March 22, 2022

Chevron Plans Further Growth Into Energy Transition – Renewable Fuels, Hydrogen and Carbon Capture

Pittsburgh, PA

Renewables Law Blog

(By Bruce Rudoy)

While long term goals of lowering greenhouse gas emissions and employing sustainable energy sources have gained momentum across all industries, Chevron Corp., through its New Energies division, has stated it has shorter term goals as well – it says its planned growth in renewable fuels, hydrogen and carbon capture is expected to enable about 30 million tones of annual CO2 equivalent emission reductions by 2028. Technology adoption, policy and consumer behavior will drive energy choices, says a top sustainability executive, as companies focus on carbon management along the path to net zero. All three factor into whether one form of energy or another is sought to supply demand created by income and population growth, according to Bruce Niemeyer, vice president of strategy and sustainability for Chevron Corp. “Keeping supply and demand balanced through the transition is important so the transition works for all and doesn’t become a negative event for those most vulnerable,” Niemeyer said earlier this month during UT Energy Week. He added, “We’re going to need many forms of energy, which means we need to work on reducing the carbon intensity of all of them.” Chevron is among the many companies working to lower its emissions amid a heightened focus on global warming and future energy supplies. Like the smartphone, technologies with features that meet consumers’ needs or low-cost technologies will gain market share, he said, noting consumer preference is a strong factor. Take, for example, the automotive sector. EVs are expected to play a key role in the energy transition, giving their lower emissions, compared to vehicles with internal combustion engines. However, “last year, our best estimate is there were 6.6 million electric vehicles sold. At the same time, there were 35 million SUVs.

March 21, 2022

Marley Kimelman Joins Babst Calland

Marley R. Kimelman recently joined Babst Calland as an associate in the Environmental Group. Mr. Kimelman assists clients with matters encompassing a broad range of environmental issues, including those related to state and federal permitting, regulatory compliance, and environmental litigation.

Prior to joining the Firm, Mr. Kimelman worked as an Environmental, Health, and Safety Regulatory Consultant at Enhesa, Inc. In this role, he was responsible for analyzing federal and state EHS regulations and drafting legal compliance reports used to advise clients on a course of action to achieve regulatory compliance. Mr. Kimelman is a 2021 graduate of George Washington Law School.

March 1, 2022

PADEP Releases Draft 2022 Integrated Water Quality Monitoring and Assessment Report

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph K. ReinhartSean M. McGovernMatthew C. Wood and Gina N. Falaschi)

On January 15, 2022, the Pennsylvania Department of Environmental Protection (PADEP) released in the Pennsylvania Bulletin, and requested public comment on, its draft 2022 Integrated Water Quality Monitoring and Assessment Report (2022 Integrated Report). See 52 Pa. Bull. 418 (Jan. 15, 2022). The draft 2022 Integrated Report, which PADEP is required to produce biennially pursuant to sections 303(d) and 305(b) of the Clean Water Act (CWA), 33 U.S.C. §§ 1313(d), 1315(b), and 40 C.F.R. pt. 130, identifies state waters that do not meet applicable water quality standards. Waters fall into three general statuses—attaining, impaired, or unassessed—and are further categorized according to uses, data, and whether a total maximum daily load (TMDL) is necessary (e.g., Category 1 waters are attaining for all uses, while Category 5 waters are impaired for one or more uses by a pollutant that requires a TMDL).

Pursuant to applicable regulations, PADEP assessed waters throughout the commonwealth for four uses: drinking water, fish consumption, aquatic life, and recreational use. 25 Pa. Code § 93.3. Similar to the 2020 Integrated Report, see Vol. XXXVII, No. 3 (2020) of this Newsletter (Pennsylvania—Mining report), PADEP identified acid mine drainage, agriculture, and stormwater runoff as the top known sources for waters impairment. PADEP conducted initial assessments on 5,844 stream miles and 25,742 public lake acres in addition to reassessing an additional 5,334 stream miles and 14,262 public lake acres. Waters were reassessed for a variety of reasons, including removal of potential discharge sources, identification of new discharge sources, or verification that source and cause of impairment are unchanged.

March 15, 2022

West Virginia Legislature Partially Acts on Rare Earth Elements

Environmental Alert

(By Robert Stonestreet, Kip Power and Ben Clapp)

During its 2022 60-day Session, the West Virginia Legislature took action to promote development of “rare earth element” recovery in the state, although it failed to deliver on all of the proposed legislative action on the last day of the Session.

