any other waste-related matters, please contact Matthew C. Wood in the Pittsburgh office at 412.394.6583 or mwood@babstcalland.com or Colleen Grace Donofrio in the New Jersey office at 856.256.2495 or cdonofrio@babstcalland.com.
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Energy Alert
(by Tim Miller and Katrina Bowers)
The United States Court of Appeals for the Fourth Circuit (Fourth Circuit) has vacated a judgment of the United States District Court for the Northern District of West Virginia that held an oil and gas lease failed to sufficiently indicate the method for calculating post-production costs to be deducted from royalty payments pursuant to West Virginia law. The lease provided that the lessor would bear some part of the post-production costs and contained a detailed list of post-production expenses that were deductible from royalties, but the District Court held the accounting methodology was not sufficiently disclosed. In Young v. Equinor USA Onshore Properties, Inc., No. 19-1334 (4th Cir. Dec. 1, 2020), the Fourth Circuit held that West Virginia law does not require that an oil and gas lease set out an “Einsteinian proof” for calculating post-production costs and, in fact, could be satisfied by a simple formula. In holding that the lease sufficiently indicated the method for calculation in compliance with West Virginia law, the Fourth Circuit explained that the method was to add all the identified, reasonable, and actually incurred post-production costs, deduct them from the lessee’s gross proceeds, and then adjust for the lessor’s share of the total pooled acreage and royalty rate. This opinion also questions the continued viability of the West Virginia Supreme Court’s holding in the Estate of Tawney v. Columbia Nat. Res., LLC, 219 W. Va. 266, 633 S.E.2d 22 (2006) in light of critical comments in a subsequent royalty case decided by the West Virginia Supreme Court in 2017, Leggett v. EQT Prod. Co., 238 W. Va. 264, 800 S.E.2d 850 (2017).
If you have any questions about the Young decision or its impact on the oil and gas industry, please contact Timothy Miller at (681) 265-1361 or tmiller@babstcalland.com, or Katrina Bowers at (681) 205-8955 or kbowers@babstcalland.com.
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Emerging Technologies Perspective
(by Ashleigh Krick)
On November 9, 2020, the Federal Trade Commission (FTC) announced a settlement agreement with Zoom Video Communications, Inc. (Zoom) that arose from alleged violations that Zoom engaged in a series of deceptive and unfair practices that undermined user security.
The FTC found that Zoom made several representations across its platform regarding the strength of its privacy and security measures used to protect users’ personal information that were untrue and provided users with a false sense of security. Specifically, the FTC found that Zoom made multiple statements regarding “end-to-end” and “AES 256-bit” encryption used to secure videoconference communications. However, Zoom did not provide end-to-end encryption for any Zoom meeting conducted outside of Zoom’s “Connecter” product. And, Zoom used a lower level of encryption that did not provide for the same level of security as “AES 256-bit” encryption. The FTC also found that Zoom stored meeting recordings unencrypted and for a longer period than Zoom claimed in its Security Guide. And, Zoom circumvented browser privacy and security safeguards through software updates without notice to users and without establishing replacement safeguards.
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Employment Alert
(by Alexandra Farone)
At the end of October 2020, the Allegheny County Council and Pittsburgh City Council each passed bills entitled “Creating a Respectful and Open World for Natural Hair Acts,” prohibiting hairstyle-based discrimination in employment, housing, and public accommodations. Protective and cultural hair textures and hairstyles, including braids, cornrows, locs, Bantu knots, Afros, and twists, are now protected under these new laws, known as the CROWN Acts. Employers in Allegheny County should review their dress codes and grooming standards to ensure compliance with the CROWN Acts.
The two CROWN Acts are nearly identical. The Allegheny County CROWN Act defines “hairstyle” as “any characteristic, texture, form, or manner of wearing an individual’s hair if such characteristic, texture, form or manner is commonly associated with a particular race, national origin, gender, gender identity or expression, sexual orientation, or religion.”
