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October 20, 2020

PHMSA Proposes Integrity Management Alternative for Class Location Changes

Pipeline Safety Alert

(by Keith Coyle and Varun Shekhar)

On October 14, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice of proposed rulemaking (NPRM) containing potential changes to the federal gas pipeline safety regulations and reporting requirements.  Citing PHMSA’s experience administering special permits, as well as the information provided in earlier studies and from various stakeholders, the NPRM proposed to amend the regulations to allow operators to apply integrity management (IM) principles to certain gas transmission line segments that experience class location changes.  Comments on the NPRM are due December 14, 2020.

PHMSA relied heavily on the conditions included in class location special permits in developing the proposed rules.  The IM alternative would only be available to pipeline segments that experience an increase in population density from a Class 1 location to a Class 3 location, subject to certain eligibility criteria.  Operators using the IM alternative would be required to conduct an initial integrity assessment within 24 months of the class location change and apply the IM requirements in 49 C.F.R. Part 192, Subpart O to the affected segment. Operators would also be required to implement additional preventative and mitigative measures for cathodic protection, line markers, depth-of-cover, right-of-way patrolling, leak surveys, and valves.

PHMSA’s decision to propose an IM alternative for managing class location changes is a significant step forward for pipeline safety.  The class location regulations are largely based on concepts established decades ago, and the pipeline industry has long advocated for an approach that reflects modern assessment tools and technologies.  While the NPRM does not necessarily satisfy all of the industry’s objectives, PHMSA’s proposal sets the stage for the next phase of the rulemaking process and potential development of a final rule.

Background

In July 2018, the Agency published an advance notice of proposed rulemaking (

October 16, 2020

Court Reinforces High Standard for Both Use and Dimensional Variance Applications

The Legal Intelligencer

(by Anna Z. Skipper and Krista-Ann M. Staley)

In exceptional circumstances, where strict application of the zoning ordinance to a particular parcel would result in an unnecessary hardship, a variance acts as a “relief valve;” it allows a deviation from the strict terms of a zoning ordinance to permit the owner's reasonable use of the property.

While landowners have a constitutionally protected right to use and enjoy their property as they desire, that right is not without legal, or practical, limits. Many development plans, whether for a large shopping complex or a small garden shed, are thwarted by the limitations of the relevant zoning ordinance, the unique physical characteristics of the property, or both. Most of the time, the landowner must simply revert to a plan that fits within the confines of both law and land.  However, in exceptional circumstances, where strict application of the zoning ordinance to a particular parcel would result in an unnecessary hardship, a variance acts as a “relief valve;” it allows a deviation from the strict terms of a zoning ordinance to permit the owner’s reasonable use of the property.

Variance applications fall under the exclusive jurisdiction of the municipality’s zoning hearing board, a quasi-judicial entity appointed by the governing body. A zoning hearing board may grant variances only under exceptional circumstances and an applicant faces a heavy burden of both proof and production. The Municipalities Planning Code (the MPC), 53 P.S. §10910.2(a), which sets forth standards and procedures for zoning in all Pennsylvania municipalities except Pittsburgh and Philadelphia, authorizes a municipality’s zoning hearing board to hear requests for variances based on allegations of unnecessary hardship. A zoning hearing board may grant a variance provided the following findings are made:

That there are unique physical circumstances or conditions, including irregularity, narrowness, or shallowness...

October 13, 2020

A September foreshadowing: EQB adopts the proposed RGGI rulemaking and the governor vetoes House Bill 2025

The PIOGA Press

(by Kevin Garber and Jean Mosites)

September saw Pennsylvania take two major steps toward locking the Commonwealth into the Regional Greenhouse Gas Initiative (RGGI). On September 15, the Environmental Quality Board (EQB) voted 13-6 to adopt proposed cap-and-trade regulations to limit carbon dioxide emissions from fossil-fuel-fired electric generating units greater than 25 megawatts capacity. Nine days later on September 24, Governor Wolf vetoed House Bill 2025 that would have prohibited the Department of Environmental Protection from taking any action to control or limit CO2 emissions without General Assembly approval.

Since it seems unlikely at this point that the General Assembly will be able to stop the administration’s effort to adopt RGGI regulations by the end of 2021, the next several months will be critical to comment on, shape or oppose these regulations.

The proposed RGGI regulations

Governor Wolf’s October 3, 2019, Executive Order No. 2019-07 directed DEP to develop a proposed rulemaking to abate, control or limit CO2 emissions from fossil fuel-fired electric power generators (EGU) and present it to the EQB by July 31, 2020. The deadline later was extended to September 15, 2020. As presented to and considered by the EQB on September 15, the proposed RGGI regulations would amend 25 Pa. Code Chapter 145 (relating to interstate pollution transport reduction) and add Subchapter E (relating to a budget trading program) to establish a program to limit the emissions of CO2 from a fossil-fuel-fired EGU with a nameplate capacity of 25 MW or greater that sends more than 10 percent of its annual gross generation to the electric grid. The proposed rulemaking is intended to reduce CO2 emissions as a contributor to adverse climate change and establish a CO2 budget trading program that can link with similar regulations in the 10 Northeast and Mid-Atlantic states that comprise...

