Author: Babst Calland

The 2018 Babst Calland Report Focuses on the Appalachian Basin Oil & Gas Industry Forging Ahead Despite Obstacles

Marcellus, Utica Shale Plays Account for 41 Percent of U.S. Natural Gas Output

PITTSBURGH, June 21, 2018 – Babst Calland today released its annual energy industry report: The 2018 Babst Calland Report – Appalachian Basin Oil & Gas Industry: Forging Ahead Despite Obstacles; Legal and Regulatory Perspective for Producers and Midstream Operators. This annual review of shale gas development activity in the Appalachian Basin acknowledges an ongoing rebound despite obstacles presented by regulatory agencies, the courts, activists, and the market. To request a copy of the Report, contact info@babstcalland.com.

In this Report, Babst Calland attorneys provide perspective on issues, challenges, opportunities and recent developments in the Appalachian Basin and beyond relevant to producers and operators.According to the U.S. Energy Information Administration’s May 2018 report, the Appalachian Marcellus and Utica shale plays account for more than 40 percent of U.S. natural gas output, compared to only three percent a decade ago. Since then, the Appalachian Basin has become recognized in the U.S. and around the world as a major source of natural gas and natural gas liquids.

The industry has been forging ahead amidst relatively low natural gas prices, infrastructure building, acreage rationalization and drilling plans that align with business expectations. The policy landscape continues to evolve with ever-changing federal and state environmental and safety regulations and tax structures along with a patchwork of local government requirements across the multi-state region.

Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group, said, “This Report provides perspective on the challenges and opportunities of a shale gas industry in the Appalachian Basin that continues to enjoy a modest rebound. While more business-friendly policies and procedures are emanating from Washington, D.C., threats of trade wars are raising concerns about the U.S. energy industry’s ability to fully capitalize on planned exports to foreign markets.”

He added, “In a sustaining low price natural gas environment, operators in the Appalachian Basin continue to reduce operating costs and maximize capital and operating budgets by increasing efficiencies, employing new technologies and consolidating operations. As a result, drilling activity and production continue to be strong compared to a year or two ago. All indicators suggest continued growth prospects for Appalachian Basin shale despite the lingering obstacles facing the industry.”

The 84-page Report contains five sections, highlighted below, each addressing key challenges for oil and gas producers and midstream operators.

Business Outlook: Growth Prospects Continue

The U.S. Energy Information Administration predicts that U.S. energy consumption and production is most likely set for modest growth over the next 30 years. Henry Hub spot prices for natural gas rebounded modestly in 2017 and have tracked reasonably close in the first half of 2018. Given relatively-flat price projections, Appalachian operators’ ability to keep costs down, improve efficiency, and pursue attractive transactions remains critical. The energy industry turnaround is evidenced by the significant slowing of bankruptcy filings, from 70 in 2016 to just 24 in 2017.

Oil and Gas Regulations Continue to Evolve, Reform and Persist

Federal and state courts, legislatures and regulatory agencies are addressing various oil and gas issues and reforms. Pennsylvania’s Environmental Rights Amendment (ERA) poses a new and significant legal and novel constitutional issue for operators in the Commonwealth. Recent court challenges include a sharp rise in the total dollar amount of assessed penalties based on how PADEP calculates fines and civil penalties. West Virginia’s Governor Jim Justice issued a series of executive orders that seek broad regulatory reform.

Pipeline Outlook Positive, But More Public Pressure

The pipeline industry is continuing to experience increased scrutiny from regulators at all levels of government. Much of this scrutiny is being driven by public interest groups and environmental advocacy organizations becoming more active in the pipeline permitting process and resorting with greater frequency to litigation as a means of advancing policy initiatives that are not favorable to the energy industry. The Pipeline and Hazardous Materials Safety Administration (PHMSA) continued to make progress in finalizing the Gas Transmission and Gathering Final Rule with the intention to divide the content of the proposed rule into three separate final rules with the hope of issuing the rules by the end of 2019.

Local Government Regulation Continues to Spawn Debate and Legal Challenges

In Robinson Township, the Pennsylvania Supreme Court invalidated two sections of Pennsylvania’s updated Oil and Gas Act (Act 13) that limited the authority of local governments to regulate oil and gas operations. This was based on a reinvigorated interpretation and application of the Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA). On June 1, 2018, the PA Supreme Court published its long-awaited Gorsline opinion. In a 4-3 decision, the majority reversed the Commonwealth Court’s decision affirming the granting of a conditional use approval for an unconventional natural gas well pad. West Virginia’s Lincoln and Fayette counties have enacted forms of “nuisance ordinances” that could potentially be used to target oil and gas related operations. As Ohio Courts heard and decided several cases regarding the extent of local authority to regulate oil and gas development, anti-fracking groups pursued an alternative route to regulation through local ballot initiatives.

