Renewables Law Blog
(By Moore Capito and Robert Stonestreet)
The West Virginia Legislature has passed a bill that will make it easier for retail electric customers to establish on-site solar energy facilities. Sponsored by Babst Calland Shareholder and House Judiciary Chairman Moore Capito, House Bill 3310 states that solar energy facilities designed to power only the premises where they are located are exempt from the jurisdiction of the West Virginia Public Service Commission under certain conditions. This means that the PSC is not involved in regulating the rates and other aspects of qualifying solar facilities. To be exempt, power generated from such a facility must be subject to a “power purchase agreement” with the retail electric customer. A PPA generally governs the design, permitting, financing, and installation of a solar facility at a retail electric customer’s location by a solar energy developer. Under a PPA, a retail customer purchases the power generated by the facility at an agreed upon rate. In addition to receiving revenue generated from the energy produced, the developer is also eligible for renewable energy tax credits. The bill is intended to promote solar installations at residences, small businesses, and industrial sites by allowing third-party developers to design and finance the installation of solar panels and then sell the electricity generated to the consumer.
To be exempt from PSC jurisdiction, an on-site solar facility must be “located on and designed to meet only the electrical needs of the premises of a retail electric customer” and be designed not to exceed certain generation limits: 25 kilowatts for residential customers; 500 kilowatts for commercial customers; and 2,000 kilowatts for industrial customers. The legislation also establishes a cap on the aggregate amount of exempt on-site solar energy generation within West Virginia. The total of all solar PPAs and net metering arrangements cannot exceed 3% of an electric utility’s aggregate customer peak demand in the state during the previous year. Under a net metering arrangement, a retail customer who generates more power through an on-site solar facility than the customer uses will receive a credit for the excess power that is sent out to the grid rather than consumed.
Before entering into a PPA for an on-site solar facility, a retail customer must notify the electric utility. If the electric utility does not notify the customer within 30 days that a cap has already been reached, the customer may proceed with the project.
If you have any questions about House Bill 3310 or solar development in West Virginia, please contact Robert M. Stonestreet (681.265.2117; rstonestreet@babstcalland.com) or Moore Capito (681.205.8953; mcapito@babstcalland.com).
Tags: House Bill 3310, retail electric, solar energy, West Virginia Public Service Commission
The Legal Intelligencer
(by Alana Fortna)
Introduction
The great Bob Dylan sang, “may you have a strong foundation when the winds of changes shift.” His song may have been released nearly 50 years ago, but his lyrics ring true today in many facets of life, even environmental law and policy. President Joe Biden stayed true to his word on combatting climate change when he signed an executive order before the dust settled on his luggage in the White House. In this article, I discuss these policy changes and my opinions on what this could mean for Superfund sites.
Executive Order on Tackling the Climate Crisis at Home and Abroad
On Jan. 27, Biden signed an executive order regarding climate change and related environmental justice concerns. The executive order speaks to taking a “governmentwide” approach to the climate crisis.
Section 202 establishes the White House Office of Domestic Climate Policy headed by a National Climate Advisor with a National Climate Task Force consisting of Executive Branch agency heads. Pursuant to Section 211, within 120 days of the order, each federal agency must submit a draft action plan to the task force describing efforts to bolster adaption and increase resilience to climate change. To ensure follow-through, agencies must submit annual progress reports on their implementation efforts.
Section 216 provides that within 90 days of the order, the Secretary of the Interior must submit a report to the task force recommending steps to take, working with state, local, Tribal, and territorial governments, agricultural and forest landowners, fishermen, and other stakeholders, to conserve at least 30% of our lands and waters by 2030. The executive order also calls for the Secretary of Commerce to “collect input from fishermen, regional ocean councils, fishery management councils, scientists, and other stakeholders on how to make fisheries and protected resources more resilient to climate change, including changes in management and conservation measures …” This 30% conservation goal could hasten the EPA’s expectations for remedial action at Superfund sites situated in and around stakeholder communities, such as Tribal lands that rely on fish and wildlife for sustenance.
Section 219 calls on agencies to “make achieving environmental justice part of their missions by developing programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged communities …” Additionally, in Section 222, the executive order outlines key responsibilities for the EPA: strengthen enforcement of environmental violations with disproportionate impact on underserved communities and create a community notification program to monitor and provide real-time data to the public on current environmental pollution in places with the most significant exposure.
- Potential Impacts of Biden’s New Policies on Superfund Sites
The discussion of climate change and environmental justice in the context of Superfund is not novel. In 2011, the EPA issued its first policy statements on climate change adaptation and coordination with Tribal governments. The new Biden policies mean a heightened focus on Superfund sites with potential impacts during: site listing, remedial activity, the five-year review and litigation.
- Potential Impacts of Biden Policies on Site Listing
The EPA uses the hazard ranking system (HRS) to assess a site for inclusion on the National Priorities List (NPL). The HRS focuses on risk and determines a score based on four pathways. HRS guidance manual (HRS manual), OSWER Directive 9345.1-07 (Nov. 1992), at p. 1. The four pathways are: ground water migration, surface water migration, soil exposure and subsurface intrusion; and air migration. The risk factors are grouped into three categories: likelihood of release, waste characteristics, and targets affected by the release. HRS Manual, at p. 2. “Targets consist of people, sensitive environments, fisheries, and resources that potentially can be affected by a site.” HRS Manual, at p. 24. The “targets factor” is the only category with no maximum value.
The executive order policies could bleed into the EPA’s scoring process under the HRS. For example, one of the pathways considers “subsurface intrusion” from contaminated groundwater or saturated soil below buildings. Even if vapor intrusion impacts are not documented, the EPA must evaluate the potential for future exposure. See Technical Support Document for U.S. EPA’s Final Rule: Addition of a Subsurface Intrusion Component to the Hazard Ranking System (Nov. 2016), at p. 20. The EPA considers the distance between the highest known point of subsurface contamination and the lowest point of a building. Some sites with contaminated groundwater may be in areas impacted by tidal flow or recharge from rivers. The depth to water table may be decreasing as the groundwater level is impacted by extreme storm events and tidal flows. Depending on the time of year and the depth to groundwater, the question of “potential for future exposure” could become more complicated and problematic.
Additionally, the EPA considers the likelihood of a release of contaminants. Major storm events in certain regions of the country influence storm surges and flows in rivers, particularly those that have tidal influence. This can impact sediment distribution in a contaminated river, which can result in the release or re-suspension of contaminated sediment. Rising sea water levels and corresponding influence on rivers could also impact source control measures and lead to recontamination. Also, any contaminated sites located in and around Tribal territories or waterbodies with critical fisheries used for sustenance fishing may face heightened scrutiny under the “targets factor,” which has no maximum value.
- Potential Impacts of Biden Policies on Ongoing Remedial Activity and Five-Year Review
Pursuant to CERCLA Section 121, a remedial action must: be protective of human health and the environment, comply with applicable or relevant and appropriate requirements of federal and state law, be cost-effective, utilize permanent solutions and alternative treatment technologies or resource recovery technologies to the maximum extent practicable, and be preferential to treatment as a principal element. See 42 U.S.C. Section 9621(a) and (b); EPA Guide to Selecting Superfund Remedial Actions, OSWER Directive 9355.0-27FS (April 1990). The National Contingency Plan (NCP) defines nine criteria to compare remedial alternatives and select a remedy that satisfies these requirements. At least three of the NCP criteria could be impacted by the executive order: long-term effectiveness and permanence of the remedy, reduction of toxicity, mobility or volume, and community acceptance.
We could see climate change impact the agency’s consideration of the long-term effectiveness and permanence of the remedy. The agency may be focused on extreme weather events in a region and may want the party performing the remedial design to evaluate this and consider whether any modifications/additions are needed.
The reduction of toxicity, mobility or volume through treatment criterion focuses on the anticipated performance of the treatment technologies. If a site is adjacent to a river that has become more prone to flooding, then a treatment technology may need to account for future transition into a veritable floodplain. If a site involves contaminated groundwater, and that groundwater is influenced by a tidal river, does this need to be accounted for differently under the backdrop of climate change? Does investigation and modeling of groundwater need to account for potential future changes in groundwater flow and levels from climate change? It is possible these difficult questions could become a more regular part of the remedial alternative analysis.
