Articles, Alerts & Perspectives

TEQ Magazine

(By Justine Kasznica)

Be Prepared

According to the CISA and the FBI the first and most important step towards protection is preparation. Being prepared includes creating, maintaining, and exercising a cyber incident response plan, resilience plan, and continuity of operations plan; ensuring personnel are familiar with key steps that must be followed during a cyber breach incident; identifying a resilience plan that addresses how to operate if you lose access to-or control of- your company’s systems; and implementing back data back-up procedures. In addition, companies need to minimize gaps by ensuring all security protocols and protections happen around the clock, including holidays and weekends.

Enhance the Organization’s Cyber Posture

Enhancing an organization’s cyber posture is imperative to its safety from any form of cyberattack. An organization may ensure proper identity and success management, protective controls and architecture, and vulnerability and configuration, by requiring strong passwords and multi-factor authentication for all users. By monitoring and detecting abnormal activity like various unsuccessful logins or unlikely geographic access, a company can spot attempted breaches early enough to prevent any damage from occurring. It is also helpful to update software in a timely manner and to be sure to use industry recommended antivirus programs.

Stay Vigilant

Simply implementing initial data privacy, security, and response measures is not enough. Cybercriminals and their methods are constantly evolving. Taking a proactive approach to data privacy and security, and being willing to invest in same, is vital to ensuring that a company’s safeguards are adequate and up-to-date. As necessary, internal and external annual audits and/or reviews of a company’s systems and policies is crucial to its data security. …

The Wildcatter

(By Nikolas Tysiak)

I hope everyone had a wonderful Thanksgiving holiday full of friends and family (and delicious, delicious turkey). I want to start out this update with something that should have been in the last update but was not.

Effective June 10, 2022, the West Virginia legislature modified Chapter 11A of the West Virginia Code to streamline the tax sale process by (1) eliminating the bifurcated distinction between “delinquent” and “non-entered” tax assessments, and (2) standardizing the statute of limitations for bringing procedural challenges to the tax sale process. Under the old laws, separate tax sale procedures existed for tax assessments that were “delinquent” (e.g., entered on the tax rolls but not timely paid) vs. “non-entered” (e.g., an assessment for a given real estate interest did not clearly exist on the appropriate county tax rolls). For delinquent assessments, the local sheriff’s tax office had original jurisdiction over the administration of sales and tax deeds; if a given assessment was not redeemed from delinquency or sold within certain time frames, such delinquent assessments were turned over to the State Auditor’s office for further administration and sale. Non-entered assessments existed exclusively under the original jurisdiction of the State Auditor’s office for administration and sale. In practice, the State Auditor’s office either explicitly or implicitly gave county assessors and sheriffs significant leeway in administering these taxation issues.

As landmen and lawyers practicing in West Virginia likely know, property interests affected by tax sales and tax deeds have proven challenging insofar as the ownership of executive rights and royalties pertaining to oil and gas. Recent caselaw brought a semblance of continuity to the effect of “non-standard” assessments affecting oil and gas interests, but in a way that was not anticipated by many title and real estate practitioners, which yielded varying and sometimes counter-intuitive results. …

PIOGA Press

(By Gary Steinbauer, Gina Falaschi and Christina Puhnaty)

On November 11, 2022, the U.S. Environmental Protection Agency (EPA) released a pre-publication version of its supplemental proposal for Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review (Supplemental Proposal). The Supplemental Proposal has been highly anticipated since EPA published its initial proposal on November 15, 2021. EPA, Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 86 Fed. Reg. 63110 (Nov. 15, 2021) (Initial Proposal).

EPA currently regulates emissions from oil and natural gas facilities under 40 C.F.R Part 60 Subparts OOOO[1] and OOOOa.[2] As part of the Initial and Supplemental Proposals, EPA would regulate oil and natural gas facilities constructed, modified, or reconstructed after November 15, 2021, under a new Subpart OOOOb. With the Supplemental Proposal, EPA has released proposed regulatory language for Subpart OOOOb. In addition, EPA released proposed regulatory text for emissions guidelines in a new Subpart OOOOc. These emissions guidelines are intended to inform states in the development, submittal, and implementation of state plans to establish standards of performance for greenhouse gases (in the form of limitations on methane) from sources existing on or before November 15, 2021. Under the Supplemental Proposal, states and tribes would be required to submit plans to EPA for review within 18 months of the publication of a final rule, with a compliance deadline for existing sources that is no later than 36 months after the deadline to submit the plan to EPA. The Supplemental Proposal also includes an updated proposed “Appendix K,” which is a protocol for determining leaks using optical gas imaging that EPA is now proposing to limit to natural gas processing plants. …

Pretrial Practice & Discovery

American Bar Association Litigation Section

(By Jessica Barnes)

Numerous allegations of misconduct support a request for over $2 million in sanctions in an ongoing discovery dispute.