The Pittsburgh CROWN Act defines “hairstyle” as “hair texture and styles of hair of any length, such as protective or cultural hairstyles, natural hairstyles, and other forms of hair presentation.” Mayor Bill Peduto submitted the CROWN Act for the City Council’s consideration earlier in October, citing the 2019 report of Pittsburgh’s Gender Equity Commission that found inequities and barriers facing people of color—especially women—in the city regarding their hairstyles and natural hair.
Individuals within the City of Pittsburgh seeking to make claims of discrimination based on hairstyle can report the matter to the City’s Commission on Human Relations, the agency tasked with enforcing the CROWN Act. The Commission has released extensive guidance for information regarding the CROWN Act in the employment, housing, and public accommodation sectors.
If you have any questions about the impact of the CROWN Acts, particularly on your existing personnel policies, please contact Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com.
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Babst Calland and our affiliated Alternative Legal Service Provider, Solvaire, announce the availability of PIPES TRACKER™– the most comprehensive and easy-to-use pipeline safety regulatory database search and tracking tool available on the market today.
Now, pipeline operators finally have an easy way to search and track enforcement cases issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA).
With PIPES TRACKER™ you can:
√ Quickly search and identify cases involving a particular citation
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Unlike our competitors, PIPES TRACKER™ is:
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Explore PIPES TRACKER™ – the only tool developed by former PHMSA attorneys who have first-hand knowledge and experience with the PHMSA enforcement process.
Please contact Brianne Kurdock at (202) 774-7016 or bkurdock@babstcalland.com for a customized demonstration of PIPES TRACKER™.
Pipeline Safety Alert
(by Keith Coyle and Varun Shekhar)
On October 14, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice of proposed rulemaking (NPRM) containing potential changes to the federal gas pipeline safety regulations and reporting requirements. Citing PHMSA’s experience administering special permits, as well as the information provided in earlier studies and from various stakeholders, the NPRM proposed to amend the regulations to allow operators to apply integrity management (IM) principles to certain gas transmission line segments that experience class location changes. Comments on the NPRM are due December 14, 2020.
PHMSA relied heavily on the conditions included in class location special permits in developing the proposed rules. The IM alternative would only be available to pipeline segments that experience an increase in population density from a Class 1 location to a Class 3 location, subject to certain eligibility criteria. Operators using the IM alternative would be required to conduct an initial integrity assessment within 24 months of the class location change and apply the IM requirements in 49 C.F.R. Part 192, Subpart O to the affected segment. Operators would also be required to implement additional preventative and mitigative measures for cathodic protection, line markers, depth-of-cover, right-of-way patrolling, leak surveys, and valves.
PHMSA’s decision to propose an IM alternative for managing class location changes is a significant step forward for pipeline safety. The class location regulations are largely based on concepts established decades ago, and the pipeline industry has long advocated for an approach that reflects modern assessment tools and technologies. While the NPRM does not necessarily satisfy all of the industry’s objectives, PHMSA’s proposal sets the stage for the next phase of the rulemaking process and potential development of a final rule.
Background
In July 2018, the Agency published an advance notice of proposed rulemaking (ANPRM) asking for public comment on potential amendments to the class location regulations in 49 C.F.R. Part 192. As PHMSA explained in the ANPRM, Part 192 generally requires operators to respond to class location changes by (1) reducing the maximum allowable operating pressure (MAOP), (2) conducting a new pressure test, or (3) replacing the pipe in the affected segment. The Agency asked whether those requirements should be updated to allow operators to address certain class location changes through the use of IM measures. PHMSA also asked for public comment on several related questions, including whether the availability of the IM alternative should be limited to segments that meet certain eligibility criteria and whether the Agency should incorporate the conditions included in prior class location special permits in the regulations.
What’s in the NPRM?
