EPA Proposes to Revise Greenhouse Gas Reporting Rule to Address Equipment Leaks

On January 29, 2016, the U.S. Environmental Protection Agency (EPA) published in the Federal Register a proposed rule that would amend the Greenhouse Gas Reporting Program for the petroleum and natural gas systems source category at 40 CFR Part 98, Subpart W, which was revised as recently as October 2015.  Specifically, EPA now proposes to add new monitoring methods for detecting leaks from oil and natural gas equipment in order to achieve consistency with the leak detection methods in the agency’s pending New Source Performance Standards rulemaking for the oil and natural gas industry.  In addition, EPA is proposing to add emission factors for leaking equipment for use in the calculation and reporting of greenhouse gas emissions.  Comments regarding the latest Subpart W rulemaking are due February 29, 2016.

Environmental Quality Board Adopts Chapter 78/78a Rulemaking

On February 3, 2016, the Pennsylvania Environmental Quality Board (EQB) adopted significant revisions to the Commonwealth’s oil and natural gas regulations by a vote of 15 to 4.  EQB’s vote formally splits current Chapter 78 (Oil and Gas Wells) into new Chapter 78 (Conventional Oil and Gas Wells) and Chapter 78a (Unconventional Wells).  Most of the significant revisions in the rulemaking package address Subchapter C (Environmental Protection Performance Standards), but the final rulemaking amends other Subchapters within Chapter 78 as well.  Specifically, the revisions would alter or create new obligations for permit applications and renewals, water supply replacement, predrilling surveys and reviews, erosion and sediment control, water management plans, emergency response plans, wastewater management, disposal of drill cuttings, site restoration, spills and releases, and production reporting.  In addition, the rulemaking includes 25 different requirements for electronic applications, electronic notifications, and electronic submittals.

Several amendments were offered from the floor but defeated.

If the rulemaking successfully completes review at the Pennsylvania Independent Regulatory Review Commission, the appropriate legislative standing committees, and the Attorney General’s Office, the revisions will become effective upon publication in the Pennsylvania Bulletin.

Babst Calland Opens Washington, D.C. Office

Energy Attorneys James Curry, Keith Coyle Join Firm as Shareholders

WASHINGTON, D.C. and PITTSBURGH, PA – January 25, 2016 – The law firm of Babst Calland today announced the opening of a new office in Washington, D.C., and the addition of two experienced energy attorneys, James Curry and Keith Coyle. Attorneys Curry and Coyle represent clients in the energy industry on a variety of matters, particularly in the areas of pipeline safety and the transportation of hazardous materials, and are joining the Firm’s Energy and Natural Resources Practice Group as shareholders. Adding to the Firm’s energy and environmental capabilities, these new attorneys bring deep experience in compliance, regulatory and legislative affairs, strategic counseling, enforcement, litigation, and audit preparation.

Attorneys Curry and Coyle are joining Babst Calland from a prominent D.C. environmental and energy law firm, where they played a critical in role in developing and expanding a nationally-recognized pipeline safety practice group. Both previously served as attorneys for the Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency that oversees the safety of the country’s growing network of gas and hazardous liquids pipelines. Active in several pipeline trade organizations and a frequent speaker at industry events, Curry counsels clients throughout the United States on PHMSA compliance matters and other transportation-related issues. Coyle, a member of the Pennsylvania Governor’s Pipeline Infrastructure Task Force who also specializes in PHMSA and transportation matters, is returning to Babst Calland, where he was an associate attorney earlier in his career.

The opening of the Firm’s new Washington, D.C. office, its sixth location, marks a significant event in Babst Calland’s 30-year history. The new office will be located at The Southern Building at 805 15th Street NW, Suite 601, Washington, DC. Founded in 1986, the Firm has a nationally-recognized environmental practice and is a leading provider of legal services to the energy industry in the Appalachian Basin and beyond.