Litigation Trends

West Virginia continues to see private nuisance suits filed against both upstream and midstream companies. In the last few years, civil suit filings alleging property contamination and nuisance claims from unconventional natural gas development have diminished significantly in Pennsylvania. Articles related to claims of alleged health effects from unconventional natural gas development continue to be published in scientific journals and in the media in even greater numbers, resulting in increasing controversy and polarization.

Many of the current opportunities and challenges facing the industry are described in the pages of this Report. Babst Calland’s multidisciplinary team of energy attorneys have chronicled the legal and regulatory landscape to help inform the energy industry operating in the Appalachian Basin.

Babst Calland Expands Mobility, Transport and Safety Practice

Former U.S. Department of Transportation and NHTSA Enforcement Division Chief Will Godfrey Joins Law Firm

WASHINGTON, DC and PITTSBURGH, PA, June 13, 2018 – Babst Calland announced the addition of William L. Godfrey as Director, Mobility, Automation and Safety.

The Firm is expanding its capabilities to support the developing needs of companies with emerging technologies. It provides strategic leadership with business and legal advice for manufacturers, suppliers, start-ups, technology companies and government entities in the full-spectrum of transportation regulatory, safety, product quality, and automation matters, including those related to automated/autonomous driving systems.

“Will Godfrey’s expertise and creativity deepens our unique vision to deliver full-stack solutions to clients’ problems that integrate technical and engineering know-how with legal insight to expand business opportunities,” said Tim Goodman, Chair of Babst Calland’s Mobility, Transport and Safety Group, and former National Highway Traffic Safety Administration Assistant Chief Counsel for Enforcement and Federal Senior Executive.

A former General Motors vehicle engineer, production manager and senior U.S. federal regulatory chief at the National Highway Traffic Safety Administration (NHTSA)/U.S. Department of Transportation (DOT), Will Godfrey will assist clients in achieving their business goals and navigating obstacles by applying a current and detailed understanding of the federal government’s approach to transportation safety regulation (particularly motor vehicles), including its programs, processes, and personnel.

Godfrey spent nearly a decade at NHTSA/DOT, where he served in various leadership capacities. Among other things, as NHTSA’s Trends and Analysis Division Chief, he led the oversight, analysis, and investigation of more than 1,100 vehicle, equipment, tire, motorcycle, and child car seat manufacturers globally, including TREAD Act/Early Warning Reporting Program and the integration of new, data-driven techniques. As a senior policy advisor to the NHTSA Administrator, he led the agency’s comprehensive reorganization of the NHTSA Office of Defects Investigation (ODI).

“Will Godfrey is well-regarded and uniquely qualified to serve clients with emerging technologies as a senior technical and strategic advisor, integrated with our best in class legal and technical team,” said Donald C. Bluedorn II, Managing Shareholder of Babst Calland. “We’re thrilled to have him join us.”

Prior to his federal service, Godfrey worked at General Motors as a vehicle engineer and production manager for various vehicle and equipment platforms. Among other things, he led programs in quality control, research and development, production, distribution, licensing, sales and service.

Godfrey received his Bachelor of Science in Automotive Engineering and Technology from Southern Illinois University. He earned a certificate from the Graduate School USA, Washington D.C. in the Federal Senior Executive Leadership Development Program in Management.

Attorney Meredith Odato Graham Selected as 2018 Lawyer on the Fast Track

PITTSBURGH, PA, May 3, 2018 – Meredith Odato Graham, an associate in the Environmental and Energy and Natural Resources groups at Babst Calland, was selected by The Legal Intelligencer as a “2018 Lawyer on the Fast Track” in Pennsylvania.

A 2011 graduate, magna cum laude, of the University of Pittsburgh School of Law, Ms. Graham focuses her practice on federal, state and local regulatory and permitting issues arising under the Clean Air Act. Ms. Graham regularly counsels companies in the chemical, oil and gas, cement and other industrial sectors regarding the environmental requirements affecting their operations. Her core practice involves assisting clients with day-to-day compliance and permitting needs for facilities located around the country, often in conjunction with technical consultants. She has experience with state and federal agency information requests and enforcement actions, as well as environmental litigation matters such as permit appeals and citizen suits. She also provides environmental due diligence services for corporate transactions.