On March 10, 2022, the Senate unanimously approved House Bill 4003, which is intended to clarify the ownership of rare earth elements present in mine drainage. The bill creates a new section of the West Virginia Abandoned Mine Lands Act, addressing valuable materials (not limited to rare earth elements) that may be produced through treatment of mine drainage. The new statute declares that these materials are part of the “waters of the state” and that they “can only be separated from the water with expensive and continuing investments of resources which may last for decades.” The new statute provides that any materials extracted through treatment of mine drainage “which have economic value” may be used, sold, or transferred for commercial gain by whoever successfully removes the materials from the mine drainage. To the extent the West Virginia Department of Environmental Protection is engaged in such activity through its mine drainage treatment activities, any proceeds the agency derives from the use, sale, or transfer of extracted materials must be deposited in the Special Reclamation Water Trust Fund or the Acid Mine Drainage Set-Aside Fund. Governor Jim Justice is expected to sign the bill into law.

A related bill that would have suspended for five years the severance tax on recovery of specifically identified rare earth elements (House Bill 4025) failed to complete legislative action before the end of the Session.

February 1, 2022

Holmes and Hutter Join Babst Calland’s Corporate and Commercial Group as Associates

Ember K. Holmes and Audra E. Hutter recently joined Babst Calland as associates in the Corporate and Commercial Group.

Ember Holmes focuses primarily on corporate and transactional matters, including commercial contracts, corporate structuring, mergers and acquisitions, and copyright and trademark issues. Prior to joining Babst Calland, she was an associate with Dickie, McCamey & Chilcote, P.C. Ms. Holmes is a 2018 graduate of the University at Buffalo School of Law.

Audra Hutter focuses primarily on corporate and transactional matters, including commercial contracts, corporate structuring, mergers and acquisitions. Prior to joining Babst Calland, she was an associate with Leech Tishman Fuscaldo & Lampl, LLC. Ms. Hutter is a 2019 graduate of the University of Pittsburgh School of Law.

March 4, 2022

Pennsylvania’s Environmental Quality Board Proposes Drinking Water Regulations for Certain PFAS and Opens Public Comment Period

Environmental Alert

(by Matt Wood and Mackenzie Moyer)

On February 26, 2022, the Environmental Quality Board (EQB) published a proposed rule to amend 25 Pa. Code Ch. 109 (Safe Drinking Water) to regulate certain per- and polyfluoroalkyl substances (PFAS).  52 Pa. B. 1245.  Specifically, the rule proposes setting a maximum contaminant level goal (MCLG) and maximum contaminant level (MCL) for both perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS).  PFOA and PFOS are two of the most common PFAS, a “family” of thousands of synthetic chemicals that have been used in consumer, commercial, and industrial applications since the 1940s.  PFAS have been used to manufacture water-, stain-, and heat-resistant products and have been a common component in some aqueous film forming foams (AFFF) routinely used for firefighting.  PFAS have been found in various environmental media like groundwater (including drinking water), plants, animals, and in humans.  Because PFAS do not break down naturally in the environment, they have been called “forever chemicals.”  Evidence suggests that PFAS exposure can lead to adverse health effects.

The proposed rule sets MCLGs of 8 parts per trillion (ppt) for PFOA and 14 ppt for PFOS and MCLs of 14 ppt for PFOA and 18 ppt for PFOS.  The MCLGs are nonenforceable levels developed solely from health effects data and act as the starting point for determining the MCLs.  To develop the enforceable MCLs, the Pennsylvania Department of Environmental Protection (PADEP) considered factors beyond health effects data, including technical limitations and costs that may affect the feasibility of achieving the MCLGs.  As part of the rulemaking process, PADEP also considered PFAS other than PFOA and PFOS (i.e., PFNA, PFHxS, PFHpA, PFBS, and HFPO-DA), but proposed not establishing MCLs for these substances at this time, primarily due to a lack of occurrence data and incomplete cost/benefit data and analysis. 

March 3, 2022

Babst Calland Joins ACBA’s Inaugural ALLY Initiative Cohort

Babst Calland, through its Women’s Initiative, is pleased to announce the Firm’s participation in the Allegheny County Bar Association’s ALLY Initiative Cohort. ALLY stands for “Attorneys, Learning as allies, Living as allies, and Yielding results.” The Initiative is designed to engage attorneys and their law firms, corporate legal departments, courts and other organizations to commit to increasing inclusivity, creating equitable workplaces and empowering historically marginalized and underrepresented community members.

