Articles, Alerts & Perspectives

The PIOGA Press

On June 20, the Pennsylvania Supreme Court issued a decision in Pennsylvania Environmental Defense Foundation v. Commonwealth (PEDF) rejecting the long-standing test for analyzing claims brought under the Environmental Rights Amendment (ERA) contained in Article I, Section 27 of the Pennsylvania Constitution. In its decision, the court set aside the three-part test that was utilized in Payne v. Kassab and replaced it with a standard based on “the text of Article I, Section 27 itself as well as the underlying principles of Pennsylvania trust law in effect at the time of its enactment.” The court did not, however, provide a definitive test to be applied in the permitting context. On August 15, the Pennsylvania Environmental Hearing Board issued its first opinion interpreting and applying the new ERA standard in the permit appeal context. Other matters before the board raise claims under the ERA, the resolution of which will shape the contours of this evolving area of law.

Center for Coalfield Justice and Sierra Club v. DEP

In Center for Coalfield Justice and Sierra Club v. DEP, No. 2014-072-B, the Center for Coalfield Justice (CCJ) and Sierra Club filed third party appeals arguing that, in addition to violating the Clean Streams Law and the Mine Subsidence Act, the Department of Environmental Protection violated the ERA by issuing two longwall mining permit revisions to Consol Pennsylvania Coal Company, LLC. The first permit revision, Revision No. 180, allowed Consol to expand its longwall mining operation into areas adjacent to and underlying Ryerson Station State Park. Revision No. 180 specifically precluded Consol from mining under the Polen Run and Kent Run streams. The second permit revision, Revision No. …

The Legal Intelligencer

On July 6, the Pennsylvania Commonwealth Court rendered a decision in Board of Commissioners of Cheltenham Township v. Hansen-Lloyd, 166 A.3d 496 (Pa Commw. Ct. 2017), addressing several significant land use issues, most notably that the submittal of a mandatory sketch plan creates a vested right to develop the subject property pursuant to the ordinance provisions in effect at the time the plan is submitted. The Commonwealth Court also ruled that absent ordinance language to the contrary, a municipal boundary line is not considered the property line for setback purposes, and although zoning hearing boards may not provide advisory opinions in the abstract, they may interpret a zoning ordinance in direct connection with an application for zoning relief.

Hansen-Lloyd owned a 43-acre property, with 10 acres being located in Cheltenham Township and the remaining acreage being located in neighboring Springfield Township. In 2008, Hansen-Lloyd submitted a mandatory “tentative sketch plan” under the township’s zoning ordinance proposing to construct an age-restricted housing development on the 10-acre portion. The township’s zoning ordinance in effect at that time permitted age-restricted housing developments on the property by special exception.

After reviewing the sketch plan, the county planning agency and the township advised Hansen-Lloyd that in addition to special exception approval it would need to obtain variances from the township’s setback regulations because the municipal boundary line dissecting its property constituted an imputed property line.

With its sketch plan actively pending before the township, from 2009 until 2015 Hansen-Lloyd attempted to negotiate a zoning ordinance text amendment with the township and neighboring Springfield Township to permit a single-family development on the property. If both the township and Springfield Township agreed to the amendment, Hansen-Lloyd would withdraw its plan for age-restricted housing and pursue a single-family development instead. …

The Department of Commerce should balance the Trump administration’s goal of expanding American manufacturing with the administration’s priority of strengthening US energy infrastructure, explains Johanna H. Jochum. Esq., Babst Calland, USA.

On 24 January 2017, US President Donald Trump signed a presidential memorandum on the use of American steel in domestic pipeline projects, which could have far reaching consequences for the global energy market. While not imposing any immediate legal requirements, the Construction of American Pipelines Memorandum (Memorandum) directed the Secretary of the United States Department of Commerce to develop a plan that would require all new, retrofitted, repaired or expanded pipelines in the US to use materials and equipment produced in the US to the “maximum extent possible and to the extent permitted by law.” The Memorandum imposed a six month deadline for the Secretary to submit the plan to the President. To date, the Department of Commerce has not released the plan the public.