PHMSA is proposing to establish an IM alternative for pipeline segments that experience a class location change from Class 1 to Class 3. The key features of the proposed IM alternative include:
- Designating the area affected by the class location change as a high consequence area (HCA) and applying the IM program requirements in 49 C.F.R. Part 192, Subpart O to the segment.
- Performing an initial integrity assessment within 24 months of the class location change.
- In performing the initial and subsequent integrity assessments of the affected segment with inline inspection (ILI) tools, inspecting all pipe between the nearest upstream ILI tool launcher and downstream ILI receiver.
- Replacing pipeline segments with discovered cracks exceeding 20% of wall thickness or a predicted failure pressure of less than 100% specified minimum yield strength (SMYS) or less than 1.5 times MAOP.
- Installing remote-control or automatic shutoff valves or upgrading existing mainline block valves downstream and upstream of the affected segment to provide that capability. The valves would need to be able to close within 30 minutes of rupture identification.
- Implementing additional preventive and mitigative measures, including conducting close interval surveys (CIS) every seven years, performing leak surveys on a quarterly basis, conducting monthly right-of-way patrols, and performing cathodic protection test station surveys.
- Complying with more stringent repair criteria, including treating additional anomalies as “immediate” repair conditions and requiring remediation of conditions reaching a 1.39 safety ratio and 40% wall loss (as opposed to a 1.1 safety ratio and 80% wall loss under the current IM regulations).
The Agency is proposing to limit the IM alternative to segments that experience a class location change after the effective date of the final rule, subject to a 60-day notification requirement. PHMSA is also proposing to prohibit the use of the IM alternative for pipeline segments with the following conditions or attributes:
- Bare pipe, wrinkle bends, missing material properties records, certain historically problematic seam types (including DC, LF-ERW, EFW, and lap-welded pipe or pipe with a longitudinal joint factor below 1.0), and body, seam, or girth-weld cracking;
- Pipe with poor external coating, tape wraps, or shrink sleeves;
- Leak or failure history within five miles of the segment;
- Pipe transporting gas that is not of suitable composition and quality for sale to gas distribution customers;
- Pipe operated at MAOP determined under the grandfather clause (49 C.F.R. § 192.619(c)) or under an alternative MAOP (49 C.F.R. § 192.619(d)); and
- Segments that do not have a documented successful eight-hour Subpart J pressure test to at least 1.25 times MAOP.
What’s Not Included in the NPRM?
- The Agency did not propose an IM alternative for Class 2 to Class 4 location changes. PHMSA reasoned that given the high population density associated with Class 4 locations, there would not be adequate, feasible measures that could be used to provide Class 4 locations with an equivalent level of public safety instead of replacing pipe.
- Although raised in industry comments on the ANPRM, PHMSA did not propose any amendments to the so-called “cluster rule”. That rule allows operators to adjust endpoints of a Class 2, 3, or 4 location based on the presence of a “cluster” of buildings intended for human occupancy. Industry commenters had asked the Agency to either clarify or revise the existing clustering methodology. PHMSA declined that request and simply noted that the NPRM contained provisions that would apply to segments covered under the cluster rule.
- PHMSA did not propose to limit the availability of the IM alternative based on pipeline diameter, operating pressure, or potential impact radius (PIR) size. Some of the commenters who responded to the ANPRM asked the Agency to include a more conservative PIR-based limitation, but industry commenters had opposed that provision as unnecessary.
What’s Next?
After the public comment period closes, the Agency will consider the information provided and decide whether to present the NPRM to the Gas Pipeline Advisory Committee (GPAC) for consideration. GPAC is a 15-member federal advisory committee that reviews and provides non-binding recommendations to PHMSA on proposed changes to the gas pipeline safety regulations. Once the GPAC process is complete, the Agency can develop a final rule for consideration by the Office of the Secretary and Office of Management and Budget and eventual publication in the Federal Register. Completion of these steps is not likely to occur until 2021 or later.
