Articles, Alerts & Perspectives

Pittsburgh, PA and Washington, DC

FNREL Water Law Newsletter

(by Lisa M. Bruderly, Mackenzie M. Moyer and Jessica Deyoe)

The Pennsylvania Department of Environment Protection’s (PADEP) Water Resources Advisory Committee (WRAC) met on May 16, 2024, to discuss PADEP’s proposed rulemaking regarding notification requirements for unauthorized discharges to waters of the commonwealth and the draft final Triennial Review of Water Quality Standards (WQSs). Section 91.33 of Title 25 of the Pennsylvania Code requires immediate notification to PADEP if, because of an accident or other activity or incident, a toxic substance or other substance which would endanger downstream users or otherwise result in pollution reaching the waters of the commonwealth, is discharged into waters of the state. The characteristics of unauthorized discharges, such as spills and leaks, are not known prior to the discharge, and there are many site-specific factors affecting the risk of unauthorized discharge. According to PADEP, the purpose of the proposed regulation is to make the notification requirements for unauthorized discharges as straightforward as possible. The requirements do not expand notification obligations but attempt to clarify which unauthorized discharges need to be reported. In PADEP’s presentation to the WRAC, PADEP provided examples of unauthorized discharges that do not need to be reported, discharges that may need to be reported, and discharges that must be reported. For example, releases of materials within secondary containment when there is no possibility of the substance reaching waters of the commonwealth do not need to be reported, spills of non-liquid materials into waters of the commonwealth may not need to be reported, depending on the material, and sanitary sewer overflows that reach waters of the commonwealth must be reported.

WRAC also reviewed the draft final version of the Triennial Review of WQSs regulation. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On October 13, 2023, the U.S. Department of Energy (DOE) announced that it had selected seven Regional Clean Hydrogen Hubs (H2Hubs) to negotiate awards for $7 billion in funding allocated under the Biden administration’s Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, 135 Stat. 429 (2021). According to DOE, the H2Hubs will “accelerate the commercial-scale deployment of low-cost, clean hydrogen—a valuable energy product that can be produced with zero or near-zero carbon emissions . . . .” Press Release, DOE, “Biden-Harris Administration Announces $7 Billion For America’s First Clean Hydrogen Hubs, Driving Clean Manufacturing and Delivering New Economic Opportunities Nationwide” (Oct. 13, 2023). Two of the H2Hubs are located in Pennsylvania and surrounding states, and other Hub projects are located in California; Texas; Minnesota, North Dakota, and South Dakota; Illinois, Indiana, and Michigan; and Washington, Oregon, and Montana.

The Mid-Atlantic Hydrogen Hub (Selectee: Mid-Atlantic Clean Hydrogen Hub (MACH2)) is located in Pennsylvania, Delaware, and New Jersey. Per DOE, it will repurpose historical oil infrastructure and use existing rights-of-way “to develop renewable hydrogen production facilities from renewables and nuclear electricity using both established and innovative electrolyzer technologies” to reduce energy costs and carbon emissions. Office of Clean Energy Demonstrations, DOE, “Regional Clean Hydrogen Hubs Selections for Award Negotiations,” available here. This Hub anticipates supporting apprenticeship programs, certifications, and other employment support, and creating more than 20,000 jobs (including more than 6,000 permanent jobs). This Hub’s federal cost share is up to $750 million. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On October 18, 2023, Pennsylvania Governor Josh Shapiro’s office announced that the Pennsylvania Department of Environmental Protection (PADEP) and the Shapiro administration had capped and plugged 100 orphaned and abandoned wells since Shapiro took office in January 2023, which surpasses the total number of wells plugged in the previous six years combined. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration Has Plugged 100 Orphaned & Abandoned Wells in Just 10 Months, Surpassing Total Over Previous 6 Years Combined” (Oct. 18, 2023).

In addition to state resources, significant funding to address these wells comes from allocations to Pennsylvania from the federal Infrastructure Investment and Jobs Act (IIJA), Pub. L. No. 117-58, 135 Stat. 429 (2021). Pennsylvania received initial IIJA grant funding totaling $25 million and is eligible for an additional $300+ million in the coming years. See Press Release, U.S. Dep’t of the Interior, “Biden Administration Announces $1.15 Billion for States to Create Jobs Cleaning Up Orphaned Oil and Gas Wells” (Jan. 31, 2022, updated June 5, 2023). According to the Shapiro administration, the IIJA funds are not only being used to cap and plug wells—PADEP has awarded contracts for 224 wells to date—but are also directed toward identifying and inventorying wells, as well as taking enforcement actions against applicable operators.

