Smart Business
(by Sue Ostrowski featuring Kate Cooper)
“With the pandemic, our clients suddenly cared a lot about whether their contracts included a force majeure provision, what it said, what it meant and how it could be interpreted,” says Cooper.
Smart Business spoke with Cooper about force majeure provisions and how approaches to them are changing.
What are force majeure provisions?
Force majeure provisions govern the conduct of both parties if unexpected or unforeseeable events result in a party being unable to deliver on the terms of the contract, with an emphasis on the unforeseeable. They’re designed to cover unexpected events and potentially allow you to delay delivering on a contract. But the provisions are not a get-out-of-jail free card, and in most circumstances, they do not let a party to a contract completely off the hook.
The disruption to the supply chain caused by the pandemic and government shutdowns has drawn renewed attention to these clauses. For example, when suppliers couldn’t deliver to their customers, those disruptions had a knock-on effect down the supply chain. Companies aiming to avoid breaching their contracts were hopeful that their force majeure provisions would provide them with relief. However, many were disappointed to find that what they wanted to do — whether that be delay performance obligations, or even terminate the contract entirely — wasn’t permitted by the language of the specific provisions set forth in their contracts.
How is the conversation regarding force majeure changing?
It will be difficult to argue that the pandemic is an unforeseeable event now that we are a year and a half into COVID-19, meaning that COVID-19 (and pandemics generally) will need to be specifically referenced in the provision in order for it to be enforceable in most jurisdictions. Contracts differ greatly in how they define force majeure, what types of events will trigger the provision and what remedies will be available to the parties, so businesses need to have a clear understanding of the specific language of their provision and its impact if triggered.
Businesses should ensure that they are tailoring their force majeure provisions to their particular circumstances, and they should consider whether it is more appropriate to include specific COVID-19 language outside of the force majeure clause.
When drafting new contracts, make sure you understand the events upon which you, or your counterparty, may wish to delay performance, and define these provisions in a clear way that connects the dots between that triggering event and the party’s inability to perform its contractual obligations.
Working with an expert legal adviser allows you to draft your contracts on a practical level in order to protect your business interests when these events arise and future disruptions occur. Relevant questions include, ‘How do your operations work? How do you fulfill contracts? What would be an impediment to doing so?’ It may be appropriate to explore options that would permit parties to renegotiate the contract or extend delivery times upon the occurrence of one of these unforeseeable events.
Pre-pandemic, most businesses did not anticipate the importance of force majeure provisions and defining the ‘unforeseeable.’ Now that so many companies have experienced how challenging these issues can be as a result of the COVID-19 pandemic, and how nuanced the interpretation of these force majeure provisions are, business leaders need to focus on crafting the appropriate coverage in their agreements for these risks post-pandemic. Paying close attention to these issues at the time your contract is being negotiated and collaborating with your counterparty on identifying potential issues and how to resolve them can prevent your business from having to absorb the costs of dealing with these issues when they occur, or entering into litigation to resolve them.
For the full article, click here.
For the PDF, click here.
The PIOGA Press
(by Ashleigh Krick)
On June 7, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an advisory bulletin (ADB) reminding owners and operators of gas and hazardous liquid pipeline facilities of a self-executing mandate from the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020” (PIPES Act of 2020).
Statutory mandate
The mandate, codified at Section 114(b) of the PIPES Act of 2020, provides that by December 27, 2021, “each pipeline operator shall update the inspection and maintenance plan prepared by the operator under section 60108(a) of title 49, United States Code, to address the elements described in the amendments to that section made by [Section 114(a)].”
Section 114(a) of the PIPES Act of 2020 added to 49 U.S.C. § 60108(a) that, in deciding on the adequacy of an inspection and maintenance plan, PHMSA or a certified state authority must consider the extent to which the plan will contribute to “eliminating hazardous leaks and minimizing releases of natural gas from pipeline facilities” and “the extent to which the plan addresses the replacement or remediation of pipelines that are known to leak based on the material (including cast iron, unprotected steel, wrought iron, and historic plastics with known issues), design, or past operating and maintenance history of the pipeline.”
Additionally, Section 114(a) added to 49 U.S.C. § 60108(a) that inspection and maintenance plans must “meet the requirements of any regulations promulgated under section 60102(q).” Section 60102(q) is a new rulemaking mandate from Section 113 of the PIPES Act of 2020 that requires PHMSA to issue new leak detection rules for operators of regulated gas gathering, transmission, and distribution lines by December 27, 2021.
Section 114(a) also provided that PHMSA or a relevant state authority must review each plan not later than December 27, 2022, and then every five years.
Advisory bulletin
PHMSA issued the ADB to reiterate the mandate from Section 114 of the PIPES Act of 2020. Notably, PHMSA stated in the ADB that Section 114 applies to all pipeline facility owners and operators, including owners and operators of hazardous liquid pipeline facilities.
• Natural gas releases and hazardous leaks. While the PIPES Act did not define the type of natural gas releases or hazardous leaks operators are required to address, the ADB provides that an operator’s plan must address both intentional and unintentional releases of natural gas. PHMSA characterized intentional releases as including venting during normal operations or due to equipment design (e.g., pneumatic device bleeds, blowdowns, incomplete combustion or overpressure protection venting). Unintentional releases, the ADB explains, include any unintentional leaks from equipment, including pipelines, flanges, valves, meters, etc.
• Pipelines known to leak. With respect to addressing the replacement or remediation of pipelines that are known to leak based on the material (e.g., cast iron, unprotected steel, wrought iron, and historic plastics with known issues, according to PHMSA), design, or past operating and maintenance history, the ADB states that PHMSA will evaluate how the operator’s plans address reducing leaks from pipelines with these issues.
• Inspection and maintenance plans. PHMSA stated in the ADB that the updated plans must be “tailored to the operator’s pipeline facilities, supported by technical analysis where necessary, and sufficiently detailed to clearly describe the manner in which each requirement is met.” PHMSA also cited to page 17 its existing Part 192 O&M Enforcement Guidance and page 18 of its existing Part 195 O&M Enforcement Guidance.
• Inspections. PHMSA noted that it, along with state authorities, would be inspecting operator’s plans to determine whether they adequately address the PIPES Act mandate. PHMSA explained that it would evaluate the steps taken by an operator to prevent and mitigate both intentional and unintentional releases of natural gas.
For the full article, click here.
Reprinted with permission from the July 2021 issue of The PIOGA Press. All rights reserved.
Renewables Law Blog
(By Anna Jewart)
On June 4, 2021, following 21 nights of public hearings held over the course of 15 months, a conditional use application for a proposed 75 megawatt solar energy system filed by Brookview Solar I, LLC, was denied by operation of law due to a two-two tie vote, with one abstention, by the Board of Supervisors of Mount Joy Township, Adams County. The applicant faced many of the same challenges and opposition frequently levied against traditional energy sources.
In November 2019, the applicant submitted its application for a solar energy field, proposed to be sited across eleven properties totaling approximately 374 acres of land located largely within the Township’s Baltimore Pike Corridor District (“BPC”) and partially within its Agricultural District (“AC”). Solar energy systems are a permitted use in the AC district and permitted as a conditional use within the BPC district under the Township Zoning Ordinance, subject to extensive use-specific regulations. The Board began holding public hearings on the application in January 2020 and concluded in March of 2021. On June 4, 2021, a motion to approve the application with conditions resulted in a 2-2-1 vote, as did a motion to deny the application. Under Pennsylvania case law, where a judicial or quasi-judicial body is equally divided, the subject matter with which it is dealing must remain in status quo, in this case resulting in a denial of the application. Due to the 2-2-1 vote, the Township did not prepare official written findings, but submitted two draft decisions in support of the Board’s motions to deny and approve the application, as well as an official decision simply noting the denial as an operation of law. The applicant appealed to the Adams County Court of Common Pleas on June 28, 2021.
The appeal alleges the Board committed an error of law and/or abused its discretion by failing to approve the application. Due to the lack of an official decision, the appeal relies largely upon the limited differences between the draft denial and draft approval decisions. The appeal notes that although the two decisions overlapped on 68 findings of fact and 7 conclusions of law, the draft denial was largely based on a finding that the applicant failed to meet certain specific criteria under the Zoning Ordinance, namely that it had failed to provide a glare study, to submit stormwater plans, or to provide proper performance security related to decommissioning. The appeal alleges the record before the Board, as well as the draft approval decision, demonstrated that a complete glare study had been provided, that the applicant was not required to provide stormwater plans, and that the security met the relevant ordinance criteria. The applicant further argues that because these bases for denial all relate to alleged deficiencies in the application, they could not be considered where the Township had accepted the application as complete.
The appeal further argues the Board erred in denying the application where the draft denial decision was also based on an alleged failure to meet several general, subjective criteria of the Ordinance. After a conditional use applicant presents credible substantial evidence that the proposed use satisfies the ordinance’s specific criteria, the burden shifts to any objectors to prove the application failed to meet the general, subjective criteria in the ordinance. The appeal alleges that because the draft denial decision failed to garner a simple majority, the objectors failed to meet this standard. In addition, it argues the record indicated the evidence presented by the objectors was merely anecdotal conjecture and speculation which was insufficient to meet their high burden of proof.
Although the Brookview Solar project involves newer technology, the legal issues are largely the same as those typically addressed in traditional Pennsylvania land use cases. Furthermore, the Court’s decision on whether to review the matter de novo or to adopt the findings of fact and conclusions of law of either draft decision will have implications for the review of land use decisions generally, not just in the renewable energy field.
Tags: conditional use application, land use, solar energy field, zoning
Renewables Law Blog
(By Bruce Rudoy)
A financial rebound is in progress as COVID-19 becomes less of a driver to business and our general livelihood, and it is one that is apparent in the renewables sector. Experts see growth fueled not just by pent-up demand, but also growing attention to ESG considerations and renewables’ financial advantages.
Corporate merger and acquisition activity was up significantly with solar developers expanding their pipelines, oil and gas companies diversifying into renewables, and funds buying up renewable assets.
According to Mercom CEO Raj Prabhu, Solar project acquisitions reached a record high in the second quarter, he said, with more than 24.7 GW of capacity acquired. That total came from 34 corporate M&A deals, compared to 20 in the first quarter of this year and 13 in the second quarter of 2020.
In the first half of 2021, solar project acquisitions reached 39.3 GW, more than doubling the 14.7 GW acquired in the first half of 2020.
Venture capital funding in particular has experienced a strong recovery. Funding for VC was 680% higher in the first half of the year, compared with last year, with $1.6 billion raised in 26 deals, according to Mercom.
Renewables have been rapidly gaining market share for years. In 2020, the United States saw its fifth consecutive year of renewables consumption growth, reaching a record high of 12% of the country’s total consumption, according to the U.S. Energy Information Administration (EIA).
EIA estimates solar energy accounted for about 11% of last year’s renewable energy consumption, and “overall, 2020 U.S. solar consumption increased 22% from 2019.”
By comparison, the agency said fossil fuel consumption fell last year by 9% to “the lowest level in nearly 30 years.”
The trend is represented globally as well. The International Energy Agency’s (IEA) most recent market update, released in May, found renewable electricity capacity added in 2020 rose by 45% to 280 GW.
“Solar PV installations will continue to break new records, with annual additions forecast to reach over 160 GW by 2022,” IEA said in its analysis. “That would be almost 50% higher than the level achieved in 2019 prior to the pandemic, affirming solar’s position as the ‘new king’ of global electricity markets.”
Corporate solar interest surges as companies exit pandemic and turn focus to ESG issues | Utility Dive
Tags: market share, renewable, renewable energy, Social and Governance (ESG), solar, solar energy, venture capital funding
GOWV News
(by Jennifer Hicks)
The United States District Court for the Northern District of West Virginia recently held that a 2018 amendment to W. Va. Code § 22-6-8 (the “Flat Rate Statute”) “clearly does not apply retroactively.” Although the Supreme Court of Appeals of West Virginia has not yet addressed this issue, this federal court decision is indicative of how the highest court in West Virginia may answer the question raised by plaintiffs in royalty litigation across West Virginia: Does the 2018 amendment apply retroactively to alter the way royalties are paid for wells drilled on a flat rate lease before May 31, 2018?
In Corder v. Antero Resources Corporation, Civil Action No. 1:18-cv-30 (N.D. W.Va. May 12, 2021), the Court analyzed several issues related to the payment of oil and gas royalties pursuant to various royalty provisions. One of the leases at issue was what is commonly referred to as a “flat rate” lease, under which the lessee was required to pay “$100 per year for each and every gas well obtained on the premises[.]”
