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June 23, 2017

The Pennsylvania Supreme Court Reexamines the Environmental Rights Amendment

Administrative Watch  The Pennsylvania Supreme Court has rejected the long-standing test for analyzing claims brought under Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA). In its June 20, 2017 decision in Pennsylvania Environmental Defense Foundation (PEDF) v. Commonwealth, the Supreme Court set aside the test from Payne v. Kassab that has been used since 1973, and held that the Commonwealth’s oil and gas rights are “public natural resources” under the ERA and that any revenues derived from the sale of those resources must be held in trust and only expended to conserve and maintain public natural resources. The Supreme Court’s opinion in PEDF is an important step in the ongoing judicial re-examination of the ERA. However, the impact of the Court’s decision on environmental and land use issues beyond the relatively narrow facts of this case remains unclear. Factual Background A statutory special fund in Pennsylvania, known as the Oil and Gas Lease Fund (Lease Fund), holds all rents and royalties from oil and gas leases of Commonwealth land. The Lease Fund was originally required, by statute, to be used “exclusively used for conservation, recreation, dams, or flood control.” In 1995, the Pennsylvania Department of Natural Resources (DCNR) became the entity responsible for making appropriations from the Lease Fund for projects. Between 2009 and 2015, the Pennsylvania General Assembly made a number of budgetary decisions related to the Lease Fund, including the enactment of Sections 1602-E and 1603-E of the Fiscal Code, which transferred control over the royalties from oil and gas leases from the DCNR to the General Assembly and required that there could be no expenditures of money in the Lease Fund from royalties unless that money was transferred to the General Fund by the General Assembly. PEDF brought claims challenging Sections 1602-E, 1603-E,…

June 20, 2017

The 2017 Babst Calland Report – Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream Operators

Babst Calland released its seventh annual energy industry report entitled The 2017 Babst Calland Report – Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream OperatorsThis annual review of shale gas development activity acknowledges the continuing evolution of this industry in the face of economic, regulatory, legal and local government challenges. To request a copy of the Report, contact info@babstcalland.com. In this Report, Babst Calland attorneys provide perspective on issues, challenges, opportunities and recent developments in the Appalachian Basin and beyond relevant to producers and operators . In general, the oil and gas industry has rebounded during the past year through efficiency measures, consolidation and a resurgence of business opportunities related to shale gas development and its impact on upstream, midstream and downstream industries. As a result, many new opportunities and approaches to regulation, asset optimization and infrastructure are underway. Increased spending during the past year has led to a significantly higher rig count in the Appalachian Basin enabling growth in the domestic production of oil and gas as other shale plays across the country experience reductions. The shale gas industry continues to provide the tri-state region with significant economic opportunities through employment and related revenue from the development of well sites, building of pipelines necessary to transport gas to market, and new downstream opportunities being created for manufacturing industries due to the volume of natural gas and natural gas liquids produced in the Appalachian Basin. Shell’s progress from a year ago to construct an ethane cracker plant in Beaver County, Pennsylvania represents just one example of the expanding downstream 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…

June 19, 2017

Enforcement of Philadelphia’s Wage History Prohibition on Hold

PA Law Weekly Job interviews are tough and they can be full of awkward questions. One of the awkward questions many applicants face is a potential employer’s request for an applicant’s compensation history. Not only is that question awkward, but some have theorized that basing starting compensation on an applicant’s historical compensation perpetuates the gender and minority wage gap. As a result, a percentage increase of the current salary of an applicant who is impacted by the wage gap could result in an even wider wage gap when compared to an applicant who is not negatively impacted by the wage gap. Accordingly, there has been a recent trend in several cities and states to propose and even pass legislation banning a new employer from seeking salary history information from an applicant or basing a starting salary on an applicant’s prior salary. In 2016, Massachusetts became the first state to pass a law prohibiting employers from asking potential candidates about their salary histories prior to making a job offer. Massachusetts Gov. Charlie Baker signed “The Act to Establish Pay Equity” on Aug. 1, 2016, with an effective date of July 1, 2018. Under this law, among other things, it is unlawful for an employer to “seek the wage or salary history of a prospective employee from the prospective employee or a current or former employer or to require that a prospective employee’s prior wage or salary history meet certain criteria,” Section 105A(c)(2). Salary history bills have also been introduced in other states such as California, New Jersey and Washington. Cities are also getting in on the action, passing ordinances prohibiting the salary history question. On May 4, Mayor Bill De Blasio of New York City signed a bill into law prohibiting employers from asking applicants about their salary histories or relying on the…