Approximately 45% of the wells are in environmental justice areas, which is consistent with the Biden administration’s Justice40 Initiative. The goal of the Justice40 Initiative is to direct 40% of the benefits of certain federal investments to disadvantaged communities across one or more of seven areas: climate change, clean energy and energy efficiency, clean transit, affordable and sustainable housing, training and workforce development, remediation and reduction of legacy pollution, and the development of critical clean water and wastewater infrastructure. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On November 1, 2023, Pennsylvania Governor Josh Shapiro announced the release of “PAyback,” an online tool for Pennsylvania permit, license, and certification applicants. See Press Release, Gov’r Josh Shapiro, “Governor Shapiro Launches First-in-the-Nation Online Money-Back Guarantee System to Bring Increased Accountability & Transparency to Commonwealth Permitting, Licensing, and Certification Processes” (Nov. 1, 2023). Specifically, PAyback allows an applicant to confirm the processing time of its application and request a refund if the application is not processed within the appropriate timeline. Refund eligibility applies to approximately 70% of applications, excluding those that, e.g., do not have an application fee. The refund policy is not retroactive and only applies to applications completed on or after November 1, 2023.

The PAyback tool is one component, and a result of Shapiro’s stated goal of increasing transparency, efficiency, and certainty for Pennsylvanians subject to these processes and requirements. Its development followed Shapiro’s issuance of Executive Order 2023-07, “Building Efficiency in the Commonwealth’s Permitting, Licensing, and Certification Processes” (Jan. 31, 2023), which directed each applicable Executive Agency to “compile a catalog of the types of permits, licenses, or certifications it issues and submit that catalog to the Governor’s Office” within 90 days. Id. Relevant Executive Agencies were tasked with compiling the following information for each permit, license, or certification:

• type, term, and basis (e.g., statutory, regulatory, or other);
• method for receiving applications and when the method was last updated;

…

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On November 2, 2023, Pennsylvania Governor Josh Shapiro and CNX Resources Corp. (CNX) announced a voluntary agreement between Shapiro’s administration and CNX, under which CNX agreed to take certain actions regarding its unconventional oil and gas operations in Pennsylvania. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration and Leading Natural Gas Company CNX Resources Announce First-of-Its-Kind Collaboration on Environmental Monitoring and Chemical Disclosures” (Nov. 2, 2023); see also Statement of Mutual Interests (Nov. 2, 2023). Specifically, CNX agreed to the following:

• “intensive” air and water quality monitoring to assess environmental impacts—data and facts that the Shapiro administration will use (with other applicable facts and data) “to inform the necessity of any additional setbacks or other future policy changes”;
• expand its no-drill zones from 500 feet to 600 feet for all sites and to 2,500 feet for sensitive sites, e.g., schools and hospitals while it is collecting data;
• publicly disclose all chemicals intended for use in drilling and hydraulic fracturing prior to use on-site;
• support regulation of gathering lines to inspect for corrosion;
• support additional safety measures applicable to transporting waste from unconventional well sites; and
• provide open-sourced, real-time emissions information to stakeholders and interested parties.

CNX also agreed not to hire Pennsylvania Department of Environmental Protection (PADEP) employees from regional offices covering CNX operations until two years after such employees leave PADEP. The actions address several recommendations from a 2020 Grand Jury Report on the unconventional oil and gas industry.  …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On March 25, 2024, Bucks County, Pennsylvania, filed a complaint in the Bucks County Court of Common Pleas against BP, Chevron, ConocoPhillips, Phillips 66, ExxonMobil, Shell, and the American Petroleum Institute, alleging that the companies deceived the public about the dangers of fossil fuel pollution and the role it has played in increasingly severe, damaging weather. Bucks Cnty. v. BP P.L.C., No. 2024-01836-0000 (Pa. Ct. Common Pleas filed Mar. 25, 2024).

Bucks County Commissioner Vice Chair, Bob Harvie, said in a press release that the complaint, the first of its kind in Pennsylvania, “seeks to shift the financial burden of the climate crisis from the taxpayers of Bucks County to the companies responsible for creating the crisis.” See Press Release, Bucks Cnty., “Bucks County Takes on Big Oil in Climate Crisis Lawsuit” (Mar. 25, 2024). The complaint makes many allegations against the defendants, including a claim that the companies knew about the harmful effects of fossil fuels, but did nothing to mitigate the danger, comparing them to tobacco companies that advertised low-tar and light cigarettes as healthy alternatives to regular cigarettes. The County claims that the companies affirmatively concealed those harms by engaging in a campaign of deception to increase the use of those products.