There is a line between zealous advocacy and bad-faith avoidance of discovery obligations. Attorneys in In re: Facebook Inc. Consumer Privacy User Profile Litigation, Case No. 18-md-02843-VC (N.D. Ca. 2022) may have crossed that line.

This matter began in March 2018 and involves the discovery that a third-party app developer harvested personal data from roughly 87 million Facebook users and sold it to Cambridge Analytica, a political consulting firm.

In September 2022, the Facebook-user plaintiffs explained to a California district judge why discovery sanctions were appropriate in this case. Specifically, the judge found “abominable” deposition misconduct and was outraged by Facebook’s years-long refusal to turn over certain user data and non-privileged internal communications.

The so-called “deposition misconduct” included Facebook’s witness refusing to answer basic questions and the defense attorney repeatedly telling the witness that she did not have to respond to the question.

With respect to the allegations of refusing to turn over certain information, Facebook attorneys argued that the orders of the judge who presided over discovery disputes were ambiguous. The current district judge did not buy that argument, accusing Facebook attorneys of pouncing on any “little ambiguity” and using it to obstruct and delay the production of obviously responsive materials.

In November 2022, the Facebook-user plaintiffs submitted their total monetary request for sanctions related to fees and costs as a result of discovery misconduct—which totaled over $2 million.

The Facebook-user plaintiffs explained in their briefing, “Plaintiffs believe that the general approach that Facebook . …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Gina Falaschi)

On July 19, 2022, House Bill 2644, 2022 Pa. Legis. Serv. Act 2022-96 (Act 96), became law, without Pennsylvania Governor Tom Wolf’s signature. The new law keeps Pennsylvania’s oil and gas well bonding amounts at the current levels of $2,500 per conventional well and $25,000 for a blanket bond for multiple conventional wells. The blanket bond amount will increase by $1,000 for every additional conventional well drilled six months after July 19, 2022, not to exceed $100,000. However, the Pennsylvania Department of Environmental Protection (PADEP) will waive the $1,000 increase for a new conventional well if the operator has plugged an orphan well at the operator’s own expense. Other than the $1,000 increase for blanket bonds, Act 96 precludes PADEP and the Environmental Quality Board (EQB) from raising bonding amounts for 10 years from the effective date. During this time, only the general assembly has such authority. Act 96 does not place a similar 10-year protection period on the adjustment of unconventional well bond amounts, allowing the EQB to adjust amounts every two years to reflect PADEP’s projected well plugging costs. The EQB has been considering two petitions: one to increase well bonding amounts for conventional wells to $38,000 per well and another to increase unconventional well bonding amounts to $83,000 per well. Act 96’s enactment effectively prevents the petitioned increase for conventional wells. See Vol. XXXVIII, No. 4 (2021) of this Newsletter.

In a formal statement published in the July 30, 2022, Pennsylvania Bulletin, Governor Wolf said he allowed Act 96 to become law, but had several concerns with the legislation, including: (1) the directive that federal Infrastructure Investment and Jobs Act (IIJA), Pub. …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Gina Falaschi)

In response to passage of the Infrastructure Investment and Jobs Act (IIJA), Pub. L. No. 117-58, 135 Stat. 429 (2021), and its conventional well plugging component, the Pennsylvania Department of Environmental Protection (PADEP) invited stakeholders to participate in several workgroup sessions to gather information and assist with PADEP’s development of a new conventional oil and gas well plugging program. See PowerPoint Presentation, PADEP, “Infrastructure Investment and Jobs Act (IIJA) Implementation” (Apr. 28, 2022); Notice, “DEP Inviting Stakeholders to Participate in Workgroups on New Federal Conventional Oil & Gas Well Plugging Program,” PA Env’t Digest (Aug. 4, 2022).