May 26, 2017

And the beat goes on: Municipal ordinances continue to face legal challenges

The PIOGA Press The oil and gas industry has enjoyed recent successes in two types of ordinance challenges in Pennsylvania. The first victory came in another in a growing line of zoning ordinance validity challenges, this one in Mount Pleasant Township, Washington County. The second victory came in a challenge to Grant Township, Indiana County’s prohibition on underground injection wells. Mount Pleasant Township As we reported last year for The PIOGA Press, five municipalities faced zoning ordinance validity challenges in 2015 and 2016. The cases were inspired largely by the Pennsylvania Supreme Court’s plurality opinion in Robinson Township v. Commonwealth, and essentially argued that the ordinances did not regulate oil and gas development stringently enough, that zoning ordinances cannot permit oil and gas uses in agricultural or residential districts, and that municipalities must engage in extensive environmental assessments when enacting regulations. In May 2016, while the Allegheny and Middlesex cases were pending on appeal before the Commonwealth Court and the Pulaski case was pending before the Lawrence County Court of Common Pleas, Citizens for Pennsylvania’s Future (PennFuture), with assistance from Fair Shake Environmental Legal Services (Fair Shake), challenged the Mount Pleasant Township, Washington County, zoning ordinance on similar Robinson Township-based grounds. Range Resources-Appalachia, LLC, MarkWest Energy Partners, L.P., and owners of a proposed well site intervened in the case. The Mount Pleasant Township Zoning Hearing Board took testimony through nine nights of hearings and ultimately decided, as did the zoning hearing boards in the previous challenges, to uphold the targeted ordinance. Critically, in the Mount Pleasant Township validity…

May 16, 2017

Clean Water Act Squeeze Play: EPA Asks the Fourth Circuit Not to Force Work on New Water Quality Standards Pending Appeal in “Constructive Submission” TMDL Case

Administrative Watch  On May 2, 2017, the U.S. District Court for the Southern District of West Virginia (Chief Judge Robert C. Chambers) issued a Memorandum Opinion and Order denying a request by the Environmental Protection Agency (EPA) for a Stay of that court’s earlier decision on liability, in an important pending Clean Water Act case. Ohio Valley Environ. Coalition, et al. v. Pruitt (Civil Action No. 3:15-0271; S.D.W.Va.). At issue is a February 14, 2017 decision issued by Judge Chambers, granting summary judgment to the plaintiff groups (collectively, “OVEC”) against EPA. In that ruling, the court directed EPA to either approve or disapprove the “constructive submission” of “no TMDLs ” for all biologically impaired bodies of water within West Virginia, within 30 days. OVEC filed the underlying action based upon the listing by the West Virginia Department of Environmental Protection (WVDEP) of 573 streams as “biologically impaired” under the WVDEP’s narrative water quality standards, one of which prohibits “materials in concentrations which are harmful…to man, animal, or aquatic life.” This list (known as a Clean Water Act “303(d) List”) was started in the late 1990s and includes streams that were added as recently as 2010, using a tool known as the “West Virginia Stream Condition Index.” Ordinarily, when a stream is listed on a 303(d) List as impaired, the relevant state agency develops a TMDL for that stream (which is a formula or method for limiting the concentration of pollutants flowing into the stream and thereby returning it to compliance). In 2012, the West Virginia Legislature amended the West Virginia Water Pollution Control Act by directing the WVDEP to develop a new tool to assess the health of biological communities for purposes of determining compliance with the WVDEP’s biological water quality standard. Once that new methodology is finalized, an…

April 27, 2017

James Miller Selected by The Legal Intelligencer as a “2017 Lawyer on the Fast Track”

James D. Miller, a shareholder in the Litigation and Construction groups at law firm Babst Calland, was selected by The Legal Intelligencer as a “2017 Lawyer on the Fast Track” in Pennsylvania. The Legal Intelligencer asked the Pennsylvania legal community to submit nominations for the annual Lawyers on the Fast Track honors. After reviewing their results, a six-member judging panel composed of evaluators from all corners of the legal profession and the state selected 32 attorneys as the 2017 Lawyers on the Fast Track. This recognition is only given to attorneys under the age of 40 who have demonstrated excellence in four categories: development of the law; advocacy and community contributions; service to the bar; and peer and public recognition. For the full article, click here.