Unlike the more discussed ‘Buy American and Hire American’ Executive Order No. 13788 that was issued several months afterwards, the Memorandum was specific in its application to pipelines. The pipeline industry immediately expressed significant concerns with several aspects of the Memorandum to the Administration. On 16 March 2017, the Department of Commerce issued a request for comments on the Memorandum and provided additional clarity to certain critical aspects of the proposal.

In response, the Department of Commerce received more than 90 comments from a variety of stakeholders during the three week comment period: pipeline operators, steel manufacturers, trade organisations and foreign governments. The comments ranged from enthusiastic support to complete dismissal, but nearly all commenters shared some amount of skepticism that such a proposal could be achieved.

Manufacturing capacity
One of the primary concerns identified by industry commenters was manufacturing capacity. …

StateCollege.com

If you’re ready to learn about everything Centre County has to offer, visit the fourth annual Super Fair of Centre County Resources on Saturday for a showcase of all the available services the county provides its residents.

The fair, which runs from 10 a.m. to 2 p.m., is held at the Nittany Mall. It gives Centre County’s community the opportunity to learn about human service agencies available to them. Hosted by the Centre County Council for Human Resources, it will feature more than 100 agencies residents can call on for help.

The fair began as a way to create a one-stop shop for information and to highlight the importance of community resources and volunteering.

“Celebrating its fourth year, this one-of-a-kind event allows human service agencies and other exhibitors a chance to promote their products and services, and to get the word out about available volunteer opportunities,” the event’s press release reads.

Some of the services available through Centre County being highlighted at the fair include aging and disability resources, mental health resources, housing services and transportation services. The American Red Cross, Habitat for Humanity and the Mid-State Literacy Council are a few of the vendors scheduled to attend.

The Super Fair is sponsored by the CCCHS, AmeriServ Bank, CATA, the Centre County Gazette, Coventry Health Care, Home Nursing Agency, PA Link to Aging and Disability Resources and Wynwood House. For more information, visit www.theccchs.org.

PROGRAM:

■ 10-10:30 a.m. — “Veterans Benefits” Participants will hear from Brian Querry, director of Centre County Veterans Affairs, about the benefits available to those who have served in the armed forces. They will also learn who is eligible for which services and what is considered a service connected condition. …

Automotive News 

By: Eric Kulisch

WASHINGTON — From a regulatory standpoint, September has been a good month so far for U.S. automakers and tech companies racing to develop autonomous vehicles.

The House of Representatives passed the SELF DRIVE Act, the Senate Commerce Committee floated a draft bill that soon will become an official proposal, and the Department of Transportation issued revised industry guidance on how the federal government will treat safety compliance in the brave new world of driverless cars.

The three efforts reflect the politically conservative tendencies of the Trump administration and Congress in projecting a hands-off approach to establishing a legal and regulatory framework for self-driving vehicles, and they promise to deliver much of the regulatory certainty and consistency sought by the industry.

Safety groups complain that the proposals give the industry too much leeway to ignore risks, but some experts say the government approach recognizes that private-sector competition will drive safety improvements faster than regulators who might overlook potential solutions when prescribing rules.

“You’re seeing a light regulatory touch to encourage innovation and prevent the government from picking winners and losers,” said Tim Goodman, a transportation safety attorney at Babst Calland. He also was assistant chief counsel for enforcement at the National Highway Traffic Safety Administration until April 2016.

“Pursuing a market-based approach allows companies to take advantage of efficiencies” and promote safety, he added.

For the full article, click here.

American College of Environmental Lawyers

By: Dean A. Calland  

David Van Slyke recently posted an excellent discussion about the slow progress of EPA’s efforts to implement its RCRA 2020 initiative goals under the Government Performance Results Act and looming budget cuts that would slow the pace even more. However, a trend appears to be emerging that may help counter this RCRA corrective inaction.

