Babst Calland Attorney Gina Falaschi, selected to Super Lawyers, part of Thomson Reuters, Rising Stars for 2022. Based in the Firm’s Washington, DC office, she provides legal services for issues involving Environmental law. Only a few attorneys from each state are selected to Super Lawyers designation for any given year. The multi-factor selection process includes independent research, peer nominations and evaluations, as well as professional achievement in legal practice.
Pittsburgh Business Times
(By Justine Kasznica)
Attorney Justine Kasznica would be the first to admit that she moved to Pittsburgh to take a chance on an apparent regional business renaissance driven by a promising technology sector. Over time, the region hasn’t disappointed.
“It’s an incredibly exciting time to be in this region and to be an attorney working with emerging technologies,” said Kasznica, who quickly would find her way into the center of Pittsburgh’s technology universe and help drive significant industry growth as part of a flourishing entrepreneurial ecosystem here.
“We are absolutely capturing a moment in history in this tri-state region,” she said. “To be able to experience the outputs of the efforts of the technologists across the region and to be part of the investor and adviser teams who are helping them grow is as rewarding as it is exciting.”
Today, Kasznica serves as a shareholder of Pittsburgh law firm Babst Calland, leading the firm’s emerging technologies group and serving on the front lines of a local industry sector that has gained global recognition while also facing its share of business and legal challenges. Babst Calland is one of the Pittsburgh region’s largest law firms.
Kasznica recently shared her insights on Pittsburgh’s burgeoning tech sector, from opportunities to greatest challenges, with the Pittsburgh Business Times as part of the law firm’s ongoing “Business Insights” interview series. The series is produced in partnership with the Pittsburgh Business Times.
Universities, R&D, and entrepreneurial support
So what has made the region’s tech sector – sometimes referred to as Pittsburgh’s innovation economy – so strong and thriving, even compared to the likes of California’s Silicon Valley? …
The American Oil & Gas Reporter
(By Gary Steinbauer)
The U.S. Environmental Protection Agency’s highly anticipated November 2021 Clean Air Act proposal regulating methane and volatile organic compound emissions from the oil and gas sector has drawn a reported 400,000 individual comment submissions. EPA seeks to use the methane proposal to expand VOC and methane emissions regulations that apply to new, modified and reconstructed sources within the crude oil and natural gas production sector, which the agency promulgated in 2012 and 2016. In addition, the methane proposal includes the first nationwide methane emissions guidelines for existing oil and gas sector sources.
It is no surprise EPA’s proposal has received a significant number of comments, especially considering the agency’s relatively brief and tumultuous history of regulating oil and gas methane emissions under the CAA. Feedback on the proposal differs considerably. Many commenters, primarily those representing the oil and gas industry and certain states, have raised serious legal concerns and question the proposal’s technical aspects and the propriety of several of its key components.
On the other hand, commenters from other states, local governments and environmental groups urge EPA to impose even more stringent requirements, beyond those included in the methane proposal. Several key themes and legal issues emerge from these comments and it seems worthwhile to highlight some of the potentially pivotal legal issues raised by commenters, including those related to EPA’s proposed community-based monitoring program.
Legal Issues
The numerous legal issues commenters raise about the methane proposal range from foundational questions about whether the CAA allows EPA to regulate methane emissions from the oil and gas in this manner to legal concerns about the way EPA proposes to regulate specific sources. …
Environmental Alert
(by Sean McGovern and Evan Baylor)
On March 12, 2022, the Pennsylvania Department of Environmental Protection (Department) shared an updated draft of the Environmental Justice Policy (Draft EJ Policy) for public comment. Among the many changes, the Draft EJ Policy expands the role of the Office of Environmental Justice (OEJ), creates new requirements for unconventional oil and gas, and creates new enforcement priorities for the Department. The Department is accepting comments on the Draft EJ Policy through May 11th.