April 13, 2017

Trump administration focuses on energy regulations

PIOGA Press The opening days of the Trump administration have seen a flurry of activity focused on regulations affecting the oil and gas industry. President Donald Trump has issued a series of executive orders and presidential memoranda aimed at reducing regulations that impact the energy industry. Congress has also used its authority under the Congressional Review Act (CRA) to repeal several recently issued regulations. While the industry has largely applauded these moves, environmental groups have signaled they intend to challenge these actions aggressively in court. Executive actions and presidential memoranda On January 20, the new White House chief of staff issued a regulatory freeze memo instructing executive branch agencies to (1) withdraw rules that had been sent to the Federal Register but had not yet been published; (2) refrain from sending new rules to the Federal Register for publication until a senior official appointed by the administration had reviewed the contents of the rule; and (3) extend the effective date for those rules that had been published prior to Inauguration Day but had not yet taken effect. On January 24, President Trump issued memoranda calling for the expedited review and approval of the Keystone XL Pipeline and Dakota Access Pipeline projects, which had been blocked or stalled during the previous administration. The president also directed the secretary of commerce to develop a plan within 180 days for using materials and equipment produced in the United States in all new, repaired or replaced pipelines. On January 30, the president issued an executive order entitled “Reducing Regulations and Controlling Regulatory Costs” (informally known as “the Two-for-One Order”). The Two-forOne Order requires agencies to identify two regulations for repeal for every new regulation the agency proposes or promulgates. The Two-for-One Order also establishes cost caps for regulatory action. The net incremental cost cap for the remaining portion…

We Must Respect the Law, Whatever it May Be

The State Journal The “law.” We all agree we need laws to be a civil society, but like other cornerstones of America’s political and social house — such as “liberty” and “freedom” and “equality” — the “law” is complex and can mean many different things. For example, the law can mean the statutes found in the United States Code or the West Virginia Code that represents the formal laws passed by the Legislature and signed by the head of the executive branch of government. In West Virginia, the state Legislature — both the Senate and House — just concluded 60 days of crafting, debating, amending, rejecting and passing laws that will either by signed into law or vetoed by Gov. Jim Justice. Those that become a law will become part of West Virginia Code. The law also means the regulations created by government agencies that are supposed to control the way something is done or the way people behave in order to ensure that the intent of the statute is followed. This law, which has the force and effect of a statute, is not considered or voted upon by elected legislators, which is why some believe that the proliferation of regulations from federal agencies must be checked. The law also means the common law that forms the basis for many civil lawsuits. Whether a party is “negligent” or a product is “defective” is based upon the common law that has developed through court decisions over the years. The common law of West Virginia has been developed by the Supreme Court of Appeals of West Virginia since we became a state in 1863, and even then, West Virginia adopted the common law of Virginia, which had in turn adopted the common law of England. The law can, in every context, be messy and unwieldy. One…

April 12, 2017

Air emissions data show safety of US Northeast shale work

Oil & Gas Journal Air emissions data from actual monitoring and testing contradict articles based on different methods claiming to have found health hazards related to oil and gas work. Data collected by objective parties in the northeastern US over the past 6 years indicate that air quality around oil and gas operations is, in fact, safe. This observation contrasts starkly with arguments made in a variety of published studies cited by opponents of domestic shale development. Click here to read the full article.

April 10, 2017

Change in Management: The impact of regime change in Washington on labor law

Pennsylvania Business Central By R. Brock Pronko Historically, one of the biggest policy differences between Republicans and Democrats has been over labor issues such as unions vs. “right-to-work”, minimum wage, the overtime rule, graduate students’ right to unionize, limiting litigation in EOEC cases, pay transparency, equal pay for women, employee health care benefits, retirement payouts and class action waivers. As a businessman, sometimes Donald Trump has had an strained relationship with labor unions during the construction of his hotels and golf resorts, occasionally resulting in regulatory disputes and legal battles. A probusiness president and Republican-majority Congress are now in a position to “repeal and replace” pro-labor laws enacted by President Obama and Congressional Democrats. The President appointed as acting chairman of the National Labor Relations Board Phillip Miscimarra, who has been characterized by Democrats as an “an anti-union lawyer.” The NLRB consists of three members from the President’s party and two members from the opposition. The board currently has two vacancies that will be filled by the President, giving pro-business members the majority. In 2007, VP Mike Pence, then a U.S. representative from Indiana, voted against the Employee Non-Discrimination Act, which aimed to prevent job discrimination based on sexual orientation. He also voted against raising the minimum wage. Republican governors have signed “right-to-work” laws. Last month, Missouri became the 28th state to pass a “right-to-work” law. “Right-to-work” laws prohibit labor unions from requiring workers to pay dues as a condition of employment, but by federal law unions are required to provide fair representation to all workers covered by a contract regardless if they pay dues. If confirmed, Supreme Court justice nominee Neil Gorsuch will likely vote in favor of conservative Republican policies on labor cases that come before the court. Pennsylvania Business Central reached out to experienced and attorneys College to look at how this sweeping regime change…