The Initiative, which will run from March 15 through October 2022, will offer programing and other projects, which will then allow firms and legal departments to earn an official “ACBA ALLY Certification.”

To read more, click here.

March 1, 2022

An experienced M&A attorney can help minimize the risk of post-closing disputes

Smart Business

(by Sue Ostrowski featuring Kate Cooper)

When selling your business, you will devote a substantial amount of time and energy to negotiating the representations and warranties in the purchase agreement. Accurate representations and warranties are critical to ensuring that the expectations of the buyer and seller are aligned to minimize the risk of post-closing indemnification claims.

“Representations and warranties are promises made by the seller about the current and future state of the business, assuring the buyer the business is operating the way seller says it is,” says Kate Cooper, shareholder at Babst Calland. “If they are not accurate, a buyer can use these to make a claim for damages post-sale.”

Smart Business spoke with Cooper about why it is critical that representations and warranties accurately portray your business when selling, and how a deal attorney with experience in your industry can help minimize the risk that a buyer will pursue a claim after closing.

What do representations and warranties cover?

Standard representations and warranties in nearly every purchase agreement include that the target entity is in good standing with the state, taxes have been properly filed and paid, and that it is in compliance with all applicable laws. Beyond that, it gets much more nuanced depending on the industry and the nature of the business. A technology company may need to make representations and warranties about its intellectual property, while a manufacturer might address environmental, health and safety issues. If you are selling real estate, you’ll need to make representations about any liens and encumbrances affecting property.

How can an experienced attorney help navigate through the process?

March 1, 2022

PADEP Revises Air Pollution and Noise Control Plans for Three Mine Permits

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph K. ReinhartSean M. McGovernGina N. Falaschi and Christina Puhnaty)

On October 8, 2021, the Pennsylvania Department of Environmental Protection (PADEP) revised the air pollution and noise control plans that apply to the following permit applications: Bituminous Surface Mine Permit 5600-PM-BMP0311, Anthracite Surface Mine Permit Application 5600-PM-BMP0343, and Large Noncoal Industrial Minerals Mine Permit 5600-PM- BMP0315.

The new air pollution and noise control plan requirements for all three application types asks applicants to identify if there will be any processing facilities (crushing, screening, cleaning, and/or stockpiling) in the permit area, and asks applicants to describe those facilities and the amount of minerals to be processed. If the amount of minerals to be processed is less than 200 tons/day, these plans require applicants to describe the management practice to be utilized to control fugitive dust, and if the amount of minerals to be processed is equal to or greater than 200 tons/day, the plans direct the applicant to contact the appropriate PADEP Regional Office Air Quality Program.

To control fugitive dust, the plans ask applicants to describe the practices that will be utilized at the surface mining operation for the following activities: access roads, truck traffic, drilling, overburden removal and coal extraction, stockpiles, loading and unloading, crushing and other processing equipment, and conveyers.

The plans also ask applicants to list all noise sources from equipment and mining activity that will originate within the permit area, indicating the hours of operations for this equipment and whether the permit area is adjacent to any residential areas, schools, hospitals, or churches.

March 1, 2022

PADEP Issues Final Guidance on Remining of Areas with Preexisting Pollutional Discharges

FNEL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph K. ReinhartSean M. McGovernGina N. Falaschi and Christina Puhnaty)

On December 10, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published final technical guidance on remining of areas with preexisting pollutional discharges. See PADEP, TGD No. 563-2112-613, “Remining of Areas with Pre-Existing Pollutional Discharges” (Dec. 10, 2021). The purpose of this guidance is to identify and explain the requirements necessary to qualify for the remining protections found under subchapter F of 25 Pa. Code ch. 87, subchapter G of 25 Pa. Code ch. 88, and subchapter F of 25 Pa. Code ch. 90 (collectively, Subchapter F/G). This guidance explains the obligations of a mine operator during the remining activity, the procedures to be followed to modify a remining permit to account for changes in groundwater flow patterns and/or new discharges, and how to qualify for bond release.

The guidance document first identifies and explains conditions that must be met to qualify for Subchapter F/G permit authorization. For a Subchapter F/G permit to be issued, the proposed mining and reclamation activities should exhibit a significant potential to abate or reduce the pollutional load from the preexisting discharges of previous surface mining. Remining protections under Subchapter F/G do not apply to underground mining permits. To be eligible, applicants for Subchapter F/G permits must have no existing legal responsibility for treatment of the discharges or for reclaiming the proposed pollutional abatement area. The water quality must be indicative of mine drainage pollution and the discharges must be from mining activities that have been abandoned prior to the remining permit application.