Pennsylvania’s Environmental Justice Policy
The OEJ oversees environmental justice initiatives and policies in the state. The primary goal of the OEJ is to increase communities’ environmental awareness and involvement in the Department’s permitting process. In 2004, the Department created the Environmental Justice Public Participation Policy (EJ Policy) to provide citizens in environmental justice communities enhanced public participation opportunities during certain Department permit application processes. The EJ Policy is a critical part of the Department’s environmental justice initiatives, providing guidelines for the Department’s approach to public engagement for permit application reviews in environmental justice areas as defined under the current EJ Policy.
In 2018, the Department circulated a draft revision to the current EJ Policy for public comment. Ultimately, the Department withdrew the proposed draft revisions after public comments were received, and the current 2004 version of the EJ Policy remained in effect. The Department continued to evaluate revisions to the EJ Policy and, in 2021, the Department proposed to update the policy by incorporating, refining, and expanding upon the withdrawn 2018 revisions. On March 12, 2022, the Department released the Draft EJ Policy for a 60-day public comment period with several public meetings and informational webinars. …
Pipeline Safety Alert
(by Keith Coyle and Chris Kuhman)
On April 8, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule in the Federal Register introducing new valve installation and rupture detection requirements for certain onshore gas, hazardous liquid, and carbon dioxide pipelines (the Final Rule). PHMSA issued the Final Rule in response to National Transportation Safety Board recommendations and congressional mandates from the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (2011 PIPES Act), as well as related studies prepared by the Government Accountability Office and Oak Ridge National Laboratories. Below is a summary of the key changes that the Final Rule makes to PHMSA’s regulations.
Rupture Mitigation Valves
The Final Rule prescribes new rupture mitigation valve (RMV) installation requirements for certain onshore gas and hazardous liquid transmission and gathering pipelines. An RMV is defined as an automatic shut-off valve (ASV) or remote-control valve (RCV) “that a pipeline operator uses to minimize the volume of gas released from the pipeline and to mitigate the consequences of a rupture.”
Operators are required to install RMVs on certain pipeline segments with diameters of six inches or greater that are constructed or “entirely replaced” after April 10, 2023. “Entirely replaced” is defined for these purposes as replacing two or more miles, in the aggregate, of any contiguous five miles of pipeline during a 24-month period. However, the RMV installation requirements only apply to entirely replaced pipelines if the addition, replacement, or removal of a valve is part of the replacement project. The RMV installation requirements also do not apply to any gas pipeline segments in Class 1 or Class 2 locations that have a potential impact radius (PIR) of 150 feet or less. …
Legal Intelligencer
(By Anna S. Jewart and Blaine Lucas)
In 2013, the Pennsylvania Supreme Court rendered its ground-breaking decision in Robinson Township v. Commonwealth, (Robinson II), in which a three-justice plurality relied on the Pennsylvania Environmental Rights Amendment, Article I, Section 27 of the Pennsylvania Constitution (ERA) to invalidate certain provisions of Act 13 (the General Assembly’s 2012 comprehensive update to the former Oil and Gas Act) limiting the authority of local governments to regulate oil and gas development. This decision triggered a wave of challenges from objectors who argued local ordinances are substantively invalid where they fail to place sufficient restrictions on oil and gas uses or allow them in allegedly incompatible zoning districts. To date, these types of claims have been consistently rejected by local zoning hearing boards, the Common Pleas Courts and the Commonwealth Court. Extensive case law following Robinson II makes it clear that where oil and gas development occurs is squarely within the purview of local zoning authority, while how it occurs is a state regulatory matter. The Supreme Court’s decisions in Gorsline v. Fairfield Township, 186 A.3d 375 (Pa. 2018), and Robinson IV, 147 A.3d 536 (Pa. 2016), and several Commonwealth Court decisions including Frederick v. Allegheny Township Zoning Hearing Board, 196 A. 3d 677 (Pa. Cmwlth. Ct. 2018), Delaware Riverkeeper Network v. Middlesex Township Zoning Hearing Board, No. 2609 C.D. 2015 (Pa. Cmwlth. 2019) and Protect PT v. Penn Township, No. 1632 C.D. 2018 (Pa. Cmwlth. Nov. 14, 2019), appear to have laid to rest any lingering doubts concerning a municipality’s authority to allow oil and gas uses within its boundaries. …
Babst Calland is pleased to announce that Bruce F. Rudoy has been elected a Fellow of the American Bar Foundation (ABF). Membership is limited to just one percent of lawyers licensed to practice in each jurisdiction. Members are nominated by their peers and selected by the ABF Board.