Flat rate leases are governed in West Virginia by W. Va. Code § 22-6-8, which was originally enacted in 1982 and first amended in 1994, to require that no permit for a flat rate well would be issued unless the lessee swore by affidavit that it would pay the lessor no less than one-eighth of the total amount paid to or received by or allowed to the lessee at the wellhead for the oil and gas so extracted, produced or marketed. In 2017, in Leggett v EQT Prod. Co., 800 S.E.2d 850, 862 (W.Va. 2017), the Supreme Court of Appeals of West Virginia interpreted this language as allowing a pro-rata deduction or allocation of all reasonable post-production expenses actually incurred by the lessee, and held that a lessee may utilize the “net-back” or “work-back” method to calculate royalties owed to a lessor pursuant to a lease governed by W. Va. Code § 22-6-8(d).
In 2018, following the Leggett decision, the West Virginia Legislature amended W. Va. Code § 22-6-8 to require that in order to obtain certain permits, a flat-rate lessee must provide an affidavit swearing that it will pay the lessor “not less than one eighth of the gross proceeds, free from any deductions for post-production expenses, received at the first point of sale to an unaffiliated third-party purchaser in an arm’s length transaction for the oil or gas so extracted, produced or marketed before deducting the amount to be paid to or set aside for the owner of the oil or gas in place, on all such oil or gas to be extracted, produced or marketed from the well.”
In Corder, the plaintiffs argued that the 2018 amendment to the Flat Rate Statute should apply retroactively to prohibit the lessee from taking deductions of post-production expenses from the plaintiffs’ royalties. The Court ultimately disagreed with the plaintiffs, explaining that “[t]he presumption is that a statute is intended to operate prospectively, and not retrospectively, unless it appears, by clear, strong and imperative words or by necessary implication, that the Legislature intended to give the statute retroactive force and effect.” Corder at 33 (quoting Syl. Pt. 2, Martinez v. Asplundh Tree Expert Co., 803 S.E.2d 582 (W. Va. 2017)). The Court further explained that there is a long-standing principle under West Virginia law that “[n]o statute, however positive, is to be construed as designed to interfere with existing contracts, rights of action, or suits, and especially vested rights, unless the intention that it shall so operate is expressly declared.” Id. (quoting Syl. Pt. 3, Rogers v. Lynch, 29 S.E. 507 (W. Va. 1897)). The Court found that the 2018 amendment to the Flat Rate Statute does not state in “clear, strong[,] and imperative words” that it applies retroactively, nor does it specify any intent by the legislature to clarify the existing law on flat rate leases or to overrule the holding of the Supreme Court of Appeals in Leggett. Rather, the 2018 amendment prohibits the issuance of any new permit unless the lessee first agrees to pay royalties pursuant to the language of the 2018 amendment. The Court held that, “Based on this, the 2018 amendment clearly does not apply retroactively.”
For the full article, click here.
RMMLF Mineral and Energy Law Newsletter
(By Joseph K. Reinhart, Sean M. McGovern & Matthew C. Wood)
On September 4, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published notice of its final technical guidance titled “Guidelines for Implementing Area of Review (AOR) Regulatory Requirement for Unconventional Wells,” No. 800-0810-001 (Sept. 4, 2021) (AOR Guidance). See 51 Pa. Bull. 5757 (Sept. 4, 2021). The AOR Guidance clarifies the AOR as “1,000 feet in all directions” from the plan view projections for horizontal and vertical unconventional wells. See 25 Pa. Code § 78a.52a(a). Vertical buffer distance for offset wells located within the AOR is 1,500 feet for all unconventional wells. See 25 Pa. Code § 78a.73(c). The final guidance document was effective upon date of publication, replacing PADEP’s 2016 guidance. Operators should reference the AOR Guidance regarding well placement and offset wells, for evaluating and monitoring nearby wells to prevent communication between wells, and for reporting and resolving incidents. The AOR Guidance also serves as an overview of PADEP’s well adoption permitting process.
Final issuance of the AOR Guidance followed a 60-day public comment period during which PADEP received approximately 55 comments from 10 commenters and made several changes to the draft version. Key changes to the AOR Guidance, as identified in the Pennsylvania Bulletin, include:
- clarifying the ability of operators to survey an area that extends beyond the prescriptive AOR regulatory language;
- removing language assigning responsibility for recently plugged offset wells to the operator who had completed the plugging;
- relocating language pertaining to briefing the hydraulic fracturing operations team about adjacent operator coordination;
- updating incident reporting language; and
- modifying operator coordination with PADEP field inspection staff ahead of hydraulic fracturing.
The AOR Guidance and related materials are available in PADEP’s eLibrary, “Oil and Gas (550-) (800-)” folder. See http://www.depgreenport.state.pa.us/elibrary/GetFolder?Folder ID=4613.
Office of Environmental Justice Includes Oil and Gas Public Engagement Section in Revised Environmental Justice Public Participation Policy and Governor Wolf Issues Executive Order Regarding Environmental Justice
On August 19, 2021, the Pennsylvania Department of Environmental Protection (PADEP), Office of Environmental Justice (OEJ), released a working draft of the Environmental Justice Public Participation Policy (EJ Policy Working Draft) to the Environmental Justice Advisory Board (EJAB). See Environmental Justice Policy, No. 012-0501-002 (Aug. 19, 2021). Unlike PADEP’s 2004 EJ Policy, currently in effect, the EJ Policy Working Draft considers oil and gas drilling and operating permits as trigger permits. Id. § II(A)(1) & app. A. Trigger permits are identified as permits for regulated activities that traditionally lead to significant public concern due to potential environmental, hu-man health, and community impacts. Id. § II(A)(1).
Section IV of the EJ Policy Working Draft includes provisions for public engagement specific to unconventional oil and gas drilling and operations. These provisions are limited only to unconventional oil and gas drilling operations due to the 45-day permit review period specified by the Pennsylvania legislature pursuant to Act 13 of 2012. See 58 Pa. Cons. Stat. § 3211(e). The EJ Policy Working Draft states that the PADEP oil and gas program in collaboration with OEJ should conduct an annual assessment of operators with anticipated or actual drilling operations in EJ areas, as defined within the policy. EJ Policy Working Draft § IV(A)(1). Operators must create a summary of their projects identified in the annual assessment and submit the summary to PADEP for review. Id. § IV(A)(2). Additionally, operators are encouraged to attend community meetings to discuss planned activities as identified in the annual assessment. Id. § IV(B)(1).
Inclusion of oil and gas drilling and operating permits as trigger permits in the EJ Policy Working Draft could affect the oil and gas industry. First, the EJ Policy Working Draft would require unconventional drilling and operating permit applicants in EJ areas to undergo EJ analysis and enhanced public participation and engagement. Id. § II(B). Second, unconventional operators will need to report active and anticipated drilling operations at existing unconventional well pads on an annual basis. Id. § IV(A)(1). In other words, the EJ Policy Working Draft would apply to already permitted and active drilling operations that continue following the policy’s scheduled summer 2022 implementation date. While the intent of section IV is to align EJ analysis with the statutory limitations of the 45-day unconventional well permit review time frame in Act 13 of 2012, the inclusion of oil and gas drilling and operating permits in the EJ Policy Working Draft would create additional public participation requirements for the industry.
On October 28, 2021, Governor Tom Wolf issued Executive Order 2021-7 (EO 2021-7), permanently establishing both OEJ and EJAB, and creating the Environmental Justice Interagency Council (EJIC). The EJIC would, among other responsibilities, be charged to “[i]dentify and make recommendations to the Governor’s Office to address potential disproportionate environmental impacts that state laws, regulations, policies, and activities may have on Pennsylvania residents in Environmental Justice Are-as.” Id. § 4(c). The executive order also cites federal EJ initiatives and Executive Order No. 14,008, “Tackling the Climate Crisis at Home and Abroad,” 86 Fed. Reg. 7619 (Jan. 27, 2021), issued by the Biden administration earlier this year, and directs OEJ to develop and publish an EJ strategic plan every five years. EO 2021-7, § 2(b)(5).
In concert with the executive order, two proposals were introduced to the Pennsylvania legislature. On October 26, 2021, Representative Donna Bullock (D-Phila.) proposed House Resolution 151, recognizing the thirtieth anniversary of the adoption of the 17 principles of EJ that were presented to delegates at the First National People of Color Environmental Leadership Summit. Senator Vincent J. Hughes (D-Phila.) proposed Senate Bill 189, which closely resembles EO 2021-7 and amends the Administrative Code of 1929 (P.L. 177, No. 175) to establish an EJ task force and regional EJ committees.
As directed by EO 2021-7, PADEP is expected to further revise its EJ Policy Working Draft, which was scheduled to be discussed at the November 16, 2021, EJAB meeting. Both legislative proposals have been respectively referred to the House and Senate Environmental Resources and Energy Committees. If the Senate bill makes it through the legislature, it will go into effect 60 days after passage.
PADEP Expresses Willingness for Program Allowing Road Application of Conventional Drilling Wastewater If Data Supports
The Pennsylvania Grade Crude Development Advisory Council (CDAC) is mandated to examine and make recommendations about existing technical regulations and policies implemented by the Pennsylvania Department of Environmental Protection (PADEP). At CDAC’s most recent meeting on August 19, 2021, PADEP representatives discussed potentially developing new regulations to allow the spreading of conventional oil and gas produced water (COGPW) as dust suppressant on un-paved roadways. This practice had been authorized for decades by PADEP and was largely used by local municipalities in northwest Pennsylvania via a PADEP approval process. See Fact Sheet, PADEP, “Roadspreading of Brine for Dust Control and Road Stabilization” (July 2011). PADEP previously attempted to amend 25 Pa. Code ch. 78 to include provisions governing road spreading of COGPW, but those revisions were never finalized. In 2018, in response to the Environmental Hearing Board’s (EHB) decision in Lawson v. PADEP, No. 2017-051-B (EHB May 17, 2018), PADEP implemented a moratorium on such road spreading. At the August meeting, attendees discussed reports of a Pennsylvania State University study in which researchers evaluated the efficacy of COGPW against commercially available alternatives. Among other things, the study found that dust suppression efficacy of all formulations of tested COGPW was less than the commercial alternatives. See Audrey M. Stallworth et al., “Efficacy of Oil and Gas Produced Water as a Dust Suppressant,” 799 Sci. of the Total Env’t 149347 (2021).
Kurt Klapkowski, Director of PADEP’s Bureau of Oil and Gas Management, explained during the meeting that past regulatory attempts to allow the spreading of COGPW as a dust suppressant and for other uses had been challenged in court (e.g., Lawson) and as such, any new regulations would have to be defensible and supported by applicable data. See Audio Recording of August 19, 2021, CDAC Meeting, https://drive. google. com/ file/d/1OJT9q9FlIVmjM1skJKpwWZKzBSQkQpic/ view. Klapkowski said that PADEP had funded and worked with Penn State to produce another study in an attempt to develop such data to support a program of road spreading that PADEP would approve under applicable regulations and would be defensible before the EHB, the courts, and under applicable statutes. Id. That study is forthcoming.
Since the August meeting, parties on both sides of the is-sue have reached out to PADEP. In a September 10, 2021, letter to PADEP Secretary Patrick McDonnell, CDAC chair Dave Hill stated, among other things, that PADEP had prevented CDAC from carrying out its statutory duties to evaluate and make recommendations by failing to inform CDAC of the two Penn State studies, which Hill said were clearly within CDAC’s purview. The letter was published in PIOGA Press Issue 138, at 10 (Oct. 2021). Hill argued that at least one of the studies could have benefited from CDAC’s expertise. On October 8, 2021, in response to Klapkowski’s comments at the August CDAC meeting, an environmental group submitted a letter signed by 80 organizations and businesses and approximately 1,800 individuals requesting, among other things, that PADEP halt any plans to develop regulations that would allow road spreading COGPW. See Letter to PADEP (Oct. 8, 2021), https://drive.google. com/ file/d/1dEziy2H4PCOQS-LcKeqrRuZxxVUE-OND/view. At the time of this report, PADEP had not proposed regulations governing the use of COGPW for road application.
Environmental Groups Submit Rulemaking Petitions to EQB for Full-Cost Bonding for Oil and Gas Well Plugging
On September 14, 2021, several environmental groups, including the Sierra Club and PennFuture, submitted two rulemaking petitions to the Pennsylvania Department of Environmental Protection (PADEP) requesting that the Environmental Quality Board (EQB) require full-cost bonding for conventional and un-conventional wells. The environmental groups contend that the full-cost bonds are necessary to incentivize operators to plug non-producing wells (or ensure that the commonwealth has funds available to do so).
For conventional wells, the petitioners seek to amend 25 Pa. Code § 78.302 in four ways: (1) increase the per-well bond amount from $2,500 to $38,000 (which the petitioners note is in line with PADEP’s estimated average cost to plug an abandoned well); (2) for blanket bonds, which can cover multiple wells, in- crease the amount from $25,000 to the sum of the individual bond amounts for the number of wells (e.g., five wells at $38,000 results in a $190,000 bond); (3) apply the revised bond amounts to all new wells and wells that were in existence as of April 17, 1985; and (4) require PADEP to issue a report to EQB every two years that recommends whether EQB should further adjust bond amounts (or every four years, if two years is not feasible). See generally Conventional Well Bonding Petition (Sept. 14, 2021).