March 1, 2022

Governor Wolf Vetoes Legislative Disapproval of RGGI Rule

FNREL Mineral and Energy Law Newsletter

Pennsylvania- Mining

(By Joseph K. ReinhartSean M. McGovernGina N. Falaschi and Christina Puhnaty)

As previously reported, the Pennsylvania Department of Environmental Protection’s (PADEP) CO2 Budget Trading Program, or Regional Greenhouse Gas Initiative (RGGI), regulation is nearing final publication. See Vol. XXXVIII, No. 4 (2021) of this Newsletter. RGGI is a regional cap-and-trade program for carbon dioxide (CO2) emissions from fossil fuel-fired electric generating units with a nameplate capacity of 25 megawatts or greater. PADEP proposes that the commonwealth join RGGI pursuant to Governor Tom Wolf’s 2019 executive order.

Following approval of the regulation by Pennsylvania’s Independent Regulatory Review Commission in September 2021, the final-form rulemaking was submitted to the House and Senate Environmental Resources and Energy standing committees.

The Senate Environmental Resources and Energy Committee passed a resolution disapproving the regulation and reported that resolution out of committee to the full chamber. The Senate passed Senate Concurrent Regulatory Review Resolution 1 (S.C.R.R.R.1), which disapproves of the rulemaking, on October 27, 2021. S.C.R.R.R.1 was reported by the House Environmental Resources and Energy Committee on November 8, 2021. On December 15, 2021, in a 130-70 vote, the House passed a resolution as well.

While the resolution was pending in the legislature, on November 29, 2021, the Environmental Quality Board (EQB) sub- mitted the CO2 Budget Trading Program rule to the Legislative Reference Bureau for publication in the Pennsylvania Bulletin. The Legislative Reference Bureau informed the EQB that it was not authorized to publish the rule because S.C.R.R.R.1 was still pending before the House of Representatives.

March 1, 2022

EQB Publishes Proposed Amendments to Anthracite Coal and Coal Refuse Disposal Regulations

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph K. ReinhartSean M. McGovernGina N. Falaschi and Christina Puhnaty)

On November 6, 2021, the Pennsylvania Environmental Quality Board (EQB) issued proposed amendments to 25 Pa. Code chs. 88 (Anthracite Coal) and 90 (Coal Refuse Disposal). See Coal Refuse Disposal Revisions, 51 Pa. Bull. 6914 (proposed Nov. 6, 2021). The proposed amendments are intended to implement Pennsylvania’s Act of October 4, 2019 (P.L. 452, No. 74) (Act 74) and to address the differences between the commonwealth’s regulations and federal regulations relating to temporary cessation at coal refuse disposal sites.

This proposal was adopted by the EQB at its meeting on June 15, 2021. On January 5, 2022, the EQB received a letter from Pennsylvania’s Independent Regulatory Review Commission (IRRC) indicating that the IRRC has no objections, comments, or recommendations on the proposed rule. See Letter from David Sumner, Exec. Dir., IRRC, to Hon. Patrick McDonnell, Chairman, EQB (Jan. 5, 2022). The amendments will go into effect upon publication of the final-form rulemaking in the Pennsylvania Bulletin.

Changes Proposed Pursuant to Act 74

Act 74 amended section 6.1 of the Coal Refuse Disposal Control Act (CRDA), 52 Pa. Stat. § 30.56a, to remove the commonwealth’s one-year limitation on the temporary cessation of operations at a coal refuse disposal site. The Pennsylvania Department of Environmental Protection (PADEP) has proposed to incorporate this amendment at 25 Pa. Code § 88.310(k)(1).

Pursuant to Act 74’s amendment of section 6.1 of the CRDA, PADEP also proposes to amend 25 Pa.