PADEP held seven workgroup sessions between August 23 and September 19, 2022. The sessions were open to the public, other interested parties, and industry. Covered topics included due diligence and documentation of previously undocumented abandoned wells; project prioritization; engineering design, permitting, and monitoring requirements; and handling of waste generated from plugging abandoned wells and reclaiming well sites. See PADEP, “September 2022 Report to the Citizens Advisory Council” (Sept. 2022); PADEP, “October 2022 Report to the Citizens Advisory Council” (Oct. 2022).

Of note, at a September 1, 2022, workgroup meeting, Joe Kelly, PADEP Bureau of Oil and Gas Planning and Program Management, said that any waste generated by the new plugging program will not be exempt from hazardous waste requirements, unlike the same or similar wastes generated from active oil and gas production wells and facilities (as exempted by 40 C.F.R. § 261.4(b)(5)). See David E. …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Gina Falaschi)

On June 25, 2022, the Pennsylvania Department of Environmental Protection (PADEP) published General Permit WMGR163 (Permit) in the Pennsylvania Bulletin, 52 Pa. Bull. 3632 (June 25, 2022). PADEP issued the Permit following a 60-day comment period that closed on March 15, 2022. As issued, the Permit authorizes the short-term processing, transfer, and beneficial use of oil and gas liquid waste to hydraulically fracture or otherwise develop an oil or gas well under the authority of the Solid Waste Management Act, 35 Pa. Stat. §§ 6018.101– .1003, and the Municipal Waste Planning, Recycling and Waste Reduction Act, 53 Pa. Stat. §§ 4000.101–.1904. The Permit covers facilities that process and beneficially reuse oil and gas liquid waste for no more than 180 consecutive days at any one time.

Any company interested in using the Permit must register its authorized activities with PADEP. 25 Pa. Code § 287.643. In addition, PADEP is prohibited from requiring an applicant to obtain a determination of applicability from the agency prior to the issuance of the final permit for the land application of material. See id. § 287.641(c), (d). The Permit is applicable to the same oil and gas facilities eligible for coverage under General Permit WMGR123 (“Processing and Beneficial Use of Oil and Gas Liquid Waste”), but with fewer conditions. Key provisions in the Permit include:

1. An authorized facility may process and transfer oil and gas liquid waste for no more than 180 consecutive days during the Permit’s two-year coverage period and a permittee can only operate for a maximum of one year during that period.

…

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Gina Falaschi)

On June 11, 2022, the Pennsylvania Department of Environmental Protection (PADEP) published a substantive revision to its technical guidance document (TGD) Radioactivity Monitoring at Solid Waste Processing and Disposal Facilities (Guidance), TGD No. 250-3100-001 (June 11, 2022), in the Pennsylvania Bulletin, 52 Pa. Bull. 3374 (June 11, 2022). PADEP updated the Guidance, which was immediately effective, to assist unconventional oil and gas operators in complying with the obligation under 25 Pa. Code § 78a.58(d) to prepare an action plan specifying procedures for monitoring for and responding to radioactive material produced by the treatment processes (and other procedures). The Guidance does not cover waste from conventional oil and gas operations.

The Guidance applies to all solid waste processing or disposal facilities, including underground injection control wells, as defined in the Guidance, and well sites where fluids or drill cuttings generated by the development, drilling, stimulation, operation, or plugging of an oil or gas well are processed on-site. Facilities that are not required to monitor radiation, but do so voluntarily, are also subject to the Guidance.

PADEP originally published a draft version of the Guidance in the Pennsylvania Bulletin in October 2019. See 49 Pa. Bull. 6197 (Oct. 19, 2019). The final Guidance follows PADEP’s July 2021 announcement that all Pennsylvania landfills, including those accepting unconventional oil and gas waste, would be required to conduct quarterly testing of leachate for radiological contamination prior to the liquid being treated on-site or being sent to an off-site wastewater treatment facility. …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Gina Falaschi)

On May 26, 2022, Penn State announced that a health study commissioned by the Pennsylvania Department of Environmental Protection (PADEP) to examine the environmental and human health impacts of spreading conventional oil and gas produced water (OGPW) as a dust suppressant concluded the practice is ineffective for that purpose and poses dangers to the environment and human health. See News Release, Tim Schley & Ashley J. WennersHerron, Penn State Coll. of Eng’g, “Oil and Gas Brine Control Dust ‘No Better’ than Rainwater, Researchers Find” (May 26, 2022). The announcement coincided with PADEP’s finalization of the study. See William Burgos et al., Penn State Univ., “Evaluation of Environmental Impacts from Dust Suppressants Used on Gravel Roads” (May 26, 2022) (Study).