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Environmental Alert
(by Kip Power and Varun Shekhar)
Appalachian oil and gas operators were recently reminded that proper handling, management, disposal and transportation of technologically enhanced naturally occurring radioactive material (TENORM) wastes that are generated in connection with shale gas production activities remain the focus of significant regulatory and enforcement efforts.
W.Va. DHHR TENORM Regulation. On the regulatory side, the West Virginia Department of Health and Human Resources, Bureau of Public Health (DHHR), an agency primarily involved with protecting the public and employees from radiological health risks associated with the healthcare industry, recently released proposed revisions to its legislative rule, “Radiological Health,” 64 W. Va. C.S.R. 23 (Proposed Rule). The Proposed Rule includes an entirely new Section 16, entitled “Radiation Safety Requirements for Technologically Enhanced Naturally Occurring Radioactive Material.”
In some respects, DHHR’s proposal follows the recommendations in Part N (2014) of the Conference of Radiation Control Program Directors, Inc.’s (CRCPD) “Suggested State Regulations for Control of Radiation.” However, it also varies from the CRCPD recommendations in ways that may prove troublesome, such as the inclusion of inconsistent levels of risk-based exposure limits (allowing a total effective dose equivalent of 100 mrem/year for a maximally exposed individual in one provision but limiting exposure to 50 mrem/year and 25 mrem/year in other parts). Of equal concern, the Proposed Rule appears to exceed DHHR’s legislative mandate and allows for regulation of activities in a manner that is duplicative of existing rules administered by the West Virginia Department of Environmental Protection.
The West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association of West Virginia recently filed detailed joint comments expressing these and other concerns about this proposed new TENORM regulation. The comment period on the Proposed Rule closed on August 5, 2020. The DHHR will now prepare responses to all comments received and the Proposed Rule (or if deemed necessary, a revised version of the proposal) will be filed with the Secretary of State as the agency’s final recommended rule for consideration by the Legislature’s Rulemaking Review Committee.
Federal Grand Jury Indictment. DHHR’s Proposed Rule comes in the wake of a federal grand jury’s 27-count criminal indictment of Cory David Hoskins, the owner of a Kentucky-based TENORM transport and disposal company, which transported sludge from an oil and gas brine processing plant in West Virginia to Kentucky for solidification and disposal in 2015. In particular, the indictment alleges that Hoskins and his company, Advanced TENORM Services, LLC, made false representations to the brine processing company, Fairmont Brine Processing, LLC, in representing his expertise and its DOT-compliant method of transport and disposal of the TENORM waste material. Rather, Hoskins and his company are alleged to have known that the TENORM material qualified as a Class 7 hazardous material under the DOT’s Hazardous Materials Regulations (HMR), but intentionally did not transport the TENORM material in compliance with the HMR’s requirements for Class 7 materials (including using truck drivers who were not authorized to transport hazardous materials, and using improper placarding, marking, labeling, shipping papers, and manifests.) The United States seeks a penalty of imprisonment of up to 20 years, a fine of not more than $250,000, and forfeiture of more than $127,000.
The indictment and significant sanctions sought demonstrate the importance of understanding the applicable restrictions and regulations on handling, processing, and disposal of TENORM, as well as the need for generators of such wastes to perform appropriate inquiry and due diligence into the disposal contractors they select.
Babst Calland attorneys are prepared to assist your company in navigating these complex regulations. Should your company have questions about DHHR’s Proposed Rule or TENORM regulation in general, please contact Christopher B. (“Kip”) Power at (681) 265-1362 or cpower@babstcalland.com or Varun Shekhar at (202) 975-1390 or vshekhar@babstcalland.com.