As to community acceptance of a remedial alternative, the executive order focuses on environmental justice and calls for more active engagement with state, local and Tribal government stakeholders. While public notice/comment has always played a role in the Superfund program, the executive order heightens this involvement. It is possible we will see updated policies and regulations making participation by identified stakeholders more deliberate and occur earlier in the process. The adage of “too many cooks in the kitchen” comes to mind here.
Under CERCLA Section 121(c), remedial actions are subject to review every five years from initiation of the remedial action. If the EPA determines that further action is necessary during the five-year review, then it will require such action. Given this mandatory review process, climate change and its potential impacts on the permanence and effectiveness of a selected remedy is a possible concern that is not easily managed.
- Potential Impacts of Biden Policies on Litigation
The executive order calls on the EPA to: strengthen enforcement of environmental violations with a disproportionate impact on underserved communities and create a community notification program to monitor and provide real-time data to the public on current environmental pollution in places with the most significant exposure. Since many contaminated sites are situated in or adjacent to underserved communities or Tribal lands, it is possible that the EPA will increase its information gathering and inspection efforts under CERCLA Section 104(e), as well as its notification of liability. Because the executive order boasts a sense of urgency and calls for heightened scrutiny in these areas, this could also result in an uptick in enforcement action by the EPA at contaminated sites. If potentially responsible parties (PRPs) are not signing up fast enough as work parties for remedial investigation or design, the EPA may be quicker on its draw with its enforcement options.
Additionally, entities tied to contaminated sites could see an uptick in private litigation, including cost recovery actions, toxic tort cases, and citizen suits. It is not just a matter of increased regulation and oversight of contaminated sites and industrial operations. It is also a matter of increased litigation that is borne out of these policy changes. The executive order calls on the EPA to establish a more robust and timely notification system regarding environmental pollution. Such heightened transparency regarding existing pollution and exposure to such pollution could lead to increased litigation alleging health effects, property damage and diminution in property value.
We could also see an increase in “private attorney general” actions in the form of citizen suits under various federal environmental statutes. There is public interest in climate change impacts and environmental justice. Such litigation may arise despite what is already being done to address the existing pollution and that remedial measures take time to implement. Regardless of whether a citizen suit grounded in climate change has teeth, increased litigation is costly and disruptive for PRPs trying to remediate a contaminated site and industrial facilities trying to operate within the confines of the applicable regulatory regime and their existing permits.
For the full article, click here.
Reprinted with permission from the April 8, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
Renewables Law Blog
(By Varun Shekhar)
On March 21, 2021, Pennsylvania Governor Tom Wolf announced the Pennsylvania “Project to Utilize Light and Solar Energy” (“PULSE”), a renewable energy project consisting of seven new solar farms totaling 191 MW in capacity to be constructed in various counties across the Commonwealth by 2023. Upon completion, the PULSE Project is expected to provide upwards of 360,000 MWh of electricity each year, estimated to be enough to supply nearly half of the state government’s annual electricity consumption. Billed as the largest solar commitment by any government in the US, 16 Commonwealth agencies are expected to use electricity generated from the PULSE Project, including, among others, the Pennsylvania Departments of Environmental Protection, Conservation and Natural Resources, Transportation, and Health, as well as the Game and Fish & Boat Commissions.
Part of Governor Wolf’s “GreenGov” initiative, the PULSE Project is a public-private partnership between the Commonwealth, Lightsource BP, and Constellation. Under the project, Lightsource BP will finance, construct, own and operate the solar farms, which will be built in Columbia, Juniata, Montour, Northumberland, Snyder, and York Counties. Pursuant to a Power Purchase Agreement, Constellation, an electricity supplier, will purchase electricity generated from the solar farms and distribute it to the Commonwealth’s participating agencies under a 15-year fixed-price supply agreement. Expected benefits of the PULSE Project include an estimated reduction of 157,000 metric tons of carbon dioxide emissions each year and creation of over 400 jobs.
Tags: GreenGov Initiative, Project PULSE, renewable energy, solar energy
Renewables Law Blog
(By Ashleigh Krick)
On March 25, 2021, the Department of Energy (DOE) announced plans to reduce the cost of solar energy technologies by 60% over the next 10 years by setting new cost targets and establishing funding opportunities. The DOE accelerated its cost target for utility-scale solar by establishing a new goal of driving down the current cost of 4.6 cents per kilowatt-hour (kWh) to 3 cents/kWh by 2025 and 2 cents/kWh by 2030. The DOE also announced $128 million in funding and initiatives aimed at lowering costs, improving performance, and speeding up the deployment of solar energy. Specifically, the DOE announced funding for advancing solar photovoltaic (PV) materials and a prize competition for perovskite technologies, increasing the lifetime of silicon-based PV systems, and supporting several concentrating solar-thermal power projects. The DOE stated that in order to meet the Biden Administration’s goal of 100% clean electricity by 2035, lowering the cost of solar energy technologies is needed to accelerate investment and deployment. More information about DOE’s funding opportunities can be found here: https://www.energy.gov/eere/solar/funding-opportunities.
Tags: Department of Energy, DOE, energy, solar
The Legal Intelligencer
(by Alex Farone)
As outside counsel for a company, a concern is always whether the corporation will be named as a respondent or defendant in litigation. When those situations do arise, counsel should pay particular attention to the nuances of the attorney-client privilege when beginning an investigation. Many attorneys make assumptions regarding the applicability of the attorney-client privilege when dealing with the company’s employees. Those assumptions, in certain circumstances, can result in discoverable communications. Because in-house counsel serve a dual role of providing legal advice as well as business advice, a more careful analysis must be given to their communications with employees. Therefore, this article focuses solely on typical communications to and from outside counsel when performing an investigation.
In Pennsylvania, the attorney-client privilege operates as a two-way street to protect client-to-attorney and attorney-to-client communications made for the purpose of obtaining or providing legal advice. When the client is a company, do all employees count as an extension of the client such that conversations with them would be privileged? In most situations, they do not.
For a corporate client, the attorney-client privilege extends to communications between the attorney and the corporation’s agents or employees authorized to act on the corporation’s behalf. This is typically interpreted as directors, officers and management employees.
Until the U.S. Supreme Court’s decision in Upjohn v. United States, 449 U.S. 383 (1981), some courts used to adhere to the so-called “control group test,” a similar but restricted version of the “authorized to act” standard used in Pennsylvania. The control group test only applied the privilege to communications made to officers or agents of the corporation responsible for directing the corporation’s actions in response to legal advice. However, the control group test overlooks the fact that the privilege is also meant to protect information given to the attorney. In rejecting the control group test, the Supreme Court created the rule that guides attorneys’ interviews with lower-level employees.
Upjohn recognized that, in many instances, an attorney cannot obtain the information it needs to defend a suit or make a strategy recommendation without speaking to lower-level, nonmanagement, rank and file employees. Aside from a termination or disciplinary issue, these “boots on the ground” employees often have first-hand knowledge of key information about a claim or defense. But, are these conversations privileged? It depends.
Pennsylvania courts have adopted this Upjohn rationale: If the employee possesses facts that the attorney needs in order to advise the corporate client, the communication may be privileged. Often the lower level employees alone will have information vital to counsel’s advice to the corporation. In order for this privilege to apply, the information relayed in the communication must be information known to the employee by virtue of his position or within the scope of his employment. For example, interviewing a new employee whose former employer accuses the corporation of tortious interference involving a restrictive covenant would be a privileged communication. On the other hand, if a corporation is faced with a toxic tort claim for water pollution affecting a community and an employee happens to live in that community, the privilege protection would not apply if the attorney questions the employee on his personal experience with his water because this is not information related to the scope of his employment.
The safest course of action to preserve the attorney-client privilege in conversations with a lower-level employee is to begin the communication with an “Upjohn warning”—a distant step-cousin to the Miranda warnings. An Upjohn warning should state that the attorney represents the corporation and not the interviewed employee, inform them that the corporation holds the attorney-client privilege, confirm that the conversation is occurring because the employee has information not generally available elsewhere and that the attorney needs to advise the corporate client, and instruct the employee not to share the substance of the communication except to other employees on a need-to-know basis. Though no Pennsylvania court has officially held that Upjohn warnings are always required to preserve the attorney-client privilege in these situations, it has been referenced in dicta in multiple Pennsylvania cases over the last five years. Therefore, it would be in the attorney’s best interest to give the Upjohn warnings out of an abundance of caution—if nothing else, it sets clear expectations for the interviewed employee and will allow them to understand the scope and purpose of their interaction with counsel.