October 6, 2020

D.C. Circuit to Decide EPA’s Authority to Regulate Greenhouse Gas Emissions

The Legal Intelligencer

(by Gary Steinbauer)

Lawsuits pending before the U.S. Court of Appeals for the D.C. Circuit are likely to shape the U.S. Environmental Protection Agency’s (EPA’s) authority to regulate greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act (CAA). These legal challenges involve two high-profile CAA deregulatory actions: The EPA’s Affordable Clean Energy rule (“Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations,” 84 Fed. Reg. 32520 (July 8, 2019)) (ACE Rule) and the EPA’s rule eliminating the transportation and storage segments from and rescinding methane requirements in the new source performance standards for the oil and gas industry (“Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review Rule,” 85 Fed. Reg. 57,018 (Sept. 14, 2020)) (policy Amendments rule) (collectively referred to as the rules). The rules repeal and replace Obama-era GHG emission regulations promulgated pursuant to Section 111 of the CAA, 42 U.S.C. Section 7411.

Section 111 of the CAA grants the EPA authority to establish national performance standards for categories of sources that cause or significantly contribute to “air pollution which may reasonably be anticipated to endanger public health or welfare.” Section 111 of the CAA establishes separate regulatory tracks for new, reconstructed and modified sources and existing sources that would otherwise qualify as regulated new sources. For new, reconstructed, or modified sources, the CAA requires the EPA to establish new source performance standards (NSPS), representing the “best system of emission reduction” (BSER), that apply directly to the particular source category. See 42 U.S.C. Section 7411(b). For existing sources, the EPA is to establish BSER-based emission guidelines that are to be applied through state-issued performance standards. See 42 U.S.C. Section 7411(d).

The Policy Amendments Rule—Regulating GHG Emissions...

September 27, 2020

Keep proprietary information safe with remote employees

Smart Business 

(by Sue Ostrowski featuring Carl Ronald)

When the economy started shutting down in March as a result of COVID-19 and employees began working remotely, keeping intellectual property and proprietary information safe didn’t top the list of companies’ concerns.

“Some businesses didn’t put procedures in place or have appropriate training classes because no one really thought the pandemic would extend as long as it has,” says Carl Ronald, shareholder at Babst Calland. “They didn’t instruct employees on how to identify important confidential information or safeguard certain proprietary documents when working from home.”

Smart Business spoke with Ronald about how to keep your company’s proprietary information safe when employees are working outside the office.

What approach should employers take to protect proprietary information?

There are different levels of confidentiality with different information, so I like to begin by identifying the information you have and classifying it accordingly. Some things are sensitive and you’d prefer them not to be disclosed, such as manufacturing schedules, production forecasts, or discounts for specific customers. But while those are things you don’t want your competitors to know, it isn’t going to be disastrous to the company if they are inadvertently disclosed.

Other information, such as a trade secret or the development of a new process that gives you a competitive advantage can devastate your business if it gets out. So, the first step is to identify the information you have and label it appropriately.

Second, businesses should train employees on the different categories of information and make sure they are treating each properly. Make sure everyone understands the importance of keeping information safe and reiterate basic steps to create barriers to access, such as not sharing passwords and using privacy screens when laptops are used in public.Third, identify employees who have access to confidential information and make sure they are bound by confidentiality...

September 17, 2020

Recent Developments in Medical Marijuana Jurisprudence—in Pa. and Beyond

The Legal Intelligencer

(by John McCreary)

This is the third installment of the author’s episodic examination of the employment law implications of the legalization of medical marijuana. The first installment appeared in The Legal Intelligencer’s Feb. 9, 2017, online edition—shortly after Pennsylvania’s Medical Marijuana Act (MMA) became effective—and described some of the ambiguities of and practical difficulties with the MMA’s employment provisions. This was followed by an article in the March 21, 2019, edition of The Legal surveying how jurisprudence from other jurisdictions had addressed some of the issues identified in the first article. There now have been a few Pennsylvania decisions on the subject, which along with the courts elsewhere are slowly creating a body of law defining rights and obligations under the medical marijuana laws. From review of these recent cases we can conclude that the courts are sympathetic to medical marijuana patients, but to this point they have yet to squarely address the significant job safety issues likely to be encountered  in the workplace, issues recognized in the Pennsylvania MMA as well as in  the analogous legislation  from other states.

Pennsylvania cases

Two Pennsylvania decisions of note provide insight into the approach of the commonwealth’s courts to the issues raised by the use of medical marijuana.

