Articles, Alerts & Perspectives Archive

EPA Proposes to Extend Certain Compliance Deadlines for Steam-Electric Power Generating Effluent Limitations Guidelines

Environmental Alert

(by Ben Clapp, Gary Steinbauer and Mackenzie Moyer)

On October 2, 2025, the Environmental Protection Agency (EPA) published a Proposed Rule and a companion Direct Final Rule to extend certain compliance deadlines for effluent limitations guidelines (ELGs) for the Steam-Electric Power Generating point source category in the Federal Register. 90 Fed. Reg. 47617; 90 Fed. Reg. 47693. EPA is “taking action to provide near-term compliance flexibility to coal-fired power plants by extending seven deadlines in the 2024 ELG rule and additional flexibilities for power generators to enhance the service life of critical energy infrastructure.” EPA states that the proposal seeks to advance the goals of the Trump administration’s Unleashing American Energy Executive Orders and provide reliable energy as demand increases due to the rise of AI and data centers.

Under the Clean Water Act (CWA), EPA is authorized to establish nationally applicable, technology-based ELGs for discharges from different categories of point sources. ELGs are based on technological feasibility, not water quality, and are based on the performance of specific treatment technologies, but do not require use of those specific control technologies.

In November 2015, EPA promulgated revisions to the steam-electric power generating point source category for the first time since 1982. The 2015 Rule set the first federal limitations on certain pollutants, such as toxic metals, discharged from a steam-electric power plant’s largest wastewater streams. As a result of legal challenges, EPA was required to reconsider certain limitations in the 2015 Rule. EPA reconsidered the ELGs for flue gas desulfurization (FGD) wastewater and bottom ash (BA) transport water and published a reconsideration rule in 2020 (the 2020 Rule). Environmental groups challenged the 2020 Rule, and that challenge has been held in abeyance since 2022. In 2024, EPA finalized the Steam Electric Supplemental Rule (the 2024 Rule), which established, among other things, zero-discharge limitations for three wastewater streams: (1) FGD wastewater; (2) BA transport water; and (3) managed combustion residual leachate (CRL). The 2024 Rule was also challenged, and the litigation is currently being held in abeyance while EPA reviews and reconsiders the Rule. See Southwestern Electric Power Co. v. EPA, No. 24-2123.

The current rulemaking package is intended to provide more flexibility for subject power plants by extending seven compliance deadlines in the 2024 Rule. First, EPA proposes providing six more years, until December 31, 2031, for existing power plants to submit a Notice of Planned Participation (NOPP) for electric generating units permanently ceasing coal combustion by December 31, 2034, a compliance option that power plants can select to avoid the zero-discharge limitations established for certain waste streams in the 2024 Rule. This deadline is also the subject of the Direct Final Rule, which becomes effective on December 1, 2025, 60 days after publication in the Federal Register, without further notice, unless EPA receives adverse comments during the comment period. If EPA receives adverse comments to the extension of the NOPP deadline for the 2034 subcategory, EPA will withdraw the Direct Final Rule. Second, EPA proposes to extend the compliance deadlines for the zero-discharge limitations for FGD wastewater, BA transport water, and CRL by five years to December 31, 2034. Third, EPA’s proposal makes changes to compliance deadlines related to certain zero-discharge limitations for indirect dischargers—dischargers that send wastewater to wastewater treatment plants instead of directly to a water of the United States. EPA’s proposal aligns the deadlines applicable to indirect dischargers with those of direct dischargers. The latter two proposed extensions were not included in the Direct Final Rule.

EPA is also proposing to expand the transfer flexibilities found in 40 C.F.R. § 423.13(o) by including new options for facilities wishing to transfer between requirements for zero-discharge and requirements applicable to facilities ceasing coal combustion by 2034. Lastly, EPA is proposing to provide permitting authorities with the authority to allow site-specific extensions for paperwork submission deadlines in both the 2020 and 2024 Rules when it is necessary to address unexpected circumstances, including those related to changes to regional capacity market prices or local electricity demands materially exceeding projections made in the most recent iterations of integrated resource plans or other planning documents.

While EPA is not proposing to change the technological bases for the ELGs at this time, EPA is soliciting feedback on whether it should consider a future rulemaking related to the technology-based limits themselves and is requesting information on the availability, economic achievability, resource adequacy, and reliability impacts of the current zero-discharge technologies.

The comment periods on Proposed Rule and Direct Final Rule close on November 3, 2025. Additionally, EPA is hosting a webinar on the rule package on October 14, 2025.

Babst Calland attorneys continue to track these developments and are available to assist with CWA-related matters. For more information on this development and other water issues, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary E. Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Mackenzie Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other environmental attorneys.

Pennsylvania Supreme Court’s Ruling in Tranter Clarifies Standard for Intrastate Venue Transfers

Litigation Alert

(by Joseph Schaeffer and Ryan McCann)

On September 25, 2025, the Pennsylvania Supreme Court clarified the standard governing motions to transfer venue under the doctrine of forum non conveniens and Rule 1006(d)(1) of the Pennsylvania Rules of Civil Procedure. The rule, together with its complementary doctrine, permits a party to seek transfer of venue—even when venue is otherwise proper—to another county “for the convenience of parties and witnesses.” Pa. R.C.P. 1006(d)(1).

In Tranter, et al. v. Z&D Tour, et al., Nos. 18 EAP 2024 to 32 EAP 2024 (Pa. 2025), a motorcoach bus carrying approximately five dozen passengers was involved in a deadly multi-vehicle collision in Westmoreland County, in western Pennsylvania. Plaintiffs, passengers on the coach bus, filed suit in Philadelphia County, in eastern Pennsylvania, for damages sustained from the accident. After conducting limited discovery on the issues of venue and forum non conveniens, defendants filed a motion to transfer venue to Westmoreland County, citing the overwhelming number of witnesses and evidence located in that area. The trial court balanced the plaintiffs’ interest in their chosen forum against the hardships asserted by defense witnesses. Considering the totality of the circumstances, and affidavits detailing the burdens of traveling across the state to testify, the trial court granted defendants’ motions to transfer venue.

The Superior Court reversed. Drawing on its own precedent, the Superior Court held that the trial court erred in granting the motions because the defendants had not shown that the proposed testimony would be “critical” to their defense. While the defendants established that the witnesses could offer relevant testimony, the defendants neither demonstrated—nor did the trial court explain—why that testimony was essential. Accordingly, the Superior Court concluded that the defendants had not met their burden to overcome the plaintiffs’ choice of forum, as there was no indication the witnesses were truly “key” to the defense.

The Pennsylvania Supreme Court granted allocatur to determine whether the Superior Court had misapplied the doctrine of forum non conveniens. On appeal, defendants argued that the Superior Court erred by elevating its own precedent over controlling Supreme Court authority, that its “key witness” requirement imposed an unreasonable and impractical burden, and that trial courts retain broad discretion in deciding transfer motions. Plaintiffs countered that significant deference is owed to a plaintiff’s choice of forum, that modern technology reduces the weight of witness-convenience arguments, and that defendants’ affidavits were deficient on multiple fronts.

The Supreme Court reversed, finding that its decisions in Cheeseman and Bratic controlled these issues.^[1] Addressing first the plaintiffs’ argument that their choice of venue is entitled to deference, the Supreme Court emphasized that such preference is “not unassailable.”^[2] Instead, a defendant may overcome it by showing “with detailed information on the record, that the plaintiff’s chosen forum is oppressive or vexatious to the defendant.”^[3] In practical terms, transfer is warranted where the plaintiff’s chosen forum is intended to burden or harass the defendant, or where the defendant demonstrates that another county would provide substantially easier access to witnesses or other sources of evidence.

Once the record is developed, the decision whether to grant a transfer lies within the trial court’s discretion. In Bratic, the Supreme Court underscored the “considerable discretion” afforded to trial courts in ruling on such motions. The Supreme Court reiterated that so long as a trial court does not rely on impermissible considerations—such as its own docket congestion or isolated factors like a witness’s residence or travel distance—its decision should not be disturbed on appeal.

The Supreme Court also explained that distance alone is not determinative: a venue is not automatically oppressive simply because witnesses must travel more than one hundred miles, nor is a shorter distance irrelevant. Nonetheless, as a general rule, the Supreme Court reaffirmed that one hundred miles serves as a reasonable guidepost in evaluating whether a chosen forum is oppressive.^[4]

The Supreme Court next rejected the plaintiffs’ argument—and the Superior Court’s conclusion—that the affidavits were insufficient, noting that Bratic reached the opposite result. It reiterated that a defendant petitioning for transfer of venue must place the grounds on the record, “but no ‘particular form of proof’ is required.”^[5]In fact, “there is no ‘affidavit requirement’ at all.”^[6]Thus, the Superior Court’s criticism of the defendants’ affidavits was an error because the defendants had established on the record the potential hardship, and that hardship need not be outlined in an affidavit.

Addressing the Superior Court’s use of a “key witness” requirement, the Supreme Court characterized it as a stark departure from Cheeseman and Bratic. The Supreme Court emphasized that those precedents control and clarified that, although a petitioner must identify burdened witnesses and provide a general description of their anticipated testimony, exacting detail is not required. Nor must petitioners characterize such testimony as “necessary,” “critical,” or uniquely beneficial to their defense.^[7]

Finally, the Supreme Court considered plaintiffs’ argument that distance poses no real burden in light of modern technology allowing remote testimony. The Supreme Court rejected this position, explaining that while virtual testimony may be useful when in-person proceedings are not feasible, it is not an adequate substitute in the ordinary course. To adopt such a rule, the Supreme Court cautioned, would effectively render the doctrine of forum non conveniens meaningless.

The Supreme Court’s ruling in Tranter is significant because it clarifies the standard for intrastate venue transfers. The Court confirmed that while a plaintiff’s forum choice carries weight, it may be overcome where the record shows that litigating elsewhere would ease witness or evidentiary burdens, without requiring defendants to prove that such witnesses are “key” or “critical.”

If you have questions about the Tranter decision, or its implications for your business, please contact Joseph V. Schaeffer at 412-394-5499 or jschaeffer@babstcalland.com or Ryan M. McCann at 412-773-8710 or rmccann@babstcalland.com.

_______________________

^[1] See generally Bratic v. Rubendall, 626 Pa. 550 (Pa. 2014); Cheeseman v. Lethal Exterminator, Inc., 549 Pa. 200 (Pa. 1997)
^[2]Tranter, slip op. at 23.
^[3]Id. at 27 citing Cheeseman, 701 A.2d at 162
^[4]Tranter, slip op at 32.
^[5]Id. citing Bratic, 99 A.3d at 9.
^[6]Id.
^[7] Tranter, slip op at 37.

FTC Withdraws Non-Compete Appeal, Previews a More Focused Approach

The Legal Intelligencer

(by Steve Antonelli and Alex Farone)

Recent activity from the Federal Trade Commission (FTC or Commission) indicates yet another shift in the Commission’s view on non-compete agreements, the latest in a turbulent 16-month period for this topic that began with the FTC’s May 2024 publication of a final rule banning most non-competes throughout the country.

The rule was set to take effect 120 days later, on September 4, 2024, and it would have banned the vast majority of new non-competes with employees, independent contractors, and volunteers nationwide, with the exception of those entered into pursuant to certain business sales. The ban was published based on the view of the Commission, which was controlled by a Democratic majority at the time, that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act. In addition to the ban, the rule would have required employers to notify impacted workers of their agreements’ unenforceability.

Two weeks before its effective date, on August 20, 2024, the U.S. District Court for the Northern District of Texas invalidated the ban with its opinion in Ryan LLC, et al. v. Federal Trade Commission. The court ruled that the ban exceeded the FTC’s statutory authority. In doing so, it held that the creation of substantive rules stretched beyond the FTC’s power, and that the ban was unreasonably overbroad. The FTC appealed the court’s ruling to the U.S. Court of Appeals for the Fifth Circuit. The FTC filed its appellate brief in January 2025 but then sought a stay of the appeal in March 2025.

On September 5, 2025, one year and one day after the ban was originally set to take effect, the FTC formally withdrew its appeal of the Ryan decision as well as a similar appeal pending in the 11th Circuit. By withdrawing the appeal, the Commission (which is now entirely comprised of Republican appointees) essentially accepted the position of the Texas federal court in Ryan, which limits the FTC’s authority to creating rules of agency procedure rather than substantive rules regarding unfair methods of competition.

Although the FTC’s appeal withdrawal appears to be the final nail in the coffin of the non-compete ban, the day before it withdrew the appeal, the FTC issued a press release announcing an enforcement action to protect American workers from “harmful labor practices” by ordering Gateway Services, Inc., the nation’s largest pet cremation business, to stop enforcing restrictive covenants against nearly all of its workers. The FTC claimed that Gateway required almost every one of its 1,800 employees, regardless of their position or responsibilities (and regardless of the existence of a protectable interest), to sign a non-compete agreement that prohibited employees from working in the pet cremation service industry for one year after the end of their employment with Gateway. The FTC claimed that these agreements, which were even entered into with hourly employees and laborers, “unfairly alter the bargaining power” between Gateway and its employees, and they suppress competition by impeding the entry or expansion of similar businesses.

To resolve the matter, the FTC accepted a consent agreement containing a proposed consent order that, if finalized after a 30-day public comment period, would:

Prohibit Gateway from entering into, maintaining, or enforcing non-competes except in the context of the sale of a business by a person with pre-existing equity, or a non-compete of a director, officer, or senior employee signed in exchange for some kind of equity award;
Require Gateway to notify its employees that they are no longer subject to their non-compete; and
Prohibit Gateway from preventing employees from soliciting customers, except for those customers with whom the employee had direct contact during the last 12 months of their employment.

Though a final decision and order in this case would only be legally binding on Gateway, the case provides guidance on what circumstances might make a particular non-compete practice unlawful under Section 5 of the FTC Act in the Commission’s current view. It also raises the question of whether the FTC remains interested in challenging non-competes generally, or only in circumstances involving egregious violations like the case it alleged against Gateway. Either way, employers should continue to monitor the latest developments involving non-compete agreements.

If you have any questions about non-compete agreements or any developments concerning the FTC’s position on non-compete agreements, please contact Stephen A. Antonelli at 412-394-5668 or santonelli@babstcalland.com or Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com.

Stephen A. Antonelli is a shareholder in the Employment and Labor and Litigation groups of Babst Calland. His practice includes representing employers of all sizes, from Fortune 500 companies and large healthcare organizations to non-profit organizations and family-owned businesses. He represents clients, in all phases of employment and labor law, from complex class and collective actions and fast-paced cases involving the interpretation of restrictive covenants, to single-plaintiff discrimination claims and day-to-day human resources counseling.

Alexandra G. Farone is an associate in the Employment and Labor and Litigation groups of Babst Calland. Ms. Farone’s employment and labor practice involves representing Fortune 500 companies, startups, public sector organizations, family-owned businesses, health care providers, and the financial services industry on all facets of employment law, including comprehensive human resources counseling concerning restrictive covenants, discrimination and harassment, disability accommodation, grievances, personnel best practices, contract negotiations, wage and hour issues, and collective bargaining.

To view the full article, click here.

EPA Will Retain PFOA and PFOS CERCLA Hazardous Substance Designation

Environmental Alert

(by Sloane Wildman and Alex Graf)

On September 17, 2025, EPA announced that it will retain the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) hazardous substance designation for PFOA and PFOS, two PFAS compounds. The final rule designating PFOA and PFOS (and their salts and structural isomers) as hazardous substances under CERCLA became effective on July 8, 2024. Substances designated as hazardous under CERCLA are subject to release reporting requirements, specific spill rules, release tracking requirements, and additional reporting mandates under other environmental statutes. Further, EPA may require potentially responsible parties – PRPs – to clean up or pay for the cleanup of hazardous substances. In conjunction with EPA’s announcement, the U.S. Department of Justice submitted a filing in Chamber of Commerce of the United States of America v. EPA, No. 24-1193 (D.C. Cir.) (ongoing litigation, currently in abeyance, challenging the CERCLA designation of PFOA and PFOS), asking the court to lift the abeyance and propose an amended briefing schedule.

Prior to its 2024 PFOA and PFOS designation, EPA’s CERCLA hazardous substance list was comprised solely of substances designated under other environmental statutes (e.g., Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, and the Toxic Substances Control Act). EPA’s 2024 designation of PFOA and PFOS represented the first time the Agency used its authority under CERCLA Section 102(a) to list specific hazardous substances that were not designated under another environmental statute. In this week’s announcement, EPA stated its intention to initiate a rulemaking to “establish a uniform framework governing designation of hazardous substances under section 102(a) of CERCLA moving forward.” Such a “Framework Rule” would establish a uniform approach to guide future CERCLA hazardous substance designation, including EPA’s method for considering the costs of proposed designation.

EPA further stated that it will prioritize holding polluters accountable while still providing certainty for passive receivers (such as water utilities) that did not manufacture or generate PFOA or PFOS, and that it believes new statutory language will be necessary to fully address concerns regarding passive receiver liability. This statement is aligned with EPA’s PFAS strategy, issued on April 28, 2025, which expressly acknowledged the Agency’s intention to protect passive receivers of PFAS. EPA noted at the time that it intended to work with Congress and industry to establish a liability framework that operates on a “polluter pays” principle to provide greater certainty to passive receivers.

Babst Calland’s Environmental Practice Group is closely tracking EPA’s PFAS actions, and our attorneys are available to provide strategic advice on how developing PFAS regulations may affect your business. For more information or answers to questions, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com or Alexandra Graf at (412) 394-6438 or agraf@babstcalland.com.

EPA Extends Certain Compliance Deadlines for Oil and Natural Gas Clean Air Act Requirements

PIOGA Press

(by Gary Steinbauer, Gina Buchman, and Christina Puhnaty)

On July 31, 2025, EPA published in the Federal Register its highly anticipated Interim Final Rule to extend several deadlines in 40 C.F.R. Part 60, Subparts OOOO, OOOOa, OOOOb and OOOOc that were promulgated in EPA’s 2024 Methane Rule. 90 Fed. Reg. 35966 (July 31, 2025). That same day, environmental groups filed a lawsuit challenging the Interim Final Rule. Envtl. Defense Fund v. U.S. EPA, Case #25-1164 (D.C. Cir.). Absent a stay by the court, which the environmental groups are currently not seeking, the Interim Final Rule and the various extended deadlines are effective.

Summary of Deadline Extensions

The Interim Final Rule extends numerous compliance deadlines for oil and gas air emission sources subject to the New Source Performance Standards in 40 C.F.R. Part 60 Subparts OOOO, OOOOa, OOOOb and OOOOc. The previous compliance deadlines were published in a March 2024 final rule. 89 Fed. Reg. 16820 (March 8, 2024). The Interim Final Rule, which became effective upon publication, extends many deadlines in OOOOb, the date that the requirements of the Super-Emitter Program apply with respect to OOOO, OOOOa, and OOOOb, and the date by which states must submit plans to EPA pursuant to the OOOOc emissions guidelines.

EPA extended the following OOOOb compliance deadlines to at least January 22, 2027:

Process Controllers: The date by which process controller affected facilities are required to be zero-bleed devices. 40 CFR §§ 60.5370b(a)(5)(i), 60.5390b(a), 60.5415b(h)(1).

Storage Vessels:
- The date by which receiving additional crude oil, condensate, intermediate hydrocarbons, or produced water throughput at tank batteries triggers a modification. 40 CFR § 60.5365b(e)(3)(ii)(C) and (D).
- The date by which a legally and practicably enforceable limit used to determine the potential VOC and methane emissions from a storage vessel must include the elements provided in paragraphs 40 CFR § 60.5365b(e)(2)(i)(A) through (F). 40 CFR § 60.5365b(e)(2)(i).
- The date by which the potential for VOC and methane emissions from storage vessels must be calculated using a generally accepted model or calculation methodology that accounts for flashing, working, and breathing losses, based on the maximum average daily throughput to the tank battery determined for a 30-day period of production. 40 CFR § 60.5365b(e)(2)(ii).

Covers and Closed Vent Systems: The date by which a required closed vent system or cover must be designed and operated with no identifiable emissions and corresponding inspections must be performed. This new compliance deadline is 18 months after the date the Interim Final Rule is published in the Federal Register or upon startup, whichever is later. 40 CFR §§ 60.5411b(a)(3), § 60.5411b(b)(4), 60.5416b(a)–(b).

Control Devices: The date by which you must install and operate a continuous burning pilot or combustion flame, as applicable, and the date by which an alert must be sent to the nearest control room whenever the pilot or combustion flame is unlit. 40 CFR §§ 60.5412b(a)(1)(viii) and (3)(viii), 60.5413b(e)(2), 60.5415b(f)(1)(vii)(A)(1), 60.5417b(d)(8)(i), 60.5417b(i)(6)(v).

EPA also gave regulated facilities until November 28, 2025, or 180 days after startup, whichever is later, to comply with continuous monitoring system requirements for enclosed combustors or flares. 40 CFR §§ 60.5370b(a)(9)(i) and (iii).

Regarding OOOOc, the EPA emission guidelines that States are required to use when regulating existing sources (i.e., regulated emission sources that commenced construction, modification, or reconstruction on or before December 6, 2022), EPA extended the deadline for States to submit their OOOOc plans to January 22, 2027. 40 CFR § 60.5362c(c). As indicated in our recent Alert, the Pennsylvania Department of Environmental Protection (“PADEP”) has issued public notice and provided an opportunity for comment for its proposed OOOOc plan. The comment period on PADEP’s proposed OOOOc plan closed on July 30, 2025. Several commenters urged PADEP to delay implementation of the OOOOc plan until EPA finalizes its reconsideration of OOOOc, and others raised concerns about PADEP’s analysis, or lack thereof, related to considering the “remaining useful life and other factors” when devising the proposed OOOOc plan requirements. PADEP’s proposed OOOOc plan noted the original March 2026 deadline for submission to EPA. It remains to be seen whether PADEP will continue moving forward with its plan given that it now has an additional 10 months to finalize and submit Pennsylvania’s OOOOc plan to EPA for approval.

EPA also extended deadlines in OOOOa and OOOOb associated with the so-called “super emitter program” created under the March 2024 Methane Rule. In the preamble for the Interim Final Rule, EPA notes that in implementing the “super emitter program,” which would allow EPA-approved third parties (using EPA-approved technologies) to provide EPA with data on super-emission events, “EPA has experienced unanticipated difficulties and concerns that require additional time for effective and lawful administration of various program procedures.” 90 Fed. Reg. at 35976. EPA is delaying implementation of the super-emitter program until after January 22, 2027, during which time EPA will not act on applications seeking approval for remote-detection technologies for use under the program. See 40 CFR §§ 60.5371a and 60.5371b.

The Interim Final Rule indicates that EPA may make additional, substantive revisions to the 2024 Methane Rule in a separate reconsideration action. EPA invites comments on the revisions in the Interim Final Rule by September 2, 2025, even though the rule became effective on July 31, 2025.

Environmental Groups’ Challenge

Ten environmental groups promptly filed a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit, challenging the Interim Final Rule. The Court has set initial filing deadlines, including a deadline to file any dispositive motions by September 18, 2025. A briefing schedule has not been established.

Press releases by the environmental groups suggest that they may attack the Interim Final Rule on both procedural and substantive groups. Procedurally, the grounds contend that EPA violated the law by offering no opportunity for public input. Substantively, the groups indicate that they plan to defend the 2024 Methane Rule requirements, including the original deadlines and requirements of that rule.

Babst Calland’s Environmental Practice Group is closely tracking these regulatory developments, and our attorneys are available to provide strategic advice on how these actions may affect your business. For more information or answers to questions, please contact Gary Steinbauer at (412) 494-6590 or gsteinbauer@babstcalland.com, Gina Buchman at (202) 853-3483 or gbuchman@babstcalland.com, Christina Puhnaty at (412) 394-6514 or cpuhnaty@babstcalland.com, or your Babst Calland relationship attorney.

To view the full article, click here.

D.C. Circuit Reinstates Clean Air Act Affirmative Defense for Emergency Exceedances

Environmental Alert

(by Joseph Schaeffer, Gina Buchman and Ryan McCann)

On September 5, 2025, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reinstated an affirmative defense under the Clean Air Act (CAA) for exceedances occurring as a result of an emergency, ruling that the Environmental Protection Agency’s (EPA) rescission of that defense was arbitrary and capricious. EPA had first established that affirmative defense for state-issued Title V permits in 1992, 57 Fed. Reg. 32250, 32306, and then expanded it to federally-issued Title V permits in 1996, 61 Fed. Reg. 34202, 34239. In doing so, it created a limited shield to liability for exceedances of emissions limitations if the operator could prove that the exceedance was due to “any situation arising from sudden and reasonably unforeseeable events beyond the control of the source, including acts of God ….” 40 C.F.R. § 70.6(g)(2). By 2016, however, EPA had concluded that the affirmative defense unlawfully encroached on the judiciary’s role to impose appropriate civil penalties for CAA violations or, alternatively, rendered applicable emissions limitations “non-continuous” in violation of 42 U.S.C. § 7602(k). EPA then rescinded the regulation affording the affirmative defense in 2023. 88 Fed. Reg. 47029, 47030–31

SSM Litigation Group (SSM), a coalition of interest groups representing Title V permit holders, petitioned the D.C. Circuit for review. After first disposing of EPA’s challenge to SSM’s standing, the Court turned to whether EPA’s elimination of the affirmative defense was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

EPA’s merits-based argument was two-pronged. The CAA allows any person to commence a civil action against another person or entity who is alleged to have violated an emission standard or limitation. 42 U.S.C. § 7604. Once such a suit has been brought, district courts have the authority to determine an appropriate civil penalty. Id. EPA maintained that the affirmative defense limits a district court’s authority to impose such civil penalties by allowing operators to escape liability. The Court, relying upon its own recent precedent, disagreed. Citing Florida Electric Power Coordinating Group, Inc. v. EPA, 94 F.4th 77 (D.C. Cir. 2024), the Court reiterated the distinction between a complete defense and a defense limited solely to remedies. Affirmative defenses that apply only to remedies exceed EPA’s authority, as they impermissibly constrain the discretion of district courts to impose civil penalties once enforcement proceedings have commenced. Conversely, establishing complete defenses does not run afoul of EPA’s authority because complete defenses relate to liability and not penalties. In other words, the district court’s authority to impose civil penalties is not hindered where the affirmative defense precludes any finding of liability.

EPA also maintained, though, that the affirmative defense violated the CAA’s continuity principle by authorizing deviations from applicable emissions limitations. See 42 U.S.C. § 7602(k). The Court found this logic to be flawed because affirmative defenses do not halt the applicable standards. Instead, the Title V defense simply prevents operators from incurring liability for non-compliance during emergencies. The underlying emissions standard continues to apply, and is therefore “continuous,” but the operator is not liable despite their failure to abide with the ongoing standards. To further clarify the breadth of this ruling, the Court stated that “a complete affirmative defense to liability does not render an emission limitation non-continuous.”

In sum, EPA’s rescission of the Title V defense was based on a legal interpretation of the CAA that the D.C. Circuit has since rejected, rendering the agency’s action arbitrary and capricious. As a result, the Title V affirmative defense for emergencies remains a liability shield for operators.

Babst Calland is closely tracking these regulatory developments, and our attorneys are available to provide strategic advice on how these actions may affect your business. For more information or answers to questions, please contact Joseph Schaeffer at (412) 394-5499 or jschaeffer@babstcalland.com, Gina Buchman at (202) 853-3483 or gbuchman@babstcalland.com, Ryan McCann at (412) 773-8710 or rmccann@babstcalland.com, or your Babst Calland relationship attorney.

White House Releases Sweeping AI Action Plan

TEQ Hub

(by Susanna Bagdasarova and Justine Kasznica)

On July 23, 2025, the White House released “Winning the Race: America’s AI Action Plan”,[1] a sweeping federal initiative setting forth the administration’s strategy to secure U.S. global leadership in artificial intelligence. Issued pursuant to Executive Order 14179, “Removing Barriers to American Leadership in Artificial Intelligence”,[2] the Action Plan outlines more than 90 federal policy actions across three strategic pillars: accelerating innovation, building American AI infrastructure, and leading in international diplomacy and security. The administration describes the effort as a path to “a new golden age of human flourishing, economic competitiveness, and national security,” goals that the Action Plan aims to realize through regulatory reform, infrastructure expansion and investment, and significant geopolitical engagement.

Guiding Principles

Three central principles[3] shape the Action Plan’s policy directives across all strategic pillars:

The American worker must benefit from the AI revolution. The expansion of AI infrastructure encouraged by the Action Plan aims to generate high-paying jobs, and AI-driven advancements in sectors like medicine and manufacturing are expected to raise the overall standard of living. Rather than displacing workers, AI is intended to enhance and support their roles.
Neutrality and objectivity must be foundational components of AI technologies. AI systems must be “free from ideological bias” and be “designed to pursue objective truth rather than social engineering agendas”.
National security depends on protecting AI systems. In a rapidly technologically advancing world, security initiatives must focus on preventing theft and misuse of U.S. AI technologies, as well as risk management and monitoring for emerging threats.

Key Policy Initiatives

Among the numerous directives and recommendations in the Action Plan, the administration identified four key policy initiatives:

Exporting American AI: To bolster U.S. influence and strengthen strategic alliances, the Departments of Commerce and State, in partnership with industry, will deliver “secure, full-stack AI export packages – including hardware, models, software, applications, and standards – to America’s friends and allies around the world.” In doing so, the U.S. can set global AI standards and simultaneously prevent countries in “America’s AI alliance” from becoming dependent on AI technologies developed by its foreign adversaries.
Promoting Rapid Buildout of Data Centers: To meet rising AI demand, the Action Plan proposes reducing regulatory burdens on infrastructure buildout to streamline permitting for data centers and semiconductor manufacturing facilities. This initiative is supplemented by directives to upgrade the U.S. electric grid and revitalize American semiconductor manufacturing, all of which is to be made possible by investments in the American workforce.
Enabling Innovation and Adoption: The Action Plan emphasizes the need for deregulation at the federal level to encourage acceleration of AI development and deployment and signals future collaboration with private industry partners in determining which rules should make the cut. It further seeks to discourage state and local regulatory barriers, proposing that “the Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds.”
Upholding Free Speech in Frontier Models: The Action Plan directs federal agencies to update procurement guidelines to contract for AI systems and services with developers “who ensure that their systems are objective and fee from top-down ideological bias.”

Strategic Takeaways

The Action Plan highlights the administration’s intent to make artificial intelligence a central pillar of national policy. It marks a significant change in the federal government’s approach to AI. In contrast to the Biden administration’s more cautious stance focusing on risk management, the Action Plan emphasizes innovation and acceleration through deregulation, rapid development, and establishing U.S. global influence in AI. For businesses, the framework provides new opportunities, incentives, and challenges, including:

Export Control Compliance: Companies participating in “full-stack” AI export programs will need to closely navigate ITAR, EAR, and other export frameworks for compliance.
Federal Procurement Standards: AI developers should anticipate additional requirements and certifications for objectivity, transparency, and model governance to qualify for government contracts.
Infrastructure Incentives and Approvals: The expedited permitting process for data centers and semiconductor facilities may provide new opportunities for developers and investors in critical infrastructure.
Regulatory Rollback Participation: Stakeholders, particularly private industry participants, will be able to provide feedback on which regulations obstruct innovation, offering a potential avenue to shape the future legal landscape of AI.

The Action Plan introduces significant regulatory, contractual, and operational changes across the AI value chain. Companies should evaluate their existing and planned AI-related activities in light of these developments, especially those touching federal contracting, export markets, and data infrastructure. They should also keep a close eye on state and local AI regulations in the wake of the Action Plan. Although it stops short of imposing the moratorium on state and local AI regulation that was stripped from the final version of President Trump’s budget reconciliation bill (H.R.1.), dubbed the One Big Beautiful Bill Act, the Action Plan encourages the Federal Communications Commission to “evaluate whether state AI regulations interfere with the agency’s ability to carry out its obligations and authorities under the Communications Act of 1934,” and tasks federal agencies to consider a state’s AI regulations when awarding federal funds.

As federal agencies enact the recommended policy actions, the administration has signaled that it is heavily focused on achieving U.S. global AI dominance. “Winning the AI Race is non-negotiable. America must continue to be the dominant force in artificial intelligence to promote prosperity and protect our economic and national security… These clear-cut policy goals set expectations for the Federal Government to ensure America sets the technological gold standard worldwide, and that the world continues to run on American technology,” said Secretary of State and Acting National Security Advisor Marco Rubio.

President Trump also highlighted his administration’s AI strategy during his first major speech on AI at a White House AI summit on the same day the Action Plan was released afternoon and signed three AI-related executive orders which correlate with various Action Plan directives: Promoting The Export of the American AI Technology Stack[4], Accelerating Federal Permitting of Data Center Infrastructure,[5] and Preventing Woke AI in the Federal Government.[6]

Babst Calland attorneys are tracking the most pressing issues related to data center development – including AI usage and privacy policies, related risks and regulatory requirements, as well as data center development financing, project siting, land use, zoning and regulatory compliance – and addressing pathways forward for successful projects. For questions or more information, please contact Susanna Bagdasarova at sbagdasarova@babstcalland.com or 412.394.5434 or Justine M. Kasznica at jkasznica@babstcalland.com or 412.394.6466.

______________________

[1] Full text available at Winning the Race: America’s AI Action Plan.

[2] Full text available at Removing Barriers to American Leadership in Artificial Intelligence.

[3] See White House Unveils America’s AI Action Plan.

[4] Full text available at Promoting The Export of the American AI Technology Stack.

[5] Full text available at Accelerating Federal Permitting of Data Center Infrastructure.

[6] Full text available at Preventing Woke AI in the Federal Government.

Former U.S. Department of Justice Environmental Enforcement Attorney Nicholas McDaniel Joins Law Firm Babst Calland’s Washington, D.C. Office

Babst Calland announced that Nicholas McDaniel has joined the firm as a shareholder in the firm’s Washington, D.C. office. With more than a decade of combined government and private practice experience, most recently as a senior enforcement attorney with the U.S. Department of Justice’s Environment and Natural Resources Division, Environmental Enforcement Section, McDaniel will be a member of the firm’s Litigation, Environmental, and Energy and Natural Resources groups. He will counsel companies on environmental compliance, enforcement, and litigation challenges.

At Babst Calland, McDaniel will focus his practice on complex environmental and commercial litigation for clients in the energy, natural resources, and manufacturing sectors. His work will include enforcement defense, citizen suits, and disputes involving environmental contamination. He also brings significant experience navigating bankruptcy proceedings involving environmental claims and negotiating settlements with regulators and citizen groups.

During his tenure at DOJ, McDaniel led major federal enforcement actions and complex negotiations that resulted in landmark environmental settlements. Notably, he secured the largest-ever civil penalty under the Clean Air Act, and is a three-time recipient of the prestigious Assistant Attorney General’s Award for Excellence – first for litigating and settling a cost recovery action under the Oil Pollution Act related to the longest-running oil spill in U.S. history, then for securing CERCLA cost recovery and natural resource damages on behalf of the United States, and later for his record Clean Air Act settlement. He also received numerous other honors, including the 2024 Arthur S. Flemming Award for legal achievement and recognition from the U.S. Department of Justice and the U.S. Environmental Protection Agency for exceptional service.

Earlier in his career, he litigated energy and rate-making cases before the Public Utilities Commission and in state courts with the Environmental Law & Policy Center.

“Nick is a highly skilled litigator with significant first-chair trial experience who has handled some of the toughest environmental enforcement cases in the country,” said Mark K. Dausch, shareholder in Babst Calland’s Litigation practice. “His government experience and proven ability to lead in the courtroom and deliver results in complex, high-stakes matters will be invaluable to our clients and a tremendous asset to our litigation team.”

“I am excited to join Babst Calland and to continue my practice alongside such a strong team of environmental and litigation attorneys,” said Nick McDaniel. “This firm has a well-earned reputation for excellence in environmental law and energy matters, and I look forward to helping clients address their most pressing challenges.”

“We are thrilled to welcome Nick to Babst Calland,” said Managing Shareholder Donald C. Bluedorn II. “His leadership role at DOJ in some of the most significant environmental enforcement cases in recent years, combined with his strong litigation background, brings exceptional perspective and capability to our clients as they navigate complex environmental challenges.”

McDaniel earned his J.D. cum laude from Harvard Law School in 2011 and his B.A. summa cum laude from Eastern Kentucky University in 2008. He is admitted to practice in the District of Columbia and Massachusetts.

Key Environmental and Energy Policies in the Second Trump Administration

Developing Pittsburgh

(by Ben Clapp and Gary Steinbauer)

Announced through a record-breaking number of executive orders, memoranda and directives, new White House energy and environmental policy initiatives are resulting in a rapidly changing environmental regulatory climate affecting the business community.

To help clients keep pace with these new policy initiatives, and recent steps that EPA has taken to implement this broad deregulatory agenda, attorneys at the law firm Babst Calland offer advice on how businesses can adapt and thrive in a swiftly changing regulatory environment.

It will be some time before we get a clear picture on “this administration’s policy objectives and how they’re all going to unfold,” Gary Steinbauer, a shareholder working with the environmental law practice of Babst Calland’s Pittsburgh office, says.

One of the emerging energy policy themes is the Trump administration’s goal of “American energy dominance,” achieved through permitting reform and environmental deregulation in the energy sector. Other themes include de-emphasizing climate change-based regulatory initiatives, promoting domestic manufacturing and mineral extraction, and grid reliability.

Executive orders 101

An executive order is a written statement in which a president broadcasts a directive to implement a policy change.

Presidents have fairly broad authority in terms of the scope of what they can order, “provided that that order is consistent with the applicable laws,” Ben Clapp, shareholder and chair of the environmental section at Babst Calland’s Washington, D.C. office, says.

A president cannot, through executive order, revise a regulation or amend or revoke a law. However, a president can revoke a previous administration’s executive orders and use them to announce new policy initiatives. Sometimes, when undertaking specific activities that have been delegated to the executive branch by Congress or the Constitution, they can compel a specific, direct action through an executive order without further procedures. In other cases, such as when a president directs an agency to issue or rescind a regulation, the agency needs to comply with notice and comment rulemaking requirements under the Administrative Procedure Act before taking final action.

Of particular interest at present are a slate of executive orders directing agencies to undertake deregulatory and permitting reform regulatory actions in furtherance of the promotion of domestic energy production. Among the most noteworthy, the Unleashing American Energy order directs agencies to identify those regulations that serve as an impediment to the production of American energy (in the context of this order – fossil-based resources, uranium, biofuels, hydroelectric power, geothermal energy and critical minerals but not including solar and wind energy sources), and develop and implement action plans to suspend, revise or rescind such actions. This order dovetails with a contemporaneous order Declaring a National Energy Emergency, which directs certain agencies to use emergency authority to facilitate energy development, transportation, refining, and generation.

Other executive orders of note relating to enhancing domestic energy production include:

Immediate Measures to Increase American Mineral Production, which, in part directs the DOI to identify areas on federal lands that can be “immediately implemented for mineral production.”
Ensuring National Security Through 232 Actions on Processed Critical Minerals, ordering the initiation of an investigation to determine the effects on national security of imports of processed critical minerals and their derivative products.
Unleashing America’s Offshore Critical Minerals and Resources, aimed at seabed mineral development by developing domestic capabilities through streamlined permitting, enhancing coordination amongst agencies.
Reinvigoration of America’s Beautiful Clean Coal Industry, which classifies coal as a mineral of the same level of importance as critical minerals, uranium, and copper, prioritizes coal leases on federal lands, promotes coal technology, including data center support, and directs agencies to identify regulations impeding coal production and consider revising or rescinding them.
A trio of executive orders aimed at enhancing the domestic production of nuclear power.

In addition, “the United States [issued executive orders] extracting itself from previous administrations’ climate change-based regulatory efforts, including removing itself from international climate agreements and rescinding executive orders that were in place to promote climate change-related regulation,” Clapp says.

National Energy Policy Act (NEPA) law reform.

Since 1970, NEPA has required that agencies closely examine the environmental impacts associated with major federal actions. In the context of emerging production, it’s important because the law’s environmental review requirements can be triggered:

In connection with the issuance of leases on federal lands for domestic energy production.
By the issuance of certain environmental permits, including those issued under Section 404 of the Clean Water Act, allowing the dredging and filling of wetlands.
By certain federal funding initiatives supporting energy projects.

Given the lengthy environmental review periods involved in the NEPA process and the propensity for project opponents to employ legal challenges to the NEPA process in attempts to delay or block energy projects, NEPA is viewed by the Trump administration as an “impediment to energy production,” Clapp says. In furtherance of the Trump administration’s Unleashing American Energy Executive Order, in February 2025, the Council on Environmental Quality (CEQ), which is the agency tasked with overseeing the implementation of NEPA, issued a memorandum directing agencies to revise or establish their NEPA implementing procedures to expedite permitting approvals in accordance with NEPA statutory timeframes. The CEQ followed that up with an interim final rule issued in April 2025 rescinding its own NEPA regulations that had been binding on other federal agencies. The current outlook for NEPA reviews remains unclear while we wait for agencies to develop their own NEPA regulations and implement the EO directives to make the approval process more efficient. Under the statute, however, agencies still have up to two years to complete the most detailed form of environmental review.

We are beginning to see early examples of agencies expediting NEPA reviews pursuant to the mandates contained in the executive orders and the CEQ February 2025 memorandum. For example, the Bureau of Land Management recently announced that they were rescinding its notice of intent to prepare Environmental Impact Statements – the most comprehensive and lengthy form of NEPA review, often taking more than two years – for more than 3,200 oil and gas leases in Western states on the grounds that it conflicted with its mandate to reduce regulatory barriers for oil and gas companies and expediting domestic energy development.

Emergency Permitting

Agency efforts are also underway to implement the emergency permitting directive issued in the Declaring a National Energy Emergency Executive Order, which requires that federal agencies, including the Army Corps of Engineers and the Department of the Interior, to use their emergency permitting powers to fast track energy projects requiring permits under Section 404 of the Clean Water Act, Section 10 of the Rivers and Harbors Act, and the Endangered Species Act. The issuance of these permits trigger NEPA reviews, and therefore, the emergency permitting procedures are entwined with the administration’s efforts to expedite NEPA reviews.

In response to this directive, the Army Corps of Engineers is actively fast-tracking more than 600 energy projects. For example, in February, the Army Corps committed to issuing its Record of Decision, approving a pipeline underneath the Mackinac Straits in Michigan, in the fall of 2025 – a remarkably quick time frame for completing a NEPA review and issuing required permits.

in May, the DOI issued a memorandum stating they were going to conduct the permitting process for energy projects, using emergency permitting approvals, in no more than 28 days.

“That is an extraordinarily fast amount of time. It can only result in administrative records that are fairly thin,” Clapp says. “These projects are going to receive a lot of attention” from opponents of fossil fuel energy production. I think there’s a significant litigation risk there.”

Key deregulatory actions

In March 2025, the EPA announced a sweeping deregulatory initiative identifying 31 regulations and agency actions that will be reconsidered in response to the Trump administration’s executive orders. “The plan likely will take years to implement and execute,” Steinbauer says.

The EPA has begun implementing its deregulatory plan, with the issuance of two significant deregulatory actions that were published in the Federal Register on June 17.

The first proposal is to repeal the Biden administration’s greenhouse gas emission standards for the power sector based on a new statutory interpretation. “Here, the Trump administration is taking the position that to regulate greenhouse gas emissions, or any new pollutant under this Clean Air Act Section, EPA needs to find that that pollutant contributes significantly to dangerous air pollution,” Steinbauer says. The EPA is also proposing an alternative basis for repealing the Biden-era power sector greenhouse gas emission standards. This alternative proposal takes a “more surgical” approach to repeal by finding that carbon capture and sequestration technology is not “adequately demonstrated” and the co-firing of natural gas and low greenhouse gas hydrogen at certain coal fired power plants is an inefficient use of natural gas.

The EPA’s second proposal also affects the power generation sector and focuses on mercury emissions standards from coal-fired stations. The Trump EPA is proposing to repeal the Biden administration’s 2024 Mercury and Air Toxic Standards (MATS) rule that regulated mercury emissions from coal-fired power plants and set filterable particulate matter emission standards, requires continuous emission monitoring systems to demonstrate compliance, and includes first-time mercury emissions standards for lignite coal plants. The Trump administration now seeks an outright repeal of the 2024 MATS rule, contending that the costs to comply with the Biden administration’s MATS rule are too high, there are other means to demonstrate compliance, and there is too much variability in monitoring lignite coal plants to justify those standards.

The Trump administration “took very broad positions” aimed at striking down the Biden-era power sector greenhouse gas emission standards and the MATS rule “at their core and in their entirety,” Steinbauer says. This could be a sign that we may see more of “a chainsaw approach” when it comes to deregulation.

On the proposed repeal of the Biden administration’s power sector greenhouse gas emission standards, the EPA issued its proposed repeal in June and has pledged to finalize that rule, six months later, in December. “I don’t think a rulemaking of this significance has ever proceeded at that pace,” Steinbauer says. “Everyone will be watching carefully to see whether the administration follows through on that anticipated timeline.”

Beyond the use of executive orders, the President is also using available statutory authorities to advance his goals. In April, President Trump gave roughly 50 coal-fired power plants a two-year compliance extension for the 2024 Mercury Air Toxic Standards using a never-before-used Clean Air Act provision. “Litigation has already been filed challenging this presidential compliance extension,” but it could be “a signal that the president is willing to be big and bold and utilize statutory authorities in ways that haven’t been contemplated or used [] before to advance his goals,” Steinbauer says.

Congress has also been involved in deregulation through its Congressional Review Act, a statute that allows Congress to nullify agency rules that were sent to it within the last 60 legislative days. Before 2017, the Congressional Review Act was only used once since it was enacted in 1996, Steinbauer says. In the first year of President Trump’s first term, “it was used 16 times by Congress,” Steinbauer says, and the act has been used more frequently since that time, by Congress during the Biden administration and now in President Trump’s second term.

Recently, Congress has used the act to strike down a Biden-era EPA regulation implementing the so-called methane tax regulation. Congress has also used the statute to eliminate Clean Air Act waivers that the Biden administration issued to California, relating to motor vehicle and engine emission requirements.

Inevitable litigation

Recent Supreme Court precedent likely will feature prominently in lawsuits challenging the Trump administration’s deregulatory actions. As an example, the Loper Bright case overturned the long-standing Chevron deference doctrine. Now, courts are obligated to exercise independent judgement in interpreting statutes, rather than deferring to an agency’s reasonable interpretation of a statute. The Trump administration is aware of Loper Bright and other recent Supreme Court decisions, as its deregulatory proposals are using language intended to address these changes.

Litigation is also being used as a “sword” to achieve the administration’s domestic energy policy initiatives, explains Steinbauer, referring to the executive order in which President Trump directed the Attorney General to challenge state laws addressing climate change and environmental justice, and those imposing carbon taxes or carbon penalties. The order singles out California, Vermont and New York, and there are now four pending lawsuits filed by the Attorney General against Hawaii, Michigan, New York and Vermont stemming from this executive order.

The EPA is also managing several pending challenges to Biden-era EPA regulations, many of which challenge regulations that the Trump administration has vowed to reconsider. In such cases, the EPA files motions “to hold those lawsuits in abeyance while it undertakes its review and evaluation of the rules that are being challenged,” Steinbauer says.

How the Trump administration is shaping EPA

The administration is also making structural changes at EPA, and through other efforts is seeking to change how agencies operate and optimize their workforce.

There are EPA workforce reorganizations occurring that could have lasting effects. For example, the EPA is proposing to eliminate its Office of Research and Development and to create a new Office of Applied Science and Environmental Solutions. The new office’s purpose is described as guiding the agency in using science in the regulatory context, and it will be housed in the EPA Administrator’s office.

Regarding EPA employees, the agency has incentivized multiple opportunities for deferred resignations or early retirements. There are reports that more than 3,000 EPA employees – or 20 percent of its workforce – took this offer in May. Reports suggest that 1,400 more EPA employees may have participated in this program in June. These workforce reduction efforts are significant because fewer EPA employees will be tasked with implementing the Trump administration’s ambitious deregulatory plan, Steinbauer says.

Keeping pace with ongoing policy developments

We are beginning to see concrete steps EPA is taking to advance its sweeping deregulatory plan. The business community needs to stay abreast of these new developments, and there will be opportunities for strategic advocacy when the agency asks for input from the regulated community or other stakeholders, explains Steinbauer.

“The success of those deregulatory efforts depends often on the legal footing and the factual footing,” he says. “The factual footing is based on the administrative record, and EPA only has access to certain data and information about a regulated industry.” Strategically engaging with the EPA on its deregulatory proposals, whether in support of or against the specific proposal, will be key for businesses navigating the rapidly changing legal landscape.

Despite the EPA’s deregulatory plans, many complex environmental regulations remain on the books, and maintaining compliance with those requirements is important. Steinbauer encourages the regulated community to perform audits to assess the strength of their compliance programs and consider using agency self-disclosure policies and laws to mitigate liability and civil penalty exposure.

Finally, Steinbauer says, be patient and adapt as necessary, as the next several years certainly will be eventful.

For more information on the actions discussed in this article or related matters, please contact Ben Clapp at bclapp@babstcalland.com or Gary Steinbauer at gsteinbauer@babstcalland.com.

To view the full article, click here.

To view the PDF, click here.

WVDEP Proposes Clean Water Act Section 401 Certification for New Corps of Engineers Expedited Permitting Mechanisms for Energy-Related Projects

Environmental Alert

(by Kip Power and Mackenzie Moyer)

On August 21, 2025, the West Virginia Department of Environmental Protection (WVDEP) published its proposed Clean Water Act (CWA) Section 401 Water Quality Certification package with respect to two separate expedited permitting mechanisms recently proposed by the U.S. Army Corps of Engineers (Corps). The proposed 401 Certification would approve the use of the Corps’ proposed Regional General Permit (RGP) and Letter of Permission (LOP) for energy projects in West Virginia, each of which was published by the Corps on June 4, 2025. The Corps proposed the RGP and LOP to expedite permitting of energy related projects under Section 404 of the CWA and (as to the RGP) Section 10 of the Rivers and Harbors Act of 1899 (RHA), as a means of implementing several Executive Orders issued by President Trump aimed at expediting regulatory approval of such projects. In finalizing its decision on the proposed Certifications, the WVDEP will consider the impact of activities that would be authorized using these mechanisms on water resources, fish and wildlife, recreation, critical habitats, wetlands, and other natural resources. WVDEP is accepting public comment on its proposed Certification package until September 23, 2025.

Section 401 Water Quality Certifications are required for permits or licenses issued by federal agencies to ensure that such projects do not violate a state’s water quality standards or adversely affect designated uses of specific streams. Under applicable federal regulations and the terms of the Corps’ proposals, the WVDEP is required to act upon the Corps’ request for CWA Section 401 Certification of both the RGP and LOP within 60 days after they were received by the WVDEP, and a failure to meet that deadline would be deemed to be a waiver of the WVDEP’s certification authority. The public comment deadline of September 23, 2025 regarding the WVDEP’s proposed Certifications is presumably geared towards allowing WVDEP to meet the 60-day response deadline established by the Corps.

The Corps’ proposed RGP, if finalized, would be available for energy or energy resource-related activities that would permanently impact one acre or less of federal jurisdictional waters and are considered to have no more than minimal individual and cumulative adverse environmental impacts. The RGP defines “energy or energy resources” as “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606(a)(3).” Further, “critical mineral” does not include “fuel minerals; water, ice, or snow; or common varieties of sand, gravel, stone, pumice, cinders, and clay.” Any applicant seeking coverage under the RGP would have to file a Pre-Construction Notification (PCN) with the Corps (containing detailed information pertaining to the project) as part of its application.

The proposed LOP would be available for energy or energy resource-related projects in West Virginia that impact no more than two acres of federal jurisdictional waters, are likely to have “minimal” effects on the human environment and are viewed as involving “minor” work. 30 C.F.R. 325.2(e)(1). Any application for coverage under the LOP must include detailed information regarding the proposed project, be coordinated with federal and state fish and wildlife authorities, and be subject to a public interest evaluation. However, issuance of a LOP would not require submission of a PCN to the Corps or publication of individual public notice of the application.

WVDEP’s proposed Certification package includes its own proposed “Standard Conditions” and “Special Conditions” to the Corps’ RGP and LOP (which are substantively identical). If finalized, West Virginia’s 401 Certifications for the RGP and LOP (including all such conditions) will be incorporated by reference into each of these permitting mechanisms. For example, Standard Condition 14 would require that any applicant proposing to conduct horizontal directional drilling beneath a Section 10 (i.e. RHA) water must prepare and submit an Inadvertent Return Contingency Plan, a Groundwater Protection Plan, and an Operations Contingency Plan to WVDEP for review and approval. If finalized as proposed, the Special Conditions would require, among other things, prior written notification to WVDEP for any proposed work in streams identified in Standard Condition 10 and in RHA Section 10 rivers within West Virginia. Notification must be provided at least 60 days prior to construction, describing the project purpose, location, and impacts. WVDEP reserves the right to require individual Section 401 Water Quality Certifications for any activities resulting in greater than 200 linear feet of cumulative impact to any stream listed in Standard Condition 10 or to any Section 10 river. See Special Condition 2.

Babst Calland attorneys continue to track these developments and are available to assist with CWA-related matters, such as project-related permitting, in West Virginia and other states. For more information on this development and other water issues, please contact Christopher B. (Kip) Power at (681) 265-1362 or cpower@babstcalland.com, Mackenzie Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other environmental attorneys.

EPA Extends Certain Compliance Deadlines for Oil and Natural Gas Clean Air Act Requirements

GO-WV

(by Gary Steinbauer, Gina Falaschi Buchman and Christina Puhnaty)

Summary of Deadline Extensions

EPA extended the following OOOOb compliance deadlines to at least January 22, 2027:

Process Controllers: The date by which process controller affected facilities are required to be zero-bleed devices. 40 CFR §§ 60.5370b(a)(5)(i), 60.5390b(a), 60.5415b(h)(1).

Storage Vessels:
- The date by which receiving additional crude oil, condensate, intermediate hydrocarbons, or produced water throughput at tank batteries triggers a modification. 40 CFR § 60.5365b(e)(3)(ii)(C) and (D).
- The date by which a legally and practicably enforceable limit used to determine the potential VOC and methane emissions from a storage vessel must include the elements provided in paragraphs 40 CFR § 60.5365b(e)(2)(i)(A) through (F). 40 CFR § 60.5365b(e)(2)(i).
- The date by which the potential for VOC and methane emissions from storage vessels must be calculated using a generally accepted model or calculation methodology that accounts for flashing, working, and breathing losses, based on the maximum average daily throughput to the tank battery determined for a 30-day period of production. 40 CFR § 60.5365b(e)(2)(ii).

Covers and Closed Vent Systems: The date by which a required closed vent system or cover must be designed and operated with no identifiable emissions and corresponding inspections must be performed. This new compliance deadline is 18 months after the date the Interim Final Rule is published in the Federal Register or upon startup, whichever is later. 40 CFR §§ 60.5411b(a)(3), § 60.5411b(b)(4), 60.5416b(a)–(b).

Control Devices: The date by which you must install and operate a continuous burning pilot or combustion flame, as applicable, and the date by which an alert must be sent to the nearest control room whenever the pilot or combustion flame is unlit. 40 CFR §§ 60.5412b(a)(1)(viii) and (3)(viii), 60.5413b(e)(2), 60.5415b(f)(1)(vii)(A)(1), 60.5417b(d)(8)(i), 60.5417b(i)(6)(v).

Environmental Groups’ Challenge

Click here, to view the article online in the September issue of GO-WV News.

What to Look for When Entering a Construction Contract

Contractor’s Compass

(by Marc Felezzola and Angela Harrod)

Maybe your construction business is growing, or maybe it has been a long-standing national competitor, but regardless of how established your business is on the national scene, there are certain things that you should always consider when reviewing a subcontract. This is especially true when your business is entering into a subcontract for a project in an unfamiliar jurisdiction. The following are just a few of the contract provisions that any subcontractor should give special consideration when undertaking a new project in an unfamiliar jurisdiction.

Anti-Indemnity Legislation
Indemnity clauses are a popular and effective means for shifting financial risk. Owners utilize them to shift risk to general contractors; general contractors use them to shift that risk down further to their subcontractors; and so on. These clauses generally require one party to agree to legally defend another in disputes arising from the project, and to pay for any damages that are awarded to the party whom is owed the indemnity. Indemnity clauses can cover all types of risk, but among the most common are non-payment of another party (e.g., the subcontractor must indemnify the prime contractor from claims for payment by the subcontractor’s vendors and suppliers), intellectual property ownership or usage, missing project milestones, and injury to persons or property.While indemnification in construction contracts is commonplace, some states limit the circumstances under which indemnity provisions may be enforced. For example, states like West Virginia (W. Va. Code § 55-8-14), Michigan (MCLS § 691.991), and Georgia (O.C.G.A. § 13-8-2) prohibit broad, generalized indemnity provisions. In contrast, Texas prohibits one party requiring another to indemnify it against the other from that party’s own negligence. It is important to consult with legal counsel regarding the level of indemnification that is permitted in a given jurisdiction when negotiating a construction contract so that the level of risk for each party is understood and allocated in accordance with applicable law.

Limits On Retainage
Just as state laws vary on the permissibility of indemnification provisions, retainage may also be regulated by state statute. Some states limit the amount of retainage an owner or contractor may withhold. For instance, retainage is not permitted on public projects in North Carolina that are valued under $100,000, and owners on private projects may not withhold more than 5% retainage through the first 50% of a project (N.C. Gen. Stat. § 143-134.1).Similarly, retainage may not exceed 10% on a public project in Pennsylvania, and when the contract is 50% complete, one-half of the retainage must be paid (62 Pa.C.S. § 3921). Furthermore, the Department of General Services in Pennsylvania specifically may not withhold more than 6% retainage for the first half of the project, and no more than 3% for the second half of the project (62 Pa.C.S. § 3921). However, retainage on private projects is regulated in Pennsylvania so there is no cap or limit. Certain states also permit a contractor or subcontractor to provide substitute security on private projects to avoid retainage altogether.Because of the jurisdictional differences, subcontractors should ensure they check whether there are any restrictions or regulations on retainage when taking on a project in a new state so that retainage is not withheld from them at a rate in excess of what is legally permitted in that jurisdiction.

Conditional Payment Clauses (i.e, Pay-If-Paid Provisions)
Conditional payment clauses are one of the strongest risk-shifting provisions contractors include in agreements with subcontractors. Under such a clause, which is often referred to as a “pay-if-paid” clause, the contractor and subcontractor agree that the owner’s payment to the contractor is an express condition precedent to the contractor’s obligation to pay the subcontractor for its work. This means that the subcontractor takes on the risk of owner non-payment and will only get paid if the owner pays the contractor for the subcontractor’s work. Thus, if an owner encounters financial troubles and stops paying its contractor, the contractor is not obligated to pay the subcontractor.Once again, the enforceability of these provisions varies by state. Many states have case law that requires that the contract language clearly express the parties’ intent to shift the risk of owner nonpayment to the subcontractor for a conditional payment clause to be enforceable. For example, in Pennsylvania and Georgia, pay-if-paid provisions must state explicitly that the parties intend for payment to the contractor to be a condition precedent to payment for the subcontractor for a court to enforce them. Other states, including California (Cal. Civil Code § 8122), Virginia (Va. Stat. §§ 11-4.6 (private projects), 2.2-4354 (public projects)), and North Carolina (N.C. Gen. Stat. § 143-134.3), have statutes that make conditional payment clauses void and unenforceable as a matter of public policy. Understanding whether and to what extent contingent payment clauses are enforceable could be a very important piece of your risk management and subcontract negotiation strategy when considering whether to cross state lines into a new jurisdiction for a project.

No Damages for Delay
Owners and contractors use “no damages for delay” provisions to limit or eliminate claims for damages due to delays on a project. These clauses generally state that in the event of a project delay, the sole and exclusive remedy available to the contractor/subcontractor is a no-cost extension of time to account for the delay. While the enforceability of “no damages for delay” provisions also varies by state, a common method for challenging the provisions is contesting whether the delay is within the scope of the “no damages for delay” clause.No damages for delay clauses are generally enforceable for private projects (but, see Wash. Rev. Code § 4.24.360), but are unenforceable for public projects in several jurisdictions. Moreover, even in states that have no regulations for no damages for delay clauses, there are generally court-created exceptions to the full enforcement of the provision under certain circumstances. Understanding whether and to what extent a no damages for delay clause will be enforced in a jurisdiction is crucial when negotiating a subcontract, and counsel familiar with the enforceability of these clauses and the exceptions thereto in the jurisdiction may be able to negotiate to limit or even eliminate the impact of no damages for delay clauses.

Preliminary Notice Requirements for Lien and Bond Claims
When embarking on any new projects, subcontractors must be aware of statutes requiring preliminary notices for lien or bond claims, as failing to comply with such a requirement can result in loss of payment security from the outset of the project.In some jurisdictions, owners and contractors may take preemptive steps to insulate themselves, as permitted by state law, from potential lien or bond claims at the end of the project. Those preemptive steps often entail filing/posting a “Notice of Contract” or “Notice of Commencement,” which function as a public declaration that work on a project is commencing. If an owner or contractor takes those steps, it then triggers a requirement that all subcontractors for the project file a corresponding preliminary notice, often in the form of a “Notice of Subcontract” or “Notice of Furnishing” within a specific (and short) amount of time after the subcontractor commences work on the project. Failure to file the preliminary notice within the required statutory time period can result in the subcontractor forfeiting some or all of its payment bond or mechanics’ lien rights with respect to the project.Because subcontractors often have a relatively short amount of time to file the required preliminary notice, and because these requirements vary widely by jurisdiction, it is critical that a subcontractor be aware of any preliminary notice requirements it may have prior to starting work on a project in a new state.

The topics discussed in this article capture only a small subset of those that should be considered when entering a construction contract and/or venturing into a new jurisdiction. Businesses should consult with a legal professional—especially when doing work in an unfamiliar jurisdiction—to ensure that they understand what risks they are assuming and how to properly preserve their legal rights.

About the authors:

Mark J. Felezzola is a shareholder at Babst Calland. He focuses his practice on complex construction-related and environmental matters. Felezzola serves as outside general counsel for owners, developers, design professionals, and construction companies, and frequently represents them in a variety of commercial and construction-related disputes including construction bid protests, construction defect claims, differing site condition claims, delay and inefficiency claims, payment and performance bond claims, mechanics’ lien claims, as well as all other types of payment and contract performance disputes. Contact Mark at 412-773-8705 or mfelezzola@babstcalland.com.

Angela M. Harrod is an associate at Babst Calland. Ms. Harrod has a broad range of experience representing corporate clients in matters including breach of contract, unfair trade practices, and complex litigation. Ms. Harrod represents contractors, subcontractors, owners, developers, design professionals, and construction companies in a broad range of matters arising from complex construction and development projects. Contact her at 412-394-5688 or aharrod@babstcalland.com.

Reprinted with permission from the August 2025 issue of Contractor’s Compass.

To read the full article, click here.

Grants Available Through Pennsylvania Grid Resilience Program Under Infrastructure Investment and Jobs Act of 2021

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(by Joe Reinhart, Sean McGovern, Matt Wood and Gina Buchman)

On May 31, 2025, the Pennsylvania Department of Environmental Protection (PADEP) announced the availability of $8 million in grants offered through the Pennsylvania Grid Resilience Grants Program (Program), which is funded by the Infrastructure Investment and Jobs Act of 2021. See 55 Pa. Bull. 3809 (May 31, 2025). The Program’s funding is available to entities that own or operate electric power systems, such as electric grid operators, electricity storage operators, electricity generators, transmission owners or operators, distribution providers, and fuel suppliers, who are looking to implement measures intended to mitigate the impact of electric grid disruptions.

PADEP is specifically interested in projects that promote clean energy generation and workforce benefits. A minimum of 5% of the program funding is being reserved for entities that sell less than 4 million MWh of electricity annually (the “Small Utility Set Aside”). On its website, PADEP has identified several eligible project types, including weatherization technologies and equipment, fire resistant technologies and fire prevention systems, the undergrounding of electrical equipment, and utility pole management. The following types of projects are ineligible for the Program: construction of a new electric generating facility, construction of a new large-scale battery storage facility, and projects relating to cybersecurity. See PADEP, “Pennsylvania Grid Resilience Grant Program,” here.

Concept paper submissions were due on August 8, 2025, and PADEP was to provide feedback on concept papers by email by August 22, 2025. Full applications will be received any time after September 1, 2025, until November 1, 2025.

Bucks County Appeals Dismissal of Climate Change Lawsuit

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(by Joe Reinhart, Sean McGovern, Matt Wood and Gina Buchman)

On June 16, 2025, Bucks County, Pennsylvania filed a notice of appeal to the Superior Court of Pennsylvania challenging the court of common pleas’ dismissal of Bucks County’s climate change lawsuit against 14 energy companies and the industry’s largest trade association, the American Petroleum Institute (API).

The complaint alleged that the energy companies and the API should be held financially liable for climate change impacts. Specifically, Bucks County alleged that the defendants engaged in a decades-long disinformation campaign that was designed to discredit climate science, create doubt around the impact of burning fossil fuels, and delay the transition to a low carbon future. Bucks County also alleged that the campaign worsened emissions, accelerated global warming, and brought devastating climate impacts to the county. The lower court dismissed the complaint for a lack of subject matter jurisdiction due to federal preemption, concluding that our federal structure does not allow any state law to address the claims in the complaint. Bucks Cnty. v. BP P.L.C., No. 2024-01836 (Pa. Ct. Com. Pleas May 16, 2025).

Similar suits have been brought by cities and states around the country. Some courts have held that these cases properly belong in state court, but courts in Delaware, Maryland, New Jersey, and New York have made rulings similar to the court of common pleas in the Bucks County case. The superior court received the original record on August 12, 2025, and will proceed from there.

PADEP Proposes OOOOc State Plan

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(by Joe Reinhart, Sean McGovern, Matt Wood and Gina Buchman)

The Pennsylvania Department of Environmental Protection (PADEP) released its Proposed State Plan for 40 C.F.R. Part 60, Subpart OOOOc Emissions Guidelines for Greenhouse Gas Emissions from Existing Crude Oil and Natural Gas Facilities (Proposed State Plan) for public comment on May 31, 2025. See 55 Pa. Bull. 3810 (May 31, 2025).

PADEP released its Proposed State Plan in response to the Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review published by the U.S. Environmental Protection Agency (EPA) in spring 2024. 89 Fed. Reg. 16,820 (Mar. 8, 2024). This rule established New Source Performance Standards Subpart OOOOb that regulates emissions for new facilities in the Crude Oil and Natural Gas source category. It also included Subpart OOOOc, establishing model emission guidelines to address emissions from existing sources in the same source category. When EPA publishes emissions guidelines as part of the New Source Performance Standard, PADEP is obligated under the federal Clean Air Act to propose a state plan that implements the federal model emission guidelines. States can choose to implement EPA’s model guidelines or develop regulatory provisions with standards that are as or more stringent than the federal provisions.

States may apply to EPA to implement less stringent standards than the model rule that take into account the remaining useful life and other factors (RULOF) of certain regulated facilities. RULOF demonstrations must show that a facility (or class thereof) cannot reasonably achieve the emission limitations in the model guidelines due to (1) unreasonable cost of control resulting from facility design, age, or location; (2) infeasibility of required control methodology; or (3) other conditions specific to the facility. 40 C.F.R. § 60.24a(e). The state must also show that EPA did not consider these types of facilities when setting standards in its model rule and that the standards are no less stringent than necessary. Id.

PADEP will implement the OOOOc emissions guidelines through General Plan Approval(s)/Operating Permit(s), but also requested input from commenters as to the applicability of RULOF to facilities in Pennsylvania. PADEP held multiple public hearings on the proposal and the public comment period closed on July 30, 2025.

When PADEP released the Proposed State Plan for comment, PADEP’s deadline to submit its state plan to EPA was March 9, 2026. On July 31, 2025, however, PEA published an interim final rule in the Federal Register extending many deadlines under the OOOOb and OOOOc regulations, including an extension to the deadline to submit state plans. 90 Fed. Reg. 35,966 (July 31, 2025). State plans are now due 540 days after the publication of the interim final rule in the Federal Register, which is January 22, 2027. While the interim final rule became effective upon publication in the Federal Register, EPA is accepting comments on the interim final rule until September 2, 2025.

Top

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.

Necessary

Always Enabled

Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.

Cookie	Duration	Description
cookielawinfo-checkbox-analytics	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional	11 months	The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy	11 months	The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

Functional

Performance

Analytics

Others