The County also claims that the companies could have chosen to facilitate a lower-carbon future, but chose corporate profits and continued deceit. The complaint also includes claims regarding misleading advertisements that portrayed the defendants as climate-friendly energy companies and accuses the companies of exacerbating the cost of adapting to and mitigating the effects of the climate crisis. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On January 26, 2024, the Pennsylvania Department of Environmental Protection (PADEP) announced that it would implement a policy requiring natural gas well operators to disclose chemicals they use in drilling and hydraulic fracturing operations before the chemicals are used on-site. See Press Release, PADEP, “Shapiro Administration, DEP Requires All Fracking Companies to Be More Transparent About Chemicals Used in Drilling” (Jan. 26, 2024). To accomplish this, PADEP said it would revise the process by which an operator submits its site-specific preparedness, prevention, and contingency plan (PPC Plan). Regulations require that an operator prepare a PPC Plan before it stores, uses, or generates regulated substances on-site, but until this change, an operator was only required to submit its PPC Plan to PADEP upon request.

Now, PADEP’s policy is that operators must submit PPC Plans to the agency prior to conducting drilling operations so PADEP can post them online on its PA Oil and Gas Mapping website. PADEP has informed operators and industry groups of the change, and since January 3, 2024, has included the policy in cover letters attached to issued unconventional well permits. This change appears to respond to one of eight recommendations summarized in the report prepared by Pennsylvania’s 43rd Statewide Investigating Grand Jury on the unconventional oil and gas industry. See Office of the Att’y Gen., Commw. of Pa., Report 1 of the Forty-Third Statewide Investigating Grand Jury (June 2020). The grand jury was convened, and the PPC Plan policy subsequently implemented, under then-Attorney General and current Governor Josh Shapiro. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)

On February 22, 2024, the Pennsylvania Public Utility Commission (PUC) issued a Final Form Rulemaking Order (Order) that would set public utility safety standards for the transportation of hazardous liquids by pipeline in intrastate commerce. See Rulemaking Regarding Hazardous Liquid Public Utility Safety Standards at 52 Pa. Code Chapter 59, No. L-2019-3010267. In the Order, the PUC states that the goal of the safety standards is “to deter inadvertent returns, leaks, subsidence events, and water supply contamination events related to the construction, operation, and maintenance of [highly volatile liquids (HVL)] pipelines by hazardous liquid public utilities within Pennsylvania.” Id. at 2. In addition to already applicable federal standards, the rule establishes state-specific standards for hazardous liquid public utilities for the design, construction, operation, and maintenance of pipelines transporting hazardous liquids within Pennsylvania.

These include, but are not limited to:

• requirements regarding the timing and content of submitting failure analysis reports, root cause analysis reports, and accident reports;
• notifying the Pipeline Safety Section of certain activities within specified timeframes, e.g., proposed major construction, major reconstruction, or major maintenance;
• submit annually to the Pipeline Safety Division an annual report for each type of hazardous liquid pipeline facility operated at the end of the previous year;
• develop a written preparedness, prevention, and contingency plan that addresses, among other things, potential environmental impacts from drilling fluid discharges; and
• provide the Pipeline Safety Section with design plans, project costs, geotechnical reports, proof of notifications, estimated start, and completion dates.

…

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Christina M. Puhnaty)

On March 16, 2024, the Pennsylvania Department of Environmental Protection (PADEP) announced in the Pennsylvania Bulletin an opportunity to submit public comments on the proposed revised General Plan Approval and/or General Operating Permit BAQ-GPA/GP-21, Coal-Mine Methane Enclosed Flare (Revised GP-21). See 54 Pa. Bull. 1429 (Mar. 16, 2024). As reported in Vol. 40, No. 3 (2023) of this Newsletter, PADEP previously published a final version of the General Plan Approval and/or General Operating Permit BAQ-GPA/GP-21, Coal-Mine Methane Enclosed Flare (GP-21) on September 23, 2023, which industry groups appealed.

According to PADEP’s technical support document (TSD) for the Revised GP-21, PADEP “was presented additional source and site-specific information after September 23, 2023, and upon review, decided certain changes were warranted to address the new information and intended use of GP-21.” TSD for the Revised GP-21, at 2. Although the TSD references changes to address the appellants’ concerns, it does not provide specific details about the appeal.