The current statistics on remedial progress at RCRA corrective action sites are disappointing.  EPA estimates that the average RCRA Facility Investigation (RFI) takes 10 years, with some taking up to 19 years. The RFI process usually constitutes up to 80 percent of the time in a given cleanup, and remedy selections are taking an average of 6 years, and may take as long as 8 years, according to information from Region 3, Region 7 and RCRAInfo analysis. RCRA Facilities Investigation Remedy Selection Track: A Toolbox for Corrective Action.  However, we have witnessed a positive trend over the past several years that may assist site remediators in recovering some of the time lost due to the continued reduction in resources for this program.

There appears to be an emerging willingness by several EPA regions and delegated states to incorporate RCRA FIRST principles into corrective action consent orders that can save significant time and money compared with the traditional approach.  RCRA FIRST is the acronym for “Resource Conservation and Recovery Act Facilities Investigation Remedy Selection Track.”  As Barnes Johnson, Director of the Office of Resource Conservation and Recovery recently wrote, RCRA FIRST was designed to use increases in efficiency and effectiveness to “reduce the planning time [of RCRA corrective action cleanups] by as much as 50-75%, resulting in faster cleanup decisions and facilitating the redevelopment of corrective action facilities.”  RCRA FIRST was an effort to address the root causes of delay such as unclear or non-specific investigation or cleanup objectives and the lack of specific processes to elevate differences among stakeholders early in the project.  …

PA Business Central 

A recent report indicates that the natural gas industry should expect continued economic gains despite remaining disapproval from local community and regulatory organizations.

Written by multiple energy and natural resource attorneys from law firm Babst Calland, the report is entitled “Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream Operators” and focuses “on issues, challenges, opportunities and recent developments in the Appalachian Basin and beyond relevant to producers and operators,” according to a press release from the firm.

The report is split up into six sections: Business issues, the changing regulatory landscape, pipeline safety legislative and regulatory developments, litigation trends, challenges and debate spawned by local laws and regulations and downstream opportunities.

“This year’s Babst Calland Report is published at an exciting time for energy in the northeastern United States. The Appalachian Basin has re-emerged to become a leading producer, prices have stabilized, pipeline projects are coming online, and the future of downstream markets is beginning to come into view. Yet, dynamism remains a big part of the story with significant acreage and assets changing hands, new entrants to the upstream and midstream markets, the evolution of energy markets and fuel mixes, and the seemingly never-ending new requirements from the federal, state and local levels of government,” said Kathryn Z. Klaber, The Klaber Group, in her preface to the report.

Production and prices

Although natural gas producers saw record low prices in 2016, the end of the year indicated a positive trend upwards that has continued into 2017. …

 The report predicts that “modest price stability may be achieved given the prospect of both increased pipeline capacity out of producing regions like Appalachia, as well as some national export capacity.

The PIOGA Press

Federal agencies tasked with reviewing energy projects will likely take a harder look at climate change following a recent decision by the U.S. Court of Appeals for the District of Columbia Circuit. In a 2-1 ruling issued August 22, a D.C. Circuit panel vacated a decision by the Federal Energy Regulatory Commission (FERC) to approve a major interstate pipeline project, holding that FERC failed to adequately consider the greenhouse gas emissions that will result from burning the natural gas being carried by the pipelines. See Sierra Club v. FERC, D.C. Cir., No. 16-1329. The court faulted FERC’s project review under the National Environmental Policy Act of 1969 (NEPA) in a decision that has the potential to delay pipeline development across the country.

What NEPA requires

As the first major environmental law in the United States, NEPA established a broad national framework for protecting the environment. NEPA requires federal agencies to evaluate the environmental and related social and economic impacts of proposed actions prior to making decisions. It requires agencies to follow certain procedures, gather public input and take a “hard look” at various factors, but it does not require a particular outcome. NEPA can apply to a wide range of federal actions, including but not limited to permit approvals. Private companies frequently become involved in the NEPA process when they need a permit issued by a federal agency, such as FERC or the U.S. Army Corps of Engineers.