For the full article, click here.
Reprinted with permission from the March 25, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
Renewables Law Blog
(By Ben Clapp)
A bipartisan group of federal lawmakers recently introduced a bill aimed at jumpstarting growth in the energy storage sector. If enacted, the Energy Storage Tax Incentive and Deployment Act of 2021 would broaden the investment tax credit program, which is widely credited with stimulating considerable growth in the solar sector, to include standalone energy storage projects. The tax credit is currently only available for energy storage projects that are charged directly from other clean energy projects that qualify for the credit, such as solar. In contrast, the proposed legislation would revise the investment tax credit so that it covers residential battery systems as well as large commercial and utility-scale storage projects, including batteries, pumped hydropower, hydrogen storage, thermal energy storage, and regenerative fuel cells, regardless of whether they are coupled with a qualifying solar project. Expanding the credit to standalone projects is intended to drive investment to storage projects with greater charging flexibility, potentially allowing storage systems to access a larger piece of the energy market.
The large-scale deployment of domestic energy storage systems is largely viewed as critical to the continued growth of the renewables sector, as well as a key component of achieving the nation’s energy reliability and resiliency goals. While it may be unrealistic to expect that extension of the tax credit to energy storage projects would result in the stratospheric levels of growth enjoyed by the solar industry over the past decade, the tax credit’s proven track record for stimulating renewables development has energy storage advocates hopeful that the proposed legislation would drive significant investment in the sector, resulting in a meaningful increase in energy storage deployment.
Tags: energy storage, Energy Storage Tax Incentive and Deployment Act of 2021, tax credits
Renewables Law Blog
(By Christopher Hall)
The Department of Energy (DOE) recently announced that it will be awarding up to $20Million to support research and development of emerging flow battery storage technology. The DOE’s announcement can be found here. Battery storage has been identified by the DOE as an integral piece of the puzzle to modernizing our grid and enabling the deployment of additional renewable energy resources. Regarding flow battery technology, the DOE stated that “while lithium-ion batteries are commonly used in electric vehicles and portable devices for various applications, flow batteries are particularly well-suited for grid storage needs.” The DOE aims to incentivize development of scalable and cost-effective “mid-sized” flow battery systems (between 10 to 100kWh). This funding opportunity follows several other recent announcements supporting the growth of energy storage, including the DOE’s Energy Storage Grand Challenge, a Department-wide program to accelerate the development, commercialization, and utilization of next-generation energy storage technologies and sustain American global leadership in energy storage, and a recently proposed Federal Bill to introduce a federal tax credit for energy storage, similar to those available to solar and wind projects.
Tags: battery storage, Department of Energy, DOE, Energy Storage Grand Challenge
The Legal Intelligencer
(by Dan Hido)
On Feb. 27, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published the final revision to the technical guidance document (TGD) No. 562-4180-306, titled “Civil Penalty Assessments for Coal Mining Operations,” 51 Pa.B. 1083 (Feb. 27, 2021). The previous version of the TGD was last updated in 2005. The PADEP first published draft revisions to the TGD on May 4, 2019, and subsequently re-published an updated draft on Oct. 3, 2020 because substantial changes were made in response to public comments.
The TGD sets the procedure and formula that the PADEP will generally follow in assessing penalties against coal mining operators for violations of Pennsylvania’s coal mining laws and the Clean Streams Law. The revised TGD makes several significant changes to how such penalties are calculated, including new, separate procedures for assessing penalties for water quality violations and revisions to the calculation of penalties for all other violations based on the seriousness of the violation and the culpability of the operator.
New Procedures for Water Quality Violations
The most significant change to the TGD is the addition of new procedures for assessing civil penalties for water quality violations under Section 605 of the Clean Streams Law, 35 P.S. Section 691.605(b). Such violations include violations of NPDES permit effluent limitations, and under the TGD each parameter exceeding an effluent limitation may constitute a separate violation. These procedures generally follow the 2005 TGD’s existing formula applicable to all violations, which is based on seriousness of the violation, culpability of the operator, costs to the commonwealth, savings to the violator, violation history and speed of compliance. However, the application of these factors will evaluate components specifically relating to water quality, such impacts to water resources or degree of exceedance of effluent limitations.
For instance, the seriousness component is based on several sub-components. First, the magnitude of the violation will be calculated in one of two ways. If physical evidence is available, such as impacts to fish or invertebrate communities, sediment deposition, impacts to water use or damage to land or water resources, the magnitude of the violation will be determined using Method 1. If such evidence is not available, the magnitude of the violation will be determined using Method 2, which is based on the degree of exceedance of applicable effluent limitations. There are five levels of magnitude under both Method 1 and Method 2: severe, significant, moderate, low or de minimis. The TGD provides criteria for the types of physical impacts or degree of exceedance of effluent limitations that correspond to each level of magnitude.
The second sub-component of the seriousness component, the resource component, evaluates the impact to aquatic life and recreation. In applying this factor the PADEP will first examine the use of the impacted waterbody. The TGD includes five categories of use: special protection, high use, moderate use, low use and all other uses. The PADEP will then examine the level of impact on aquatic life, water supply and recreation. Finally, the PADEP will determine the extent of the impacts.
The TGD includes a matrix that provide a base penalty amount based on the results of the magnitude and resource sub-components of the seriousness component. This base penalty amount may then be further adjusted based on the duration of the violation and the operator’s failure to report the violation.
The savings to the violator component may include costs associated with treating water to meet effluent limitations and the cost to construct and maintain treatment systems. The remaining factors (culpability, speed of compliance, costs to the commonwealth and history of violations) will be calculated using the same procedures applicable to all other violations discussed below.
Updated Procedures for All Other Violations
For violations of Pennsylvania’s coal mining laws other than those related to water quality, the TGD provides guidance to the PADEP in assessing civil penalties based on the factors in 25 Pa. Code Section 86.194. The revised TGD makes several changes to the application of these factors from the 2005 TGD, the biggest being with respect to assessment of penalties for high seriousness violations under the seriousness component. The TGD now permits the PADEP to assess penalties up to the statutory maximum for high seriousness violations. Previously, penalties for high seriousness violations were assessed only up to $2,000, and only violations meeting “extraordinary circumstances” criteria warranted a penalty up to the statutory maximum.
The revised TGD also creates a wider range of operator culpability. For instance, the revised culpability component includes willful, reckless, negligent and no culpability categories. In contrast, the 2005 TGD only included negligent and reckless categories. Under the 2005 TGD, penalties for negligent violations could be assessed up to $1,200, and penalties for reckless violations could be assessed up to the statutory maximum. Under the revised TGD, the maximum penalty of $1,200 for negligent violations remains unchanged; however, penalties for reckless violations will now only be assessed up to $1,500, rather than the statutory maximum. The criteria for what constitutes a reckless violation would also be revised. For example, violations pertaining to situations previously identified in inspection reports or notices of violations, which were previously classified as negligent violations under the 2005 TGD, are now classified as reckless violations.
Under the new willfulness criteria, a penalty up to the statutory maximum may be assessed if “the operator made a conscious choice to engage in certain conduct with knowledge that a violation will result.” Finally, the TGD creates a new no culpability category, under which no penalty assessment is warranted under the culpability component where the operator’s conduct was consistent with the standard of conduct to foresee and prevent the violation that a reasonable person would observe under the circumstances.
No significant changes were made from the 2005 TGD to the other penalty components, which include speed of compliance, costs to the commonwealth, savings to the violator and history of violations. The final revised TGD is available at http://www.depgreenport.state.pa.us/elibrary/GetFolder?FolderID=4595.
For the full article, click here.