Historically, road spreading OGPW was authorized in Pennsylvania, but PADEP placed a moratorium on the practice in response to a 2018 legal challenge and subsequent decision by the Environmental Hearing Board. See Lawson v. PADEP, EHB Docket No. 2017-051-B (May 17, 2018). In accordance with Pennsylvania solid waste laws, using OGPW on roads for dust control could continue if conventional operators demonstrated the chemical makeup of the wastewater was similar to commercially available dust suppressants.

The Study assessed the effectiveness and environmental impacts associated with various dust suppressants used on dirt and gravel roadways, which included testing synthetic rainwater, calcium chloride (CaCl2) brine, soybean oil, and OGPW from three conventional oil and gas operations.

PADEP presented the study results at the July 25, 2022, Oil and Gas Technical Advisory Board meeting. …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Gina Falaschi)

On September 16, 2022, the U.S. Court of Appeals for the Third Circuit affirmed a district court ruling that Pennsylvania state legislators and municipalities lacked standing to challenge the Delaware River Basin Commission’s (DRBC) regulation banning hydraulic fracturing for natural gas within the basin. Yaw v. DRBC, 49 F.4th 302 (3d Cir. 2022), aff’g No. 2:21-cv-00119, 2021 WL 2400765 (E.D. Pa. June 11, 2021); see Vol. XXXVIII, No. 3 (2021) of this Newsletter. The court held that the appellants failed to meet the standing requirements of Article III of the U.S. Constitution because: (1) in the case of the state senator appellants, individual members of the state legislature lack standing to assert the interests of the legislature as a whole; and (2) in the case of the municipality appellants, their alleged injuries were “conjectural” or “hypothetical,” as opposed to “actual” or “imminent.” The court also held that none of the appellants had standing as trustees of Pennsylvania’s public natural resources under the Environmental Rights Amendment to the Pennsylvania Constitution because the DRBC’s ban has not cognizably harmed the trust.

The five-member DRBC is governed by a compact between the federal government and four states that draw water from the Delaware River: Pennsylvania, New Jersey, Delaware, and New York, represented by a member of the U.S. Army Corps of Engineers and each state’s governor, respectively. See Delaware River Basin Compact, Pub. L. No. 87-328, 75 Stat. 688. …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi and Christina Puhnaty)

The Supreme Court of Pennsylvania has upheld a preliminary injunction of the Regional Greenhouse Gas Initiative (RGGI) rule granted by the Commonwealth Court of Pennsylvania. On July 8, 2022, the commonwealth court granted a preliminary injunction preventing the state from participating in RGGI pending resolution of the case. See Vol. 39, No. 3 (2022) of this Newsletter. Governor Tom Wolf appealed the injunction to the supreme court. On August 31, 2022, the supreme court denied the state’s emergency request to reinstate the automatic supersedeas, thereby maintaining the preliminary injunction while litigation on the merits proceeds before the commonwealth court later this year. See Ziadeh v. Pa. Legis. Reference Bureau, No. 79 MAP 2022 (Pa. Aug. 31, 2022).

As previously reported in Vol. 39, No. 2 (2022) of this Newsletter, the Pennsylvania Department of Environmental Protection’s (PADEP) CO2 Budget Trading Program rule, or RGGI rule, which links the state’s cap-and-trade program to RGGI, was published in the Pennsylvania Bulletin in April 2022. See 52 Pa. Bull. 2471 (Apr. 23, 2022). RGGI is the country’s first regional, market-based cap-and-trade program designed to reduce carbon dioxide (CO2) emissions from fossil fuel-fired electric power generators with a capacity of 25 megawatts or greater that send more than 10% of their annual gross generation to the electric grid.

On April 25, 2022, owners of coal-fired power plants and other stakeholders filed a petition for review and an application for special relief in the form of a temporary injunction, and a group of state lawmakers filed a challenge as well. …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi and Christina Puhnaty)

As reported in Vol. 55, No. 3 (2022) of the Water Law Newsletter, the Pennsylvania House and Senate Environmental Resources and Energy standing committees (Standing Committees) and the Independent Regulatory Review Commission (IRRC) recently disapproved a proposed rulemaking to change the water quality criterion for manganese in Pennsylvania. The future of the rulemaking is now uncertain.