Construction Law 2016 – The Year in Review

Breaking Ground On Thursday, March 9, 2017, the Construction Services group of the law firm of Babst Calland Clements & Zomnir, P.C. held its annual Year in Review Seminar. Attended by over 100 construction professionals, Babst Calland’s Year in Review Seminar summarized and addressed the implications of the most noteworthy construction-related legal developments of 2016, including the latest amendments to Pennsylvania’s Mechanics’ Lien Law, labor and employment issues, cases interpreting Pennsylvania’s payment acts, construction claim damages, and a recent decision involving a jurisdictional dispute on a public construction project. MECHANICS’ LIEN LAW AMENDMENTS On October 14, 2014 then-Governor Tom Corbett approved legislation amending Pennsylvania’s Mechanics’ Lien Law. Commonly referred to as Act 142, the amendments established a structured procedure for owners, contractors, and subcontractors to receive and give notice of mechanics’ lien claims, as well as a central electronic repository under which these notices must be filed (the “Directory”). Act 142 was widely supported by both owners (along with construction lenders) and contractors as a means to better identify all subcontractors and material suppliers with lien rights on a project. Act 142 became effective on December 31, 2016, and the new notice requirements apply only to “searchable projects” beginning after that date and costing at least $1.5 million. Specifically, Act 142 allows the following four notices to be filed with the Directory: (1) Notice of Commencement; (2) Notice of Furnishing; (3) Notice of Completion; and (4) Notice of Nonpayment. Use of the Directory is discretionary, but an owner must file a Notice of Commencement before any labor, work, or materials are furnished for the project if the owner wishes to avail itself of the Directory’s protections. If an owner files a Notice of Commencement, a subcontractor (defined as including first and second tier subcontractors or material suppliers) must file a Notice of Furnishing…

April 7, 2017

PHMSA Issues Notice of Underground Natural Gas Storage Facility User Fees

Pipeline Safety Alert On April 6, 2017, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a notice of agency action (Notice) announcing the rate structure for the underground natural gas storage facility user fee. In section 12 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act of 2016), Congress directed PHMSA to prescribe procedures to collect user fees for underground natural gas storage facilities. The fees will fund an $8 million Underground Natural Gas Storage Facility Safety Account. In November 2016, PHMSA proposed a rate structure for these user fees and agreed to accept comments on the proposal until January 6, 2017. As discussed below, PHMSA responded to the comments filed in response to the Notice and made certain revisions to its user fee calculations. Working Gas Capacity PHMSA confirmed that working gas capacity, as defined by the Energy Information Administration (EIA) and used in the EIA Monthly Underground Natural Gas Storage Report, will be used as the basis for the user fee rate structure. PHMSA acknowledged that the number of wells is an appropriate basis for the rate structure, but stated that the agency currently lacks the data needed to support such a calculation. After the agency collects information on the number of wells, the user fee structure will likely be changed in the future. PHMSA also stated that it will combine the working gas capacity for all fields operated by each holder of a PHMSA-issued operator identification number (OPID). The agency stated that it is in the process of contacting storage operators to determine the correct OPID for each storage facility. If PHMSA is unable to determine the OPID, it will sum the working gas capacities by company name. Inclusion of Inactive Wells PHMSA noted that since EIA’s Monthly Storage Report includes inactive wells,…

April 4, 2017

Trump Executive Order Withdraws Obama Administration Actions on Climate Change and Requires Review of Regulations Affecting Energy Sector

Administrative Watch  This is the second in a series of Administrative Watch alerts to assist in understanding the significant regulatory actions arising out of the Trump administration, and the effect of legal challenges to those actions by environmental groups.

On March 28, 2017, President Donald Trump signed an Executive Order entitled “Promoting Energy Independence and Economic Growth,” with the stated policy of “promot clean and safe development” of domestic energy resources and ensuring an affordable and reliable supply of electricity, while “avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation.” Although the Executive Order does not itself withdraw any rules issued by the U.S. Environmental Protection Agency (EPA) or other agencies, it clearly reflects President Trump’s intent to drastically change course from the Obama administration’s stance on climate change and to seek reducing environmental regulation of, among other sources of greenhouse gases, coal-fired power plants and oil and natural gas operations.

This Executive Order revokes existing Executive Order 13653, signed by President Barack Obama on November 1, 2013, which expressly recognized the existence of and potential impacts from climate change and directed interagency efforts to prepare for such impacts. The Executive Order signed by President Trump also revokes and rescinds several presidential memoranda and executive reports, including but not limited to:

  • The President’s Climate Action Plan (June 2013), which, among other things, identified Obama administration priorities and laid the groundwork for measures to reduce carbon dioxide emissions from power plants, reduce methane emissions from oil and gas operations and other industries, and increase investment in renewable energy sources; and
  • Presidential Memorandum on Power Sector Carbon Pollution Standards (June 2013), which directed EPA to develop and publish proposed rules to establish carbon dioxide emissions standards for existing, new, modified and reconstructed power plants.

