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New U.S. EPA Environmental Justice Agenda Announced

Posted in Articles, Environment

On Monday, May 23, U.S. EPA released a draft of its final Environmental Justice Strategic Plan for the Years 2016-2020, which is open for comment until July 7, 2016.  The plan focuses on three major goals.  The first goal is to deepen the environmental justice practice within EPA programs, specifically to improve the health and environment of overburdened communities, which EPA plans to achieve through use of rulemaking, permitting, compliance and enforcement, and science.  The second goal, to work with partners to expand impact in overburdened communities, involves working with state and local governments, federal agencies, community-based organizations, and tribes and indigenous peoples to consider and implement best-practices starting from the ground-level.  Finally, the third goal is to demonstrate progress on environmental justice challenges, through tasks related to disparities in exposure of children to lead, increased access to drinking water, improvement to air quality to reach national ambient air quality standards for low-income populations, and decreased exposure to contaminants at hazardous waste sites. 

Overall, EPA seeks to strengthen its capacity for addressing environmental justice concerns by placing greater emphasis on low-income communities into their regular agency activities, such as rulemaking, permitting, and enforcement.  It seeks to view communities more holistically with improved tools for monitoring and screening environmental pollutants and health risks and gain more insight through collaboration with state partners.  For more information from EPA, click here.  You can find the entire draft of the 2020 Environmental Justice Action Agenda here.

U.S. EPA Issues Draft Information Request on Methane Emissions

Posted in Energy, Environment

On the same day that U.S. EPA finalized amendments to the New Source Performance Standards for the oil and gas industry (click here for our blog post on the final rule), the Agency issued a draft  Information Collection Request (ICR) to require oil and gas companies to provide extensive information on methane emissions from various sources.  The draft ICR is comprised of two parts: (1) an operator survey to collect information on the number and types of equipment at onshore production facilities, and (2) a facility survey to collect detailed information on emissions sources and control devices in use at onshore production, gathering, boosting, processing, transmission, storage and import/export facilities.  Owners/operators have 30 days to respond to the operator survey, and 120 days to respond to the detailed facility survey.

Click here for a copy of the unofficial version of the ICR.  EPA will accept comments on the draft ICR for 60 days after publication in the Federal Register.

U.S. EPA Finalizes NSPS OOOO Amendments

Posted in Energy, Environment

On May 12, 2016, U.S. EPA finalized amendments to the New Source Performance Standards (NSPS) for the oil and natural gas source category at 40 CFR Part 60, Subpart OOOO, and established new standards at 40 CFR Part 60, Subpart OOOOa.  The final rule establishes standards for greenhouse gas emissions in the form of limitations on methane emissions, and requires additional sources not originally subject to Subpart OOOO to comply with with the VOC and methane limitations prescribed under the rule.

Click here for a copy of the unofficial version  of the final rule.  The final rule will be effective 60 days after publication in the Federal Register.

USEPA Sued to Tighten Disposal Regulations

Posted in Energy

A number of environmental groups have filed suit against the USEPA, alleging that the agency failed to update its rules for the disposal of oil and gas drilling waste, and calling on it to issue more stringent regulations, reports the Columbus Dispatch:

“Updated rules for oil and gas wastes are almost 30 years overdue, and we need them now more than ever,” said Adam Kron, senior attorney at the Environmental Integrity Project, in a news release.

The lawsuit, filed in the U.S. District Court for the District of Columbia, asks the court to force the EPA to update oil and gas wastewater disposal rules. Those rules, the groups say, should include a ban on spreading fracking wastewater onto roads.

The groups also want the EPA to require landfills or ponds that take waste from oil and gas drilling to be built with liners and structural safeguards.

Click read to read more. You can also read the Complaint here.