Proposed Changes to Manganese Water Quality Criterion 

The proposed manganese rule would add a numeric water quality criterion for manganese of 0.3mg/L to Table 5 at 25 Pa. Code § 93.8c, which is intended to “protect human health from the neurotoxicological effects of manganese.” Executive Summary at 1, “Final-Form Rulemaking: Water Quality Standards and Implementation—Manganese” (Aug. 9, 2022). Section 93.8c establishes human health and aquatic life criteria for toxic substances, meaning the Pennsylvania Department of Environmental Protection (PADEP) would be regulating manganese as a toxic substance. The existing criterion of 1.0 mg/L, which was established in 25 Pa. Code § 93.7 as a water quality criterion, would be deleted. The 0.3 mg/L criterion would apply to all surface waters in the commonwealth. PADEP identified the parties affected by the manganese rule to be “[a]ll persons, groups, or entities with proposed or existing point source discharges of manganese into surface waters of the Commonwealth.” Executive Summary at 3.

PADEP also specifically identified “[p]ersons who discharge wastewater containing manganese from mining activities” as affected parties, and expects that mining operators would need to perform additional treatment to meet this criterion.  …

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi and Christina Puhnaty)

In late July 2022, the Pennsylvania Department of Environmental Protection (PADEP) published its Non-Regulatory Agenda, which outlines the agency’s upcoming plans related to its documents, manuals, and technical guidance. The Non-Regulatory Agenda outlines the agency’s intent to rescind its Engineering Manual for Mining Operations, TGD No. 563-0300-101 (Jan. 1, 1999), by the end of this year. The agenda also notes PADEP’s intent to revise several other technical guidance documents (TGDs) related to coal mining activities in the commonwealth. The TGDs identified by PADEP to be revised in early 2023 are:

• Surface Water Protection – Underground Bituminous Coal Mining Operations, TGD No. 563-2000-655 (Oct. 8, 2005);
• Financial Assurance and Bond Adjustments for Mine Sites with Post-Mining Discharges, TGD No. 563-2504-450 (Dec. 15, 2007) (draft);
• Increased Operation and Maintenance Costs of Re-placement Water Supplies (on All Coal and Surface Noncoal Sites), TGD No. 562-4000-102 (Dec. 2, 2006);
• Water Supply Replacement and Permitting, TGD No. 563-2112-605 (Dec. 31, 1998); and
• Water Supply Replacement and Compliance, TGD No. 562-4000-101 (Oct. 18, 1999).

Draft revisions will be published in the Pennsylvania Bulletin and should be available online at https://www.depgreenport. state.pa.us/elibrary/GetFolder?FolderID=4556. The public will have an opportunity to comment on these draft revisions for a period of at least 30 days.

Copyright © 2022, The Foundation for Natural Resources and Energy Law, Westminster, Colorado

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi and Christina Puhnaty)

On November 12, 2022, the Pennsylvania Environmental Quality Board (EQB) published amendments to the Pennsylvania Department of Environmental Protection’s (PADEP) regulations in 25 Pa. Code chs. 121 and 129 for all major stationary sources of nitrogen oxides (NOx) or volatile organic compound (VOC) emissions, which is commonly known as the RACT III rule. See 52 Pa. Bull. 6960 (Nov. 12, 2022). The rule requires major sources of either or both of these air pollutants in existence on or before August 3, 2018, to meet reasonably available control technology (RACT) emission limits and requirements by January 1, 2023. See also Vol. 39, No. 1 (2022) of this Newsletter (Pennsylvania – Oil & Gas report).

These regulations are being promulgated to address federal Clean Air Act (CAA) RACT requirements to meet the 2015 ozone National Ambient Air Quality Standards (NAAQS) in the commonwealth. The CAA requires a reevaluation of RACT when new ozone NAAQS are promulgated. RACT is required in nonattainment areas, including the Ozone Transport Region, which includes Pennsylvania. The RACT III rulemaking establishes presumptive RACT requirements and emission limits for specific source categories of affected facilities. The RACT III rulemaking also imposes additional requirements for all major sources of NOx and/or VOCs, not just those subject to the presumptive RACT requirements and limitations.

RACT III applies to all major sources of VOCs and NOx. Because the commonwealth is in the Northeast Ozone Transport Region, the major source threshold is 50 tons per year (tpy) of VOCs and 100 tpy of NOx. …