March 24, 2017

State Must Push Harder to Capitalize on Natural Resource Development

The State Journal  West Virginia has a long history of watching most of its natural resources being harvested and sent to out-of-state users who add value to those resources. The same is happening with West Virginia’s natural gas, and we need to do something about it. Whether it has been coal converted into electricity or timber fashioned into furniture, the value added to West Virginia’s natural resources has too often taken place outside of the state’s borders. Now, as noted in the 2017 Sustainable Energy in America Factbook, the United States has experienced a 79 percent increase in shale gas extraction since 2011, and a 12 percent jump in total gas production in the last five years. Much of this increase centers on the Marcellus and Utica shale plays, of which West Virginia is an important part. Numerous groups rightly tout the potential for shale gas to provide a better future for both West Virginia and the region. As such, West Virginia must continue efforts to modernize its laws and regulations so natural gas can be economically and efficiently produced. Likewise, we must support the development and construction of intrastate and interstate pipelines that will only increase the demand for West Virginia’s natural gas and contribute to the country’s energy security. But while production and transmission of natural gas are solid economic drivers for the state, each cubic foot of gas and each gallon of natural gas liquids that leaves West Virginia represents a lost opportunity to add value to that resource right here. The only way to truly realize the full value of West Virginia’s natural gas is to adopt policies that attract and establish the activities that use — and add value to — that gas. For example, according to the Factbook, natural gas is now the largest source of power in…

March 10, 2017

The Act 142 amendments and altered landscape of the Pennsylvania Mechanics’ Lien Law for oil and gas construction projects

PIOGA Press The Pennsylvania Mechanics’ Lien Law, 49 P.S. § 1101 et seq, provides contractors a powerful legal remedy for recovering 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. As a result of Act No. 142’s amendments to the lien law, effective December 31, 2016, project owners, general contractors, and subcontractors have been evaluating their business practices to ensure compliance with the amended lien law and the subsequent launch of the online State Construction Notices 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. This created a lack of certainty with respect to what parties may have lien rights against a property site. The directory (located at www.scnd.pa.gov) helps owners and general contractors track work performed by subcontractors, sub-subcontractors and suppliers. Required notices under the act The act creates a more structured notice procedure for owners and contractors on “searchable projects” (projects consisting of the construction, alteration or repair of an improvement costing at least $1.5 million). Specifically, the act permits four new types of filings within the directory: (1) Notice of Commencement, (2) Notice of Furnishing, (3) Notice of Completion and (4) Notice of Nonpayment. An owner (or an agent of the owner) is required to file a Notice of Commencement to trigger compliance with the act. A Notice of Commencement should be filed before any labor, work or materials are furnished for the project and must contain: (1) the full name, address and email address of the contractor; (2) the full name and location of the project; (3) the county in which the project is located; (4) a “legal description” of the property, including the…

March 8, 2017

Early Moves in Trump Administration Reduce Regulation, Rouse Environmental Groups

Administrative Watch 

This is the first in a series of Administrative Watch alerts to assist in understanding the significant regulatory actions arising out of the Trump administration, and the effect of legal challenges to those actions by environmental groups.

The first 60 days of the Trump administration have seen a host of executive and congressional actions impacting environmental regulations and the energy sector. Industry has largely applauded these moves, but environmental groups have signaled that they intend to aggressively challenge these actions in court: Executive ActionsRegulatory Freeze Memo. On January 20, 2017, White House Chief of Staff, Reince Priebus, issued a memo to the heads of all departments and federal agencies imposing a temporary moratorium on most regulatory actions. The memo indicated that no new regulations should be sent to the Office of Federal Register (OFR) without the review and approval of the new administration; that any regulations awaiting publication by the OFR should be withdrawn; and that consideration should be given to postponing the effective date of any recently-published regulations for at least 60 days. On January 24, 2017, the Acting Director of the Office of Management and Budget (OMB) issued guidance to agencies implementing the Regulatory Freeze memo. OMB directed executive agencies to promptly identify effective dates that need to be extended. OMB also discussed the types of rules that would likely meet the exceptions laid out in the Regulatory Freeze memo. Examples include those rules that would frustrate statutory or judicial deadlines such as the civil penalty adjustments required to be filed as a result of the Federal Civil Penalties Inflation Adjustment Act of 1990. • Presidential Pipeline Memoranda. On January 24, 2017, President Donald J. Trump issued memoranda calling for the expedited review and approval of two pipeline projects that had been blocked or stalled…

March 3, 2017

Executive Order Aims to Roll Back Clean Water Rule

Administrative Watch

On February 28, 2017, President Donald Trump signed an executive order, Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States Rule” (the Order), directing his administration to withdraw and reconsider the Clean Water Rule (the Rule), 80 Fed. Reg. 37054 (June 29, 2015). The Order is the first step in following through with President Trump’s campaign pledge to eliminate the Rule, which he characterized as a “massive power grab,” and begins the lengthy process of rescinding or revising the Rule.