The ABF Fellows is a global honorary society that recognizes attorneys, judges, law faculty and legal scholars whose public and private careers have demonstrated outstanding dedication to the highest principles of the legal profession and to the welfare of their communities. ABF Fellows hail from nearly 40 countries and hold a wide variety of influential roles.
Mr. Rudoy is a shareholder and co-chair of Babst Calland’s Energy and Natural Resources and Renewables groups and Land and Energy Title Department. Mr. Rudoy concentrates his practice in the areas of Oil and Gas, Renewable Energy, and the associated business transactions, corporate and real estate law. He counsels various clients on title, transaction and regulatory matters. Those matters are diverse and include title issues and opinions, purchase and sale of assets and equity, due diligence examination and analysis. Transactional matters related to energy contract matters include Joint Ventures, Farm-Outs and Farm-Ins, Power Purchase Agreements, Equipment Supply Agreements, EPC Contracts, Offtake Agreements, leases and licensing, secured lending, and litigation related to all of the foregoing. Mr. Rudoy is also a member of the Firm’s board of directors.
Mr. Rudoy is admitted to practice in Pennsylvania, Alaska, Kentucky, New Mexico, North Dakota, Ohio, Oklahoma, Texas, West Virginia and Wyoming. He is also a member of the bar associations in each of those states. He graduated from Pennsylvania State University in 1987 with a B.S. in Finance. He attended the London Metropolitan University (formerly City of London Polytechnic) in London, England in 1986 where he studied law and economics. …
PIOGA Press
(By Kevin Garber and Gina Falaschi)
On April 4, 2022, the Pennsylvania Senate failed by one vote to reach the two-thirds majority vote needed to override Governor Tom Wolf’s January 10th veto of Senate Concurrent Regulatory Review Resolution 1, which was intended to block the Pennsylvania Department of Environmental Protection’s regulation to join the Regional Greenhouse Gas Initiative (RGGI). However, the following evening, April 5, the Commonwealth Court issued a stay preventing the Legislative Reference Bureau from publishing the regulation as a final, immediately-effective rule in the Pennsylvania Bulletin and scheduling a hearing for May 4, 2022 on litigation that DEP initiated in February to force publication of the final regulation.
RGGI is the country’s first regional, market-based cap-and-trade program, designed to reduce carbon dioxide emissions from fossil-fuel-fired electric power generators with a capacity of 25 megawatts or greater that send more than 10 percent of their annual gross generation to the electric grid. Regulated sources must hold allowances equal to their CO2 emissions over a three-year compliance period. Each allowance is equal to one short ton of CO2. Regulated sources may purchase state-issued allowances at quarterly auctions or through secondary markets and can use allowances issued by any RGGI state to comply. Regulated sources may also use offsets awarded for certain environmental projects to meet a maximum of 3.3 percent of their allowances.
If the rule is published in the Pennsylvania Bulletin before July 1, 2022, the partial year emissions cap for Pennsylvania would be 40.7 million tons of CO2 for the remainder of 2022. The total annual emissions cap would gradually decline to 58 million in 2030. Affected units would need to start monitoring emissions on July 1, 2022 to be able to purchase allowances for CO2 emitted on or after that date. …
PIOGA Press
(By Justine Kasznica and Ember Holmes)
On March 21, President Biden issued a statement in response to evolving intelligence that Russia is exploring options for malicious cyberattacks against the United States. The statement highlights the measures taken by the administration to strengthen cyber defenses within the federal government and, to the extent that it has authority, within critical infrastructure sectors.