The petitioners are also seeking a new regulation in 25 Pa. Code ch. 78 to govern bonding for unconventional wells, with even larger increases in bond amounts. That is, the petitioners are requesting an increase from the $4,000 starting cost to $83,000 per unconventional well. Likewise, the petitioners are proposing the same approach for blanket bonds (i.e., $83,000 multiplied by the number of wells). The proposed effective date and PADEP-required report are identical to the petition for conventional wells. See generally Unconventional Well Bonding Petition (Sept. 14, 2021). Of note, bonding for unconventional wells is already governed by 25 Pa. Code § 78a.302, which contradicts the petitioners’ proposed new regulation.
Regarding next steps for the rulemaking petitions, PADEP will use EQB’s Petition Policy (25 Pa. Code ch. 23) to determine whether the petitions are complete and whether EQB can take the proposed actions without conflicting with federal law. In the event PADEP determines that one or both of the petitions meet these conditions, it will inform EQB. The petitioners will then have an opportunity to make oral presentations at the next EQB meeting (occurring at least 15 days after PADEP’s determination) and PADEP will recommend to EQB whether it should accept the petitions.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
RMMLF Energy Law Newsletter
(By Joseph K. Reinhart, Sean M. McGovern, Gina N. Falaschi and Christina Puhnaty)
On August 21, 2021, the Pennsylvania Department of Environmental Protection (PADEP) issued a draft revision of its technical guidance that explains PADEP’s considerations when evaluating liners and cap systems installed at coal refuse disposal areas pursuant to 25 Pa. Code chs. 86, 88, and 90. See PADEP, Draft TGD No. 563-2112-656, “Liners and Caps for Coal Refuse Disposal Areas” (Aug. 21, 2021) (Draft TGD). These systems of liners and protective caps, called “barrier layers,” are intended to prevent adverse impacts to groundwater and surface water and to prevent precipitation from coming into contact with coal refuse by preventing or reducing water migration through the refuse material. See 25 Pa. Code §§ 90.50(a)–(b), .101–.102, .122. As noted in the preamble for the rulemaking that established section 90.50(b), “[t]his statutory requirement was intended to ensure that precipitation contacting the coal refuse is kept to a minimum, thereby reducing the volume of water needing treatment after the site is closed.” 31 Pa. Bull. 3735, 3736 (July 14, 2001). PADEP noted that this draft technical guidance document, when finalized, would not mandate that existing structures be replaced or retrofitted.
PADEP’s current guidance serves as a guide for the use of liners for impoundments, stockpiles, and coal refuse disposal areas. See PADEP, TGD No. 563-2112-656, “Liners and Caps for Coal Refuse Disposal Areas” (July 17, 2021). PADEP’s draft revision of this technical guidance is significantly different from the current guidance in that the revised draft guidance incorporates protective caps and emphasizes PADEP’s preference for barrier layers constructed using synthetic material rather than clay. The draft guidance explains PADEP’s characterization of the differences between these two types of low permeability/impermeable barrier layers: “low hydraulic conductivity” soils (i.e., clay) and synthetics. Synthetics include flexible polymeric sheets or flexible membrane liners. PADEP considered the appropriateness of these materials for both liners and caps at coal refuse disposal areas. According to PADEP, clay may be used if the material is of a specific quality and consistency, and PADEP considers the use of clay liners appropriate where the liner system will not be subject to continual hydraulic head conditions. The agency listed coarse refuse facilities, temporary storage areas, and outslopes of refuse facilities as such locations. Draft TGD at 1–2.
Similarly, PADEP concluded that “clay caps are generally unsuitable for circumstances with high hydraulic head conditions, for slurry impoundments, or as a permanent cap for any coal refuse,” and encourages synthetic liners in these situations. Id. at 2. PADEP lists “erosion prevention, cracking and deterioration from exposure, anticipated activity or construction on the final capped area, settlement, and shifting” as considerations when choosing caps, and notes that “clay soils are susceptible to drying out over time,” which can result in vegetation root systems penetrating the caps. Id. at 7.
The draft guidance further explains that PADEP considers synthetics to be “the best and most practical choice to prevent precipitation from coming into contact with the coal refuse to the maximum extent practicable” due to synthetic material’s durability and longevity. Id. at 3. As noted above, the relevant regulatory provisions were “intended to ensure that precipitation contacting the coal refuse is kept to a minimum.” Id. at 6. The draft guidance recommends synthetic barrier layers under high head slurry impoundment coal refuse disposal areas where water has the potential to be held against the liner system for an extended duration (high head conditions). Id. at 3. PADEP notes in the draft guidance that it will consider other technologies that meet or exceed the requirements of the guidance. Id.
The draft guidance then sets forth standards for both liners and caps that can further aid facilities in determining the type of barrier layer appropriate for a coal refuse disposal area. Id. At 4–9. The draft guidance also explains what information applicants should submit to PADEP when proposing to install barrier layers at their facility. Id. at 9–10. Finally, the draft guidance explains what information regarding its barrier layers applicants should submit to PADEP during PADEP-approved periods of temporary cessation exceeding 90 days. Id. at 11. Several statutory provisions require site operators to seek PADEP approval when temporarily halting operation of a coal refuse disposal area for a period longer than 90 days. See 25 Pa. Code § 88.310(k)(1), 90.122, .167. The draft guidance provides that, during these periods, operators must demonstrate to PADEP that the site has the appropriate controls in place to minimize the extent of precipitation reaching the coal refuse disposal area. Draft TGD at 11.
Pursuant to the Coal Refuse Disposal Action Plan approved by the U.S. Office of Surface Mining Reclamation and Enforcement (OSMRE) on August 19, 2019, PADEP was projected to complete its revision of this guidance document by December 31, 2020. See Coal Refuse Disposal Action Plan, Action Plan ID: PA-EY2020-002 (Aug. 19, 2019) (on file with author). This deadline has since been extended by OSMRE to June 30, 2022. See Letter from Ben Owens, OSMRE, to William S. Allen, Jr., PADEP Bureau of Mining Programs (Dec. 14, 2020) (on file with author). These documents are also available at https://www.odocs. osmre.gov/.
EQB Publishes Proposed Changes to RACT Requirements for Major Sources of NOx and VOCs
On August 7, 2021, the Environmental Quality Board (EQB) published a proposed rule to amend 25 Pa. Code chs. 121 and 129 to address 2015 8-hour National Ambient Air Quality Standards (NAAQS), which is commonly known as the RACT III rule. See Additional RACT Requirements for Major Sources of NOx and VOCs for the 2015 Ozone NAAQS, 51 Pa. Bull. 4333 (proposed Aug. 7, 2021). The Pennsylvania Department of Environmental Protection (PADEP) developed the rule in response to the U.S. Environmental Protection Agency’s (EPA) October 26, 2015, revision to the primary and secondary NAAQS for ozone. See NAAQS for Ozone, 80 Fed. Reg. 65,292 (Oct. 26, 2015) (to be codified at 40 C.F.R. pts. 50–58). Under section 110 of the Clean Air Act, 42 U.S.C. § 7410, states are required to reevaluate reasonably available control technology (RACT) requirements each time the ozone NAAQS are promulgated for nonattainment areas. Because Pennsylvania is in the Ozone Transport Region, RACT is applicable to nitrogen oxides (NOx) or volatile organic compounds (VOCs) across the commonwealth.
The proposed rulemaking would add the terms “combustion source” and “natural gas compression and transmission facility fugitive VOC air contamination source” to the definitions in 25 Pa. Code § 121.1. The addition of these terms supports proposed chapter 129 amendments adopting presumptive RACT requirements and emission limitations for certain major stationary sources of NOx and VOCs in existence on or before August 3, 2018.
Comments on the proposed rule were due on October 12, 2021, and the Pennsylvania Independent Regulatory Review Commission was required to provide comments by November 12, 2021. PADEP intends to finalize the rule in the first quarter of 2022 with compliance anticipated to begin on January 1, 2023. EPA will review the proposed rulemaking for approval as a revision to Pennsylvania’s state implementation plan following promulgation of final-form rulemaking.
PADEP’s RGGI Rule Nears the End of the Rulemaking Process
As reported in previous editions of this Newsletter, the CO2 Budget Trading Program rulemaking is a proposal by the Pennsylvania Department of Environmental Protection (PADEP), pursuant to Governor Tom Wolf’s 2019 executive order, to join the Regional Greenhouse Gas Initiative (RGGI). RGGI is a regional cap-and-trade program for carbon dioxide (CO2) emissions from fossil fuel-fired electric generating units with a nameplate capacity of 25 megawatts or greater. See Vol. XXXVIII, No. 3 (2021), Vol. XXXVIII, No. 2 (2021), Vol. XXXVIII, No. 1 (2021), 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. At its July 13, 2021, meeting, the Environmental Quality Board debated and voted 15-4 to adopt the final CO2 Budget Trading Program regulation. On September 1, 2021, the Independent Regulatory Review Commission (IRRC) approved the regulation by a vote of 3 to 2.
Following IRRC approval, the final-form rulemaking was sent to the Pennsylvania House and Senate Environmental Resources and Energy standing committees. On September 2, 2021, the Pennsylvania House Environmental Resources and Energy Committee passed a resolution disapproving the regulation. On September 14, 2021, Pennsylvania’s Senate Environmental Resources and Energy Committee also passed a resolution disapproving the regulation. The full Senate voted in favor of the resolution on October 27, 2021, and, if the resolution also passes in the House, it will be presented to Governor Wolf.
The Governor is expected to veto any disapproval measure, which then would require a veto-proof majority from the legislature to override the veto and block the regulation. If the legislature is unsuccessful in blocking the regulation, it will be submitted to the Office of the Attorney General for review, and if approved, published in the Pennsylvania Bulletin as a final rule.
The Governor intends to finalize the regulation by the end of 2021 and regulated entities could be required to begin compliance on January 1, 2022. Legal challenges to the rule are anticipated. Further information regarding the rule can be found on PADEP’s RGGI webpage at https://www.dep.pa.gov/ Citi zens/ climate/Pages/RGGI.aspx.
Wolf Administration Releases Statewide Climate Change Action Plan
On September 22, 2021, Governor Tom Wolf released the Pennsylvania Climate Action Plan 2021. In accordance with the Pennsylvania Climate Change Act of 2008 (Act 70 of 2008), 71 Pa. Stat. §§ 1361.1–.8, the plan must be updated every three years. The Pennsylvania Department of Environmental Protection (PADEP) and the Climate Change Advisory Committee developed and presented the 2021 plan to the Governor. It outlines a plan to reach the goal that the Governor set in 2019 to reduce greenhouse gas (GHG) by 26% by 2025 and by 80% by 2050 from 2005 levels. It also identifies GHG inventory, forecast, and reduction efforts, GHG emission reduction strategies, GHG reduction modeling results, and adaption opportunities, and recommends legislative changes to achieve identified goals.
PADEP and the Climate Change Advisory Committee also produced an overview of the plan. See Climate Action Plan 2021 Overview (Sept. 2021). This overview compiles the strategies that government, industry, business, and community organizations can immediately implement to reduce GHG emissions suggested in the plan. Some of the proposed strategies, which focus on both existing programs and emerging technologies, include:
- joining the Regional Greenhouse Gas Initiative and Transportation Climate Initiative Program to cap carbon emissions from the transportation and electric generation sectors;
- adopting codes for new buildings that go above and beyond standard codes, increasing training for inspectors on existing building codes, and establishing a commercial building energy performance program to accelerate energy efficiency;
- expanding the provisions of Act 129 of 2008 to increase the annual energy savings targets for electric distribution companies and developing a similar program for gas utilities;
- increasing the Alternative Energy Portfolio Standards to require electricity generators to get more of their energy from clean renewable sources;
- amending the Pennsylvania Clean Vehicles Program to increase the availability of light-duty electric vehicles through a rulemaking that would establish a requirement for automakers to include light-duty electric vehicles as a percentage of their model offerings;
- refunding the Pennsylvania Sunshine Solar Rebate Program for homeowners and small businesses;
- incentivizing battery storage at the grid level;
- assessing the potential role of alternatives to natural gas;
- pursuing carbon capture, use, and storage technologies for emissions from fossil fuel combustion source points;
- using direct air capture systems to remove existing atmospheric carbon dioxide;
- implementing strategies to increase peak load management and keep the grid in balance as more renewable electricity comes online; and
- ensuring that climate action statewide is informed by the work of the PADEP Environmental Justice Office.