Reprinted with permission from the March 18, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
RMMLF Mineral Law Newsletter
(by Joe Reinhart, Sean McGovern and Casey Snyder)
On November 18, 2020, Senate Bill 790 (SB 790), the Conventional Oil and Gas Wells Act, sponsored by Sen. Scarnati (R-Jefferson), was presented to Governor Tom Wolf for signature. Governor Wolf vetoed the bill on November 25, 2020. See Governor Wolf’s Veto Letter for SB 790 (Nov. 25, 2020). SB 790 would have set a legislative framework for regulations for the conventional oil and gas industry in Pennsylvania. See Memorandum from Sen. Scarnati to All Senate Members, “Conventional Oil and Gas Wells Act” (June 6, 2019). In his veto letter, Governor Wolf acknowledged the difficulty in regulating conventional and unconventional operations under Pennsylvania’s current program, which was updated by law in 2012 and by regulations for the unconventional industry in 2016. These updates were tailored to the new unconventional industry developing in the state, and placed new requirements on the conventional industry. Proposed regulations for the conventional industry were not promulgated in 2016 after the state legislature passed legislation requiring rules for the conventional industry to be promulgated separately from the unconventional rulemaking. See Pennsylvania Grade Crude Development Act, 58 Pa. Stat. §§ 1201–1208.
Governor Wolf cited several reasons for vetoing the bill and why he believed it posed a risk to the public health and environment. He characterized the bill as including “roll backs,” stating that protections for drinking water, public resources, spills, and erosion and sediment control are weakened for the conventional industry, which he alleged violates regulations at a rate “three to four times” higher than the unconventional industry. Additionally, he stated that several parts of the bill were “likely” unconstitutional under the Pennsylvania Constitution.
Introduced in June 2019, SB 790 would create environmental rules and reporting requirements specific to the conventional oil and gas industry, which differs in many respects from the size and operations of the unconventional industry. While SB 790 was not enacted into law, the Pennsylvania Department of Environmental Protection (PADEP) is working on a new set of regulations for the conventional industry, independent of SB 790. As mentioned in PADEP’s “2019 Oil and Gas Annual Report,” it seeks to promulgate new regulations in several rulemaking packages amending the conventional regulations at 25 Pa. Code ch. 78. PADEP and the Pennsylvania Grade Crude Development Advisory Council (CDAC) had been working on legislative language to address the regulation of conventional well sites, and created a scoping document in 2018 on the potential for agreement on legislative or regulatory language. Over the past two years, discussions centered mostly on legislative language. However, PADEP developed the forthcoming rulemaking packages after it determined that the legislative discussions had not resulted in viable legislative language. PADEP recently discussed the draft conventional oil and gas rulemaking packages amending waste management and environmental protection performance standards with the Oil and Gas Technical Advisory Board at its September 17, 2020, meeting. See PADEP Regulatory Update (Oct. 7, 2020). The CDAC reviewed these draft rulemaking packages at its December 3, 2020, meeting, and will be generating comments on the draft rulemakings. Pennsylvania Grade Crude Oil Coalition president David Clark criticized moving forward with the proposed rulemaking packages so quickly. See Pa. Indep. Oil & Gas Ass’n, “DEP Advancing New Rules for Conventional Wells After Veto of Industry-Backed Bill,” link here. Several other conventional industry representatives pointed out issues with the draft rulemaking packages in public comments at the December 3 CDAC meeting. See CDAC Public Comments (Dec. 3, 2020), link here. CDAC declined to hold another meeting in February 2021 to speed up review of the draft rulemakings, and will hold its next meeting in April 2021. See CDAC Agenda (Dec. 3, 2020), link here.
The Governor’s regulatory agenda from October 3, 2020, provides the latest update on the rulemaking time frame, estimating that the proposed rules could be presented to the Environmental Hearing Board in the second quarter of 2021. See 50 Pa. Bull. 5568 (Oct. 3, 2020).
Governor Wolf Approves Bill on Pipeline Emergency Response Plans
On November 25, 2020, Governor Tom Wolf signed into law House Bill 2293 (HB 2293), sponsored by Rep. Quinn (R-Delaware). See 66 Pa. Cons. Stat. Ann. § 1512 (effective Jan. 25, 2021). The new law requires public utilities operating pipelines to provide emergency response plans upon written request to the Secretary of the Pennsylvania Public Utility Commission, the Pennsylvania Emergency Management Agency, and the emergency management director for each county where the pipeline runs through a densely populated area. The law tasks the Public Utility Commission with enforcing its requirements, and violations of the law could result in an enforcement.
The accompanying memorandum on HB 2293 recognizes that highly confidential information exists in pipeline operators’ emergency response plans. See Memorandum from Reps. Quinn & Comitta to All House Members, “Public Utilities Emergency Response Plan” (Jan. 16, 2020). If information contained in the response plan is confidential security information as defined under section 2 of the Public Utility Confidential Security Information Disclosure Protection Act, 35 Pa. Stat. § 2141.2, the law protects such information from disclosure to the public. However, for these protections to apply, the public utility must properly designate the confidential security information in the emergency response plan.
This bipartisan legislation is regarded as the first pipeline safety law, of approximately two dozen other proposed laws, to be enacted over the past three years.
Delaware River Basin Commission Approves Gibbstown LNG Terminal
On December 9, 2020, the Delaware River Basin Commission (DRBC), a federal agency created in 1961 by an interstate compact between Pennsylvania, Delaware, New Jersey, and New York, voted 4-0-1, with one abstention from New York, to approve a liquefied natural gas (LNG) terminal project by Delaware River Partners, a subsidiary of New Fortress Energy, in Gibbstown, New Jersey, along the Delaware River. See DRBC, Resolution for the Minutes and Accompanying Opinion (Dec. 9, 2020). The dock will permit liquefied hazardous gas and LNG from Pennsylvania to be loaded directly from truck or railcar to a marine vessel for overseas delivery. This site is reportedly the first in the nation that would allow delivery of LNG by rail.
The DRBC originally approved this project on June 12, 2019. See DRBC Docket D-2017-009-2 (June 12, 2019). However, the Delaware Riverkeeper and the Delaware Riverkeeper Network requested an administrative hearing after submitting comments arguing against approval of the project. The approval was affirmed by a hearing officer with the Pennsylvania Department of State on July 21, 2020, who found that the approval of the dock would not substantially impair or conflict with the DRBC’s Comprehensive Plan, a document guiding the agency to consider the immediate and long-range development and use of the water resources of the Delaware River Basin. See Report of Findings and Recommendations, In re DRBC Docket D-2017-009-2 Gibbstown Logistics Center Dock 2 (DRBC July 21, 2020). As part of the hearing, over a dozen expert and fact witnesses testified on topics involving the project and a lengthy administrative record was established. The DRBC next had to vote on the findings and recommendation of the hearing officer’s report from July 21, 2020. Given the time required to review the report, the DRBC passed a motion moving the vote from September 10, 2020, to December 9, 2020. The approval was again affirmed by a vote of 4-0-1, with one abstention from New York.
Pennsylvania Supreme Court to Answer Questions on Legal Standards Applying to Zoning Objections to Unconventional Natural Gas Projects
On January 5, 2021, the Pennsylvania Supreme Court agreed to consider the role that courts should play and the standards that should apply when courts hear a zoning appeal over unconventional oil and gas operations. See Order Granting Appeal in Part, Protect PT v. Penn Twp. Zoning Hearing Bd., Nos. 247 WAL 2020, 248 WAL 2020 (Pa. Jan. 5, 2021).
In this case, an energy company filed two applications for a special exception to develop unconventional gas wells on its property. These were approved by the zoning hearing board over Protect PT’s objections regarding alleged concerns about public health and environmental issues presented through layperson and expert testimony. The zoning board found that the objectors did not establish that the proposed use would “create a high probability that an adverse, abnormal or detrimental effect will occur to public health, safety and welfare,” which was a finding upheld by both the Westmoreland County Court of Common Pleas and the Commonwealth Court of Pennsylvania. Protect PT v. Penn Twp. Zoning Hearing Bd., 238 A.3d 530 (Table), 2020 WL 3640001 (Pa. Commw. Ct. July 6, 2020). In upholding the finding of the board approving the special exceptions, the commonwealth court held that the evidence submitted by the objectors was not a basis to overrule the board. Some evidence dealt with particulars of construction and development, not the use of the land at issue, the latter being the proper inquiry according to the commonwealth court. Id. at *8. Further, the commonwealth court held that other evidence did not rise to the standard of showing a high probability that adverse effects to public health, safety, and welfare would occur. Id. In sum, the objectors failed to produce “sufficient, credible evidence” that if the ordinance requirements and conditions in the special exceptions are met, the use would still create a high probability of negative effects. Id. at *10. In a concurrence to the commonwealth court’s affirmation, Judge McCullough noted his “concern” with the “legal framework employed to address, analyze, and dispose of the issues” concerning the evidence submitted by the objectors and other issues discussed by the court. Id. at *15 (McCullough, J., concurring).