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Environmental Alert
(by Robert Stonestreet)
On August 5, 2020, the United States Fish and Wildlife Service (Service) published a proposed regulation in the Federal Register to define the term “habitat” for purposes of the Endangered Species Act (ESA). 85 FR 47333. The ESA already defines the term “critical habitat,” which in general means areas designated as essential to preserve or promote recovery of threatened or endangered species regardless of whether those species are actually present in the area. The term “habitat,” however, is not itself defined in the ESA or existing regulations. The Service has been involved in years of litigation over efforts to designate as “critical habitat” certain areas where the listed species do not presently exist and could not survive under current conditions. This proposed definition of “habitat” follows a ruling by the United States Supreme Court that an area must first qualify as “habitat” for a listed species in order for the area to be designated as “critical habitat.” Weyerhaeuser Co. v. United States Fish and Wildlife Service, 139 S. Ct. 361 (2018).
The Service proposes to define “habitat” as follows:
The physical places that individuals of a species depend upon to carry out one or more life processes. Habitat includes areas with existing attributes that have the capacity to support individuals of the species. (emphasis added)
The Service also requests comments on the following alternative definition of “habitat”:
The physical places that individuals of a species use to carry out one or more life processes. Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist. (emphasis added)
Both of these regulatory definitions would narrow the scope of “critical habitat” designations from how the Service has previously interpreted that term. For example, Weyerhaeuser addressed a rulemaking by the Service that designated as “critical habitat” areas where the listed species at issue once lived, but could not survive under present conditions unless changes were made to certain physical features. The owner of the land designated as “critical habitat” challenged that designation as exceeding the scope of the ESA. Under either of the proposed definitions, areas where a listed species could not presently survive would not seem to qualify as “habitat,” and thus could not be designated as “critical habitat.”
Comments on the proposed regulation are due by September 4, 2020 and may be submitted at www.regulations.gov under Docket No. FWS-HQ-ES-2020-0047.
If you have any questions about the proposed regulation, or the Endangered Species Act in general, please contact Robert M. Stonestreet at rstonestreet@babstcalland.com or 681.265.1364.
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Environmental Alert
(by Donald Bluedorn, Gary Steinbauer and Casey Snyder)
On July 29, 2020, United States Environmental Protection Agency (EPA) Administrator Andrew Wheeler signed a pre-publication version of a final rule (the Rule) revising portions of EPA’s 2015 coal combustion residuals (CCR) landfill and impoundment regulations. The Rule becomes final 30 days after publication in the Federal Register.
In 2015, EPA promulgated regulations implementing national minimum criteria for new and existing CCR landfills and surface impoundments. A federal appellate court partially vacated and remanded portions of these regulations on August 21, 2018 (the court’s decision is covered in more detail in our prior Alert). Following the court’s decision, EPA published proposed rules in the Federal Register on December 2, 2019 and August 14, 2019, to address the court’s remand order and make other changes (the Proposed Rules).
The Rule includes the following key changes for CCR units:
- Reclassifies compacted-soil lined or “clay-lined” surface impoundments to “unlined,” meaning these structures must be retrofitted or closed;
- Establishes a revised date, April 11, 2021, by which CCR units must cease receiving waste and initiate closure or retrofit because: (1) they are unlined or were formerly “clay-lined” CCR surface impoundments; or (2) they failed the minimum depth to aquifer location standard;
- Revises the alternative closure provisions that would grant certain facilities additional time to develop alternative capacity to manage their CCR and non-CCR waste streams;
- Updates the annual groundwater monitoring and corrective action report requirements to make the data easier to understand for public review, including adding an executive summary requirement; and
- Revises the CCR website requirements to ensure that relevant facility information required by the regulations is immediately available to the public.
As compared with the deadlines in the December 2, 2019 proposed rule, the Rule gives the regulated community additional time to use and for seeking a site-specific alternative for initiating closure of certain CCR surface impoundments. The amended deadlines are summarized in Table 1 of the Rule’s preamble and are found below.
- As discussed above, the new deadline to cease receipt of waste and initiate closure for surface impoundments that failed the minimum depth to aquifer location standard and unlined (now including clay-lined) surface impoundments, is April 11, 2021 (previously, August 31, 2020 in the December 2, 2019 proposed rule).