A copy of the plan and additional information is available on PADEP’s Pennsylvania Climate Action Plan website at https://www.dep.pa.gov/Citizens/climate/Pages/PA-Climate-Action-Plan.aspx.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
RMMLF Mineral and Energy Law Newsletter
(By Joseph K. Reinhart, Sean M. McGovern, Gina N. Falaschi and Matthew C. Wood)
On June 22, 2021, a few weeks after hearing oral arguments, the Supreme Court of Pennsylvania dismissed as having been improvidently granted appeals by environmental advocacy group Protect PT to overturn two Penn Township Zoning Hearing Board (Board) decisions to grant special exceptions for gas well development in the township. Protect PT v. Penn Twp. Zoning Hearing Bd., 252 A.3d 600 (Pa. 2021) (mem.).
The companion cases originated from the Board’s 2018 decisions to approve special exception applications by Olympus Energy LLC (Olympus) to develop oil and gas operations at two well pads in Penn Township, Westmoreland County, Pennsylvania. In the hearings, Protect PT asserted that the cumulative impacts of the gas well development near residential neighborhoods could increase the probability of negative environmental, safety, and health impacts in the community. The Board ultimately approved Olympus’s applications, concluding the proposed development satisfied the requirements of the township’s zoning ordinance (subject to certain conditions) and that Protect PT failed to present sufficient, credible evidence to rebut the Board’s conclusion.
Protect PT first appealed the Board’s decisions to the Westmoreland County Court of Common Pleas, which denied the appeals and affirmed the Board’s decisions without taking additional evidence. Protect PT subsequently appealed to the Commonwealth Court of Pennsylvania. Before the commonwealth court, Protect PT argued that the Board capriciously disregarded the evidence presented to it in granting Olympus’s applications. See Protect PT v. Penn Twp. Zoning Hearing Bd., 238 A.3d 530 (Table), 2020 WL 3640001 (Pa. Commw. Ct. 2020), appeal granted in part, 243 A.3d 969 (Table) (Pa. 2021), appeal dismissed as improvidently granted, 252 A.3d 600 (Pa. 2021) (mem.). Thus, Protect PT argued, the Board erred in determining that the well pad development “would not create a high probability of adverse, abnormal, or detrimental effects on public health, safety, and welfare based on related increased traffic and air emissions during its development and operation.” Id. at *6.
Citing precedent, the commonwealth court stated that it could not substitute its interpretation of the evidence for the Board’s, whose function is to weigh the evidence before it as “the sole judge of the credibility of witnesses and the weight afforded their testimony” and that the Board “is free to reject even uncontradicted testimony it finds lacking in credibility, including testimony offered by an expert witness. It does not abuse its discretion by choosing to believe the opinion of one expert over that offered by another.” Id. at *7 (quoting Taliaferro v. Darby Twp. Zoning Hearing Bd., 873 A.2d 807, 811 (Pa. Commw. Ct. 2005)). In reviewing the evidence considered by the Board, the commonwealth court found that Protect PT failed to present credible evidence of the alleged negative effects that would result from approving the well pad operations and that the Board did not err in granting the Olympus application. Id. at *9, *13. Protect PT petitioned the Supreme Court of Pennsylvania to allow it to appeal, which the court granted, limiting review to specific issues. Protect PT v. Penn Twp. Zoning Hearing Bd., 243 A.3d 969 (Table) (Pa. 2021); see Vol. XXXVIII, No. 1 (2021) of this Newsletter. Before the supreme court, Protect PT con-tended that the Board should not be allowed to reject without explanation its expert’s evidence of the cumulative negative impacts of well development as not credible. The court concluded that it would take the matter under advisement and, as stated above, dismissed the appeals a few weeks later.
Corps Issues Pennsylvania State Programmatic General Permit-6
On June 25, 2021, the Philadelphia, Pittsburgh, and Baltimore Districts of the U.S. Army Corps of Engineers (Corps) jointly announced the issuance of the Pennsylvania State Programmatic General Permit-6 (PASPGP-6) for a five-year period, effective July 1, 2021, for applicable parts of Pennsylvania. See Corps, Special Public Notice # SPN-21-28 (June 25, 2021). The PASPGP is the mechanism that the Pennsylvania Department of Environmental Protection (PADEP) and the Corps rely upon to permit most projects in Pennsylvania that impact federally regulated waters, but do not require an individual section 404 permit. PASPGP-6 allows applicants to obtain both federal section 404 permits and state water obstruction and encroachment permits for projects impacting federal and state regulated waters. PASPGP-6 replaces Pennsylvania State Programmatic General Permit-5 (PASPGP-5), which became effective July 1, 2016, was revised in July 2018, and expired on June 30, 2021. PASPGP-6 authorizes work in waters of the United States within portions of Pennsylvania for activities that would cause no more than minimal adverse environmental effects, individually and cumulatively, subject to the permit’s specific terms and conditions, and operates in conjunction with the relevant PADEP state regulatory program.
PASPGP-6 changes a number of elements from PASPGP-5. For example, PASPGP-6 updates the following eligibility thresholds: (1) PASPGP-5’s one-acre threshold for single and complete projects (temporary and/or permanent impacts of one acre) was changed to 0.5 acre of permanent loss of waters of the United States, including jurisdictional wetlands (with some exceptions); and (2) PASPGP-5’s one-acre threshold for temporary impacts to waters of the United States, including jurisdictional wetlands, was changed in PASPGP-6 to unlimited acreage, as long as the work is determined to result in no more than minimal impact. Id.
In addition, PASPGP-6 updates the reporting threshold for Corps review of an application, which is now calculated based on impacts associated with an overall project. The reporting threshold under PASPGP-5 applied to single and complete projects. As noted above, the eligibility threshold determination under PASPGP-6 is made based on single and complete projects. Id. In another change, section 10 waters within the Pittsburgh District (previously ineligible under PASPGP-5) are eligible for authorization under PASPGP-6 (which requires Corps review unless the work qualifies for authorization under PADEP Waivers 10 and 12). Id. The PASPGP-6 full permit and related materials are available on the Corps’ website at https://www.nab. usace.army.mil/Missions/Regulatory/Permit-Types-and-Process.
U.S. District Court Dismisses Challenge to DRBC’s Hydraulic Fracturing Ban
On June 11, 2021, the U.S. District Court for the Eastern District of Pennsylvania dismissed a lawsuit challenging the authority of the Delaware River Basin Commission (DRBC) to ban hydraulic fracturing within the Delaware River Basin (Basin). See Yaw v. DRBC, No. 2:21-cv-00119, 2021 WL 2400765 (E.D. Pa. June 11, 2021).
In 2009, the DRBC, citing concern for adverse environmental effects, instituted a moratorium prohibiting hydraulic fracturing “within the drainage area of the basin’s Special Protection Waters,” unless previously approved by the DRBC. News Release, DRBC, “DRBC Eliminates Review Thresholds for Gas Extraction Projects in Shale Formations in Delaware Basin’s Special Protection Waters” (May 19, 2009). The moratorium was expanded in 2010 and remained in effect until February 2021 when the DRBC memorialized the moratorium as a ban via regulation. See News Release, DRBC, “Wastewater Importation and Water Exportation Rule Amendments to Be Proposed” (Feb. 25, 2021). Seeking declaratory judgment and injunctive relief against the DRBC, two Pennsylvania state senators, Gene Yaw and Lisa Baker, and their caucus, and two Pennsylvania townships and two counties located within the Basin filed suit in federal court in January 2021. The plaintiffs alleged that the moratorium (1) exceeds the DRBC’s authority under the Delaware River Basin Compact, (2) is an unconstitutional taking of private and public property, (3) is an illegal usurpation of the commonwealth’s power of eminent domain, and (4) violates the constitutional guarantee of a republican form of government. Yaw, 2021 WL 2400765, at *3.
The question before the court was whether the plaintiffs had standing to bring their claims. The state senator plaintiffs argued, among other things, general injuries to the commonwealth and its citizens, as well as injuries against the general assembly’s power and authority. Id. at *5. The court rejected these arguments, finding that any such powers were vested in the general assembly or commonwealth, not individual senators. Id. at *6. The state senator plaintiffs also argued that Pennsylvania law provides them with interests sufficient to confer standing, and that their role as “trustees” under the Pennsylvania Environmental Rights Amendment (ERA) conferred standing. Id. (citing Pa. Const. art. I, § 27). Finding that these arguments amounted to nothing more than the state senator plaintiffs asking the court to substitute “friendlier state standards” for those under Article III of the U.S. Constitution, the court rejected them. Id. at *7. Citing precedent, the court likewise rejected the argument that Yaw, Baker, and their caucus are trustees for the commonwealth natural resources, noting that such authority is vested in Pennsylvania agencies or entities. Id. at *8 (citing Pa. Envtl. Def. Found. v. Commonwealth, 161 A.3d 911, 931–32 & n.23 (Pa. 2017)).
Regarding the municipal plaintiffs, the court found that they had obligations as trustees under the ERA but had failed to allege a cognizable injury that would confer standing under Article III. Id. at *9. That is, the court found, their arguments that “loss of funds” that would have flowed to the municipalities had fracking occurred within their boundaries were too speculative and did not show a current or recent injury, not to mention the requirements of traceability and redressability. Id. Despite the municipal plaintiffs’ failure to meet the burden to demonstrate standing, the court noted that articulating actual injury may be possible and allowed them to file a second amended complaint. Id. at *10.
The municipalities did not file a second amended complaint and on July 2, 2021, the court dismissed their claims (and the amended complaint) with prejudice. On July 12, 2021, the state senators, their caucus, and three of the municipalities appealed the dismissal of their claims to the U.S. Court of Appeals for the Third Circuit. See Yaw v. DRBC, No. 21-2315 (3d Cir. filed July 19, 2021).
Substantial Changes to Hazardous Liquid Pipeline Safety Regulations Proposed by Public Utility Commission
On July 15, 2021, the Pennsylvania Public Utility Commission (PAPUC) adopted a notice of proposed rulemaking (NOPR) with proposed changes to the regulations for the design, construction, operations, and maintenance of intrastate pipelines transporting petroleum products and hazardous liquids in Pennsylvania. See PAPUC, Docket Number L-2019-3010267. The proposed changes are significant and in several respects would exceed the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) federal pipeline safety standards and reporting requirements, which PAPUC incorporates by reference. Comments are due 60 days from the date that the NOPR is published in the Pennsylvania Bulletin. A brief summary of the key proposals is provided below.
Reporting (§§ 59.133–.134)
- Proposes a time frame and associated requirements for the submittal of an unredacted failure analysis, which must be conducted by a PAPUC-approved, independent third-party consultant following a reportable accident.
- Proposes that a public utility notify PAPUC prior to construction, reconstruction, maintenance, or assessment activities and sets time frames for the notification based upon project cost. Requires immediate notification of excavation damages, washouts, or unplanned replacement of any pipeline section or cutout.
Design and Construction (§§ 59.135–.138)
- Proposes several design and construction requirements for new pipelines and existing pipelines that are converted, relocated, replaced, other otherwise changed, including analysis of geotechnical conditions, design for geological hazards, setbacks, minimum depth of coverage, testing methodologies, and numerous construction and safety requisites.
- Requires pipelines installed using horizontal directional drilling (HDD), trenchless technology (TT), or other direct bury methodologies to comply with relevant Pennsylvania Department of Environmental Protection (PADEP) regulations protecting water wells and supplies and PADEP’s “Trenchless Technology Technical Guidance Document.”
- Establishes notification requirements prior to commencing HDD, TT, or other direct bury methods, or in the event private or public water supplies are adversely impacted.
- Proposes notification requirement and several in-line and hydrostatic testing schedules, including for pipelines installed prior to 1970, pipelines installed after 1970, and following leak repair.
Operations and Maintenance (§ 59.139)
- Proposes several operations and maintenance requirements, including emergency response procedures, liaison activities with emergency responders and school administrators, public awareness communications, line markers, inspections of rights-of-way, leak detection, and odorization.
Integrity Management (§ 59.139)
- Requires public utilities to consult with public officials when determining the need for remote control emergency flow restriction devices (EFRD) in all high consequence areas and base the need for EFRD on limiting the lower flammability limit to 660 feet on either side of the pipeline.
Operator Qualifications (§ 59.140)
- Significantly expands a public utilities operator qualification program by modifying “covered task” as defined in PHMSA’s federal regulations.
- Requires that a public utilities operator qualification plan include a written qualification program for construction tasks, processes for training all individuals to identify and react to facility-specific abnormal operating conditions, and requalification intervals for each covered task.
Land Agents (§ 59.141)
- Requires that land agents hold a valid professional license as an attorney, real estate salesperson, real estate broker, professional engineer, professional land surveyor, or professional geologist in Pennsylvania.
Corrosion Control (§ 59.142)
- Requires written procedures for the design, installation, operations, and maintenance of cathodic protection systems, including establishing average and worst-case corrosion rates for each pipeline segment.