On appeal to the Pennsylvania Supreme Court, the issues to be answered by the court are:
(1) Whether the Commonwealth Court’s opinion conflicts with the Court’s previous application of the capricious disregard of evidence standard and creates an issue of such substantial public importance as to require prompt and definitive resolution by this Honorable Court?
(2) Whether the Commonwealth Court’s failure to meaningfully evaluate the cumulative impacts of developing multiple unconventional natural gas wells in close proximity to residential neighborhoods creating high probability of adverse, abnormal or detrimental effects on public health, safety and welfare and significantly altering the character of the community was an abuse of discretion which creates a question of first impression of such public importance which requires this Honorable Court’s prompt and definitive resolution?
Order Granting Appeal in Part, at 1–2. Based on the briefing schedule, there is a chance oral arguments could be held as early as April 2021, but they are more likely to be held in October 2021, due to restrictions related to COVID-19 and remote hearing requirements.
PADEP Publishes Final Unconventional Guidance on Water Supply Impacts
On August 8, 2020, the Pennsylvania Department of Environmental Protection (PADEP) published notice in the Pennsylvania Bulletin of a final technical guidance document titled “Policy for the Replacement or Restoration of Private Water Supplies Impacted by Unconventional Oil and Gas Operations,” No. 800-0810-002 (Aug. 8, 2020) (Final TGD), and the related comment and response document, outlining its policy and interpretation of the legal requirements to replace or restore private water supplies affected by unconventional oil and gas operations. See 50 Pa. Bull. 4091 (Aug. 8, 2020). The Final TGD replaced a previous interim final version in effect since October 2016 (Interim TGD). The Final TGD and the comment and response document can be viewed here.
Section 3218 of Pennsylvania’s Oil and Act of 2012 contains provisions relating to water supply impacts from unconventional oil and gas operations. 58 Pa. Cons. Stat. Ann. § 3218. Specifically, § 3218(a) requires an unconventional well operator to restore or replace water supplies affected by their operations. PADEP promulgated regulations implementing this provision at 25 Pa. Code § 78a.51. While it does not carry the force of law, the Final TGD provides operators and affected parties guidance on how PADEP implements the legal requirements when water supplies are affected by unconventional oil and gas operations. The Final TGD contains several substantive amendments from the Interim TGD.
Some changes in the Final TGD from the Interim TGD version include, but are not limited to:
- allows treatment of the impacted water supply as a temporary water supply;
- allows an operator to submit a request to PADEP for additional time to evaluate an impacted water supply to demonstrate that the impact may be temporary or may be corrected by remedial action at a location other than the water supply in “a short amount of time”;
- states PADEP can require sampling for methane, ethane, and propane if it determines an operator is responsible for introducing those contaminants into the local aquifer or there is a concern they may be present in the new water supply source;
- specifies that the operator must report receipt of notice electronically to PADEP within 24 hours of receiving notice from a landowner, water purveyor, or affected person that a water supply has been affected by pollution or diminution, and that water supply replacement plans should be shared among any affected persons and their consultants;
- adds a requirement that operators must comply with certain industry standards when utilizing plumbing accessories and equipment associated with the implementation of temporary water supplies or permanent restoration or replacement of private water supplies; and
- includes new references and citations to PADEP’s broad authority under the Clean Streams Law (35 Pa. Stat. §§ 691.1–.1001) to issue orders, inspect private and public property, and otherwise investigate “all facts” relating to pollution of waters of the Commonwealth, including private water supply complaints. See 35 Pa. Stat. § 691.305.
PADEP Publishes Draft Guidance on Spill Policy Under Pennsylvania’s Clean Streams Law and NPDES Regulations
On August 8, 2020, the Pennsylvania Department of Environmental Protection (PADEP) published notice in the Pennsylvania Bulletin of a new draft technical guidance document entitled “Guidance on Notification Requirements for Spills, Discharges, and Other Incidents of a Substance Causing or Threatening Pollution to Waters of the Commonwealth Under Pennsylvania’s Clean Streams Law,” No. 383-4200-003 (Aug. 8, 2020) (Draft TGD), outlining its spill policy interpreting legal requirements under the Clean Streams Law (35 Pa. Stat. §§ 691.1–.1001 and implementing regulations at 25 Pa. Code ch. 91) and Pennsylvania’s National Pollutant Discharge Elimination System (NPDES) regulations (25 Pa. Code ch. 92a). See 50 Pa. Bull. 4091 (Aug. 8, 2020). The Draft TGD and associated public comments are available here.
Pennsylvania has broad notification requirements for spills, releases, discharges, or other incidents that cause or threaten pollution of “waters of the Commonwealth,” defined to include groundwater. 35 Pa. Stat. § 691.1. Generally, a person must notify PADEP if, by accident or other activity, a toxic or other substance that would endanger downstream users of waters of the Commonwealth results in pollution, creates the danger of pollution, or damages property, enters, or is placed so that it might enter waters of the Commonwealth. 25 Pa. Code § 91.33(a). This regulation does not provide objective or quantifiable thresholds for determining what spills, releases, discharges, or other events require reporting. Additionally, it is not limited to certain industries or permitted facilities, but rather applies any time there is an incident like a discharge or threat of discharge into waters of the Commonwealth.
This regulation is incorporated by reference in several regulatory programs, including Pennsylvania’s NPDES program. NPDES permit holders must comply with the spill reporting requirements under 25 Pa. Code ch. 92a. Specifically, § 92a.41(b) requires that NPDES permittees comply with the immediate oral notification requirements of § 91.33. In addition, § 92a.41(b) interprets that immediate oral notification requirement to mean as soon as possible, but not later than four hours after the NPDES permittee becomes aware of the incident causing or threatening pollution, and requires a written submission to PADEP within five days of becoming aware of the incident.
The purpose of the Draft TGD is to provide guidance on the immediate notification requirements for compliance under these programs. The Draft TGD applies to all persons and operations subject to reporting requirements under § 91.33, including the oil and gas industry, which has its own spill reporting requirements in separate regulations. See 25 Pa. Code §§ 78.66, 78a.66; PADEP, “Addressing Spills and Releases at Oil & Gas Well Sites or Access Roads,” No. 800-5000-001 (Sept. 21, 2013).
PADEP’s position in the Draft TGD is that there are no objective threshold requirements for what incidents need to be reported under § 91.33(a), which tracks the regulatory language. The Draft TGD recommends erring on the side of notification when there is some question as to whether reporting is required, and it states that PADEP may consider the decision to notify when exercising its enforcement discretion. The Draft TGD also uses language slightly broader than the language of § 91.33(a). Under this provision, notification is triggered if an incident “would” endanger downstream users, result in pollution, create a danger of pollution, or damage property. The Draft TGD replaces “would” with the term “may,” arguably expanding the scope. Other information in the Draft TGD defines who the “responsible parties” required to notify are and provides examples of how responsible parties respond to spills, releases, discharges, and other incidents. The Draft TGD does not clarify its interaction with requirements for reporting spills under the oil and gas regulations or policy. As noted by the Marcellus Shale Coalition in its comments on the Draft TGD, some of the oil and gas notification requirements and PADEP’s other programs have notification time frames and applicability thresholds inconsistent with what is required under § 91.33(a) and the Draft TGD. See, e.g., 25 Pa. Code §§ 78.66, 78a.66a.