Palmiter v. Commonwealth Health Systems, No. 19-CV-1315 (Lackawanna Cty. 2019) found an implied cause of action to enforce the MMA’s antidiscrimination provision. That section of the MMA creates a protected class of employees “certified to use medical marijuana,” who are protected against employment discrimination because of such “status” as a certified user. See 35 Pa.C.S.A. Section 10231.2103(b)(1). But uniquely among the commonwealth’s employee-protective laws, the MMA does not provide statutory remedies, nor does it explicitly confer jurisdiction on the courts to address violations. This statutory insufficiency is in marked contrast to, for example, the Pennsylvania...

September 10, 2020

EPA finalizes revisions to oil and natural gas New Source Performance Standards

The PIOGA Press

(by Julie Domike, Michael Winek, Gina Falaschi and Gary Steinbauer)

On August 13, the U.S. Environmental Protection issued two prepublication final rules related to the New Source Performance Standards for the Crude Oil and Natural Gas Industry at 40 C.F.R. Part 60, Subparts OOOO and OOOOa (NSPS). The two rules―the “policy amendments” and “technical amendments”―arise from EPA’s review of the NSPS pursuant to President Trump’s 2017 Executive Order 13782, “Promoting Energy Independence and Economic Growth,” which directs the agency to review existing regulations that potentially “burden the development or use of domestically produced energy resources” and to revise or rescind regulatory requirements if appropriate. The rules become effective 60 days after publication in the Federal Register.

 Policy amendments

The agency’s policy amendments revise NSPS Subpart OOOO (promulgated in 2012), regulating volatile organic compound (VOC) emissions from certain new, reconstructed, and modified sources in the oil and natural gas industry, and NSPS Subpart OOOOa (promulgated in 2016), regulating VOC and methane emissions from specified new, reconstructed, and modified sources in the oil and gas industry. This rule provides that:

(1) The transmission and storage segments are no longer included in any source category regulated by the NSPS. These excluded emissions sources include transmission compressor stations, pneumatic controllers and underground storage vessels. To regulate a source category under the NSPS, the agency must first make a finding that the emissions of air pollutants from that source cause or contribute significantly to air pollution. These segments were not included in the original NSPS, and no such finding was made when these segments were added to the NSPS in the 2012 and 2016 final rules, making the regulation of the segments improper under the Clean Air Act (CAA). Accordingly, EPA amended the NSPS to remove these sources fromthe source...

September 4, 2020

Court Enforces Settlement Agreement Despite Sunshine Act Violation

The Legal Intelligencer

(by Blaine Lucas and Anna Skipper)

Most lawsuits settle before disposition by the courts. Any settlement agreement is just that, an agreement between the parties, which to be enforceable must possess all the elements of a valid contract—offer, acceptance, and consideration or a meeting of the minds. In Pennsylvania, when one of the parties to a settlement agreement is a public entity, additional considerations come into play, most notably the Sunshine Act, 65 Pa. C.S. Sections 701-716.

Enacted by the General Assembly to facilitate more transparent means of governmental decision-making, the Sunshine Act has existed in some form since 1974, and places restraints upon a local agency’s ability to enter into contracts, including settlement agreements. Specifically, the Sunshine Act requires that all “official action,” including final decisions on the creation of liability by contract or the adjudication of rights, duties and responsibilities, must be taken at a duly advertised meeting open to the public. On the other hand, the Sunshine Act permits “deliberations” in six enumerated categories to take place in private “executive session.” One permissible reason to deliberate in private is to consult with the agency’s attorney regarding information or strategy in connection with litigation or with issues on which identifiable complaints are expected to be filed. However, any official action arising out of deliberations in executive session still must be taken at an open meeting. Thus, even if  settlement of a lawsuit is discussed in executive session, it still must be voted upon at a public meeting subject to all of the Sunshine Act’s requirements.

Recently, the Pennsylvania Commonwealth Court considered the fate of a settlement agreement that was agreed upon by a public agency in executive session, but never voted upon at a public meeting. In Baribault v. Zoning Hearing Board of Haverford Township, No. 1211...

August 26, 2020

Webinar: A Decade of Environmental & Regulatory Progress in the Natural Gas Industry

Pittsburgh, PA – Cabot Oil & Gas Corporation, in cooperation with Marcellus Drilling News and Natural Gas Now hosted a Think About Energy Briefing webinar on Wednesday August 26, 2020.

Today’s webinar featured Patrick Henderson of the Marcellus Shale Coalition, Kathryn Klaber of the Klaber Group and Joseph Reinhart of Babst Calland.

The webinar provided attendees with a look back at the environmental and regulatory progress that has occurred since the shale industry started in earnest over a decade ago. Panelists discussed the numerous legislative, regulatory and best management practices that have evolved through cooperation and respect for the communities and environment in which the industry operates.