RMMLF Mineral and Energy Law Newsletter
(By Joseph K. Reinhart, Sean M. McGovern and Gina N. Falaschi)
Continuing from previous issues of this Newsletter, this report provides recent updates on the Pennsylvania Environmental Quality Board’s (EQB) proposed CO2 Budget Trading Program rulemaking, which would link Pennsylvania’s program to and implement the Regional Greenhouse Gas Initiative (RGGI) within the commonwealth beginning in 2022. See Vol. XXXVIII, No. 2 (2021), Vol. XXXVIII, No. 1 (2021), 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. RGGI is the country’s first regional, market-based cap-and-trade program designed to reduce carbon dioxide (CO2) emissions from the power sector. The proposed regulation would limit CO2 emissions from Pennsylvania’s fossil fuel-fired electric generating units with a nameplate capacity of 25 megawatts or greater that send more than 10% of their annual gross generation to the electric grid. The proposed initial emissions cap for Pennsylvania in 2022 is 78 million tons of CO2, which would decline annually.
The public comment period for the proposed rule ran from November 7, 2020, until January 14, 2021. The Independent Regulatory Review Commission (IRRC) released its comments on February 16, 2021. See Comments of the Independent Regulatory Review Commission, Environmental Quality Board Regulation #7-559 (IRRC #3274, CO2 Budget Trading Program (Feb. 16, 2021). The IRRC recommended that EQB (1) explain the choice to institute the program through regulation rather than legislation; (2) provide analysis of its statutory authority to enact the proposal; (3) consider recommendations from commentators on public health, safety, and welfare, economic or fiscal impact, and adequacy of data; and (4) delay implementation of the rulemaking for one year to give the regulated community an opportunity to adjust business plans to account for increased costs associated with Pennsylvania joining RGGI. Id.
In response to public comment, in March 2021, the Pennsylvania Department of Environmental Protection (PADEP) announced a set of equity principles to help inform the public on the implementation of the RGGI program and investments of the program’s proceeds. See Press Release, PADEP, “Wolf Administration Announces Equity Principles to Guide Investments Through Regional Greenhouse Gas Initiative” (Mar. 10, 2021). PADEP also engaged a contractor, the Delta Institute, to develop a plan to invest RGGI auction proceeds to diversify Pennsylvania’s economy and assist communities affected by changes in the energy sector.
PADEP released the final form rulemaking for the CO2 Budget Trading Program ahead of presenting the regulation to the Air Quality Technical Advisory Committee, Citizens Advisory Council, and Small Business Compliance Advisory Counsel at their May 2021 meetings. All three committees voted in support of advancing the rulemaking. Further information regarding these meetings and presentations can be found on PADEP’s RGGI webpage at https://www.dep.pa.gov/Citizens/climate/Pages/RGGI.aspx.
In early July 2021, PADEP released the comment and response document and additional regulatory documents for its CO2 Budget Trading Program. See id. PADEP’s final rule included a number of changes from the draft rule, including quarterly CO2 allowance budgets for 2022 in the event that Pennsylvania joins RGGI part way through the year, a modification to the limited exemption, expansion of the cogeneration (now combined heat and power) set-aside with qualifiers, adjustment of the waste coal set-aside allowances, clarifications to the strategic use set-aside, an additional PADEP commitment to perform an annual air quality impact assessment, and incorporating the equity principles. At its July 13, 2021, meeting, EQB debated and voted 15-4 to adopt the final regulation.
The final regulation will be presented to the Pennsylvania House and Senate Environmental Resources and Energy Committees and the IRRC for approval. The IRRC plans to consider the rule at its September 1, 2021, meeting. See id. If approved by the IRRC and the legislative committees, the regulation will be submitted to the Attorney General’s Office, and if approved, published in the Pennsylvania Bulletin as a final rule. Governor Tom Wolf intends to finalize the regulation by the end of 2021, and regulated entities could be required to begin compliance on January 1, 2022.
The rulemaking, however, continues to face opposition from regulated industry and the general assembly. Despite Governor Wolf’s veto of a bill that would have prohibited PADEP from adopting a greenhouse gas cap-and-trade program with-out specific statutory authorization in September 2020, see Vol. XXXVII, No. 4 (2020) of this Newsletter, the current legislature has continued to advance similar legislation in 2021. In January 2021, Senator Joe Pittman introduced Senate Bill 119, 204th Leg., Reg. Sess. (Pa. 2021), which would require legislative approval before PADEP could impose a carbon tax on employers engaged in electric generation, manufacturing, or other industries operating in the commonwealth, or enter into any multi-state program, such as RGGI, that would impose such a tax. The bill passed 35-15 in the Senate on June 14, 2021, and was sent to the House Environmental Resources and Energy Committee on June 15, 2021. Unlike the legislation vetoed in 2020 by Governor Wolf, Senate Bill 119 passed with a veto-proof majority in the Senate.
The rulemaking has also gained support in the general assembly. On June 4, 2021, Senator Carolyn Comitta announced that she would introduce legislation, the RGGI Investment Act, to create the proposed RGGI funding program. See Senate Bill 15, 204th Leg., Reg. Sess. (Pa. 2021). The legislation would establish several trust funds to distribute the estimated $300 million annual revenue generated through RGGI auctions. These funds would make targeted investments to support environmental justice communities, workers affected by energy transition, and Pennsylvania’s growing clean energy and commercial and industrial sectors. The bill was referred to the Senate Environmental Resources and Energy Committee on July 26, 2021.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
The Legal Intelligencer
(by Blaine Lucas and Anna Jewart)
This past May, a curio story made international news when a Belgian farmer moved a stone monument on his property by approximately 7.2 feet. While this typically would have remained unknown, except to the farmer and perhaps to his neighbor, the farmer did not consider that the stone had been placed in 1819 to mark his home country’s border with France, and moving it resulted in an approximate 3,000 square foot loss of territory for the French. Luckily, the change in location was quickly caught and resolved without international incident. The quick discovery and resulting amicable resolution between the two nations was made possible in large part because the local Belgian municipality, Erquelinnes, had geo-localized the stones in 2019 for its 200th anniversary and knew exactly where it should have been. A few days after the story went viral, the Pennsylvania Commonwealth Court addressed what happens when municipalities here misplace their historic markers and later disagree over the location of their common boundaries. In Woodward Twp. Mun. Corp. of Clinton County, Pa. v. Dunnstable Twp. Mun. Corp. of Clinton County, Pa., Nos. 704 C.D. 2020, 733 C.D. 2020 (Pa. Cmwlth. May 12, 2021), disagreement over boundary stones and surveys dating back to 1844 resulted in a modern-day battle of the experts to determine exactly where the shared boundary of the two townships actually lies.
Although it was avoided by the farmer in Erquelinnes, wars and lawsuits are often fought over the location of boundaries, whether they are private, municipal, or international. Consequently, Pennsylvania law provides certain protections for the agreed upon location of municipal boundaries, and establishes procedures for both how to change them willingly, and how to resolve disputes surrounding their location. Article III, Section 32 of the Pennsylvania Constitution prohibits the state legislature from passing any local or special law that creates new counties, townships or boroughs or changes county limits, township lines, borough limits, or school districts. In turn, it grants the electors of a municipality the right to consolidate, merge, and change boundaries by initiative and referendum, without the approval of any governing body.
Although the alteration of a known municipal boundary must be accomplished by majority vote of the citizens of a municipality, the resolution of a dispute over an uncertain municipal boundary may be handled only by the judiciary. Pursuant to the various municipal codes, courts of common pleas are authorized to appoint a board of commissioners to determine the location of the boundary. This board serves as fact-finder and its resulting determination has the force and effect of a jury verdict. The findings of the board will not be disturbed by a reviewing court absent an abuse of discretion, so long as its determination was supported by legally competent testimony.
In Woodward, Woodward Township (“Woodward”) and Dunnstable Township (“Dunnstable”), both second class townships in Clinton County (“County”), disagreed over their shared boundary line. The dispute began in the late 2000s, but the underlying issues dated back to the mid-1800s. In the late 2000s, a Woodward supervisor noticed the boundary line depicted on the County Geographic Information System (“GIS”) Department’s maps did not coincide with the tax parcel maps. In 2017, Woodward filed a petition in the Clinton County Court of Common Pleas for appointment of a board of boundary commissioners pursuant to Section 302 of the Second Class Township Code, 53 P.S. §65302, (“Code”). In accordance with Section 302, the trial court appointed a board of three impartial citizens as commissioner (“Board”). As required by the Code, the Board included a registered surveyor. The other two members were an attorney and real estate professional. In 2018 the Board conducted a hearing and view of the disputed boundary line and ultimately found in favor of the boundary proposed by Woodward.
The Board initially found that in 1841 Dunnstable was subdivided to create Woodward by the Court of Quarter Sessions of Clinton County, as was authorized by law at the time. In 1843, citizens in southwestern Dunnstable requested that the Court of Quarter Sessions adjust the boundary line between the two townships so that the area located on the southwestern side of Dunnstable would be annexed to Woodward, moving the southern boundary line eastward. In 1844, the Court of Quarter Sessions confirmed a report setting forth new boundary line.
Both sides presented the testimony of surveyors, neither of which could find the southernmost point of the 1841 boundary line between the two townships. Both surveyors proposed boundary lines starting from a common point on an island in the Susquehanna River, headed north to a stone monument marking the former site of a maple tree, and then diverged. The boundary proposed by Woodward’s surveyor headed due north, then due west, then due north again, based on the 1841 document which created the initial boundary. The line proposed by Dunnstable’s surveyor was based on an assumption that in 1843 or 1844, the surveyor would have left monuments to mark the division line. The Dunnstable surveyor searched for the monuments and based his boundary line along set stones he found. This proposed line generally matched the Clinton County GIS line, although no one from the County testified at the hearing. The majority of the Board ultimately found the boundary proposed by Woodward to be more credible and rejected the assumptions and findings set forth by the surveyor for Dunnstable. Dunnstable appealed to the Commonwealth Court.
On appeal, Dunnstable argued the Board erred by failing to recognize two cut stone monuments, which it contended take precedence over any other description or source, and the 1844 court-ordered description of the change in boundary line was consistent with the findings of its survey. In addition, it argued Woodward was attempting to illegally annex a portion of Dunnstable, which would require a referendum, and the Board had failed to take into consideration evidence of acquiescence by Woodward.
In considering the credibility of the Dunnstable and Woodward surveys, the Board had reasoned, based on prior case law, that where monuments are doubtful, courses and distances are considered more reliable. It also found no relation in the placement of the set stones to the disputed boundary line. The Commonwealth Court first observed that pursuant to the Code, when a board files its report and recommendation with the appointing court, it shall be confirmed nisi, and therefore the reviewing court may not disturb the Board’s determination unless it committed an error of law or its conclusion was not supported by competent evidence. The Court found that because Dunnstable’s arguments addressed the weight and credibility given to the testimony and evidence presented by Woodward, not its competency, it was not permitted to set aside the Board’s findings.
Dunnstable also argued that Woodward was attempting to illegally annex a portion of Dunnstable through the statutory procedure reserved for the alteration of boundary lines. However, the Court found that because the modern version of the Code only granted the Board the power to discern the location of a boundary, and not to alter that location, the misuse of the Code to achieve annexation was unlikely, and there was no evidence that Woodward was doing so. Although the Court acknowledged there was evidence annexation had occurred in a manner no longer permissible, the annexation had taken place in 1844, not 2020, and those issues were not properly before the Court.
Dunnstable’s final issue involved the doctrine of acquiescence, which provides that long acquiescence in the location of municipal boundaries by the municipality and its inhabitants, where all municipal action and improvements have been done under the assumption those boundaries are correct, will support the conclusion that they are the true boundaries. Evidence of acquiescence is relevant where there is doubt as to what the true boundaries were in fact, or as to the legality of their establishment. This is particularly true where personal, civil, and political rights have become affixed according to the boundaries established by usage. Dunnstable pointed to the testimony of a property owner who owned properties on both sides of the line, and constructed a house in 2009 which he intended to be placed in Dunnstable, based upon a 2008 survey. Based on the Board’s decision, the home would now be located in Woodward. However, the Court noted that case law dictated that acquiescence should only be considered where a boundary cannot be determined based upon the evidence. While the Board had noted evidence of acquiescence, it had considered the evidence unnecessary given their finding of a true boundary line based on the evidence presented. The Court therefore found there were no grounds to disturb that determination.
Although disputes over municipal boundaries remain fairly rare, they do occur, and the implications for municipal and private property rights are notable. Although modern GIS mapping makes the recognition of known boundaries easier, the digital lines must still be based on historic surveys or markers which may have been lost, eroded, or even intentionally moved. An updated review of their boundaries gained territory for Woodward Township, and saved Erliquennes, Belgium, from creating an international incident.
For the full article, click here.