Commenting on these developments, Chester R. Babst III, managing shareholder of Babst Calland, said, “We are expanding the capabilities of our nationally-recognized energy and environmental practice through the addition of Jim Curry and Keith Coyle, and the creation of a Pipeline and HazMat Safety practice with a new office in our nation’s capital. We are very pleased to welcome these well-regarded attorneys to our Firm as they share similar values, experience and philosophy for serving clients, some with whom we have shared business relationships,” said Babst.

“It is an exciting time for us to join Babst Calland, a firm with a significant energy and environmental legal practice and reputation that will complement our Pipeline and HazMat Safety practice in support of clients across the United States,” said Attorneys James Curry and Keith Coyle.

To read more:  click here.

Senate Bill 257 Introduced In Ohio Would Facilitate Curing Title Defects

Senate Bill 257 was introduced in the Ohio General Assembly on December 30, 2015. The Bill, introduced by Senators Bill Seitz and Michael Skindell and co-sponsored by Senator John Eklund, would revise current Ohio Revised Code Section 5301.07. The current version of Section 5301.07 provides that certain defects in recorded real property instruments, such as a defective acknowledgement or improper witnessing, are cured and the instrument is deemed to be valid and enforceable after 21 years after the instrument was recorded. Prior to 21 years, a challenge can be made to the enforceability of the instrument based on such defects. Under the proposed revisions in Senate Bill 257, there is a rebuttable presumption that the defective instrument which is signed and acknowledged by a person owning an interest in real property conveys or otherwise affects the interest of such person and is valid, enforceable and effective as if legally made without any defects. Such instrument shall also provide constructive notice to all third parties of the instrument, notwithstanding any defect. The presumption can only be rebutted by clear and convincing evidence of fraud, undue influence, duress, forgery, incompetency or incapacity. In addition, the time period after which such defects are cured is lessened from 21 years to 4. The changes proposed by the Bill also include an expansion of the type of defects which are covered by Section 5301.07. Under Senate Bill 257, the Section will apply to several specified defects, but is not limited to the defects listed, arguably expanding the application of the Code Section to any defect in a real property instrument. The Bill would also make the Code Section applicable to all “real property instruments,” which include deeds and leases. Therefore, if Senate Bill 257 is passed into law, litigation is likely to arise as to the section’s applicability to and effect on oil and gas leases.

Ohio Supreme Court Resolves Hupp v. Beck Energy Once and For All

The Ohio Supreme Court definitively decided a case that at one time threatened the validity of thousands of Ohio oil and gas leases. As previously reported in April of 2014, the Seventh District Court of Appeals overturned the decision of the Monroe County trial court in Hupp v. Beck Energy Corp., which originally held that a standard oil and gas lease form was void against public policy because it allowed a lease to be held in perpetuity. In January of 2015, the case was accepted for review by the Supreme Court of Ohio which issued a decision this morning affirming the District Court’s ruling.   The Court held that the leases were not void against public policy and could not held in perpetuity because (i) delay rentals could only be used to maintain the leases during their stated primary term; (ii) the phrase “capable of being produced,” as used in the lease referred to the potential for production from a well drilled on the leased lands rather than the lands themselves; and (iii) that production “in the judgment of the Lessee” also applied to production from an existing well and not possible production from the leased lands.  The Court also declined to read an implied covenant of reasonable development into the leases as they required development to commence within a certain period and contained specific language disclaiming implied covenants.

Administrative Watch: Pennsylvania Methane Reduction Strategy Expected to Transform Air Program for Oil and Natural Gas Sector

On January 19, 2016, Pennsylvania Governor Tom Wolf and the Department of Environmental Protection (DEP) announced a sweeping new regulatory strategy for reducing methane emissions from oil and natural gas operations in the Commonwealth.  Methane, the primary constituent of natural gas, is considered by federal and state agencies to be a potent greenhouse gas which contributes to climate change.  Governor Wolf stated that Pennsylvania, as the nation’s second-largest producer of natural gas, is “uniquely positioned to be a national leader in addressing climate change.”