In the Revised GP-21, PADEP proposes to raise the best available technology (BAT) compliance requirement to limit NOx emissions to less than or equal to 0.15 lb/MMBtu, up from 0.08 lb/MMBtu. As explained in the TSD, PADEP determined that the 0.08 lb/MMBtu limit finalized in September was “not appropriate at the variable site conditions and the concentration of methane present in Pennsylvania mines.” Id. at 3. The Revised GP-21 also allows operators to install and operate methane gas monitors to continuously measure and record the coal-mine gas methane concentration. …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Christina M. Puhnaty)

Pennsylvania Governor Josh Shapiro recently announced two pieces of legislation as part of his “commonsense energy plan” that would replace state efforts to join the Regional Greenhouse Gas Initiative (RGGI): (1) the Pennsylvania Climate Emissions Reduction Act (PACER) and (2) the Pennsylvania Reliable Energy Sustainability Standard (PRESS). Press Release, Gov’r Josh Shapiro, “Governor Josh Shapiro’s Energy Plan Builds on Pennsylvania’s Legacy of Energy Leadership by Protecting and Creating Energy Jobs and Lowering Electricity Costs for Consumers” (Mar. 13, 2024). According to the Shapiro administration, these Pennsylvania-specific programs are aimed at reducing greenhouse gas emissions, lowering utility bills for consumers, and creating and protecting jobs in the Commonwealth.

PACER was introduced as House Bill 2275 by Representative Aerion Abney and as Senate Bill 1191 by Senator Carolyn Comitta on May 8, 2024, along with many cosponsors. The legislation proposes to establish a Pennsylvania-run CO2 Budget Trading Program with its own auction of CO2 allowances. The bill directs the Pennsylvania Department of Environmental Protection (PADEP) to administer this program in accordance with parts of the regulation promulgated to implement the commonwealth’s participation in RGGI, 25 Pa. Code ch. 145, subch. E (CO2 Budget Trading Program), with some changes. “Budget sources”—fossil fuel-fired electricity generators with a nameplate capacity of 25 MW or more—would be required to comply with the program under PACER and purchase allowances (authorization to emit one ton of VOCs) equal to the tons of CO2 emitted annually.

The legislation also directs PADEP to review the base budget—the number of allowances available for auction set in the CO2 Budget Trading Program regulation—and consider the impact of the budget on jobs, consumers, and the environment to determine whether revisions to the budget are necessary. …

Pittsburgh, PA

The Legal Intelligencer

(by Alex Farone)

On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to publish its proposed final rule banning most noncompetition agreements, or “non-competes.” The final rule was published on May 7, 2024, in the Federal Register and therefore becomes effective 120 days later, on September 4, 2024, but legal challenges to the FTC’s authority to issue this ban will likely result in a stay in enforcement of the ban until litigation is resolved.

As of the effective date, the final rule would ban new non-competes with employees, independent contractors, and volunteers nationwide, on the basis that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act, with one exception. The ban will not apply to a non-compete that is entered into pursuant to the bona fide sale of a business, the persona’s ownership interest in a business entity, or all (or substantially all) of a business entity’s operating assets.

The final rule will also void pre-existing non-competes, with two exceptions. First, existing non-competes for senior executives will remain enforceable after the effective date of the final rule. A “senior executive” is defined as a worker earning more than $151,164 annually who is in a policy-making position, meaning a company president, chief executive officer or equivalent, or any other person who has final authority to make policy decisions that control significant aspects of a business entity. Second, the ban will not apply to an existing non-compete that has been breached and where a cause of action accrued prior to the effective date.

The final rule will also require employers to provide “clear and conspicuous notice” to all workers, other than senior executives, with existing non-competes by the effective date stating that the non-compete will not be, and cannot legally be, enforced. …

Pittsburgh, PA

TEQ Hub

(by Alex Farone)

On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to publish its proposed final rule banning most noncompetition agreements, or “non-competes.” The final rule was published on May 7, 2024 in the Federal Register and becomes effective on September 4, 2024, but legal challenges to the FTC’s authority to issue this ban will likely result in a stay in enforcement of the ban until litigation is resolved.

As of the effective date, the final rule would ban new non-competes with employees, independent contractors, and volunteers nationwide, on the basis that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act, with one exception. The ban will not apply to a non-compete that is entered into pursuant to a bona fide sale of a business entity, the persona’s ownership interest in a business entity, or all or substantially all of a business entity’s operating assets.

The final rule will also void pre-existing non-competes, with two exceptions. First, existing non-competes for senior executives will remain enforceable after the effective date of the final rule. A “senior executive” is defined as a worker earning more than $151,164 annually who is in a policy-making position, meaning a company president, chief executive officer or equivalent, or any other person who has final authority to make policy decisions that control significant aspects of a business entity. Second, the ban will not apply where an existing non-compete has been breached and a cause of action accrued prior to the effective date.

The final rule will additionally require employers to provide “clear and conspicuous notice” to all workers, other than senior executives, with existing non-competes by the effective date stating that the non-compete will not be, and cannot legally be, enforced. …