The Clean Water Rule sought to clarify the definition of “waters of the United States” (WOTUS) and the extent of federal authority to regulate these waters under the Clean Water Act (CWA) after years of differing interpretations. The Rule was widely regarded by industry as having expanded the extent of waters to be regulated under the CWA. As a result, the Rule was generally considered to broaden the jurisdictional reach of the United States Army Corps of Engineers (the Corps) and United States Environmental Protection Agency (the USEPA) with regard to issues such as permitting for wastewater discharges and dredge and fill activities in navigable waters. The Rule was challenged by numerous industry groups, as well as 31 state attorney generals, including Scott Pruitt, the newly-appointed Secretary of the USEPA. Amid questions as to whether the court of appeals or the federal district court is the appropriate forum to hear challenges to the Rule, the United States Supreme Court granted review of this jurisdictional issue in January 2017. The Rule has been stayed in light of these ongoing challenges.

The recent Order lays out the following policy: “It is in the national interest to ensure that the Nation’s navigable waters are kept free from pollution, while…

March 1, 2017

Ambitious pipeline safety oversight plans expected to be scaled back under Trump

SNL Energy The Trump administration is expected to scale back at least one major safety rulemaking for the natural gas transmission and gathering industries, and possibly alter other recent proposals from the U.S. Pipeline and Hazardous Materials Safety Administration. “Elections have consequences. These guys are going to be more averse to aggressive regulation than the previous ,” said Jeff Wiese, former associate administrator of PHMSA. PHMSA’s 550-page proposed gas gathering and transmission pipeline safety rule is primed for revision under the new administration, Wiese and other pipeline safety experts familiar with the inner workings of PHMSA said in recent interviews. The sprawling regulation, which has been in the works for years, incorporates congressional mandates, National Transportation Safety Board recommendations and other initiatives. The parts that are not statutorily ordered may be the first to go. “I do believe there will be adjustments made to the gas rule. … A lot of those parts are NTSB items,” said Wiese, who left PHMSA in 2016 and is now consulting group TRC Companies Inc.’s vice president and national practice leader for pipeline integrity services. “I think there are going to be some compromises made on items that are not statutory mandates.” Keith Coyle, an attorney with Babst Calland, said he expects PHMSA to substantially walk back the gas transmission and gathering rule proposal under the Trump administration. He agreed that fulfilling NTSB recommendations, although they often form the basis for congressional mandates, will likely drop on PHMSA’s priority list. For instance, the proposed rule’s guidance for verifying the maximum allowable operating pressures and materials of pipelines goes beyond what is covered under Congress’ mandate to the agency, Coyle said. PHMSA’s decision to regulate gathering lines was not also congressionally mandated, and Coyle said the agency may set that aspect of the rulemaking aside entirely for the time being. Questions…

February 24, 2017

Established Evidentiary Standards for Special Exception Applications

The Legal Intelligencer 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, authorizes a municipality to adopt a zoning ordinance containing provisions permitting uses of land by special exception administered by the zoning hearing board. Pennsylvania courts have consistently explained that a “special exception is neither special nor an exception,” but rather a use of property expressly contemplated by a local governing body to be consistent with the overall zoning plan and the health, safety and welfare of the community, as in Freedom Healthcare Services v. Zoning Hearing Board of New Castle, 983 A.2d 1286 (Pa. 2009). The law in Pennsylvania concerning the evidentiary standards applicable to special exception applications is well-settled. An applicant for a special exception has both the initial presentation duty and the ultimate persuasion burden as to whether the application: falls within the special exception provision of the zoning ordinance; and satisfies the specific objective criteria set forth in the zoning ordinance, as in Bray v. Zoning Board of Adjustment, 410 A.2d 909 (Pa. 1980). Once the applicant establishes that the objective criteria of the zoning ordinance have been met, “a presumption arises that the use is consistent with the health, safety and general welfare of the community,” as in MarkWest Liberty Midstream & Resources v. Cecil Township Zoning Hearing Board, 102 A.3d 549 (Pa. Commw. Ct. 2014). At this point, the burden shifts to objectors to present evidence and persuade the zoning hearing board that there is a high degree of probability that the proposed use will have a detrimental impact on the surrounding community above and beyond that which is normally generated by the type of use proposed. Thus, an applicant does…