The Legal Intelligencer asked the Pennsylvania legal community to submit nominations for the annual Lawyers on the Fast Track honors. After reviewing their results, a five-member judging panel composed of evaluators from all corners of the legal profession and the state selected 30 attorneys as the 2018 Lawyers on the Fast Track. This recognition is only given to attorneys under the age of 40 who have demonstrated excellence in four categories: development of the law; advocacy and community contributions; service to the bar; and peer and public recognition.

Charles Saffer Joins Babst Calland

CHARLESTON, WV, March 13, 2018 – Charles Saffer recently joined Babst Calland as senior counsel in the Energy and Natural Resources and Corporate and Commercial groups. Mr. Saffer focuses his practice on real estate and mineral title matters for corporate clients within the commercial and oil and gas industries. A 1998 graduate of the West Virginia University College of Law, he previously represented a multinational chemical corporation in the disposition of significant assets in West Virginia.

Attorneys Nicholas Bunner, Brittany Boldt, Matthew Dishong, Mackenzie Kline, and Rachel Lutz Join Babst Calland

PITTSBURGH, PA, March 1, 2018 – Attorneys Nicholas F. Bunner, Brittany J. Boldt, Matthew D. Dishong, Mackenzie A. Kline, and Rachel E. Lutz joined Babst Calland in the Firm’s Mineral Title department in the Energy and Natural Resources Group with focused practices counseling various energy, oil, gas and mineral-related clients on transaction matters, including title examination, title curative, oil and gas title opinions, and due diligence.

Nicholas Bunner is a 2016 graduate of the University of Pittsburgh School of Law. He previously interned with the Allegheny County District Attorney’s Office and participated in the University of Pittsburgh Health Law Clinic, obtaining special education accommodations and disability benefits for clinic clients.

Brittany Boldt is a 2015 graduate of Washington & Lee University School of Law, she previously worked as a family law attorney in Armstrong County, Pennsylvania.

Matthew Dishong, a 2013 graduate of the University of Pittsburgh School of Law, previously worked as an associate at a Pittsburgh-based energy law firm where his practice included examining mineral titles in West Virginia, Pennsylvania and Ohio.

Mackenzie Kline, a 2013 graduate of the West Virginia University College of Law, previously worked in land administration for a Texas-based oil and gas company in its Charleston, West Virginia office where he managed numerous contracts and various working, royalty, and overriding royalty interests. He has also examined mineral title in West Virginia, Pennsylvania, and Ohio for large firms in West Virginia and Pennsylvania.

Rachel Lutz, a 2012 graduate of the West Virginia University College of Law, previously worked as an associate for a law firm in Wheeling, West Virginia and focused her practice on litigation matters including product liability, employment, and oil and gas matters.

Attorney Eric Kitcho Joins Babst Calland

PITTSBURGH, PA, February 21, 2018 – Eric D. Kitcho recently joined Babst Calland as an associate in the Litigation and Employment and Labor groups. Mr. Kitcho focuses his practice on general civil litigation. In his labor and employment practice, Mr. Kitcho defends employers in claims arising under Title VII, Age Discrimination in Employment Act, Americans with Disabilities Act, and Family and Medical Leave Act. He also routinely handles cases involving trade secrets and breaches of restrictive covenants. Mr. Kitcho is a 2014 graduate, magna cum laude, from University of Pittsburgh School of Law.

Tiffany Arbaugh Joins Law Firm Babst Calland

CHARLESTON, WV, February 15, 2018 – Tiffany M. Arbaugh recently joined Babst Calland as staff attorney in the Energy and Natural Resources Group. Ms. Arbaugh focuses her practice on real estate and energy matters within the oil and gas industry. She earned her J.D. from the Appalachian School of Law in 2005.

The Pittsburgh Life Sciences Greenhouse Partners with Babst Calland to Assist Startups

Legal Services for Incorporation and Standard Business Agreements

PITTSBURGH (Jan. 23, 2018)— The Pittsburgh Life Sciences Greenhouse (PLSG) has partnered with local law firm Babst Calland to offer startup companies in the PLSG portfolio access to legal assistance regarding certain corporate governance work and drafting of certain standard business agreements, under a flat fee arrangement*. This Flat Fee Program is available to individuals and entities that come through PLSG for investment and development.