George Stark, Director, External Affairs, Cabot Oil & Gas Corporation, moderated today’s discussion. “We are fortunate to have panelists who have been involved in the shale industry for more than a decade in the Commonwealth. In each of their respective roles, they all had one common goal – how can we get this done the right way. The industry has made tremendous strides over the past decade and this would not have happened without the expertise of panelists like we have today,” said Stark.

Patrick Henderson, Director of Regulatory Affairs for the Marcellus Shale Coalition, focused on the environmental improvements in Pennsylvania and their impact on the quality of life.

“We’ve made terrific progress over the past decade in Pennsylvania, and because of safe and responsible natural gas development, our environment is better protected and our air quality is dramatically improved,” said Henderson. “Pennsylvania has among the highest of environmental standards for ensuring that natural gas is developed safely and responsibly, and our state Department of environmental Protections own data demonstrates that natural gas operators have among the highest environmental compliance rates of any industry in the Commonwealth.”

Henderson highlighted the shale industry’s commitment to getting it right from...

August 26, 2020

Pittsburgh’s space industry is thriving

Smart Business 

(by Sue Ostrowski with Justine Kasznica)

As Pittsburgh and the surrounding region continue to attract and grow companies that support the space industry, a space collaborative is gaining ground to bring stakeholders together.

“If we do things right, Pittsburgh is well-positioned to be recognized as a center for research and commercialization of space-related technologies and innovation,” says Justine Kasznica, an attorney at Babst Calland.

Smart Business spoke with Kasznica about the growing number of local companies and regional stakeholders supporting space exploration.

How did the space collaborative begin?

In 2019, Astrobotic Technology Inc., a Pittsburgh-based space robotics company building lunar delivery capabilities, made national news when it was awarded an $80 million NASA grant for a mission to develop a lunar lander to deliver payload to the lunar surface. This year, Astrobotic was awarded an additional $200 million NASA grant for an historic mission to deliver a NASA rover to drill for water ice on the South Pole of the Moon. A group of individuals representing industry, academia, local and state government, as well as regional economic development organizations — all passionate about space — saw this as a unique opportunity to coalesce a broader network of existing regional assets to establish a space industry group in Pittsburgh.

What role have other institutions played in bringing Pittsburgh to the forefront of space-related industries?

Pittsburgh has been involved in space history since the Apollo era, having manufactured much of the steel and glass hardware, as well as communications technology, for the Apollo 11 mission. Today, the region’s advanced manufacturing capabilities and world-class expertise in artificial intelligence, robotics, and space transport and logistics can propel Pittsburgh to an even more dominant seat at the table.

Local universities, in partnership with industry and the federal government, are actively engaged in planetary science research, space navigation, mobility and robotics programs....

August 20, 2020

EPA Finalizes Revisions to Oil and Natural Gas New Source Performance Standards

Environmental Alert

(by Julie Domike, Michael Winek, Gina Falaschi and Gary Steinbauer)

On August 13, 2020, the U.S. Environmental Protection issued two prepublication final rules related to the New Source Performance Standards for the Crude Oil and Natural Gas Industry at 40 C.F.R. Part 60, Subparts OOOO and OOOOa (NSPS).  The two rules – the “Policy Amendments” and “Technical Amendments” (Rules) – arise from EPA’s review of the NSPS pursuant to President Trump’s 2017 Executive Order 13782, “Promoting Energy Independence and Economic Growth,” which directs the Agency to review existing regulations that potentially “burden the development or use of domestically produced energy resources” and to revise or rescind regulatory requirements if appropriate.  The Rules become effective 60 days after publication in the Federal Register.

Policy Amendments.  The Agency’s “Policy Amendments” amend NSPS Subpart OOOO (promulgated in 2012), regulating VOC emissions from certain new, reconstructed, and modified sources in the oil and natural gas industry, and NSPS Subpart OOOOa (promulgated in 2016), regulating VOC and methane emissions from specified new, reconstructed, and modified sources in the oil and gas industry.  This rule provides that:

The transmission and storage segments are no longer included in any source category regulated by the NSPS. These excluded emissions sources include transmission compressor stations, pneumatic controllers and underground storage vessels.  To regulate a source category under the NSPS, the Agency must first make a finding that the emissions of air pollutants from that source cause or contribute significantly to air pollution.  These segments were not included in the original NSPS, and no such finding was made when these segments were added to the NSPS in the 2012 and 2016 final rules, making the regulation of the segments improper under the Clean Air Act (CAA). Accordingly,...

August 20, 2020

Five Babst Calland Attorneys Named as 2021 Best Lawyers® “Lawyers of the Year”, 32 Selected for Inclusion in The Best Lawyers in America©, and 12 Named to Best Lawyers® “Ones to Watch”

Babst Calland is pleased to announce that five lawyers were selected as 2021 Best Lawyers “Lawyer of the Year” in Pittsburgh, Pa. and Charleston, W. Va. (by BL Rankings). 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.