Depending on the circumstances of a project, the reviewing agency may be required to prepare a decision document known as an environmental impact statement (EIS). NEPA requires preparation of an EIS for each “major Federal action[] significantly affecting the quality of the human environment.” See 42 U.S.C. …

The American Oil & Gas Reporter

HARRISBURG, PA.–The Pennsylvania Supreme Court’s decision in Pennsylvania Environmental Defense Foundation (PEDF) v. Commonwealth has upended a longstanding interpretation of an environmental provision in the state’s constitution, but oil and gas representatives indicate no one is certain yet of the implications of the June 20 ruling, particularly regarding development of privately-held oil and gas resources.

The Pennsylvania Independent Oil & Gas Association reports that another pending Supreme Court case, Gorsline v. Board of Supervisors of Fairfield Township, ultimately may give a clearer sense of the court’s intentions.

In the meantime, though, the new construal of the constitution already is being employed to challenge oil and gas activity, PIOGA warns.

ERA Interpretation

At issue in the PEDF case was Pennsylvania’s Oil and Gas Lease Fund, which holds all rents and royalties from oil and gas leases on state-owned land. By law, the fund is to be used by the Department of Conservation and Natural Resources exclusively for conservation, recreation, dams or flood control, Babst Calland attorneys Kevin Garber and Blaine Lucas explain in PIOGA’s newsletter. Beginning in 2009 as part of the state budget process, the Pennsylvania General Assembly made changes to Sections 1602-E and 1603-E of the Pennsylvania Fiscal Code, transferring control over royalties from oil and gas leases from DCNR to the legislature and requiring that there could be no expenditures of royalties from the lease fund unless the general assembly transferred that money to the general fund.

In 2012, the attorneys recount, PEDF filed a challenge in Pennsylvania Commonwealth Court to § 1602-E and 1603-E and the appropriation of money from the leases, among other things. The basis of the legal action was the Pennsylvania Supreme Court’s December 2013 plurality opinion in Robinson Township v. …

The Legal Intelligencer 

On June 27, the Commonwealth Court rendered a decision in Smith v. Ivy Lee Real Estate, 2017 Pa. Commw. LEXIS 412 (Pa Commw. Ct. 2017), holding that municipal subdivision and land development ordinances (SALDO) can be enforced through private causes of action. The case was a matter of first impression under the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., (MPC), the state law establishing the framework for zoning and land use development regulations in Pennsylvania.

In Smith v. Ivy Lee, Ivy Lee Real Estate owned real property in Taylor Township. In 2015, Ivy Lee commenced construction activities on its property to convert an existing dwelling into a restaurant. The township does not have a zoning ordinance, but had adopted a SALDO pursuant to the MPC. The township concluded that Ivy Lee’s proposed project did not rise to the level of a “land development” under its SALDO. This decision is important because a “land development” requires submittal of a land development plan. That plan, and supporting application material, must comply with specific standards and criteria under the SALDO and undergo formal review and approval at various public meetings.

Believing Ivy Lee’s project did trigger the SALDO as a land development, the adjacent property owners (the Smiths) filed a private enforcement action against Ivy Lee in the form of a petition for permanent injunction. In the petition, the Smiths alleged that Ivy Lee’s construction activities constitute a land development under the SALDO, Ivy Lee is required to submit a land development plan to the township for review and approval, Ivy Lee’s plan, as-is, does not conform to the requirements of the SALDO, and the Smiths are authorized by Section 617 of the MPC to file a private action to enforce the SALDO. …

The Legal Intelligencer

The Pennsylvania Mechanics’ Lien Law, 49 P.S. Section 1101 et seq. (the Lien Law), provides contractors a powerful legal hammer for the recovery of payment owed for work performed on a construction project; they can impose a lien against the property on which their work was performed, clouding the owner’s title, until payment is received. In December 2016, as a result of last year’s Act 142 (the act) amendments to the Lien Law, the Department of General Services launched the online State Construction Notices Directory (the directory). Prior to the creation of the directory, there was no streamlined system for owners and general contractors to track subcontractors and suppliers on a project site. Now, the directory provides greater certainty with respect to who may have lien rights, and helps owners and general contractors track work performed by subcontractors, sub-subcontractors and suppliers with whom they otherwise do not have a contractual relationship.