PADEP Publishes Unconventional Pressure Barrier Guidance for Comment
On August 29, 2020, the Pennsylvania Department of Environmental Protection (PADEP) published notice in the Pennsylvania Bulletin of a new draft technical guidance document entitled “Guidelines for Development of Operator Pressure Barrier Policy for Unconventional Wells,” No. 800-0810-003 (Aug. 29, 2020) (Draft TGD). See 50 Pa. Bull. 4459 (Aug. 29, 2020). The Draft TGD underwent public comment from August 29 to September 28, 2020. The Draft TGD and associated comments can be found at https://www.ahs.dep.pa.gov/eComment/. PADEP has been developing this long-awaited guidance for several years. PADEP previously stated that it was developing pressure barrier policy guidance as part of Pennsylvania’s unconventional oil and gas regulations to assist unconventional operators in complying with pressure barrier policy requirements. See PADEP, Chapter 78/78a Comment Response Document, Part 1 of 2, “Environmental Protection Performance Standards at Oil and Gas Well Sites,” Comment No. 764 (2016). The unconventional oil and gas regulations went into effect in 2016. See 46 Pa. Bull. 6431 (Oct. 8, 2016). It is unclear why the guidance has taken years to develop. Given the recent comment period, the Draft TGD could be approaching finalization; however, there are no deadlines by which PADEP must finalize the Draft TGD.
The guidance is meant to provide unconventional operators guidelines on how to develop a pressure barrier policy prior to drilling a well and in other required circumstances. A pressure barrier policy is a component of a preparedness, prevention, and contingency plan, which is required under the unconventional oil and gas regulations. 25 Pa. Code § 78a.55(a), (d). PADEP asserts operators must consider using pressure barriers during unconventional operations including, but not limited to, drilling, hydraulic fracturing, completion, alteration, plugging, workover activities, and maintenance or repair activities. When identified as necessary, at least two mechanical pressure barriers capable of being tested during well drilling and completion operations are required between the open formation and the atmosphere. Id. § 78a.72(i). An operator is also permitted to determine that a pressure barrier policy is applicable to more than one well based on subsurface conditions. PADEP defines mechanical pressure barriers in the Draft TGD to include well heads, ram-type blow-out preventers, and annual-type blow-out preventers. If an operator notices a well control incident like a loss of control or control emergency, an operator must report this incident to PADEP within two hours. In addition to outlining the requirements of a pressure barrier policy, the Draft TGD includes worksheets developed by PADEP to assist operators with developing a pressure barrier policy.
PADEP Releases 2019 Oil and Gas Annual Report
On September 14, 2020, the Pennsylvania Department of Environmental Protection (PADEP) released the “2019 Oil and Gas Annual Report” (Report). The Report is an annual publication that highlights program initiatives, production and permitting statistics, enforcement data, and other topics of the past year.
The Report provides data collected from the past year and older annual data from previous years. Several highlights of the data include:
- Inspections. According to PADEP, in 2019, it completed 35,324 compliance inspections at conventional and unconventional well sites, 1,549 fewer than 2018.
- Enforcement. A total of $4,097,545 in fines and penalties was collected in 2019, pushing the total amount collected to $43.7 million over the past 10 years. This number was slightly down from the 2018 penalty amount, but up from 2017. Additionally, compared to 2018 levels, alleged compliance violations issued to unconventional and conventional operators decreased to 985 from 1,043, and to 1,763 from 3,017, respectively.
- Production. Natural gas production increased from 6.1 trillion cubic feet in 2018 to 6.8 trillion cubic feet in 2019.
- Permits and Operations. PADEP issued 1,475 unconventional well permits in 2019, 393 fewer than 2018. A total of 615 unconventional wells were drilled during 2019, around 162 less than 2018. A total of 172 conventional wells were drilling during 2019, an increase of 32 wells from 2018. The average time to process an oil and gas permit improved by several days in 2019 for both the Northwest and Southwest district offices.
- Produced Fluid Management. As of 2019, operators achieved a 90% reuse or recycle rate of produced fluids. There were 11 active underground injection control (UIC) disposal wells in Pennsylvania. PADEP estimates that 8% of produced fluids from oil and gas sites was disposed of at UIC wells in Pennsylvania, Ohio, or West Virginia, and the remaining 2% was managed by other wastewater treatment options.
In addition to providing statistics, PADEP discussed its efforts and anticipated outlook on projects, initiatives, and regulatory actions currently underway or anticipated in the future. In 2019, working groups met to address topics like natural gas storage, permit processing efforts, and groundwater study issues, among others. PADEP states that it is analyzing alternative methods of funding given the fluctuation of oil and gas permits per year. In the regulatory context, the Report confirms PADEP’s intent to move forward with updating conventional oil and gas regulations on environmental protection performance standards via several rulemakings in late 2020. PADEP is also reviewing its role in issuing UIC permits. Pennsylvania does not have primacy to implement the UIC program. Currently, a UIC permit applicant must first obtain approval from the U.S. Environmental Protection Agency, and then a well permit from PADEP. The agencies are exploring the possibility of transitioning this two-step process to a concurrent review process by both agencies.
Copyright ©2021, Rocky Mountain Mineral Law Foundation, Westminster, Colorado.
RMMLF Mineral Law Newsletter
(by Joe Reinhart, Sean McGovern, Daniel Hido and Gina Falaschi)
Pennsylvania’s Environmental Quality Board (EQB) published its proposed Regional Greenhouse Gas Initiative (RGGI) CO2 Budget Trading Program rule in the Pennsylvania Bulletin on November 7, 2020, which opened the public comment period for the rule. See 50 Pa. Bull. 6212 (Nov. 7, 2020). EQB hosted a number of virtual public hearings in December 2020 and accepted comment until January 14, 2021. EQB received more than 13,000 public comments on the proposed rule. Currently, the Independent Regulatory Review Commission (IRRC) is reviewing the proposed CO2 Budget Trading Program rule. The IRRC reviews regulations under the Regulatory Review Act to determine whether a proposed regulation is consistent with the authorizing statute and whether the regulation is in the public interest. While the IRRC has access to all public comments submitted to EQB regarding the proposed CO2 Budget Trading Program rule, the IRRC has also received a significant number of comments directly from legislators and the public. The IRRC’s comments, recommendations, or objections on the proposed regulation were due to the Pennsylvania Department of Environmental Protection by February 16, 2021.
A final regulation is expected later in 2021, at which time EQB will also release its responses to the public comments submitted on the proposed rule. The rule is tentatively scheduled to take effect in January 2022. For detailed descriptions of the content and implementation of the proposed rule, see Vol. XXXVII, No. 4 (2020), Vol. XXXVII, No. 3 (2020), Vol. XXXVII, No. 2 (2020), Vol. XXXVII, No. 1 (2020), Vol. XXXVI, No. 4 (2019) of this Newsletter.
Ozone Transport Commission Recommends Daily NOx Emission Limits at Coal-Fired Power Plants in Pennsylvania
On June 8, 2020, the U.S. Environmental Protection Agency (EPA) received a recommendation from the Ozone Transport Commission (OTC) that EPA require Pennsylvania to adopt daily limits on nitrogen oxide (NOX) emissions from coal-fired electric generating units (EGUs). See 85 Fed. Reg. 41,972 (July 13, 2020). The OTC oversees the administration of the Ozone Transport Region (OTR), which includes Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, the District of Columbia, and parts of Virginia. The OTC and OTR were established as part of the 1990 amendments to the Clean Air Act (CAA) due to recognition that the transport of ozone and ozone precursors throughout the northeastern states may render the states’ attainment strategies interdependent.
The recommendation was submitted under section 184(c) of the CAA, which allows the OTC to develop, and submit to EPA, recommendations for additional control measures to be applied within all or a part of the OTR if such measures are necessary to bring any area in the OTR into attainment with national ambient air quality standards (NAAQS) for ozone by the applicable attainment deadlines. 42 U.S.C. § 7511c(c). Upon receipt, EPA must publish a notice in the Federal Register, hold a public hearing within 90 days of receipt, and make a determination within nine months approving or disapproving the recommendation. Id. If EPA determines that the measures in the recommendation are necessary to bring any area in the OTR into attainment, EPA will make a finding under CAA § 110(k)(5) that the state implementation plan (SIP) for that state is inadequate to meet the requirements of CAA § 110(a)(2)(D), often referred to as the “good neighbor provision.” Id. § 7410. EPA then requires each affected state to revise its SIP to include the approved additional control measures. Id. § 7511c(c)(5).