Reprinted with permission from the June 17, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
Renewables Law Blog
(By Bruce Rudoy)
It’s no secret that coal plants have had trouble competing with cheaper renewables and natural gas in recent years. Unexpectedly low prices from PJM’s latest capacity auction spurred a fresh wave of retirement announcements this month. But Talen Energy has decided that rather than retire coal plants and walk away, it would convert those sites to be used for other renewable energy-related projects. While Talen promised in November 2020 to shut down roughly 5 gigawatts of coal capacity in the 2020s, the company wanted more of a comprehensive strategy for this transition. “This is the first of hopefully many unit transitions from coal to lower-carbon sources and battery,” said Cole Muller, who oversees Talen’s fossil-powered fleet in the territory of regional transmission organization PJM. “It’s really about decarbonizing, …investing in the communities and continuing to provide opportunities for our people.” After that project, Talen plans to build a 1-gigawatt battery fleet in the next three to five years on its existing properties, using individual batteries as large as 300 megawatts. “If you just retire it, you have a significant loss to both jobs and the tax base, and the communities at large,” Muller said. Talen tapped battery developer Key Capture Energy to build a 20-megawatt system as a demonstration of the concept. That smaller size allows for a streamlined approval process, Muller noted. But the battery will act just like any other commercial power plant, bidding into PJM’s markets for capacity, ancillary services and energy arbitrage. Assuming that goes well, Talen can add up to another 115 megawatts of battery storage to fully utilize the coal plant’s grid connection capacity. That’s a distinct advantage for developing batteries at an older power plant. The site has been cleared to export a certain amount of power to the grid, so there’s less risk of having to pay for hefty network upgrades as developers must do at greenfield sites. The coal-to-battery switching remains too nascent to be labeled a trend. But we hopefully will see more of these transitions in the future making the switch from coal to renewable energy a win for everyone.
A power plant in Maryland ditches coal for batteries, a first for the US (canarymedia.com)
Tags: battery storage, coal, decarbonizing
The Legal Intelligencer
(by Molly Meacham)
Even in ordinary times, keeping up with an ever-changing employment law landscape is a compliance challenge for businesses. The extraordinary circumstances of the COVID-19 pandemic sparked unprecedented compliance challenges for employers, including workplace safety issues, additional temporary leave requirements, and interpreting existing obligations through the lens of COVID-19.
Compliance obligations for employers are continuing to evolve in 2021. Presidential administration change and a change in the majority party in the U.S. Senate each typically cause new and revised legislation and regulations. Combined with the ongoing pandemic, the result is continued significant alteration to the legal and regulatory framework that will impact employers in 2021 and beyond. These developing issues include worker classification under the Fair Labor Standards Act (FLSA), a temporary expansion of the Consolidated Omnibus Budget Reconciliation Act (COBRA) under the American Rescue Plan Act of 2021 (ARPA), and COVID-19 workplace safety issues relating to fully vaccinated employees.
FLSA Independent Contractor Rule Withdrawn
One of the most important baseline employment-related determinations a business can make is whether a worker is properly classified as an employee or an independent contractor under the FLSA. Worker misclassification is a frequently-litigated issue that represents significant legal exposure for businesses, as damages for misclassification can include retroactive application of minimum wage and overtime requirements, the value of employee benefits that were not provided, any legally-mandated sick time, or self-employment tax paid by the worker.
In the last weeks of the Trump administration in early 2021 the Department of Labor (DOL) issued a Final Rule seeking to clarify the independent contractor test and make it easier to identify workers covered by the FLSA. The traditional independent contractor test contains six non-exclusive factors which the DOL’s Wage and Hour Division and the federal courts evaluate on a case-by-case basis to determine whether a worker is, as a matter of economic reality, dependent on the employer for work or in business for themselves, with no single factor considered dispositive. The Rule’s new test elevated two of those factors to “core factors” intended to carry the most weight in the analysis: (1) the nature and degree of control over the individual’s work, and (2) the worker’s opportunity to earn profits or incur losses based upon their contributions. Only if those factors were inconclusive were other traditional factors to be considered, in particular the worker’s level of skill or expertise, the permanency of the relationship, and whether the workers are an integral part of the business.
Two months into the Biden administration, in March 2021 the DOL delayed the Final Rule’s implementation and proposed its withdrawal, which was finalized on May 6, 2021. See 86 FR 24305-6. The DOL received multiple comments both in favor of and opposed to withdrawing the Rule, and decided to withdraw the Rule on the basis that it is “inconsistent with the FLSA’s text and purpose,” and would depart “from longstanding judicial precedent.” Id. at 24307. The DOL also disagreed with the Rule’s elevation of two core factors over other potential factors, which it believed could cause confusion and disruption for businesses and workers and lead to inconsistent outcomes. Id. at 24308. The DOL stated that it does not currently intend to propose or issue replacement regulatory guidance. As the Rule never actually took effect, following its withdrawal, businesses should not alter their analysis of independent contractor issues based upon the “core factors” approach of the Rule. Instead, businesses should continue to be guided by the application of existing judicial precedent, regulations and Wage and Hour Division guidance to their specific facts and circumstances.
COBRA Extension and Premium Assistance
Several laws have been passed to provide temporary relief relating to the economic impacts to businesses and individuals caused by COVID-19, including the ARPA. The ARPA included an extended period to elect COBRA coverage and a period of COBRA premium assistance, each for qualifying individuals. There are several aspects to qualification, but an individual may qualify if their employment was involuntarily terminated (except for gross misconduct) or their hours were involuntarily reduced. Eligible individuals must be notified of both the election extension and premium assistance.
For qualifying individuals first eligible for COBRA coverage on or after November 1, 2019, the ARPA allows a second extension period during which to elect COBRA coverage, beginning on April 1, 2021 and ending 60 days after a special election notice was provided to the qualifying individual. The special election notice was required to be provided to eligible individuals by May 31, 2021. The ARPA only extends the time to elect coverage and does not extend the COBRA coverage period, which is typically 18 months.
The ARPA also provides COBRA premium assistance for eligible individuals from April 1, 2021 through October 31, 2021. Employers are required to provide the premium assistance to eligible individuals, and then claim a tax credit for reimbursement. Standard COBRA notices should be updated for this period to provide information about premium assistance, and eligible individuals must also be notified when their premium assistance will expire. Again, this premium assistance does not extend the COBRA coverage period.
Businesses should coordinate with their group health plan administrators to identify which individuals are eligible for extended COBRA coverage and premium assistance, and to ensure their COBRA notices to eligible individuals are compliant during these temporary ARPA changes. The DOL has issued model revised notices on its website, including a temporary update to the standard COBRA election notice for use through October 31, 2021.
OSHA, the CDC and Vaccinated Workers
In its existing guidance related to the COVID-19 pandemic posted in January 2021, the Occupational Safety and Health Administration (OSHA) expressly recommended that employers maintain the same protective measures for both vaccinated and unvaccinated employees. That guidance is advisory only, and that same month President Joseph R. Biden Jr. issued an executive order directing OSHA to revise its guidance on COVID-19, including considering an emergency temporary standard to provide OSHA-enforceable workplace safety rules on COVID-19.
OSHA’s emergency temporary standard related to COVID-19 was drafted but not yet finalized or publicized in May 2021 when the Centers for Disease Control and Prevention (CDC) updated their recommendations to allow people who are fully vaccinated to cease wearing a mask or physically distancing except as where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance. Although an emergency temporary standard relating to COVID-19 is still expected at some point, its release has been delayed while OSHA reviews the new CDC guidance. In the interim, the only guidance OSHA has provided to employers is that employers should refer to CDC guidance for information on measures appropriate to protect fully vaccinated workers.
CDC guidelines continue to evolve, and it is uncertain whether OSHA will wholly adopt CDC guidelines or place additional requirements on employers. Before making changes to workplace COVID-19 safety measures employers should consider any relevant state, local or other restrictions, remembering that those restrictions set a minimum standard that must be met. In addition, employers should evaluate how the CDC’s guidelines and the unique circumstances of their workplaces interact with OSHA’s General Duty Clause, which requires employers to provide their workers with a workplace free from recognized hazards that are causing or likely to cause death or serious harm. OSHA’s silence to date on a COVID-19 emergency temporary standard is not likely to go on indefinitely, and employers should remain prepared to implement updated safety measures in the coming months.
For the full article, click here.
Reprinted with permission from the June 3, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
RMMLF Mineral Law Newsletter
(Joseph K. Reinhart, Sean M. McGovern and Casey J. Snyder)
On February 16, 2021, the Pennsylvania Commonwealth Court affirmed the Pennsylvania Environmental Hearing Board’s (EHB) decision to deny environmental groups’ petition for attorney’s fees after a settlement with the Pennsylvania Department of Environmental Protection (PADEP) in a third-party permit appeal over Sunoco Pipeline L.P.’s (Sunoco) Mariner East 2 pipeline because neither side acted in “bad faith.” Clean Air Council v. PADEP, 245 A.3d 1207 (Pa. Commw. Ct. 2021). After the plaintiffs settled the dispute at the EHB over permits issued to Sunoco for its Mariner East 2 pipeline, the plaintiffs filed an application with the EHB to recover costs and fees of the litigation totaling nearly $230,000 from Sunoco, which was not a party to the settlement. Id. at 1210. The EHB applied a stricter standard for recovering fees from a private party than in applications to recover fees from PADEP, requiring the plaintiffs to show the private party acted in “bad faith.” Id. at 1211. Under this standard, the EHB reasoned, permittees would not be “dissuaded from vigorously protecting their interests . . . in good faith.” Id. (quoting Clean Air Council v. PADEP, 2019 EHB 228, 236). Finding no bad faith, the EHB denied the plaintiffs’ application for costs and fees. Id.
The plaintiffs appealed the decision to the commonwealth court, arguing that the EHB should have applied the less stringent “catalyst test,” which would have required the plaintiffs to meet an easier standard: that the opposing party provided some benefit the fee-requesting party sought, the suit stated a genuine claim, and their appeal was a substantial or significant reason why the opposing party provided the benefit the fee-requesting party sought in the underlying suit. Id. at 1215. The court rejected the plaintiffs’ arguments and held “it was entirely within EHB’s discretion, and eminently appropriate, to apply the instant bad faith standard in deciding whether or not to impose costs and fees upon a private party permittee.” Id. at 1218 (emphasis added). Thus, the catalyst test is not the “sole and exclusive” standard the EHB may employ in cost and fee applications against a permittee under section 307(b) of the Clean Streams Law. Id. The court also determined PADEP had no standing to challenge the EHB’s decision on a costs and fees application against a third party where PADEP’s interest was entirely prospective and concerned how the EHB’s application of the bad-faith standard would be applied in future costs and fees applications.
In a separate decision, the commonwealth court upheld an EHB ruling that reduced the fees awarded to a family that challenged PADEP permits for the Mariner East 2 pipeline crossing their land. PADEP v. Gerhart, No. 107 C.D. 2020, 2021 WL 563313 (Table) (Pa. Commw. Ct. Feb. 16, 2021). The EHB in 2019 held that PADEP misclassified a wetland on the Gerhart’s property and that Sunoco had to conduct additional restoration of the wetland after completing the pipeline’s construction under Sunoco’s approved restoration plan. Id. at *1. The EHB held Sunoco to the bad-faith standard and PADEP to the catalyst test in parceling out who was responsible for the reduced legal fee award to the plaintiff. Following the same logic as its ruling in the Clean Air Council case, the court affirmed that the EHB had the discretion to apply both standards in awarding fees, charging no fees to Sunoco and $13,135.77 in fees to PADEP. Id. at *2–3.
On March 18, 2021, the plaintiffs filed an appeal with the Pennsylvania Supreme Court from the February 16, 2021, commonwealth court decision affirming the EHB’s denial of their request for attorney’s fees. See Petition for Allowance of Appeal, Clean Air Council v. PADEP, No. 131 MAL 2021 (Pa. Mar. 18, 2021). PADEP has also appealed the ruling that it did not have standing. See Clean Air Council v. PADEP, No. 132 MAL 2021 (Pa. filed Mar. 18, 2021). A date for oral argument had not been scheduled as of May 1, 2021.
Environmental Groups, PADEP Reach Settlement over Reissued General Permit
In a February 4, 2021, letter, five environmental groups asked the Pennsylvania Department of Environmental Protection (PADEP) to suspend or revoke dozens of permit approvals under recently reissued General Permit WMGR123 (General Permit). See Letter Re: DEP’s Recent Approval of 49 Authorizations Under the New General Permit WMGR123 Without Proper Public Notice (Feb. 4, 2021). The General Permit, created in 2010, provides for the “processing, transfer and beneficial use of oil and gas liquid waste to develop or hydraulically fracture an oil or gas well.” General Permit WMGR123 (as amended Mar. 14, 2012). The General Permit expired on October 4, 2020, but was extended to January 4, 2021, pending PADEP’s planned renewal. PADEP began the process of updating and renewing the General Permit in 2020, and published notification on December 19, 2020, that a new WMGR123 was approved and would become effective January 4, 2021. See 50 Pa. Bull. 7249 (Dec. 19, 2020).