The Pennsylvania methane reduction strategy is expected to result in significant changes to the air permitting and regulatory regime that currently applies to oil and natural gas industry sources.  For more information, read our Administrative Watch.

Fish and Wildlife Service Publishes Final Rule for Northern Long-Eared Bat

On January 14, 2016, the U.S. Fish and Wildlife Service (“USFWS”) published in the Federal Register the Final 4(d) Rule for the Northern Long-Eared Bat.  USFWS issues such rules pursuant to Section 4(d) of the Federal Endangered Species Act in order to promulgate regulations that are tailored to the conservation needs of specific threatened or endangered species.  The final 4(d) rule issued by USFWS for the Northern Long-Eared Bat prohibits the incidental take of the species in certain circumstances, including incidental takes resulting from tree cutting activities that: (1) occur within 0.25 miles of a known hibernaculum; or (2) result from the cutting or destruction of “known occupied maternity roost trees,” or any other trees within a 150-foot radius of the maternity roost tree during pup season (June 1 through July 31).  The final rule replaces the Interim 4(d) Rule issued by USFWS on April 2, 2015.

Commonwealth Court Affirms Lycoming County Ruling In Favor of UGI

As previously reported, in November 2014, the Lycoming County Court of Common Pleas granted the condemnation of a temporary construction easement to UGI Penn Natural Gas, Inc., a public utility.  As a result, UGI was allowed to use the easement to park and store vehicles, equipment and materials related to the construction and maintenance of a pipeline which is to provide gas service to the Moxie/Panda Electric Generation Plant.  Law360 reported that the Commonwealth Court of Pennsylvania recently issued a pair of opinions upholding the decision of the trial court.  CourtListener recently posted a copy of the opinions.  Among other findings concerning the timeliness of the landowners’ claims, the Commonwealth Court concluded that: (1) a pipeline meant to supply a power plant could constitute a public utility service; and (2) the scope of UGI’s taking was not greater than necessary to acquire the property rights in connection with the easement.  In short, the court determined that the landowners’ challenges were meritless. 


Publication of OSHA’s Final Rule on Silica Expected

Last week, the Pittsburgh Post-Gazette reported that OSHA may publish its final rule on occupational exposure to crystalline silica as soon as February 2016.  Safety + Health Magazine further reports that OSHA has sent a draft of its final rule to the Office of Management and Budget (“OMB”), one of the final steps prior to the publication of a final rule.  The proposed rule was under OMB review for nearly two-and-a-half years.  OSHA’s proposed rule would set a permissible exposure limit of 50 micrograms of respirable crystalline silica per cubic meter of air, reducing the current limit for general industry in half, and set a permissible exposure limit of 250 micrograms for construction sites and shipyards.  In addition, the rule also would require engineering controls to reduce exposure, air monitoring, medical surveillance, and worker training.  The content of the final rule is not known, but may reflect changes in response to more than 2000 public comments received on the proposed rule.


Pennsylvania Supreme Court To Determine Standard For Constitutional Challenges Under the Environmental Rights Amendment

As reported by Law360, the Pennsylvania Supreme Court will allow argument after the January decision by the Commonwealth Court in Pa. Envtl. Def. Found. v. Commonwealth, 108 A.3d 140, 45 ELR 20006, in order to determine how judges should approach government actions challenged under the Environmental Rights Amendment (Article I, Section 27) of the Pennsylvania Constitution.  The Court said that it would consider “the proper standards for judicial review of government actions and legislation challenged under the Environmental Rights Amendment” and, specifically, the constitutionality of a pair of fiscal code amendments that gave the Pennsylvania Legislature control over revenue streams generated from the leasing of state land for oil and gas drilling.  In January, the Commonwealth Court ruled that the Environmental Rights Amendment did not place fundamental restrictions on what the Commonwealth can do with revenues generated from public lands.