The OTC’s recommendation, dated June 5, 2020, suggests that EPA require Pennsylvania to adopt daily limits on NOX emissions from coal-fired EGUs with existing selective catalytic reduction (SCR) or selective non-catalytic reduction (SNCR) controls. The OTC recommends that these limits be at least as stringent as those in place for plants in Delaware, Maryland, and New Jersey to ensure that controls are optimized throughout the ozone season to help downwind states attain the ozone standard by the dates required in the CAA. The OTC provided its four main reasons for making this recommendation under CAA § 184(c): (1) several areas in the OTR are not expected to attain the 2015 ozone NAAQS by 2021; (2) research shows that large regional NOX reductions lower peak ozone across the eastern United States and that additional NOX reductions are needed for attainment of the 2008 and 2015 ozone NAAQS; (3) the OTC references EPA information identifying emissions from Pennsylvania as contributing to downwind nonattainment and includes estimates developed by Maryland of additional NOX reductions from Pennsylvania EGUs that could be achieved through daily NOX limits; and (4) the OTC decided to use the CAA § 184(c) process after a collaborative process resulted in some states adopting daily NOX limits, while Pennsylvania has not
EPA issued a Federal Register notice on July 13, 2020, that the OTC had submitted a recommendation, see 85 Fed. Reg. 41,972 (July 13, 2020), but delayed the public hearing, originally scheduled for September 4, 2020. On January 15, 2021, EPA issued a notice in the Federal Register announcing a virtual public hearing on February 2, 2021, and opening a public comment period. See 86 Fed. Reg. 4049 (Jan. 15, 2021). This notice also summarizes the OTC’s recommendations, provides additional information EPA believes will be relevant in reaching a decision, and requests input on various issues. Specifically, EPA requested comment regarding whether the Delaware, Maryland, and New Jersey regulations have been accurately summarized, how those regulations could be used as standards for evaluating a SIP revision submitted by Pennsylvania, and EPA’s authority under CAA § 184(c) to modify the OTC’s recommendation. EPA recently extended the public comment period on these issues until April 7, 2021. See 86 Fed. Reg. 10,267 (Feb. 19, 2021).
PADEP Publishes Draft Reissuance of General Permit for Stormwater Discharges Associated with Mining Activities
On January 9, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published notification of its intent to modify and reissue the National Pollutant Discharge Elimination System (NPDES) General Permit for Stormwater Associated with Mining Activities (GP-104). See 51 Pa. Bull. 241 (Jan. 9, 2021). The five-year term of the current GP-104 was set to expire on February 12, 2021, but was extended until the permit is reissued. According to PADEP, the revised GP-104 includes “extensive revisions” required by the U.S. Environmental Protection Agency (EPA) that will affect coal and non-coal mining operators. Notable proposed modifications to GP-104 include the following:
- Expiration of Permit Coverage. The current GP-104 provides authorization for five years from the date the operator obtains coverage. Under the revised GP-104, authorization would expire upon expiration of the general permit. In other words, an operator that obtains coverage in the middle of the permit term would only be authorized to discharge for the remainder of the term rather than a full five years. The Pennsylvania Bulletin notice states that operators with current GP-104 authorizations that expire after February 2021 will receive notice and the option to certify acceptance of the renewed GP-104 with no reapplication or fee required.
- Applicability. The revised GP-104 would clarify that activities authorized through a government-financed construction contract with PADEP would be eligible for coverage under the general permit. In contrast, the revised GP-104 would not authorize discharges to sediment-impaired waters or discharges that may result in discharges of toxic substances at levels that exceed applicable water quality criteria. The revised permit also clarifies that it does not apply to activities that may result in a discharge from underground mines, acid mine drainage, pumped groundwater, water used to refine or wash product, or stormwater that is commingled with such sources. See PADEP, Draft Approval of Coverage Under the General NPDES Permit for Stormwater Discharges Associated with Mining Activities, § 2(d) (rev. Jan. 2021). Operators ineligible for coverage under GP-104 would be required to obtain an individual NPDES permit.
- Effluent Limitations. GP-104 includes effluent limitations for pH, total suspended solids, and total settleable solids in part A of the permit. The current GP-104 includes instantaneous maximum, daily maximum, and 30-day average limits. The proposed GP-104 would eliminate the daily maximum and 30-day average limits and only require instantaneous maximum limits. The revised GP-104 would also include a new provision stating that the discharge must meet applicable total maximum daily loads and must not cause or contribute to an exceedance of applicable water quality standards. This provision would further enable PADEP to revoke the general permit at any time “if the status of a watershed or receiving stream changes,” in which case the operator would be required to apply for an individual permit. Id. § A(1)(c).
The proposed GP-104 would also make several revisions to the standard conditions in part B of the permit, including monitoring, recordkeeping, and reporting; modification or termination; civil and criminal penalties under the Clean Water Act; and certification requirements. The 30-day public comment period on the draft permit closed on February 8, 2021.
PADEP Invites Public Comments on Act 54 Report Regarding Effects of Mine Subsidence
On January 9, 2021, the Citizens Advisory Council (CAC) of the Pennsylvania Department of Environmental Protection (PADEP) published notice in the Pennsylvania Bulletin of a public comment period on the report entitled “The Effects of Subsidence Resulting from Underground Bituminous Coal Mining in Pennsylvania, 2013–2018” (2019) (Report). See 51 Pa. Bull. 241 (Jan. 9, 2021). The Act of June 22, 1994, P.L. 357, No. 54 (Act 54) amended the Bituminous Mine Subsidence and Land Conservation Act of 1966, 52 Pa. Stat. § 1406.18a, to require PADEP to compile data and report findings regarding the effects of underground mining on land, structures, and water resources. An Act 54 report is prepared and presented to the governor, the Pennsylvania General Assembly, and the CAC every five years. The current Report is the fifth report issued since the passage of Act 54. As reported in Vol. XXXVII, No. 1 (2020) of this Newsletter, the Report was finalized in 2019. The January 9, 2021, notice provides the opportunity for the regulated community and the public to comment on the final Report. Comments may be submitted through April 9, 2021.
The Report, compiled by the University of Pittsburgh, is approximately 225 pages long and nearly 1,000 pages with attachments. It describes the University’s findings regarding the effects of mine subsidence on land, structures, water supplies, hydrologic balance, groundwater, streams, and wetlands, and provides recommendations to PADEP.
- Land and Structure Damages. The Report identifies 124 reported impacts to land from underground mine subsidence, 66 of which were classified “Company Liable,” defined as a final resolution holding the mining company responsible for the damage. Report at 6-3, 6-18. The Report identifies reported structural effects at 455 of the 3,612 (15%) structures that were undermined from 2013 to 2018, with 247 of the reported effects classified as “Company Liable.” Id. at 4-2. Most of the identified impacts to land or structures were attributed to longwall mining.
- Water Supply Impacts. The Report identifies reported impacts, primarily loss of flow, to 379 of 2,353 (16%) water supplies in undermined areas during the assessment period, with 192 classified as “Company Liable.” This is a significant decrease from the 2008–2013 Act 54 Report, which identified 855 water supply impacts. Id. at 5-5; see Vol. XXXII, No. 1 (2015) of this Newsletter.
- Streams. The Report identifies approximately 81 miles of streams over 148 stream reaches that were undermined during the assessment period. The Report identifies approximately 52 miles (64%) of streams that were impacted by flow loss, pooling, or both. Overall, impacts were identified in approximately half of the stream reaches that were undermined during the assessment period. Report at 9-5.
- Hydrologic Balance and Groundwater. Generally, the Report notes that it is difficult to assess the effects of subsidence on hydrologic balance or groundwater. Id. at 7-2, 8-18. Thus, rather than discussing statistics involving specifically identified impacts, the Report discusses how certain data can be better utilized to assess such effects.
The Report concludes with 40 recommendations to PADEP, many of which relate to increasing data collection and usage to better evaluate the impact of mine subsidence on hydrologic balance, groundwater, streams, and wetlands. See id. at 12-1 to 12-10.
OSMRE Approves Updates to Pennsylvania Regulatory Program
The federal Office of Surface Mining Reclamation and Enforcement (OSMRE) took two notable actions in its oversight of Pennsylvania’s mining program in the past quarter.
Approval of Amendments Regarding Effluent Limitations
On November 9, 2020, OSMRE published notice in the Federal Register of the agency’s approval of two amendments to Pennsylvania’s regulatory program that the Pennsylvania Department of Environmental Protection (PADEP) originally submitted to OSMRE in 2010. See 85 Fed. Reg. 71,251 (Nov. 9, 2020).