The groups alleged that PADEP failed to follow public notification requirements required under both the reissued General Permit and Pennsylvania regulations at 25 Pa. Code § 287.642(c) for 49 General Permit renewal applications for existing permits. Specifically, the groups alleged PADEP granted 49 total General Permit renewals on December 23, 2020, and January 4, 2021, without providing any public notice, or with providing public notice but under the previous version of the General Permit, despite the new General Permit becoming effective on January 4, 2021. Before any appeals were filed, PADEP and the environmental groups entered into a stipulation of settlement under which PADEP agreed to hold an additional 60-day public comment period and the environmental groups agreed not appeal any of the General Permit approvals based on public notice procedures. See Stipulation of Settlement (Feb. 16, 2021). PADEP published notice of the 60-day public comment period on March 20, 2021, which closed on May 19, 2021. See 51 Pa. Bull. 1535 (Mar. 20, 2021). The groups subsequently filed appeals of six General Permit authorizations with the Pennsylvania Environmental Hearing Board.
Editor’s Note: The reporters’ law firm is representing two companies whose authorizations have been appealed.
Pennsylvania Democrats Granted Intervention in Lawsuit Challenging Delaware River Watershed Drilling Ban
On February 25, 2021, by a 4-0-1 vote, the Delaware River Basin Commission (DRBC) amended its regulations to ban the drilling of unconventional wells in the Delaware River Basin. See News Release, DRBC, “New DRBC Regulation Prohibits High Volume Hydraulic Fracturing in the Delaware River Basin” (Feb. 25, 2021). During the special meeting, the United States abstained from the vote, but indicated support for the result, while the vote was unanimous from the state commissioners.
Prior to the amendment to the Basin regulations, Senator Gene Yaw (R-23), Senator Lisa Baker (R-20), and the Pennsylvania Senate Republican Caucus filed a lawsuit to overturn the de facto moratorium that had been in place since 2010. See Yaw v. DRBC, No. 2:21-cv-00119 (E.D. Pa. filed Jan. 11, 2021). The DRBC alleged it maintained its authority to prohibit construction or operation of natural gas wells within the Basin as a valid exercise of its power to regulate “projects” utilizing “water resources.” Delaware River Basin Compact § 3.8 (1961). The lawsuit asserts several counts, including constitutional claims relating to eminent domain, regulatory takings, and the Republican Form of Government Clause (Guarantee Clause), and an ultra vires claim regarding the DRBC’s authority over the moratorium.
On March 12, 2021, Senator Steve Santarsiero (D-10) was joined by Democratic colleagues, including the Democratic Caucus of the Pennsylvania House of Representatives, to intervene as defendants in the lawsuit. In one-page orders from U.S. District Court for the Eastern District of Pennsylvania, the court allowed the Democratic intervenors to be added as defendants in the case on March 19, 2021, and in a second order, relieved them of any obligation to respond to the initial complaint on March 24, 2021. The intervenors and the DRBC filed motions to dismiss for lack of jurisdiction and failure to state a claim on April 15, 2021, after the plaintiffs amended their complaint on March 31, 2021, to reflect the DRBC’s new regulations prohibiting unconventional wells. See Motion to Dismiss and Memorandum of Law in Support of County Intervenors’ Motion to Dismiss Amended Complaint, Yaw v. DRBC, No. 2:21-cv-00119 (E.D. Pa. Apr. 15, 2021). The motion to dismiss filed by the Democratic intervenors sets forth three main arguments for dismissing the lawsuit. First, the plaintiffs lack standing to file their lawsuit. Second, the plaintiffs’ allegation of a regulatory taking fails as a matter of law. Third, the plaintiffs’ complaint fails to plead a claim under the Guarantee Clause. The court had not ruled on the defendants’ motions as of May 1, 2021.
Chesapeake Reaches $1.9 Million Settlement Agreement with PADEP, EPA over Alleged Wetland and Stream Violations
On March 24, 2021, the Pennsylvania Department of Environmental Protection (PADEP), U.S. Environmental Protection Agency (EPA), and U.S. Department of Justice executed a consent decree with Chesapeake Appalachia, LLC (Chesapeake) to resolve Chesapeake’s alleged violations of the federal Clean Water Act and the Pennsylvania Clean Streams Law and Dam Safety and Encroachments Act associated with the alleged failure to identify and protect wetlands at 76 oil and gas well sites in Pennsylvania. See Proposed Consent Decree, United States v. Chesapeake Appalachia, LLC, No. 4:21-cv-00538 (M.D. Pa. Mar. 24, 2021). The alleged violations stem from discharges of dredged and/or fill material into waters of the United States and/or waters of the Commonwealth, creation of unauthorized encroachments, water obstructions, and issues related to earth disturbance activities, and stormwater management. Beginning in 2013 while renewing Pennsylvania Erosion and Sediment Control General Permit authorizations, Chesapeake discovered that some of its operations in Pennsylvania did not completely delineate all required wetlands or required resources. Chesapeake disclosed these sites to PADEP and EPA and, over the course of several years, the parties worked on how to bring Chesapeake back into compliance. Despite Chesapeake’s efforts to discover and report the non-compliance, PADEP and EPA declined to address the matter under their respective policies on voluntary audit and self-disclosures. Proposed Consent Decree at 7.
Under the terms of the consent decree, Chesapeake agreed to:
- pay a $1.9 million civil penalty;
- replace, restore, or enhance 25.778 acres of wetlands and 2,326 linear feet of streams;
- institute a compliance assurance program to ensure its facilities operate in compliance with federal and state law; and
- pay greater stipulated penalties than normally found in state settlement agreements, should Chesapeake fail to meet its obligations.
The consent decree was subject to a 30-day public comment period that closed on April 29, 2021, and is pending final court approval.
Environmental Justice Updates in Pennsylvania
The Pennsylvania Department of Environmental Protection’s (PADEP) Office of Environmental Justice is in the process of updating its environmental justice (EJ) policy titled “Environmental Justice Public Participation Policy,” in line with a recent trend of similar efforts from the Biden administration and several states to increase EJ review in regulatory actions like permitting. See PADEP, Environmental Justice Public Participation Policy (No. 012-0501-002) (effective Apr. 24, 2004). A revised policy could affect the process of PADEP’s permitting, enforcement, and other regulatory activities.
PADEP’s policy went into effect in 2004. The current policy applies to “Environmental Justice Areas,” which are areas of concern (a half-mile radius from the center of the proposed permit activity and any area outside this radius impacted by the proposed activity) that are also part of a census tract with a 30% or greater minority population or 20% or greater at or below the poverty level, as defined by the U.S. Census Bureau. Permitting actions in Environmental Justice Areas are subject to increased public participation requirements. The policy applies to (1) “trigger permits,” which are permits that PADEP determined to have significant public health concerns; and (2) “opt-in permits,” which are all other permits that PADEP may determine warrant EJ consideration under the policy.
While a draft of the revised policy has not yet been released, PADEP signaled that it could be dramatically changing the scope of the policy. PADEP is currently in a public outreach stage of the revision process, seeking comments on how it can address EJ concerns in addition to public participation in the permitting review process. PADEP’s Office of Environmental Justice held public outreach meetings in late March 2021 to discuss the timeline and seek comments on certain questions about the scope of the policy. Also, PADEP could expand the list of “trigger permits” in the revised policy to include certain oil and gas-related permits. The revisions under discussion now constitute the second proposed draft of the policy since it became effective. In a previous 2018 draft revision of the policy that was withdrawn in November 2020, PADEP proposed to include permits to drill and operate underground injection control wells for disposal of oil and gas liquid waste or enhanced recovery. See PADEP, Draft Environmental Justice Public Participation Policy (No. 012-0501-002) (withdrawn draft from 2018).
A draft of the revised policy is expected to be published sometime in fall 2021. See Office of Envtl. Justice, PADEP, “Environmental Justice Policy Revision,” https://www.dep.pa.gov/PublicParticipation/OfficeofEnvironmentalJustice/Pages/Policy-Revision.aspx. A final revised policy could be in effect by spring or summer 2022, after several stages of planned public comment, internal review, and community engagement.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
RMMLF Mineral Law Newsletter
(By Joseph K. Reinhart, Sean M. McGovern, Daniel P. Hido and Gina N. Falaschi)
Continuing from previous publications of this Newsletter, this report provides updates on the Pennsylvania Environmental Quality Board’s (EQB) proposed CO2 Budget Trading Program rulemaking, which would link Pennsylvania’s program to and implement the Regional Greenhouse Gas Initiative (RGGI) within the commonwealth. See Vol. XXXVIII, No. 1 (2021), 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.
After the public comment period closed in January 2021, the Independent Regulatory Review Commission (IRRC) issued its comments on the proposed rule on February 16, 2021. See Comments of the Independent Regulatory Review Commission, Environmental Quality Board Regulation #7-559 (IRRC #3274), CO2 Budget Trading Program (Feb. 16, 2021).
The IRRC’s comments, based on criteria in section 5b of Pennsylvania’s Regulatory Review Act, 71 Pa. Stat. § 745.5b, addressed the significant objections to the proposed rule from the members of the regulated community and general assembly. The comments recommended that EQB explain the choice to institute the program through regulation rather than legislation, provide analysis of its statutory authority to enact the proposal, and consider recommendations from commentators on public health, safety, and welfare, economic or fiscal impact, and adequacy of data. The IRRC also asked EQB to consider delaying the implementation of the rulemaking for one year to give the regulated community an opportunity to adjust business plans to account for increased costs associated with Pennsylvania joining RGGI. Under the Regulatory Review Act process, EQB will respond to these comments, and other public comments, when finalizing this rulemaking.
On March 10, 2021, the Pennsylvania Department of Environmental Protection (PADEP) announced a set of equity principles to help inform the public on the implementation of the RGGI program and investments of the program’s proceeds. See Press Release, PADEP, “Wolf Administration Announces Equity Principles to Guide Investments Through Regional Greenhouse Gas Initiative” (Mar. 10, 2021). The RGGI Equity Principles are (1) inclusively gathering and considering input from the public related to decisions made under RGGI; (2) protecting public health and welfare, mitigating any adverse impacts on human health, especially in environmental justice communities, and seeking to ensure environmental and structural racism are not replicated in the engagement process; and (3) working equitably and with intentional consideration to distribute environmental and economic benefits of the proceeds of allowance auctions. PADEP has also joined with the Delta Institute to engage with impacted communities to identify a path for an equitable transition for all Pennsylvania residents. The Delta Institute will develop a plan to invest RGGI auction proceeds to diversify Pennsylvania’s economy and assist communities that are affected by changes in the energy sector.
At the April 8, 2021, Air Quality Technical Advisory Committee meeting, PADEP presented updates on the status of and revised language for the proposed implementation of the RGGI program. PADEP summarized the key proposed changes and public comments received and updated power sector modeling. Proposed changes to the regulation include adjustment of the waste coal set-aside, expansion of the cogeneration set-aside, clarification of the strategic use set-aside, the addition of annual air quality impact assessment, and the incorporation of the RGGI Equity Principles into the preamble. PADEP made a similar presentation to the Citizens Advisory Council (CAC) on April 20, 2021. PADEP presented the updated modeling and the CAC voted on the proposal at its May 19, 2021, meeting.
PADEP’s proposal continues to meet opposition from the regulated industry and the general assembly. In January 2021, Senator Joe Pittman introduced Senate Bill 119, 204th Leg., Reg. Sess. (Pa. 2021), which would require legislative approval before PADEP could impose a carbon tax on employers engaged in electric generation, manufacturing, or other industries operating in the commonwealth, or enter into any multi-state program, such as RGGI, that would impose such a tax. The bill had its first consideration in the Senate on April 27, 2021, and second consideration on May 12, 2021. This bill is similar to Senate Bill 950 from the legislature’s previous session, a version of which was passed as House Bill 2025 and was vetoed by Governor Tom Wolf in September 2020. See Vol. XXXVII, No. 4 (2020) of this Newsletter.
In addition to introducing legislation, Senate Republicans sent Governor Wolf a letter on April 21 advising him that they will reject all future nominees to the Public Utility Commission (PUC) due to the Governor’s recent actions related to joining RGGI. See Letter from Senate Republicans to Governor Wolf (Apr. 21, 2021). The group has committed not to confirm any PUC nominees until Governor Wolf either removes Pennsylvania from RGGI or submits the compact to the general assembly for approval.
PADEP is currently working on the comment response document. PADEP expects to present the final regulation to EQB in summer 2021. If EQB adopts the final regulation, the regulation will be presented to the Pennsylvania House and Senate Environmental Resources & Energy Committees and the IRRC for action. If approved by the three committees, the regulation will be submitted to the Attorney General’s Office, and upon approval, published in the Pennsylvania Bulletin.