Pennsylvania Commission Approves Controversial Oil and Gas Regulations

Posted in Energy

Despite formal disapproval by Pennsylvania House and Senate Committees, the Commonwealth’s Independent Regulatory Review Commission, on April 21, 2016, in a 3-2 decision, approved contentious oil and gas regulations that the Governor’s Office claims will improve protection of water resources, address landowner concerns, enhance transparency and improve data management.  The regulations include updates to the well permitting process, requiring drillers to identify public resources (such as schools and playgrounds) that may be impacted by drilling activity and to identify abandoned wells that could be impacted by new drilling.  Further, the regulations require drillers to restore or replace impacted water supplies to Federal Safe Drinking Water Act standards.  Moreover, the regulations prohibit drillers from storing waste in pits and using brine for roadway dust suppression.  Although designed to impact the once-burgeoning Marcellus Shale-related unconventional drilling industry, most of the objections now focus upon the cost of compliance to family-owned, conventional oil and gas well operators.  Those objections, and legislative displeasure with the 3-2 decision, are presented in an April 28th article of The Bradford Era.

The Pennsylvania Legislature has about a month to pass a resolution disapproving the regulations that would be presented to the Governor.  Anticipating a gubernatorial veto, the Senate and House would be required to override that veto by a two-thirds vote.  If no action is taken by the Legislature or a resolution fails, the regulations will take effect following review by the Pennsylvania Attorney General’s Office, the Office of General Counsel and the Commonwealth Budget Office.

 

 

Sixth Circuit Denies En Banc Review of WOTUS Jurisdictional Issue

Posted in Energy, Environment

This entry is a follow-up to our blog post on February 23, 2016 regarding the Sixth Circuit’s decision that it has jurisdiction to adjudicate challenges to the EPA-Army Corps WOTUS rule.  On April 21, 2016, the Sixth Circuit denied six petitions for rehearing en banc.  In order to obtain en banc (full court) review, the issue presented must be one of “exceptional importance.” The Court held that “the issues raised in the petitions were fully considered upon the original submission and decision of the cases . . . No judge has requested a vote on the suggestion for rehearing en banc.”

PA: Royalty Dispute Class Action Fails

Posted in Energy

The Superior Court of Pennsylvania recently sided with a lessee in a class action royalty dispute.  In Hall v. CNX Gas Co., LLC, the lease contained a royalty provision providing that royalties were to be calculated on the net amount realized at the point of sale.  The lessors asserted that because the provision did not authorize the pro rata allocation of lost and used gas among lessors, CNX was limited to deducting only actual volumes of lost or used gas from each lessor’s share when calculating royalties.  CNX maintained that there was no volume of lost or used gas to allocate at the point of sale.  The court agreed, holding that even though the lease was silent as to the allocation of lost and used gas, the language of the royalty provision obviated the need for an express term addressing the subject.  The court reasoned that lost and used gas was not a part of the royalty calculation since the royalty calculation was based on the net amount realized at the point

Click here to read the case.

Pennsylvania Court Upholds Sublease of Production Rights

Posted in Energy

The Pennsylvania Superior Court recently held that a sublease of production rights under 250 acres in Greene County did not alter the habendum clause of a 50 year old oil and gas lease or sever rights provided under the original lease. The original lease was for the term of ten (10) years or so long as, among other actions, oil or gas was produced or gas was stored. In 2011, Equitrans L.P. subleased the oil and gas production rights under the lease to EQT Production Company.The landowners argued that the sublease severed the production rights from the storage rights and since no oil or gas was produced, any production rights under the lease terminated. The Court disagreed, holding that express provisions of the sublease evidenced the intent of the parties to not sever the production rights and under the original lease either production or storage could hold the lease. As such, production rights were not terminated.

Click here to read the case in its entirety.

Ohio Court Of Appeals Issues Decision on Effect of Pugh Clause, Expansion of Drilling Units, Equitable Tolling

Posted in Energy

On March 4, 2016, the Ohio Seventh District Court of Appeals in Summitcrest, Inc. v. Eric Petroleum Corp., et al., addressed several issues concerning oil and gas leases in Ohio.  In its decision, the Court held that: (1) a Pugh clause in an oil and gas lease did not operate to terminate the lease prior to the expiration of its primary term; (2) defendant-lessee was entitled to equitable tolling of the lease during the pendency of the suit; and (3) an implied covenant of good faith and fair dealing could not be used to negate the express language of the lease, which authorized the lessee to expand an existing drilling unit.   The Seventh District is one of the first Ohio appellate courts to address the interpretation and effect of a Pugh clause under Ohio law.

Read more about this case in our Client Alert.