Receiving this designation reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and the same practice areas for their abilities, professionalism, and integrity. Those named to the 2021 Best Lawyers “Lawyer of the Year” include:

Kevin J. Garber, Environmental Law “Lawyer of the Year” in Pittsburgh, Pa. – In addition to the “Lawyer of the Year” award, Kevin Garber was also listed in the 2021 Edition of The Best Lawyers in America in Environmental Law, Natural Resources Law, Energy Law, Water Law, and Litigation – Environmental.

Timothy M. Miller, Litigation – Environmental “Lawyer of the Year” in Charleston, W. Va. – In addition to the “Lawyer of the Year” award, Timothy Miller was also listed in the 2021 Edition of The Best Lawyers in America in Energy Law, Commercial Litigation, Bet-the-Company Litigation, Oil and Gas Law, Litigation – Environmental.

Christopher B. “Kip” Power, Natural Resources Law “Lawyer of the Year” in Charleston, W. Va. – In addition to the “Lawyer of the Year” award, Kip Power was also listed in the 2021 Edition of The Best Lawyers in America in Environmental Law, Natural Resources Law, Energy Law, Commercial Litigation, Mining Law, Oil and Gas Law, Litigation – Regulatory Enforcement (SEC, Telecom, Energy), Litigation – Environmental, Litigation – Land Use and Zoning, Litigation – Municipal.

Joseph K. Reinhart, Natural Resources Law “Lawyer of the Year” in Pittsburgh, Pa. – In addition to the “Lawyer of the Year” award, Joseph Reinhart was also listed in the 2021 Edition of The Best Lawyers in...

August 18, 2020

FTC Investigation of Twitter for Alleged Privacy Violations Reinforces Need for Strong Privacy Policies and Practices

Emerging Technologies Perspectives

(by Ashleigh Krick)

On August 3, 2020, Twitter disclosed in a regulatory filing that it is under investigation by the Federal Trade Commission (FTC) for allegations that the company used user phone numbers and email addresses for targeted advertising in violation of a 2011 Consent Agreement. Twitter estimates that it could face $150 to $250 million in losses due to legal fees and enforcement penalties resulting from this matter.

The 2011 Consent Agreement resolved charges that Twitter violated the Federal Trade Commission Act (FTC Act) when hackers obtained administrative control of Twitter allowing them access to non-public user information, private tweets, and the ability to send out fake tweets from any user’s account. The FTC found that Twitter’s actions neither upheld statements in its privacy policy, nor provided reasonable and appropriate security to prevent unauthorized access to nonpublic user data and honor the privacy choices of its users.

Click here for PDF. 

August 18, 2020

Report Sees Shale Poised For Growth

American Oil & Gas Reporter

PITTSBURGH–Despite challenges, a maturing shale industry is poised for growth as natural gas and oil producers have slashed the costs of production, concludes the law firm of Babst Calland in its 10th annual energy industry report.

The 2020 Babst Calland Report–The U.S. Oil & Gas Industry: Federal, State, Local Challenges & Opportunities; Legal and Regulatory Perspective for Producers and Midstream Operators covers topics ranging from the industry’s business outlook, regulatory enforcement and rule-making to developments in pipeline safety and litigation trends, Babst Calland says, adding that its attorneys’ collective legal experience and perspectives on these and related business developments are highlighted in the report.

“The U.S. natural gas and oil industry has experienced tremendous growth and change since we first published this report in 2011,” comments Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group. “Fast forward to an unprecedented 2020 with a pandemic, a corresponding economic slowdown, and an oversupply of natural gas and crude oil. With increased public and government pressure, sustained low prices, and less-reliable financing options, resiliency will continue to be the driving force of a dynamic energy market that continues to evolve.”

Reinhart says the past decade clearly has demonstrated the energy industry’s resilience amid price fluctuations, increasing regulation, opposition from nongovernmental organizations and policy changes. He says the industry has improved efficiencies, even as lower commodity pricing has squeezed margins, while also seeking new markets.

According to the Energy Information Administration, Reinhart cites, the United States exported more natural gas in 2019 by pipeline than it imported for the first time since 1985, mainly because of increased pipeline capacity to send natural gas to Canada and Mexico.

“Perhaps a more fossil fuel-friendly federal government and the promise of a predictable federal regulatory landscape helped boost capital spending and the prospects...

August 13, 2020

Babst Calland Attorneys Target Oil and Gas Political Issues to Watch

Hart Energy

(by Joseph Markman and Len Vermillion featuring Kevin Garber and Jean Mosites)

In some presidential election years, voters have struggled to discern substantive differences between the positions of the major party candidates. Not this year.

The energy and environmental policies of President Donald Trump and former Vice President Joe Biden reveal “a night and day difference between the two approaches,” Kevin Garber, a shareholder in the Babst Calland law firm told Hart Energy’s Joseph Markman and Len Vermillion.

But oil and gas executives need to focus their attention beyond the presidential race.