February 16, 2017

EPA Final Rule Adds Vapor Intrusion to Hazard Ranking System

The Voice The United States Environmental Protection Agency (EPA) published a final rule, effective February 8, 2017, adding vapor intrusion as an exposure pathway for consideration under the Hazard Ranking System. 82 Fed. Reg. 9754 (Jan. 9, 2017). The Hazard Ranking System is the screening mechanism used by the EPA to determine whether to place sites on the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) National Priorities List—the list of priority sites warranting further investigation and possible remediation under the Superfund program. The rule and its potential implications at current and future sites are addressed in this article. Vapor Intrusion Vapor intrusion occurs when vapor-forming chemicals from a subsurface source, such as soil or groundwater, migrate into an overlying building through cracks in the foundation or utility lines. Volatile chemicals are most susceptible to vapor intrusion because they evaporate easily. Common examples of vapor-forming chemicals include volatile organic compounds (i.e., trichloroethylene and benzene), semivolatile organic compounds (i.e., naphthalene), and pesticides. The New Rule Adding vapor intrusion to the Hazard Ranking System arose out of a May 2010 report of the Government Accountability Office (GAO) concluding that if vapor intrusion is not assessed, there is a concern that sites posing a serious human health risk will not be addressed. The GAO asked the EPA to consider adding vapor intrusion and the effect that it may have on the number of sites that it might add to the National Priorities List. On January 31, 2011, the EPA published a notice asking for public comments on the potential addition of vapor intrusion. In the rationale, the EPA noted that there are contaminated sites that did not qualify for listing on the National Priorities List under the current Hazard Ranking System, but they may be listed if the exposure threat from vapor intrusion is included in the…

February 15, 2017

An ounce of prevention: Employer-employee agreements

PIOGA PRESS Your company has worked hard to stay competitive in the oil and gas industry—developing a robust customer list, inventing cutting-edge industry techniques and strategizing to ensure successful reactions to rapidly-changing market conditions. Jane is a valued member of your organization, an important leader in your sales group and a part of your strategic planning team. One day, Jane walks into your office and asks for a few minutes of your time. Jane informs you that she is pursuing other opportunities and gives her two weeks’ notice. You thank Jane for her efforts on behalf of the company and wish her well, but after she leaves you begin to feel panicked. You’ve trusted Jane with your customers and with confidential company information. What happens if she goes to work with a competitor? If she then calls your customers and asks them to move their business to her new employer? If she discloses confidential information, allowing her new employer to steal your competitive advantage? Advance planning increases business protection and employer control Now imagine that in response to Jane’s resignation you thank her and wish her well, and then remind her of her post-employment obligations as contained in the non-compete and confidentiality agreement she signed when she began working at the company. Jane may respond that she’s moving forward with the agreement in mind and tell you about her exciting new opportunity in a different field. If instead Jane expresses her intent to violate the agreement or gives a non-committal response, you are prepared. You immediately develop a course of action to protect your company, by engaging with Jane and/or her new employer and enforcing your rights under the agreement. Having an agreement like Jane’s in place requires advance planning. In Pennsylvania, restrictive covenants such as noncompetition and non-solicitation agreements are enforceable if they are…

February 10, 2017

Pennsylvania Governor Signs Act Authorizing Municipalities to Provide Fire and EMS Volunteers with Tax Credits

The Public Record On November 21, 2016, Governor Tom Wolf signed Act 172 of 2016 (Act 172) into law. Act 172 authorizes municipalities to offer tax credits against the earned income and real estate tax liability of certified fire company and nonprofit emergency medical services agency (EMS) volunteers. The purpose of the law is to incentivize current fire and EMS volunteers to remain active and increase recruitment of new volunteers. Under Act 172, municipalities may establish, by ordinance, an earned income tax credit up to the full amount of the volunteer’s municipal income tax liability, and a real property tax credit up to 20 percent of the volunteer’s municipal real estate tax liability. In this ordinance, the municipality must, among other things, set forth the total amount of the tax credit that will be offered to a volunteer, a process to reject a request by a volunteer who does not satisfy the criteria for a tax credit, and a procedure by which a volunteer can appeal a rejected request. In order to qualify for a tax credit authorized by Act 172, a volunteer must be an active volunteer, subject to the tax of a municipality that has authorized a credit pursuant to Act 172, and certified pursuant to the municipality’s established “volunteer service credit program.” Once a municipality authorizes an earned income and/or real estate tax credit, it must create a “volunteer service credit program” with annual volunteer certification requirements. Pursuant to this program, municipalities must consider the following factors when determining a volunteer’s certification eligibility: (1) the number of emergency calls to which the volunteer responds; (2) the volunteer’s level of training and participation in formal training and drills; (3) the amount of time the volunteer spends on administrative and other support services in aid of the fire company or EMS; and…