Additionally, President Biden called on private sector critical infrastructure owners and operators to accelerate and enhance their cybersecurity measures, urging them to take advantage of public-private partnerships and initiatives, including those administered by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA). Appended to President Biden’s statement was a Fact Sheet (www.whitehouse.gov/briefing-room/statements-releas- es/2022/03/21/fact-sheet-act-now-to-protect-against- potential-cyberattacks), which outlines specific steps that companies can take to bolster cybersecurity across the nation, and refers readers to various resources compiled by CISA, as part of a cybersecurity campaign. In November, the Biden administration began ramping up its cybersecurity and defense measures in response to Russian President Vladimir Putin’s escalating aggression toward Ukraine. On January 11, CISA, the Federal Bureau of Investigation (FBI) and the National Security Agency (NSA) issued Alert AA22-011A, “Understanding and Mitigating Russian State-Sponsored Cyber Threats to U.S. Critical Infrastructure” (www.cisa.gov/uscert/ncas/alerts/aa22-011a) which provided an overview of Russian state-sponsored cyber operations; commonly observed tactics, techniques and procedures (TTPs); detection actions; incident response guidance; and mitigations. The administration, CISA, FBI and NSA continued to monitor the level of risk posed by Russia, which recently escalated based on intelligence indicating that Russia is planning cyberattacks against the United States in response to economic sanctions that the United States has imposed.
What is Shields Up?
Shields Up is a cybersecurity campaign formed out of the combined efforts of CISA and the FBI to help organizations prepare for, respond to and mitigate the impact of cyberattacks by Russia. …
PIOGA Press
(By Gary Steinbauer and Christina Puhnaty)
The U.S. Environmental Protection Agency’s highly anticipated November 2021 Clean Air Act (CAA) proposal regulating methane and volatile organic compound (VOC) emissions from the oil and gas sector drew a reported 400,000 individual submissions. Through the methane proposal (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. 63,110 (Nov. 15, 2021)), EPA seeks to expand the current VOC and methane emissions regulations that apply to new, modified, and reconstructed sources within the crude oil and natural gas production sector that were promulgated by EPA in 2012 (40 C.F.R. Part 60, Subpart OOOO) and 2016 (40 C.F.R. Part 60, Subpart OOOOa). In addition, the methane proposal includes the first nationwide methane emissions guidelines for existing sources within the oil and gas sector.
It is no surprise that EPA received a significant number of comments on the methane proposal, especially considering the relatively brief and tumultuous history of the agency’s regulation of methane emissions from the oil and gas sector under the CAA. The commenters’ views on the proposal differ considerably. Many commenters, primarily those representing the oil and gas industry and certain states, raised serious legal concerns and also questioned the technical aspects and propriety of several key components of issues with the proposal. On the other hand, commenters from other states, local governments and environmental groups urged EPA to impose even more stringent requirements, beyond those included in the methane proposal. Several key themes and legal issues emerged from these comments. This article highlights some of the potentially pivotal legal issues raised by commenters, including those related to EPA’s proposed community- based monitoring program. …
The Wildcatter
(By Nikolas Tysiak)
There is much to report in Leg/Reg land this go around! Let’s dive right in…
PENNSYLVANIA
Murrysville Watch Committee v. Municipality of Murrysville Zoning Hearing Board, 2022 WL 200112 (Comm. Ct. Pa. January 24, 2022). The Murrysville Watch Committee sued appealing a decision of the Zoning/Hearing Board on the validity of the municipality zoning ordinances relating to oil and gas development. Specifically, the MWC alleged that the use of property zoned as residential for oil and gas development was improper – oil and gas development should have been reserved for industrial zoned property, indicated that allowing oil and gas development in residential zones was unconstitutional “spot zoning” (the “unreasonable or arbitrary zoning classification of a small parcel of land, dissected or set apart from surrounding properties, with no reasonable basis for the differential zoning . . .”), and that the allowance of oil and gas development in residential districts violated the Environmental Rights Amendment to the Pennsylvania Constitution (“ERA”). The Commonwealth Court found that the MWC failed to introduce evidence to establish that the oil and gas drilling was incompatible with the “uses or overall character” of the residential zoning districts in question and failed to adduce competent evidence that the ordinances at issue were unreasonable. The court further found that the MWC failed to present any credible evidence that the zoning ordinance violated the rights established under the ERA. The Commonwealth Court accordingly affirmed the decision by the Zoning/Hearing Board and denied the MWC’s legal challenges to the zoning districts.