“Looking at the real local level, there are task forces, there are climate plans, there are initiatives for electric vehicles and renewables and building codes—whether you can or cannot have gas hookup in new construction,” said Jean Mosites, also a Babst Calland shareholder who practices environmental law. “A lot of interesting things are going on and certainly not just federal.”

Watch video. 

August 13, 2020

Justine M. Kasznica – Emerging Technologies Attorney

Emerging Technologies Profile 

What motivated your desire to help start-ups and emerging technology companies with their legal matters? I was a litigator at a large firm in Philadelphia, fresh out of law school, when I started working with a good friend from undergrad to commercialize a robot designed to work with autistic kids. I was able to bring in my first client, and had the rare opportunity to work with a cross-disciplinary team of colleagues to support the legal needs of my friend’s start-up. This was a career turning point for me, as it was the moment when I discovered the rewards of working with start-ups. I saw the critical role that lawyers play in supporting the commercialization of advanced technologies and committed to doing my part in building a responsible future for robotics and artificial intelligence.

As an early adopter of the drone, what was the origin of your drone fascination and expertise? Growing up, my older brother and I spent a lot of time designing, building and flying model rockets, and other favorite aircraft (from balsa/rubber-powered Piper Cubs to radio-controlled Corsairs and B-25 Mitchells). When Jeff Bezos announced (circa 2012) that drones would be delivering all my future Amazon orders to my doorstep, I couldn’t resist learning about the regulatory hurdles facing unmanned aircraft systems (UAS, as we call them), and saw a great opportunity to connect my legal work with my interests in aviation and aerospace. Somewhere along this journey, I received my first drone “Quentin” – a DJI Phantom 4 – as a Valentine’s Day gift from my husband.

How do you effectively manage so many start-up client relationships at the same time? What’s your secret? The truth is, I’m still working on it… There aren’t enough hours in a day, and I am fortunate to work with...

August 12, 2020

Climate change developments

The PIOGA Press

This article is an excerpt of The 2020 Babst Calland Report, which represents the collective legal perspective of Babst Calland’s energy attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. A full copy of the Report is available by writing info@babstcalland.com.

The momentum to propose and adopt new legislation, regulation, policies and programs to address climate change steadily increased during 2019 and only subsided in early 2020 as the nation struggled to address the COVID-19 pandemic. As described below, the Trump administration continued its regulatory reform, reducing various obligations related to greenhouse gas (GHG) emissions, while state and federal courts continue to evaluate claims against both the government and industry regarding their risks, roles and responsibilities to confront the impacts of climate change.

For the full article, click here.

August 11, 2020

U.S. Army Corps of Engineers Proposes to Reissue Nationwide Permits and Split NWP 12

Environmental Alert

(by Lisa Bruderly and Ben Clapp)

The U.S. Army Corps of Engineers (Corps) has recently pre-published a proposed rule to issue and modify its Nationwide Permits (NWPs) in a move aimed at clarifying the NWPs and reducing the regulatory burden associated with certain authorized activities.  NWPs are issued pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899.  They authorize an array of activities that result in a discharge of dredged and fill material into waters of the United States, provided that the activities meet the threshold criteria and fulfill the general and specific conditions of the particular NWP.

Scope of Proposed Rule

The Corps typically reissues the NWPs approximately every five years, with the last publication in 2017, when 52 NWPs were issued. The Corps is proposing to reissue the permits after only three years to incorporate modifications identified in response to Executive Order 13783, which directed federal agencies to review existing regulations that “potentially burden the development or use of domestically produced energy resources.”  Nine NWPs were identified as result of this review and are modified in the proposed rule.  Modifications generally pertain to changes in thresholds for requiring pre-construction notifications or Corps approvals, elimination of linear foot thresholds for certain NWPs, and expansion of criteria for using certain NWPs.

In addition, five new NWPs are being proposed. The remainder of the existing NWPs are being reissued, without change, to keep all permits on the same five-year cycle.

Proposed Modifications to NWP 12

Of particular interest to the oil and gas industry and utilities is the Corps’ proposal to split NWP 12 (Utility Line Activities) into three NWPs, depending on the type of utility line: oil and gas (NWP 12), electric utilities and telecommunications (Proposed NWP C) and...

August 11, 2020

West Virginia DHHR Proposes New TENORM Rules, Federal Grand Jury in Kentucky Indicts TENORM Shipper for Violations of Federal DOT Regulations

Environmental Alert

(by Kip Power and Varun Shekhar)

Appalachian oil and gas operators were recently reminded that proper handling, management, disposal and transportation of technologically enhanced naturally occurring radioactive material (TENORM) wastes that are generated in connection with shale gas production activities remain the focus of significant regulatory and enforcement efforts.