February 9, 2017

Employment Law Issues in Pennsylvania’s Medical Marijuana Act

The Legal Intelligencer

Act 16 of 2016, the Medical Marijuana Act (MMA), 35 Pa.C.S.A. §10231.101, et seq., effective May 17, 2016, puts Pennsylvania among the growing number of states permitting the use of marijuana for prescribed medicinal purposes. The MMA, like all state laws purporting to “legalize” marijuana use, squarely conflicts with federal law, which still considers marijuana to be a Schedule 1 substance under the Controlled Substances Act with no legitimate medical uses, see 21 U.S.C. Sections 812(b)(1)(A)-(C); 844(a). The MMA acknowledges: “Nothing in this act shall require an employer to commit any act that would put the employer or any person acting on its behalf in violation of federal law.” The MMA creates uncertainty with respect to the application and enforceability of employer “zero tolerance” and similar policies against the use of illegal drugs, injects new risks into the workplace and adds still more potential claims to the ever-growing list of employment-related causes of action. Overview The MMA permits appropriately credentialed physicians to prescribe and certify marijuana treatment in various forms—but not in dry leaf or plant for—to patients for any one of 17 chronic “serious medical conditions,” most being debilitating. MMA also establishes the licensing criteria for becoming a certified grower/processor and dispenser of medical marijuana; criminal and civil penalties for diversion of medical marijuana by a grower, dispensary, patient or care giver; and an advisory board to oversee operation of the act. The Pennsylvania Department of Health has issued interim regulations to implement some of the provisions of the MMA and is in the process of drafting more permanent rules. Employment Provisions of the MMA Although many of the conditions for which marijuana may be prescribed are disabling, the act addresses the rights and obligations of employees who may be able to work while certified to receive medicinal marijuana. These…

February 3, 2017

Pennsylvania DEP Invites Public Comment on Controversial Air General Permits for Oil and Gas Industry

Administrative Watch The Pennsylvania Department of Environmental Protection (DEP) has announced the beginning of a public comment period regarding two draft general permits that, if finalized, would result in significant changes to the air permitting regime for oil and gas industry sources. According to a notice published in the Pennsylvania Bulletin on February 4, 2017, DEP also proposes to revise the Air Quality Permit Exemptions document (DEP Doc. No. 275-2101-003) as it relates to oil and gas exploration, development, and production activities. The draft permits and proposed revisions to the exemption document present a number of timing, cost, and other implementation considerations for oil and gas operators. The first draft permit is a revised version of the existing general plan approval/operating permit known as “GP-5” for compressor stations and processing facilities. The draft revised GP-5 would be available for natural gas compressor stations, processing plants, and, for the first time, transmission stations. It includes a number of conditions that would expand on existing obligations for midstream operators who are accustomed to dealing with GP-5. For example, the revised GP-5 includes specific requirements for the control of methane emissions from storage vessels and other sources. The second draft permit, known as “GP-5A,” represents an even greater departure from the status quo, as it would require operators to obtain an air permit for “unconventional natural gas well site operations” and “remote pigging stations” for the first time. Production facilities are currently authorized pursuant to the air permitting exemption known as “Exemption 38” in DEP Doc. No. 275-2101-003. DEP treats oil and gas exploration, development, and production activities which fall under Exemption 38 as exempt from the obligation to obtain an air permit. The Pennsylvania Bulletin notice indicates that DEP intends to divide Exemption 38 into two separate categories, Exemption 38a and Exemption 38b. Exemption 38a…

January 19, 2017

The Pennsylvania Storage Tank and Spill Prevention Act and oil and gas operations

PIOGA Press As we begin the New Year, many of us in the environmental sector automatically look at our new calendars and realize that this is the beginning of a new season of annual regulatory requirements. These requirements range from annual emissions statements and waste reporting to various certification and registration renewals. For those that have containers at one or more sites, you may be (or should be) asking yourself whether any of those containers must be registered pursuant to Pennsylvania’s Storage Tank and Spill Prevention Act, 35 P.S. § 6021, et seq. What is the Tank Act? The Tank Act was enacted on July 6, 1989, to: (i) protect surface waters and soil from releases of regulated substances from storage tanks; (ii) provide a statutory mechanism for the cleanup of such releases; and (iii) provide a statutory mechanism to fund the cleanups of releases from underground storage tanks. The regulations promulgated pursuant to the Tank Act can be found in 25 Pa. Code Chapter 245. These regulations cover both aboveground storage tanks (ASTs) and underground storage tanks (USTs). How the Tank Act applies Like many environmental statutes, applicability of the Tank Act is dependent on definitions, most notably the definitions of an AST and a UST. Without directly quoting 25 Pa. Code Chapter 245.1 for the definition of an AST, which is too long for this article, there are five main requirements to meet the definition of an AST. The tank must: (i) be aboveground; (ii) be stationary; (iii) have a capacity greater than 250 gallons; (iv) contain a regulated substance; and (v) the tank does not meet any of the 19 exemptions from the definition of an AST. Similarly, the four main requirements in the definition of a UST are: (i) the tank must be below ground; (ii) the tank must have a…