In light of the updates to the Lien Law, owners, general contractors, and subcontractors involved with the ever-increasing energy infrastructure projects within the commonwealth would be prudent to evaluate their business practices to ensure compliance with—and to take full advantage of their rights under–the amended Lien Law.

Applicability to Energy Infrastructure Construction Contracts

Although the case law in Pennsylvania is not completely settled, it appears from the text of the Lien Law, and the case law developed from it, that many well pad and pipeline construction projects are subject to the Lien Law. For example, a Pennsylvania appellate court held that a “well for the production of gas, oil or other volatile or mineral substance” falls within the definition of a “structure or other improvement” governed by the Lien Law, so long as the well involves “the erection or construction of a permanent improvement.” …

PITTSBURGH, PA, August 17, 2017 – Babst Calland is pleased to announce that five attorneys were selected as 2018 Best Lawyers® “Lawyers of the Year”. Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant.

The 2018 “Lawyers of the Year” in Pittsburgh, Pa. and Charleston, W.Va. include:

Kevin J. Garber, Best Lawyers 2018 Environmental Law “Lawyer of the Year”

Blaine A. Lucas, Best Lawyers 2018 Land Use and Zoning Law “Lawyer of the Year”

Joseph K. Reinhart, Best Lawyers 2018 Energy Law “Lawyer of the Year”

John A. McCreary, Best Lawyers 2018 Labor Law – Management “Lawyer of the Year”

Timothy M. Miller was named the Best Lawyers 2018 Litigation – Environmental “Lawyer of the Year” in Charleston, W.Va.

In addition, 26 attorneys were named to the 2018 Edition of The Best Lawyers in America© the most respected peer-review publication in the legal profession, in the following practice areas:

• Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law: Norman E. Gilkey
• Bet-the-Company Litigation: Mark D. Shepard, Timothy M. Miller
• Commercial Litigation: Steven F. Baicker-McKee, Mark D. Shepard, Steven B. Silverman, Timothy M. Miller, Christopher B. Power, Robert M. Stonestreet
• Construction Law: Kurt F. Fernsler, D. Matthew Jameson III, Richard J. Lolli
• Corporate Law: Frank J. Clements, Bruce F. Rudoy, Laura Stone
• Employment Law – Management: Richard J.

…

Made in PA

(by Joseph K. Reinhart)

It was only a year or so ago that the oil and gas industry had experienced what could be considered a market correction, with low commodity prices and inadequate pipeline capacity prompting energy companies to recalibrate their business plans. Even producers with strong financial reserves reduced their capital spending, which led to fewer new wells being developed. In 2016, we saw the beginning of a rebound as energy companies increased spending. Thus far in 2017, rig count has significantly expanded in the Appalachian Basin.

As the volume of natural gas and natural gas liquids produced in the Appalachian Basin grows, new downstream opportunities are being created for manufacturing industries. Shell’s 2016 announcement of plans to construct a cracker plant in Beaver County, Pa. represents just one example of the expanding market for natural gas. Many other manufacturing firms are expected to enter the region and establish businesses drawn by the energy and raw materials associated with natural gas and natural gas liquids from the Marcellus and Utica shales.

Significant changes occurring in the political landscape are expected to affect the energy industry. President Donald Trump’s administration is signaling a fundamental shift in energy policies established by former President Barack Obama. New executive orders and policies promise to lead to more pipeline development, reduced federal oversight of the oil and gas industry and increased access to oil and natural gas reserves. However, many non-governmental organizations have vowed to challenge the Trump administration’s initiatives while many state and local governments have signaled their intention to take greater measures in regulating the oil and gas industry.

Important legal developments for industry to watch include:

•Shortly after President Trump issued an executive order requiring that for every regulation passed by an administrative agency, two additional regulations must be repealed, environmental groups filed suit in federal court challenging this action. …