First, PADEP proposed to delete manganese from the Group B effluent limitation guidelines (ELGs) applicable during precipitation events. PADEP submitted the proposed amendment on its own initiative to bring state regulations current with the U.S. Environmental Protection Agency’s (EPA) ELGs applicable to the mining industry at 40 C.F.R. § 434.63. 85 Fed. Reg. at 71,253. OSMRE approved the amendment as consistent with federal requirements. Id. at 71,255. Manganese is still included in Group A ELGs, which apply in the absence of a precipitation event.
The second change involves PADEP regulations regarding passive treatment of post-mining pollutional discharges. The changes add definitions of “post-mining pollutional discharges” and “passive treatment” to 25 Pa. Code § 86.1. The amendments then set criteria for treating post-mining pollutional discharges based on levels of pH, acidity, and alkalinity, establish design standards for passive treatment system, and set alternate ELGs for post-mining pollutional discharges treated with passive treatment systems. 85 Fed. Reg. at 71,253–54.
OSMRE noted that federal regulations do not contain provisions that address post-mining pollutional discharges or the use of passive treatment systems. In support of the amendments, PADEP cited a January 28, 1992, memorandum from EPA to Pennsylvania that stated the effluent limitations applicable to the mining industry at 40 C.F.R. pt. 434 do not expressly apply to groundwater seeps and recommended PADEP establish effluent limitations for post-mining pollutional discharges using its best professional judgment (BPJ). Pennsylvania completed its BPJ analysis in 1994. 85 Fed. Reg. at 71,254–55.
In approving the amendments, OSMRE concluded that establishing regulations for the passive treatment of post-mining pollutional discharges is within PADEP’s authority under state law and is not inconsistent with federal requirements. However, OSMRE declined to approve the part of the definition of post-mining pollutional discharges that references the definition of “minimal impact post-mining discharges” in Pennsylvania’s Surface Mining Conservation and Reclamation Act, 52 Pa. Stat. § 1396.4, because, according to OSMRE, that statutory definition itself was never approved by OSMRE. 85 Fed. Reg. at 71,256–57.
The approximately 10-year delay in OSMRE approving the proposed amendments appears to be due in part to extensive comments from federal agencies and public interest groups on the proposed amendments. The history of the amendments is summarized in the Federal Register notice at pages 71,257–62.
Notice of Receipt of Federal Consistency Rulemaking
As reported in Vol. XXXVII, No. 2 (2020) of this Newsletter, on March 14, 2020, the Environmental Quality Board (EQB) published the final “Federal Office of Surface Mining Reclamation and Enforcement Program Consistency” rule in the Pennsylvania Bulletin. See 50 Pa. Bull. 1508 (Mar. 14, 2020). On December 17, 2020, OSMRE published notice in the Federal Register of these proposed changes to Pennsylvania’s regulatory program, which were submitted by PADEP on March 16, 2020. See 85 Fed. Reg. 81,864 (Dec. 17, 2020).
As discussed in further detail in the prior report, the proposed amendments include revisions to the determination of the value of collateral bonds, clarification that seeding does not restart the period of bond liability, and a revised definition of haul road under the anthracite mining regulations at 25 Pa. Code ch. 88. These revisions were required by OSMRE. The proposed changes also include the removal of the one-year time limit on temporary cessation of surface coal mining and anthracite mining operations under 25 Pa. Code chs. 87 and 88, respectively, changes to the calculation of civil penalties, and a revision to the definition of “surface mining activities” to incorporate by reference the federal definition at 30 C.F.R. § 701.5. These changes were not required by OSMRE but were made by PADEP for consistency with federal requirements. Finally, the March 2020 rulemaking included several changes unrelated to federal consistency, such as the definition of a preferred site for new coal refuse disposal facilities, calculation of remining financial guarantees and eligibility for remining financial incentives, and the procedure to calculate the amount of precipitation from a 24-hour storm event.
The public comment period on the proposed amendments closed on January 19, 2021. OSMRE will publish its decision on the proposed amendments in a forthcoming Federal Register notice.
Copyright ©2021, Rocky Mountain Mineral Law Foundation, Westminster, Colorado.
EmTech Law Blog
(by Gina Falaschi)
The United States is experiencing a wave of state-led clean transportation initiatives that are gaining substantial momentum. Faced with insufficient federal action, states started focusing their efforts on the sector that produces the largest percentage of greenhouse gas: transportation. On November 10, 2020, the Environmental Law Institute and Babst Calland co-hosted a webinar that explored these initiatives, their potential impact, and funding sources. Click here for a transcript of the discussion, which has been edited for style, clarity, and space considerations.
Tags: Transportation, Vehicles
Babst Calland has been named to this year’s Pennsylvania Business Central’s “Top 100 Organizations” list and profiled in its Signature Top 100 issue. Nominations were taken throughout the publication’s 23-county coverage area, and the final organizations were selected by an editorial committee due to their positive impacts in the business community of central Pennsylvania.
For the full list, click here.
Environmental Law Reporter
The United States is experiencing a wave of state-led clean transportation initiatives that are gaining substantial momentum. Faced with insufficient federal action, states started focusing their efforts on the sector that produces the largest percentage of greenhouse gas: transportation. On November 10, 2020, the Environmental Law Institute and Babst Calland co-hosted a webinar that explored these initiatives, their potential impact, and funding sources. Click here for a transcript of the discussion, which has been edited for style, clarity, and space considerations.
Copyright © 2021 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
Renewables Law Blog
(By Bruce Rudoy)
In another sign of various sectors of the energy industry coming together to advance decarbonization, Enterprise Products Partners LP, a company focused on pipeline, storage and natural gas processing, among other services and products to the energy industry, signed a virtual power purchase agreement for solar energy from the Space City Solar project located in Wharton County, Texas. “We are committed to being a responsible steward of the environment, including using energy sustainably across our footprint,” A.J. “Jim” Teague, co-CEO of the Houston-based midstream company’s general partner, said in a statement on March 1. The PPA made with EDF Renewables North America is the result, Teague said, of an initiative launched by Enterprise Products in 2020 to expand solar power purchasing and/or installations across its system. “We estimate that by 2025, approximately 25% of our power will be from renewable resources.” The Space City Solar project is expected to commence construction in Summer 2021 and begin delivery of clean electricity in Summer 2022. The power purchase agreement between EDF Renewables and an affiliate of Enterprise Products was for a second tranche of the project for 100 MWac/132 MWdc. The project’s total capacity is up to 345 MWac/455 MWdc. Approximately 300 jobs are expected to be created during the construction phase with more than $30 million generated in new tax revenue over the operating life for Wharton County taxing entities, according to a joint release from Enterprise and EDF.
EDF Renewables North America Signs Virtual Power Purchase Agreement with Enterprise Products for Solar Energy | Business Wire
Tags: Enterprise Products Partners LP, renewable, solar, Virtual Power Purchase Agreement
Renewables Law Blog
(By Robert Stonestreet)
Democratic Senators from West Virginia (Joe Manchin) and Michigan (Debbie Stabenow) have introduced legislation to make billions of dollars available to promote manufacturing related to energy efficiency and renewable energy. According to a press release, the proposed “American Jobs in Energy Manufacturing Act of 2021” would provide up to $8 billion in tax credits to “manufacturers and other industrial users to retool, expand, or build new facilities that make or recycle energy-related products.” Half of those credits are designated for communities adversely affected by closures of coal mines or power plants that have not previously received similar tax credits. Under the proposed bill, credits are available for new construction or retrofitting of existing facilities to produce or recycle a range of energy products including:
- advance electric grid, energy storage, and fuel cell equipment;
- equipment for production of low-carbon, low emission fuels, chemicals and other products;
- renewable energy and energy efficiency equipment;
- products or technologies that capture, remove, use, or store carbon dioxide; and
- advanced vehicles, components, and related infrastructure.
The bill is intended to promote creation of domestic jobs that draw on skills possessed by individuals formerly employed in manufacturing, coal mining, or power plant operation. The bill also seeks to promote investment in communities experiencing high unemployment due to coal mine or power plant closures.
Tags: energy, Energy Manufacturing Act of 2021, Manufacturing, tax credits