March 1, 2022

Environmental Impacts from Construction of Mariner East 2 Pipeline Results in Charges of Environmental Crimes; Settlement Reached to Restore Marsh Creek Lake

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph K. ReinhartSean M. McGovernMatthew C. Wood and Gina N. Falaschi)

On October 5, 2021, Pennsylvania Attorney General Josh Shapiro announced that the Environmental Crimes Section had charged Energy Transfer, L.P. (Energy Transfer), parent company of Sunoco Pipeline, L.P. (Sunoco), with 46 counts of environmental crimes. The charges stemmed from an investigation by the Forty-Fifth Statewide Investigating Grand Jury (Grand Jury), which concluded that Sunoco had violated Pennsylvania law in connection with its construction of the Mariner East 2 pipeline, a project that crosses 17 counties in the commonwealth. Two charges were later added from a criminal referral from the Pennsylvania Department of Environmental Protection (PADEP), bringing the total charges to 48. Among other things, Attorney General Shapiro and the Grand Jury alleged that Sunoco had repeatedly allowed—and failed to report to PADEP, as required by law—spills, leaks, and losses of drilling fluid during horizontal directional drilling (HDD) activities. The Grand Jury also heard testimony from landowners complaining of impacts to their properties, including to drinking water sources, and found that Sunoco’s HDD activities had impacted multiple recreational lakes in different counties. See generally Police Criminal Complaint, Commonwealth v. Energy Transfer, L.P., No. CR- 302-2021 (Pa. Commw. Ct. Oct. 5, 2021); Grand Jury’s Presentment (Oct. 5, 2021).

On December 6, 2021, two months after Attorney General Shapiro announced the criminal charges, PADEP and the Department of Conservation and Natural Resources (DCNR) announced that it had reached a settlement with Sunoco that requires the company to address impacts from releases of drilling fluid and mud that occurred in August 2020 at Marsh Creek Lake State Park in Chester County, Pennsylvania.

March 1, 2022

Pennsylvania Supreme Court Holds That Eminent Domain Power Need Not Be Property-Specific to Invoke Inverse Condemnation Liability

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph K. ReinhartSean M. McGovernMatthew C. Wood and Gina N. Falaschi)

On November 29, 2021, the Pennsylvania Supreme Court overturned a decision by the Pennsylvania Commonwealth Court, ruling that UGI Storage Company (UGI) could be held liable for taking oil and gas drilling rights in a proposed protective buffer zone around the Meeker natural gas storage field in Tioga County, Pennsylvania. In 2009, UGI, a quasi-public entity with the power of eminent domain, sought from the Federal Energy Regulatory Commission (FERC) a certificate of public convenience and necessity to acquire and operate certain facilities related to the interstate transportation and sale of natural gas owned by UGI Central Penn Gas, Inc. (CPG), including a 1,216- acre underground storage field in Tioga County and an additional 2,980-acre protective buffer zone around the storage field.

FERC granted UGI’s application for the storage field but denied its request for the full buffer zone (citing issues with notification and property rights requirements in accordance with applicable federal regulations). The decision resulted in only parts of the buffer zone being certificated. In 2015, certain property owners sought the appointment of a board of viewers to assess damages for de facto condemnation of their properties under section 502(c) of the Eminent Domain Code, 26 Pa. Cons. Stat. § 502. The property owners claimed that although only certain segments of the buffer zone had been certificated, UGI was treating the properties within the uncertificated segments in the same manner as those within the certificated are- as as protection for the integrity and security of the storage field.

March 1, 2022

Pennsylvania General Permit for Short Duration Processing and Beneficial Use of Oil and Gas Liquid Waste Available for Public Comment

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph K. ReinhartSean M. McGovernMatthew C. Wood and Gina N. Falaschi)

On January 15, 2022, the Pennsylvania Department of Environmental Protection (PADEP) published draft General Permit WMGR163 (Draft Permit) in the Pennsylvania Bulletin for public comment. See 52 Pa. Bull. 419 (Jan. 15, 2022). PADEP created the Draft Permit as a result of the July 9, 2021, passage of Act 70, which amended the Administrative Code of 1929. As pro- posed, the Draft Permit would authorize 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 Draft Permit covers facilities that process and beneficially reuse oil and gas liquid waste for no longer than 180 consecutive days.

If finalized as proposed, any company interested in using the Draft Permit will have to register its authorized activities with PADEP pursuant to 25 Pa. Code § 287.643. PADEP will be prohibited from requiring an applicant to obtain a determination of applicability from the agency (25 Pa. Code § 287.641(c)) prior to the issuance of the final permit as authorized under 25 Pa. Code § 287.641(d) for the land application of material. Key provisions in the Draft Permit include:

  1. Facilities are authorized to process and transfer oil and gas liquid waste for no more than 180 consecutive days during the permit’s one-year coverage
  2. The permittee may not store more than 1,000,000 gallons of oil and gas liquid waste on-site at any one
  3. Oil and gas liquid waste is not subject to concentration limits or chemical testing in order to be stored in an impoundment (unlike General Permit WMGR123).
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