W.Va. DHHR TENORM Regulation. On the regulatory side, the West Virginia Department of Health and Human Resources, Bureau of Public Health (DHHR), an agency primarily involved with protecting the public and employees from radiological health risks associated with the healthcare industry, recently released proposed revisions to its legislative rule, "Radiological Health," 64 W. Va. C.S.R. 23 (Proposed Rule). The Proposed Rule includes an entirely new Section 16, entitled "Radiation Safety Requirements for Technologically Enhanced Naturally Occurring Radioactive Material."

In some respects, DHHR’s proposal follows the recommendations in Part N (2014) of the Conference of Radiation Control Program Directors, Inc.'s (CRCPD) "Suggested State Regulations for Control of Radiation.” However, it also varies from the CRCPD recommendations in ways that may prove troublesome, such as the inclusion of inconsistent levels of risk-based exposure limits (allowing a total effective dose equivalent of 100 mrem/year for a maximally exposed individual in one provision but limiting exposure to 50 mrem/year and 25 mrem/year in other parts). Of equal concern, the Proposed Rule appears to exceed DHHR’s legislative mandate and allows for regulation of activities in a manner that is duplicative of existing rules administered by the West Virginia Department of Environmental Protection.

The West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association of West Virginia recently filed detailed joint comments expressing these and other concerns about this proposed new TENORM regulation. The comment period on the Proposed Rule closed on August 5, 2020. The DHHR will now prepare responses to...

August 10, 2020

US Fish and Wildlife Services Proposes Definition of “Habitat” under Endangered Species Act

Environmental Alert

(by Robert Stonestreet)

On August 5, 2020, the United States Fish and Wildlife Service (Service) published a proposed regulation in the Federal Register to define the term “habitat” for purposes of the Endangered Species Act (ESA). 85 FR 47333.  The ESA already defines the term “critical habitat,” which in general means areas designated as essential to preserve or promote recovery of threatened or endangered species regardless of whether those species are actually present in the area.  The term “habitat,” however, is not itself defined in the ESA or existing regulations.  The Service has been involved in years of litigation over efforts to designate as “critical habitat” certain areas where the listed species do not presently exist and could not survive under current conditions.  This proposed definition of “habitat” follows a ruling by the United States Supreme Court that an area must first qualify as “habitat” for a listed species in order for the area to be designated as “critical habitat.” Weyerhaeuser Co. v. United States Fish and Wildlife Service, 139 S. Ct. 361 (2018).

The Service proposes to define “habitat” as follows:

The physical places that individuals of a species depend upon to carry out one or more life processes.  Habitat includes areas with existing attributes that have the capacity to support individuals of the species. (emphasis added)

The Service also requests comments on the following alternative definition of “habitat”:

The physical places that individuals of a species use to carry out one or more life processes.  Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist. (emphasis added)

Both of these regulatory definitions would narrow the scope of “critical habitat” designations from how the Service has previously interpreted that term. ...

August 5, 2020

EPA Establishes Deadlines for Closing Certain CCR Surface Impoundments

Environmental Alert

(by Donald Bluedorn, Gary Steinbauer and Casey Snyder)

On July 29, 2020, United States Environmental Protection Agency (EPA) Administrator Andrew Wheeler signed a pre-publication version of a final rule (the Rule) revising portions of EPA’s 2015 coal combustion residuals (CCR) landfill and impoundment regulations. The Rule becomes final 30 days after publication in the Federal Register.

In 2015, EPA promulgated regulations implementing national minimum criteria for new and existing CCR landfills and surface impoundments. A federal appellate court partially vacated and remanded portions of these regulations on August 21, 2018 (the court’s decision is covered in more detail in our prior Alert). Following the court’s decision, EPA published proposed rules in the Federal Register on December 2, 2019 and August 14, 2019, to address the court’s remand order and make other changes (the Proposed Rules).

The Rule includes the following key changes for CCR units:

Reclassifies compacted-soil lined or “clay-lined” surface impoundments to “unlined,” meaning these structures must be retrofitted or closed; Establishes a revised date, April 11, 2021, by which CCR units must cease receiving waste and initiate closure or retrofit because: (1) they are unlined or were formerly “clay-lined” CCR surface impoundments; or (2) they failed the minimum depth to aquifer location standard; Revises the alternative closure provisions that would grant certain facilities additional time to develop alternative capacity to manage their CCR and non-CCR waste streams; Updates the annual groundwater monitoring and corrective action report requirements to make the data easier to understand for public review, including adding an executive summary requirement; and Revises the CCR website requirements to ensure that relevant facility information required by the regulations is immediately available to the public.

As compared with the deadlines in the December 2, 2019 proposed rule, the Rule gives the regulated community...

July 30, 2020

New Clean Transportation Initiatives Coming to Pennsylvania

The Legal Intelligencer

(by Julie Domike and Gina Falaschi)

The transportation sector is the nation’s largest source of greenhouse gas emissions. To reduce these emissions, cleaner transportation initiatives are on the rise nationwide, with new state programs being announced almost daily. While California has always been in the forefront of these enterprises, other states, including Pennsylvania, are not far behind. This is especially true of the new clean transportation initiatives for the medium- and heavy-duty vehicle market, which produces 25% of the transportation sector emission but only represents 4% of the vehicles on the road.