- The closure initiation deadlines under the site-specific alternative due to lack of capacity is no later than October 15, 2023 (the same as the December 2, 2019 proposed rule) and October 15, 2024 for eligible unlined CCR surface impoundments (previously, October 15, 2023 in the December 2, 2019 proposed rule).
- The deadline for site-specific alternative to initiate closure due to permanent cessation of a coal-fired boiler(s) by a date certain is October 17, 2023 for CCR surface impoundments 40 acres or smaller, or October 17, 2028 for surface impoundments larger than 40 acres (no change from the December 2, 2019 proposed rule).
The extended timelines for initiating closure of existing unlined CCR surface impoundments and those that do not meet the minimum depth to aquifer location requirements provide the regulated community some breathing room until April 2021 to prepare for initiating closure. Affected facilities without adequate alternative on- or off-site disposal capacity, however, will need to move quickly to continue using eligible CCR surface impoundments. The Rule imposes a November 30, 2020 deadline to submit extensive documentation for an alternative closure demonstration.
Legal challenges to the Rule are inevitable. The Sierra Club has already vowed to challenge the Rule, and other environmental groups may follow suit. State attorneys general, industry, or others could join the litigation fray. All eyes will be on the courts to see whether litigation impacts the Rule’s deadlines. In the meantime, facilities with affected CCR surface impoundments now know when they need to initiate closure or seek a site-specific alternative closure initiation deadline.
If you have any questions about the Rule and its implications, please contact Donald C. Bluedorn II at (412) 394-5450 or dbluedorn@babstcalland.com, Gary E. Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, or Casey J. Snyder at (412) 394-5438 or csnyder@babstcalland.com.
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Pipeline Safety Alert
(by James Curry and Boyd Stephenson)
On July 24, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Final Rule (Rule) in the Federal Register allowing railroads to transport liquefied natural gas (LNG) in modified DOT-113C120W (DOT-113) railcars designed to hold cryogenic flammable liquids. The rule was prompted by a 2017 Association of American Railroads (AAR) rulemaking petition to allow LNG transport by rail and Executive Order 13868, directing PHMSA to conduct a rulemaking allowing LNG to travel by rail tank car. In developing the Rule, PHMSA relied on safety data from other cryogenic flammable liquid shipments and from an existing special permit that already allows limited transportation of LNG by rail to demonstrate LNG could safely be transported. The Rule follows PHMSA’s October 24, 2019, Notice of Proposed Rulemaking (NPRM). It takes effect on August 24, 2020, and PHMSA is allowing immediate voluntary compliance.
The rulemaking attracted significant attention from industry eager to meet increased natural gas demand, safety organizations such as the National Transportation Safety Board that raised concerns about transporting LNG, and from environmental groups. Numerous media reports on the Executive Order also increased public attention. Over 450 individuals and organizations submitted comments on the NPRM. In the NPRM and in the Rule, PHMSA noted that it lacks data about how many LNG rail shipments are likely to occur under the new rules. Currently, cryogenic flammable gases are transported rarely by railcar, but most commenters expect LNG rail shipments to quickly outstrip shipments of other cryogenic flammable gases.
Previously, LNG could only be transported by rail tank car with a special permit, or in smaller, portable tanks loaded onto a railcar. However, other cryogenic liquids that that pose risks similar to LNG, such as ethylene and hydrogen, can be transported on DOT-113 railcars under the current Hazardous Materials Regulations. In the NPRM, PHMSA proposed allowing railroads to transport LNG on DOT-113 rail tank cars, and sought comment on additional design requirements and other safety measures the Agency should consider. In response to public comments, the Rule allows LNG to be transported in DOT-113 tank cars that meet additional design requirements, indicated by adding a “9” at the end of the DOT-113C120W Standard name. This will differentiate LNG railcars from existing DOT-113 railcars. The Rule also requires railroads and entities offering LNG to implement additional operational controls over LNG shipments.
What Did PHMSA Change in the Final Rule?