IRRC Approves Final Rulemaking on Water Supply Replacement for Coal Surface Mining
As reported in Vol. XXXVI, No. 4 (2019) of this Newsletter, on November 2, 2019, the Pennsylvania Environmental Quality Board (EQB) published a proposed rule revising the water supply replacement regulations under 25 Pa. Code chs. 87–90. See 49 Pa. Bull. 6524 (proposed Nov. 2, 2019). The final-form regulation was submitted to the Independent Regulatory Review Commission (IRRC) on February 25, 2021. On April 15, 2021, the IRRC issued an order approving the regulation. See IRRC Approval Order (Apr. 15, 2021); see also 51 Pa. Bull. 2468 (May 1, 2021). The Senate and House Environmental Resources & Energy Committees also approved the final regulation on April 14, 2021.
Among other changes, the final rule reserves current 25 Pa. Code §§ 87.119 (surface coal mining) and 88.107 (anthracite mining) and replaces those provisions with the extensively revised new sections 87.119a and 88.107a. The most notable changes in these new sections include:
- Water Supply Survey. Pre-mining water supply surveys are often used to establish baseline water supply conditions. The current regulations only generally refer to such surveys. In contrast, sections 87.119a(a) and 88.107a(a) of the final rule specify that the survey must include the location and type of the water supply, the existing and reasonably foreseeable uses of the supply, the chemical and physical characteristics of the water, historical and recent water quantity measurements, and sufficient sampling to document seasonal variations in hydrologic conditions.
- Water Supply Replacement Obligations. Sections 87.119a(b) and 88.107a(b) clarify that if a water supply has been affected to a demonstrable extent by mining, the operator must restore or replace the water supply with a permanent source adequate for the purposes served and “reasonably foreseeable uses” of the water supply. Subsection (c) requires operators to provide a temporary water supply within 24 hours if the water supply owner/user is without a readily available alternative source of water. Under subsection (d), the Pennsylvania Department of Environmental Protection (PADEP) may provide a temporary water supply and seek to recover costs from the operator.
- Adequacy of Restored or Replaced Water Supply. Sections 87.119a(f) and 88.107a(f) require a restored or replaced water supply to be as reliable and permanent as the previous supply, not require excessive operation and maintenance (O&M) or result in increased cost to the user without compensation, and provide the water supply owner/user with as much control and accessibility as the previous water supply. The final rule expands the concept of “adequate quality,” requiring the restored or replaced water supply to be comparable to the previous supply as documented in the water supply survey, or meet the requirements of the Pennsylvania Safe Drinking Water Act (SDWA). PADEP may require the restored or replaced water supply to be of equivalent quality to the pre-mining supply, even if this requires water of better quality than SDWA standards, if the water supply user demonstrates that such quality is necessary to meet the use served by the original supply. Finally, “adequate quantity” means the restored or replaced water supply must deliver the amount of water necessary to satisfy the purposes served by the supply as documented in the pre-mining survey, including any “reasonably foreseeable uses,” which includes “the reasonable expansion of use where the quantity of the water supply available prior to mining was adequate to supply the foreseeable uses.”
- Reimbursement. Sections 87.119a(e) and 88.107a(e) of the final rule are new provisions that require operators to reimburse water supply owners/users who replace the water supply themselves when it is later determined that the operator is responsible for the water supply problem. The operator may dispute costs that appear to be excessive based on the pre-mining survey.
- Operation and Maintenance. New sections 87.119a(g) and 88.107a(g) contain detailed procedures for determining O&M costs and requiring the operator to post a bond to assure payment of increased O&M costs so that the restored or replaced water supply does not result in increased costs to the user.
- Presumption of Liability. New sections 87.119a(j) and 88.107a(j) clarify the statutory presumption contained at 52 Pa. Stat. § 1396.4b(f)(2) that an operator is responsible for pollution or diminution of water supplies within 1,000 feet of the boundaries of areas affected by surface mining operations, and the defenses available to operators to rebut the presumption.
The final rulemaking package is available at http://www.irrc.state.pa.us/docs/3245/AGENCY/3245FF.pdf. The revised regulations will go into effect upon publication in the Pennsylvania Bulletin.
OSMRE Publishes 2020 Pennsylvania Evaluation Report
In March 2021, the Pittsburgh Field Office of the federal Office of Surface Mining Reclamation and Enforcement (OSMRE) released its annual evaluation report of the regulatory and abandoned mine reclamation programs administered by the Pennsylvania Department of Environmental Protection (PADEP). The report covers the 2020 evaluation year, which ran from July 1, 2019, to June 30, 2020. The report is issued pursuant to OSMRE’s authority under the federal Surface Mining Control and Reclamation Act (SMCRA) to oversee the implementation of state programs that have been approved as meeting the mini-mum requirements of SMCRA.
The first half of the report addresses PADEP’s administration of SMCRA’s regulatory program. The report notes that PADEP reported over 1,100 inspectable sites, including 700 active sites, and performed over 11,000 full or partial inspections. OSMRE conducted 84 oversight inspections, including 71 in the bituminous region and 13 in the anthracite region. Of the 71 inspections in the bituminous region, 40 did not identify any violations. Of the 31 inspections where violations were identified, OSMRE identified a total of 58 violations, 53% of which related to hydrologic balance. OSMRE, “2020 Pennsylvania Annual Evaluation Report,” at 10–12 (Mar. 2021).
The report similarly includes an evaluation of off-site im-pacts from mining. The report notes that PADEP identified a total of 48 off-site impacts related to 34 permits during the evaluation year, with 96% of permits causing no off-site im-pacts. Forty-four of the 48 off-site impacts related to hydrology. Those off-site impacts are classified as major (9), moderate (12), or minor (23). OSMRE noted that of the 141 total violations identified during oversight inspections, 18 involved off-site im-pacts, and 13 of those related to hydrology. Id. at 21–23.
The second half of the report addresses PADEP’s administration of SMCRA’s abandoned mine land (AML) reclamation program and highlights various PADEP AML projects, accomplishments, and initiatives. The report concluded that PADEP effectively administers both the regulatory and AML programs. Id. at 32, 50. The 94-page report is available at https://www. odocs.osmre.gov/ (to access the report, select “Pennsylvania” and “2020” in the respective state and year fields and “Annual Evaluation Reports” in the category field).
Pennsylvania to Become a Leader in Solar Energy Production
On March 22, 2021, Governor Tom Wolf announced a clean energy initiative that would produce nearly 50% of state government’s electricity through seven new solar energy arrays totaling 191 megawatts to be built around the state. See Press Release, Gov. Tom Wolf, “Gov. Wolf Announces Largest Government Solar Energy Commitment in the U.S.” (Mar. 21, 2021). Pennsylvania PULSE (Project to Utilize Light and Solar Energy), a part of the initiative, will go into operation on January 1, 2023.
Solar arrays will be built in seven locations in six counties: Columbia, Juniata, Montour, Northumberland, Snyder, and York. The Pennsylvania Department of General Services contracted with Constellation, a Pennsylvania Public Utility Commission-licensed electric generation supplier, to secure a 15-year fixed-price supply agreement. The project is expected to deliver 361,000 megawatt-hours of electricity per year, or about half the electricity used by state government annually.
To date, this is the largest government-backed commitment to solar energy announced in the United States.
PADEP Publishes Final Revised Policy on Civil Penalty Assessments for Coal Mining Operations
On February 27, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published the final revision to Technical Guidance Document (TGD) No. 562-4180-306, titled “Civil Penalty Assessments for Coal Mining Operations.” 51 Pa. Bull. 1083 (Feb. 27, 2021). The TGD makes several major changes to the procedures for calculating civil penalty amounts for coal mining violations, the most significant of which is the addition of new procedures for calculating water quality violations under section 605 of the Clean Streams Law, 35 Pa. Stat. § 691.605. No revisions were made to the version of the TGD that was published for public comment on October 3, 2020, which is discussed in detail in Vol. XXXVII, No. 4 (2020) of this Newsletter.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
RMMLF Water Law Newsletter
(By Lisa M. Bruderly)
On May 12, 2021, the Baltimore, Philadelphia, and Pittsburgh Districts of the U.S. Army Corps of Engineers (Corps) jointly issued a 15-day public notice (SPN 21-26), requesting comments on whether to reinstate certain 2017 and 2021 nationwide permits (NWPs) that are suspended in parts of Pennsylvania. The comment period closed on May 27, 2021.
The reinstatement is being proposed in case Pennsylvania State Programmatic General Permit 6 (PASPGP-6) is not finalized and issued prior to the expiration of Pennsylvania’s current state programmatic general permit (PASPGP-5) on June 30, 2021. At present, if PASPGP-6 is not issued before July 1, 2021, most projects in Pennsylvania impacting federally regulated waters would be required to obtain individual Clean Water Act § 404 permits. Obtaining an individual permit is typically a more lengthy and complicated process than obtaining coverage under a programmatic general permit or NWP.
State Programmatic General Permit
The PASPGP is the mechanism that the Pennsylvania Department of Environmental Protection (PADEP) and the Corps rely upon to permit most projects in Pennsylvania that impact federally regulated waters, but do not require an individual section 404 permit. PASPGP-6 allows applicants to obtain both federal section 404 permits and state water obstruction and encroachment permits for qualified projects impacting federal and state regulated waters.
PASPGP-6 has not yet been finalized. The draft PASPGP-6 was published for public comment on September 4, 2020. See Corps, Special Pub. Notice SPN-20-57 (Sept. 4, 2020); see also Vol. LIII, No. 3 (2020) of this Newsletter. The public comment period closed on October 4, 2020. On February 12, 2021, PADEP issued a conditional state water quality certification (SWQC) under section 401 of the Clean Water Act, which certifies that activities authorized by PASPGP-6 would comply with the commonwealth’s water quality standards if the applicant complies with the following conditions and “constructs, operates and maintains the project in compliance with the terms and conditions of State permits . . . obtained to meet these SWQC conditions”:
- Prior to beginning any activity authorized by the Corps under PASPGP-6, the applicant must obtain all necessary environmental permits or approvals, and submit to PADEP environmental assessments and other information necessary to obtain the permits and approvals, as required under state law.
- Fill material may not contain any wastes as defined in the Solid Waste Management Act.
- Applicants and projects must obtain all state permits and/or approvals necessary to ensure that the project meets the State’s applicable water quality standards.
51 Pa. Bull. 1592 (Mar. 20, 2021).
Proposed NWP Reinstatement
With the availability of the PASPGP, many NWPs have typically been suspended in Pennsylvania, except for projects in certain section 10 waters and, for certain NWPs, when the regulated activity or indirect impacts extend across state boundaries. (“Section 10 waters” are waters that are considered as navigable under section 10 of the River and Harbor Act of 1899, 33 U.S.C. § 403.) On January 6, 2017, the Corps reissued 54 NWPs, which were effective March 19, 2017. Of these 54 NWPs, 31 NWPs were suspended in Pennsylvania, largely to eliminate redundancy with the PASPGP mechanism. If PASPGP-6 is not issued before PASPGP-5 expires, the Corps is proposing to reinstate 24 of the NWPs suspended in 2017, including NWP 7 (Outfall Structures and Associated Intake Structures), NWP 14 (Linear Transportation Projects), and NWP 18 (Minor Discharges).
On January 13, 2021, the Corps reissued 12 existing NWPs and issued four new NWPs. See 86 Fed. Reg. 2744 (Jan. 13, 2021); see also Vol. LIV, No. 1 (2021) of this Newsletter. The 16 reissued/issued NWPs were effective on March 15, 2021. Of those 16 NWPs, nine were suspended in Pennsylvania, except in “areas within Pittsburgh District’s area of responsibility in the Commonwealth of Pennsylvania.” If PASPGP-6 is not issued before PASPGP-5 expires, the Corps’ proposal would reinstate the nine suspended 2021 NWPs, including NWP 12 (Oil and Natural Gas Pipelines) and NWP 39 (Commercial and Institutional Developments) for the entire state.
If any or all of the NWPs are reinstated, those NWPs would be subject to the applicable 2017 or 2021 regional conditions for Pennsylvania.
Conclusion
If PASPGP-6 is not finalized before PASPGP-5 expires (i.e., by June 30, 2021), the reinstatement of certain currently suspended NWPs would provide flexibility to permit a project impacting regulated waters, without pursuing an often lengthy and complicated individual section 404 permit. However, the prospective permittee must ensure that the project meets the applicability criteria, general conditions, and regional conditions of the selected NWP. These criteria are not the same as under PASPGP-5, and in some instances, a portion of the project may need to be redesigned to meet NWP requirements.
Recent Pipeline Enforcement and Challenges in Pennsylvania
On May 7, 2021, the Pennsylvania Department of Environmental Protection opened the public comment period for a major permit amendment for Sunoco Pipeline, LP, regarding both its Chapter 102 (Erosion and Sediment Control) and Chapter 105 (Water Obstruction and Encroachment) permits for the Mariner East 2 pipeline The amendments request a change to the route and installation method for a water encroachment near Marsh Creek State Park in Chester County, Pennsylvania. The identified location is the same as the location for an 8,000-gallon drilling fluid release.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado