RMMLF Mineral and Energy Law Newsletter

(By Joseph K. Reinhart, Sean M. McGovern, Gina N. Falaschi and Matthew C. Wood)

On June 22, 2021, a few weeks after hearing oral arguments, the Supreme Court of Pennsylvania dismissed as having been improvidently granted appeals by environmental advocacy group Protect PT to overturn two Penn Township Zoning Hearing Board (Board) decisions to grant special exceptions for gas well development in the township. Protect PT v. Penn Twp. Zoning Hearing Bd., 252 A.3d 600 (Pa. 2021) (mem.).

The companion cases originated from the Board’s 2018 decisions to approve special exception applications by Olympus Energy LLC (Olympus) to develop oil and gas operations at two well pads in Penn Township, Westmoreland County, Pennsylvania. In the hearings, Protect PT asserted that the cumulative impacts of the gas well development near residential neighborhoods could increase the probability of negative environmental, safety, and health impacts in the community. The Board ultimately approved Olympus’s applications, concluding the proposed development satisfied the requirements of the township’s zoning ordinance (subject to certain conditions) and that Protect PT failed to present sufficient, credible evidence to rebut the Board’s conclusion.

Protect PT first appealed the Board’s decisions to the Westmoreland County Court of Common Pleas, which denied the appeals and affirmed the Board’s decisions without taking additional evidence. Protect PT subsequently appealed to the Commonwealth Court of Pennsylvania. Before the commonwealth court, Protect PT argued that the Board capriciously disregarded the evidence presented to it in granting Olympus’s applications. See Protect PT v. Penn Twp. Zoning Hearing Bd., 238 A.3d 530 (Table), 2020 WL 3640001 (Pa. Commw. Ct. 2020), appeal granted in part, 243 A.3d 969 (Table) (Pa. 2021), appeal dismissed as improvidently granted, 252 A.3d 600 (Pa. 2021) (mem.). Thus, Protect PT argued, the Board erred in determining that the well pad development “would not create a high probability of adverse, abnormal, or detrimental effects on public health, safety, and welfare based on related increased traffic and air emissions during its development and operation.” Id. at *6.

Citing precedent, the commonwealth court stated that it could not substitute its interpretation of the evidence for the Board’s, whose function is to weigh the evidence before it as “the sole judge of the credibility of witnesses and the weight afforded their testimony” and that the Board “is free to reject even uncontradicted testimony it finds lacking in credibility, including testimony offered by an expert witness. It does not abuse its discretion by choosing to believe the opinion of one expert over that offered by another.” Id. at *7 (quoting Taliaferro v. Darby Twp. Zoning Hearing Bd., 873 A.2d 807, 811 (Pa. Commw. Ct. 2005)). In reviewing the evidence considered by the Board, the commonwealth court found that Protect PT failed to present credible evidence of the alleged negative effects that would result from approving the well pad operations and that the Board did not err in granting the Olympus application. Id. at *9, *13. Protect PT petitioned the Supreme Court of Pennsylvania to allow it to appeal, which the court granted, limiting review to specific issues. Protect PT v. Penn Twp. Zoning Hearing Bd., 243 A.3d 969 (Table) (Pa. 2021); see Vol. XXXVIII, No. 1 (2021) of this Newsletter. Before the supreme court, Protect PT con-tended that the Board should not be allowed to reject without explanation its expert’s evidence of the cumulative negative impacts of well development as not credible. The court concluded that it would take the matter under advisement and, as stated above, dismissed the appeals a few weeks later.

Corps Issues Pennsylvania State Programmatic General Permit-6

On June 25, 2021, the Philadelphia, Pittsburgh, and Baltimore Districts of the U.S. Army Corps of Engineers (Corps) jointly announced the issuance of the Pennsylvania State Programmatic General Permit-6 (PASPGP-6) for a five-year period, effective July 1, 2021, for applicable parts of Pennsylvania. See Corps, Special Public Notice # SPN-21-28 (June 25, 2021). The PASPGP is the mechanism that the Pennsylvania Department of Environmental Protection (PADEP) and the Corps rely upon to permit most projects in Pennsylvania that impact federally regulated waters, but do not require an individual section 404 permit. PASPGP-6 allows applicants to obtain both federal section 404 permits and state water obstruction and encroachment permits for projects impacting federal and state regulated waters. PASPGP-6 replaces Pennsylvania State Programmatic General Permit-5 (PASPGP-5), which became effective July 1, 2016, was revised in July 2018, and expired on June 30, 2021. PASPGP-6 authorizes work in waters of the United States within portions of Pennsylvania for activities that would cause no more than minimal adverse environmental effects, individually and cumulatively, subject to the permit’s specific terms and conditions, and operates in conjunction with the relevant PADEP state regulatory program.

PASPGP-6 changes a number of elements from PASPGP-5. For example, PASPGP-6 updates the following eligibility thresholds: (1) PASPGP-5’s one-acre threshold for single and complete projects (temporary and/or permanent impacts of one acre) was changed to 0.5 acre of permanent loss of waters of the United States, including jurisdictional wetlands (with some exceptions); and (2) PASPGP-5’s one-acre threshold for temporary impacts to waters of the United States, including jurisdictional wetlands, was changed in PASPGP-6 to unlimited acreage, as long as the work is determined to result in no more than minimal impact. Id.

In addition, PASPGP-6 updates the reporting threshold for Corps review of an application, which is now calculated based on impacts associated with an overall project. The reporting threshold under PASPGP-5 applied to single and complete projects. As noted above, the eligibility threshold determination under PASPGP-6 is made based on single and complete projects. Id. In another change, section 10 waters within the Pittsburgh District (previously ineligible under PASPGP-5) are eligible for authorization under PASPGP-6 (which requires Corps review unless the work qualifies for authorization under PADEP Waivers 10 and 12). Id. The PASPGP-6 full permit and related materials are available on the Corps’ website at https://www.nab. usace.army.mil/Missions/Regulatory/Permit-Types-and-Process.

U.S. District Court Dismisses Challenge to DRBC’s Hydraulic Fracturing Ban

On June 11, 2021, the U.S. District Court for the Eastern District of Pennsylvania dismissed a lawsuit challenging the authority of the Delaware River Basin Commission (DRBC) to ban hydraulic fracturing within the Delaware River Basin (Basin). See Yaw v. DRBC, No. 2:21-cv-00119, 2021 WL 2400765 (E.D. Pa. June 11, 2021).

In 2009, the DRBC, citing concern for adverse environmental effects, instituted a moratorium prohibiting hydraulic fracturing “within the drainage area of the basin’s Special Protection Waters,” unless previously approved by the DRBC. News Release, DRBC, “DRBC Eliminates Review Thresholds for Gas Extraction Projects in Shale Formations in Delaware Basin’s Special Protection Waters” (May 19, 2009). The moratorium was expanded in 2010 and remained in effect until February 2021 when the DRBC memorialized the moratorium as a ban via regulation. See News Release, DRBC, “Wastewater Importation and Water Exportation Rule Amendments to Be Proposed” (Feb. 25, 2021). Seeking declaratory judgment and injunctive relief against the DRBC, two Pennsylvania state senators, Gene Yaw and Lisa Baker, and their caucus, and two Pennsylvania townships and two counties located within the Basin filed suit in federal court in January 2021. The plaintiffs alleged that the moratorium (1) exceeds the DRBC’s authority under the Delaware River Basin Compact, (2) is an unconstitutional taking of private and public property, (3) is an illegal usurpation of the commonwealth’s power of eminent domain, and (4) violates the constitutional guarantee of a republican form of government. Yaw, 2021 WL 2400765, at *3.

The question before the court was whether the plaintiffs had standing to bring their claims. The state senator plaintiffs argued, among other things, general injuries to the commonwealth and its citizens, as well as injuries against the general assembly’s power and authority. Id. at *5. The court rejected these arguments, finding that any such powers were vested in the general assembly or commonwealth, not individual senators. Id. at *6. The state senator plaintiffs also argued that Pennsylvania law provides them with interests sufficient to confer standing, and that their role as “trustees” under the Pennsylvania Environmental Rights Amendment (ERA) conferred standing. Id. (citing Pa. Const. art. I, § 27). Finding that these arguments amounted to nothing more than the state senator plaintiffs asking the court to substitute “friendlier state standards” for those under Article III of the U.S. Constitution, the court rejected them. Id. at *7. Citing precedent, the court likewise rejected the argument that Yaw, Baker, and their caucus are trustees for the commonwealth natural resources, noting that such authority is vested in Pennsylvania agencies or entities. Id. at *8 (citing Pa. Envtl. Def. Found. v. Commonwealth, 161 A.3d 911, 931–32 & n.23 (Pa. 2017)).

Regarding the municipal plaintiffs, the court found that they had obligations as trustees under the ERA but had failed to allege a cognizable injury that would confer standing under Article III. Id. at *9. That is, the court found, their arguments that “loss of funds” that would have flowed to the municipalities had fracking occurred within their boundaries were too speculative and did not show a current or recent injury, not to mention the requirements of traceability and redressability. Id. Despite the municipal plaintiffs’ failure to meet the burden to demonstrate standing, the court noted that articulating actual injury may be possible and allowed them to file a second amended complaint. Id. at *10.

The municipalities did not file a second amended complaint and on July 2, 2021, the court dismissed their claims (and the amended complaint) with prejudice. On July 12, 2021, the state senators, their caucus, and three of the municipalities appealed the dismissal of their claims to the U.S. Court of Appeals for the Third Circuit. See Yaw v. DRBC, No. 21-2315 (3d Cir. filed July 19, 2021).

Substantial Changes to Hazardous Liquid Pipeline Safety Regulations Proposed by Public Utility Commission

On July 15, 2021, the Pennsylvania Public Utility Commission (PAPUC) adopted a notice of proposed rulemaking (NOPR) with proposed changes to the regulations for the design, construction, operations, and maintenance of intrastate pipelines transporting petroleum products and hazardous liquids in Pennsylvania. See PAPUC, Docket Number L-2019-3010267. The proposed changes are significant and in several respects would exceed the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) federal pipeline safety standards and reporting requirements, which PAPUC incorporates by reference. Comments are due 60 days from the date that the NOPR is published in the Pennsylvania Bulletin. A brief summary of the key proposals is provided below.

Reporting (§§ 59.133–.134)

  • Proposes a time frame and associated requirements for the submittal of an unredacted failure analysis, which must be conducted by a PAPUC-approved, independent third-party consultant following a reportable accident.
  • Proposes that a public utility notify PAPUC prior to construction, reconstruction, maintenance, or assessment activities and sets time frames for the notification based upon project cost. Requires immediate notification of excavation damages, washouts, or unplanned replacement of any pipeline section or cutout.

Design and Construction (§§ 59.135–.138)

  • Proposes several design and construction requirements for new pipelines and existing pipelines that are converted, relocated, replaced, other otherwise changed, including analysis of geotechnical conditions, design for geological hazards, setbacks, minimum depth of coverage, testing methodologies, and numerous construction and safety requisites.
  • Requires pipelines installed using horizontal directional drilling (HDD), trenchless technology (TT), or other direct bury methodologies to comply with relevant Pennsylvania Department of Environmental Protection (PADEP) regulations protecting water wells and supplies and PADEP’s “Trenchless Technology Technical Guidance Document.”
  • Establishes notification requirements prior to commencing HDD, TT, or other direct bury methods, or in the event private or public water supplies are adversely impacted.
  • Proposes notification requirement and several in-line and hydrostatic testing schedules, including for pipelines installed prior to 1970, pipelines installed after 1970, and following leak repair.

Operations and Maintenance (§ 59.139)

  • Proposes several operations and maintenance requirements, including emergency response procedures, liaison activities with emergency responders and school administrators, public awareness communications, line markers, inspections of rights-of-way, leak detection, and odorization.

Integrity Management (§ 59.139)

  • Requires public utilities to consult with public officials when determining the need for remote control emergency flow restriction devices (EFRD) in all high consequence areas and base the need for EFRD on limiting the lower flammability limit to 660 feet on either side of the pipeline.

Operator Qualifications (§ 59.140)

  • Significantly expands a public utilities operator qualification program by modifying “covered task” as defined in PHMSA’s federal regulations.
  • Requires that a public utilities operator qualification plan include a written qualification program for construction tasks, processes for training all individuals to identify and react to facility-specific abnormal operating conditions, and requalification intervals for each covered task.

Land Agents (§ 59.141)

  • Requires that land agents hold a valid professional license as an attorney, real estate salesperson, real estate broker, professional engineer, professional land surveyor, or professional geologist in Pennsylvania.

Corrosion Control (§ 59.142)

  • Requires written procedures for the design, installation, operations, and maintenance of cathodic protection systems, including establishing average and worst-case corrosion rates for each pipeline segment.