PHMSA is allowing LNG shipment by rail tank car, subject to additional design requirements for DOT-113 railcars:
- LNG may be transported by rail in DOT-113 railcars, provided that they meet the following additional design requirements:
- The outer shell must be made of AAR TC 128, Grade B normalized steel plate, previously required only for railcars transporting hazmat that presents poisonous inhalation hazards and toxic inhalation hazards.
- The outer steel jacket thickness is increased from 7/16 inches to 9/16 inches and the outer jacket head thickness is increased from1/2 inch to 9/16 inches.
- PHMSA is designating this enhanced standard as DOT-113C120W9 and requiring railcars that meet it to be marked to distinguish them from DOT-113 railcars designed to transport other cryogenic flammable liquids.
- Railcars transporting LNG must meet the following railcar design and loading requirements:
- A start-to-discharge pressure valve setting of 75 psig
- A design service temperature of -260° F
- A maximum pressure when offered for transportation of 15 psig
- A filling density of 37.3% by weight, increased from 32.5% in the NPRM
- PHMSA is allowing DOT-113 railcars carrying LNG to be loaded up to a gross weight of 286,000 lbs., with approval from the Federal Railroad Administration (FRA), because an unladen railcar meeting the enhanced DOT-113 standard will weigh at least 138,050 lbs.
The Final Rule also imposes additional operational controls on LNG shippers and railroads:
- Shippers must remotely track and monitor railcars transporting LNG for pressure and location and inform the railroad if tank pressure rise exceeds 2 psig in a 24-hour period. Shippers must also notify the FRA if an LNG railcar does not reach its destination within 20 days.
- In the NPRM, PHMSA considered incorporating two AAR operating standards for hazmat trains by reference, OT-55 and HM-1. PHMSA chose not to, so that railroads would have the option to adopt operational practices that exceed those standards. FRA tracks railroad voluntary compliance with these standards, and PHMSA indicated it would reverse course if FRA finds railroads are not operating in accordance with these standards or exceeding them.
- Before a railroad may transport LNG, it must perform a routing analysis considering 27 safety and security risk factors listed in 49 C.F.R. Part 172, Appendix D. After the routing analysis is complete, railroads must comply with the safety and security plan requirements and commodity flow data gathering requirements currently required for High-Hazard Flammable Trains (HHFT).
- A train with a block of 20 or more LNG tank cars, or 35 or more total LNG tank cars, must be equipped with an end of train device or a distributed power system to facilitate faster breaking, as is required for HHFTs.
Commentary
- The Hazardous Materials Regulations prescribe requirements for separation between railcars carrying hazmat based on the type of hazmat carried, whether a car is occupied by a crewperson, the distance from the locomotive or other power unit, and other factors. Several commenters proposed that PHMSA should adopt more stringent railcar separation requirements for LNG shipments. PHMSA declined to do so, and cited several ongoing research projects into hazardous materials railcar separation safety. PHMSA indicated it might impose more restrictive separation requirements for LNG if that research demonstrates a safety benefit in doing so. In the Rule, PHMSA also noted that it lacks an effective method for estimating the number of LNG railcars that may be loaded onto a train. PHMSA stated that the number of railcars could also affect potential future separation requirement changes.
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Emerging Technologies in a Time of Pandemic
(by Ben Clapp, Julie Domike, Gina Falaschi, Justine Kasznica and Boyd Stephenson)
COVID-19 restrictions are both easing and tightening in cities around the country, and a nationwide return to work seems further off than it did a month ago. But it is never too early to plan ahead. As the United States looks to safely return to work, offices are preparing for a radical shift, accelerating a need for emerging technologies to address challenges in the workplace. Separation, space, health, and cleanliness concerns are paramount, in an abrupt about-face from the pre-virus trends towards flexible workspaces and open floor plans. This has created a host of novel issues for business administrators, who are leveraging technology to keep work environments safe while maintaining a semblance of business normalcy in these unprecedented times.
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