Under the Flat Fee program, Babst Calland can assist with:
• Incorporating a business, including preparing and filing with the Department of State the Articles of Incorporation, as well as preparation of other required documents.
• Assisting with the establishment of a single-member limited liability company, including the preparation and filing of a Certificate of Organization with the Department of State, and the preparation of an Operating Agreement.
• Preparing certain standard business agreements, including: (1) confidentiality agreement/non-disclosure agreement; (2) employment agreement/noncompete agreement.

“Our team can provide efficient and effective legal assistance to help companies new and old navigate the day-to-day issues commonly faced by businesses, and we look forward to working with PLSG and its exciting portfolio of emerging life sciences companies,” said Alana Fortna of Babst Calland. “The life sciences space is essential to the continued growth of our region.”

“PLSG believes in the mission of helping regional life sciences companies achieve successful commercialization, and Babst Calland’s offer to bring its legal expertise and insight to bear on behalf of our startups for a flat fee is both incredibly valuable and very much appreciated,” said Jim Jordan, PLSG President and CEO. “By developing this Flat Fee Program with Babst Calland, we can make sure that our companies have experienced counsel at a predictable cost.”

The PLSG kicks off this new program by giving away one free legal service* at a drawing during its B2B event, “Start-ups: Why and when to hire a lawyer?” scheduled from 5:30 to 6:30 p.m., Thursday, January 25, at PLSG offices on the South Side, featuring guest speakers Alana Fortna and Ben Milleville from Babst Calland. Please see the PLSG website for details and registration (www.PLSG.com).

Anthony DaDamo Joins Babst Calland

PITTSBURGH, PA, January 22, 2018 – Anthony S. DaDamo recently joined Babst Calland as a staff attorney in the Energy and Natural Resources Group. Mr. DaDamo counsels various energy, oil, gas and mineral-related clients on transaction matters as they relate to gas title issues and opinions. Mr. DaDamo is a 2014 graduate of the University of Pittsburgh School of Law.

Babst Calland Names Milleville, Rorabaugh and Tysiak Shareholders

PITTSBURGH, January 10, 2018 – Babst Calland recently named Benjamin W. Milleville, Elena L. Rorabaugh and Nikolas E. Tysiak shareholders in the Firm.

Benjamin W. Milleville, a member of the Firm’s Corporate and Commercial Group, advises businesses and nonprofit organizations on corporate and transactional matters, including mergers and acquisitions, reorganizations, joint ventures, commercial contracts, governance matters, compliance, and real estate transactions. Mr. Milleville advises businesses of varying size and complexity, and at various points in their lifecycles. In his role as outsourced corporate counsel to a multinational public company, he counsels senior management in the U.S. and abroad on a broad range of legal matters. Mr. Milleville also advises entrepreneurs and startup businesses on the legal issues faced by emerging companies, including business structuring and protection of intellectual property. In his nonprofit practice, Mr. Milleville counsels clients, including charitable organizations and trade associations, on obtaining and maintaining tax-exempt status, nonprofit governance, and nonprofit mergers and strategic alliances.

Mr. Milleville is a 2008 graduate of the University of Pittsburgh School of Law.

Elena L. Rorabaugh, a member of the Firm’s Energy and Natural Resources Group, is experienced in assisting oil and gas companies navigate the legal obstacles involved with exploration and production. Her practice focuses on energy, oil, gas and mineral-related transaction matters, including title examination and title curative work. Ms. Rorabaugh also counsels clients with respect to the acquisition and disposition of oil and gas properties and has experience in all aspects of title due diligence. Ms. Rorabaugh also has experience representing E&P, midstream and other energy companies in mergers and acquisitions, and she counsels clients on a variety of business and corporate transactional matters.

Ms. Rorabaugh is a 2009 graduate of Duquesne University School of Law.

Nikolas E. Tysiak, a member of the Firm’s Energy and Natural Resources Group, practices in the areas of energy and real estate law, with a primary focus on transactions and ownership involving oil and gas, where he has extensive experience identifying and curing novel real estate title issues in West Virginia, Ohio and Pennsylvania.

Mr. Tysiak also maintains a general real estate practice, with experience conducting foreclosure proceedings, drafting complex retail and commercial leasing agreements, drafting deeds and other documents necessary to effectuate property transactions, conducting real estate closings, researching and writing title insurance policies and overseeing curative measures to finalize property transactions.

Mr. Tysiak is a 2005 graduate of Washington College of Law at American University.

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