OHIO
French v. Ascent Resources-Utica, L.L.C., 2022-Ohio-869 (March 24, 2022). In this case, the Ohio Supreme Court determined that a suit seeking the determination that an oil and gas lease expired by its own terms is a controversy “involving the title to or the possession of real estate” and therefore is exempt from arbitration clauses as a matter of Ohio law, overturning a decision of the 7th District Court of Appeals, and affirming a trial court case on the issue. …
Environmental Alert
(By Kevin Garber and Gina Falaschi)
On April 4, 2022, the Pennsylvania Senate failed by one vote to reach the two-thirds majority vote needed to override Governor Tom Wolf’s January 10th veto of Senate Concurrent Regulatory Review Resolution 1, which was intended to block the Pennsylvania Department of Environmental Protection’s regulation to join the Regional Greenhouse Gas Initiative (RGGI). However, the following evening, April 5, the Commonwealth Court issued a stay preventing the Legislative Reference Bureau from publishing the regulation as a final, immediately-effective rule in the Pennsylvania Bulletin and scheduling a hearing for May 4, 2022 on litigation that DEP initiated in February to force publication of the final regulation.
RGGI is the country’s first regional, market-based cap-and-trade program, designed to reduce carbon dioxide emissions from fossil-fuel-fired electric power generators with a capacity of 25 megawatts or greater that send more than 10 percent of their annual gross generation to the electric grid. Regulated sources must hold allowances equal to their CO2 emissions over a three-year compliance period. Each allowance is equal to one short ton of CO2. Regulated sources may purchase state-issued allowances at quarterly auctions or through secondary markets and can use allowances issued by any RGGI state to comply. Regulated sources may also use offsets awarded for certain environmental projects to meet a maximum of 3.3 percent of their allowances.
If the rule is published in the Pennsylvania Bulletin before July 1, 2022, the partial year emissions cap for Pennsylvania would be 40.7 million tons of CO2 for the remainder of 2022. The total annual emissions cap would gradually decline to 58 million in 2030. Affected units would need to start monitoring emissions on July 1, 2022 to be able to purchase allowances for CO2 emitted on or after that date. …
The Legal Intelligencer
By Matthew Wood and Mackenzie Moyer
On Feb. 26, the Environmental Quality Board (EQB) took another meaningful step toward finalizing Pennsylvania’s first state-established maximum contaminant levels (MCLs) for regulating contaminants in drinking water. On that date, the EQB published a proposed rule to amend 25 Pa. Code Ch. 109 (Safe Drinking Water) to establish MCLs for perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), two of the most common PFAS. PFOA and PFOS are just two of a group of thousands of PFAS, manmade chemicals used in various consumer, commercial and industrial manufacturing processes since the 1940s. PFAS have commonly been used to imbue products with water-, stain-, and heat-resistant properties and as ingredients in aqueous film forming foams (AFFF) used to extinguish flammable liquid fires (e.g., those that might occur on airports or military bases). PFAS do not break down naturally in the environment and have thus been called “forever chemicals.” Due to these properties and their ubiquitous nature, PFAS have been found in various environmental media, such as groundwater (including drinking water), plants, animals, and in humans, and evidence suggests that PFAS exposure can lead to adverse health effects. In the absence of definitive federal action to regulate PFAS, many states, including Pennsylvania, have in recent years taken steps to investigate, understand, and regulate PFAS.