At a public hearing on June 25, the California Air Resources Board adopted a long-awaited Advanced Clean Trucks Regulation. California Air Resources Board, Notice of Decision (June 25, 2020). This program builds on California’s 2012 Advanced Clean Cars Regulation to further reduce emissions from the transportation sector by requiring truck manufacturers to sell a certain percentage of zero-emission vehicles beginning in model year 2024. The percentage will increase annually, meeting the ultimate goal of phasing out new diesel trucks by 2045.

The federal Clean Air Act affords California the ability to pass historic initiatives and to be at the forefront of setting new, more stringent, environmental standards. While Section 209 of the federal Clean Air Act generally preempts state and local emission standards for new motor vehicles, there are a few exceptions. See 42 U.S.C. Section 7543(a). The EPA can waive preemption for any state that had adopted standards for control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966. The only state that qualifies to receive such waivers is California, the only state to have adopted motor vehicle emission standards prior to March 1966.

Additionally, under Section 177 of the Clean Air Act, states that have EPA-approved plans to attain the...

July 29, 2020

New PHMSA Rule Allows Rail LNG Transport

Pipeline Safety Alert

(by James Curry and Boyd Stephenson)

On July 24, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Final Rule (Rule) in the Federal Register allowing railroads to transport liquefied natural gas (LNG) in modified DOT-113C120W (DOT-113) railcars designed to hold cryogenic flammable liquids.  The rule was prompted by a 2017 Association of American Railroads (AAR) rulemaking petition to allow LNG transport by rail and Executive Order 13868, directing PHMSA to conduct a rulemaking allowing LNG to travel by rail tank car.  In developing the Rule, PHMSA relied on safety data from other cryogenic flammable liquid shipments and from an existing special permit that already allows limited transportation of LNG by rail to demonstrate LNG could safely be transported.  The Rule follows PHMSA’s October 24, 2019,  Notice of Proposed Rulemaking (NPRM).  It takes effect on August 24, 2020, and PHMSA is allowing immediate voluntary compliance.

The rulemaking attracted significant attention from industry eager to meet increased natural gas demand, safety organizations such as the National Transportation Safety Board that raised concerns about transporting LNG, and from environmental groups.  Numerous media reports on the Executive Order also increased public attention.  Over 450 individuals and organizations submitted comments on the NPRM.  In the NPRM and in the Rule, PHMSA noted that it lacks data about how many LNG rail shipments are likely to occur under the new rules.  Currently, cryogenic flammable gases are transported rarely by railcar, but most commenters expect LNG rail shipments to quickly outstrip shipments of other cryogenic flammable gases.

Previously, LNG could only be transported by rail tank car with a special permit, or in smaller, portable tanks loaded onto a railcar.  However, other cryogenic liquids that that pose risks similar to LNG, such as...

July 28, 2020

New rules mean foreign investments in U.S. real estate fall under government review

Smart Business

(by Sue Ostrowski with Boyd Stephenson)

The rules of international investment in U.S. real estate have changed, and failure to understand these new rules — issued by the Committee on Foreign Investments in the United States (CFIUS) in February — could cause huge headaches.

“If you’re not aware of or don’t understand the rules, that could cause a real estate deal to be undone by CFIUS, potentially resulting in financial harm or making a business liable to a foreign entity,” says Boyd A. Stephenson, an attorney at Babst Calland.

The president has the authority to reverse certain business transactions involving a foreign entity if it is determined they pose a national security risk. CFIUS advises the president on when to do that. In February 2020, that authority was extended to real estate ownership.

Smart Business spoke with Stephenson about the impact of the new rules.

What is CFIUS, and how does it work?

CFIUS is an interagency committee of the federal government that advises the president about mergers and acquisitions, financings, and real estate transactions that involve foreign actors. If a foreign entity wants to invest in or buy a cardboard box manufacturer, it’s generally not a concern. But if it wants to invest in a U.S. startup that’s developing technology with better AI, such an investment would result in a review from CFIUS to determine whether the deal should be cancelled based on national security concerns. This authority is retroactive, so if your deal consummates on April 15 and the transaction is reversed on May 1, you lose that equity stake.

How does the new rule extend into real estate transactions?

The new rule applies to real estate acquisitions that are a certain distance from an airport or seaport, or, for a military installation, up to being within the same county. You need to be...

July 27, 2020

Babst Calland Joins the Solar Energy Industries Association (SEIA)

Babst Calland is a member of the Solar Energy Industries Association (SEIA). A national trade association within the electric power industry, SEIA facilitates education, research, standards and collaboration with utilities, solution providers, and other energy industry leaders.