Pennsylvania’s proposed rule is the result of years of investigation and evaluation. In 2018, Gov. Tom Wolf established by executive order (2018-08) Pennsylvania’s PFAS action team, which he tasked with the broad functions of, among other things, ensuring safe drinking water and managing environmental PFAS contamination. In June 2019, the Pennsylvania Department of Environmental Protection (PADEP) began sampling public drinking water systems within a half mile of potential PFAS sources such as manufacturing, fire training and military facilities. …
Environmental Alert
(by Lisa Bruderly and Mackenzie Moyer)
On March 28, 2022, the United States Environmental Protection Agency (EPA) published a proposed rule to expand the types of non-transportation-related facilities that may need to develop Facility Response Plans (FRPs) under the Clean Water Act (CWA). 87 Fed. Reg. 17890. At present, FRPs are required for certain facilities[1] that are reasonably expected to cause “substantial harm” to the environment by discharging oil into navigable waters. The proposed rulemaking would require FRPs for facilities that could reasonably be expected to cause substantial harm to the environment by discharging CWA hazardous substances to navigable waters.
Background
The proposed rulemaking is in response to judicial challenges related to EPA’s failure to meet the requirements of § 311(j)(5) of the CWA, which requires the president to “issue regulations which require an owner or operator of a tank vessel or facility . . . to prepare and submit . . . a plan for responding, to the maximum extent practicable, to a worst case discharge, and to a substantial threat of such a discharge, of oil or a hazardous substance.” 33 U.S.C. § 1321(j)(5).
In 2019, the Natural Resources Defense Council filed suit in federal court, claiming that the EPA’s failure to issue the regulations required by § 311(j)(5), was a “failure to perform a non-discretionary duty or act in violation of the [CWA].” Complaint for Declaratory and Injunctive Relief, Environmental Justice Health Alliance for Chemical Policy Reform v. EPA, No. 1-19-cv-02516 (S.D.N.Y. Mar. 21, 2019). The plaintiffs and EPA resolved the litigation through the entry of a consent decree requiring EPA, by March 12, 2022, to sign a notice of proposed rulemaking relating to FRPs for CWA hazardous substances. …
Smart Business
(By Sue Ostrowski featuring Kevin Wills)
As the deal market has heated up, the timeline for transactions has contracted, with deals being negotiated and closed in as few as 30 days.
“Transaction timelines are being compressed, and that has an impact on both buyers and sellers when completing a transaction,” says Kevin T. Wills, a shareholder in the Corporate and Commercial and Emerging Technologies groups at Babst Calland. “Compressed deal timelines are likely here to stay, at least for the foreseeable future, and buyers and sellers must be prepared to hit the ground running when considering a transaction.”
Smart Business spoke with Wills about how deal timelines have shrunk and the impact that is having in the deal-making space.
How have compressed deal timelines impacted buyers?
Buyers have less time to review a deal and conduct due diligence before making a determination with respect to closing, potentially forcing them to take on more risk than they previously would.
It is very much a seller’s market, both in the business and real estate deal space, and sellers are regularly in a position to move on to the next potential bidder if they don’t like the proposed deal terms. Buyers are offering compressed timelines and other concessions to be more attractive to sellers to give themselves a leg up on competitors and secure deals.
In order to mitigate the risk associated with compressed deal timelines, some buyers are starting due diligence while negotiating the purchase agreement, spending money on third-party reports to help manage the timeframe, but those are dollars lost if you can’t come to an agreement.
A risk associated more with real estate transactions specifically is that there are regularly deposits that become nonrefundable at the end of the due diligence period and, if a buyer’s third-party reports will not be completed timely, buyers run the risk of having their deposit become nonrefundable before their diligence is complete, forcing them to decide whether to put their deposit at risk or terminate the purchase agreement. …