The Ohio Department of Commerce, Division of Real Estate & Professional Licensing, recently reached out to Ohio’s “land professionals” (i.e., oil and gas landmen registered with the Division) concerning the renewal of their registrations. Pursuant to House Bill 197, land professionals must file their renewal paperwork with the Division on or before December 1, 2020. Failure to file by December 1, 2020 will result in the expiration of the land professional’s registration. Those land professionals who have not yet filed their renewal paperwork can expect a reminder letter from the Division around the end of October, 2020.
On September 29, 2020, the Supreme Court of Ohio accepted appeals from the Fifth District Court of Appeals’ decisions in Peppertree Farms, L.L.C. v. Thonen, Case No. 2020-Ohio-3042, and Peppertree Farms, L.L.C. v. Thonen, Case No. 2020-Ohio-3043, as well as the Seventh District Court of Appeals’ decision in Fonzi v. Miller, Case No. 2020-Ohio-3739. In the Thonen cases, the Court will address whether the Ohio Dormant Mineral Act (R.C. 5301.56) supersedes and controls over the Ohio Marketable Title Act (R.C. 5301.47, et seq.) as to the termination of severed oil and gas interests. In Miller, the Court will address several issues related to the application of the Ohio Dormant Mineral Act (R.C. 5301.56), including the level of due diligence required before serving a notice of abandonment by publication. Both cases are on pause for now: The Court held the Thonen cases until it decides West v. Bode, Case No. 2019-1494, and Miller until it decides Gerrity v. Chervenak, Case No. 2019-1123.
This post provides an important update to our January 2018 Client Alert regarding U.S. EPA’s ‘Once In, Always In’ policy for major sources of hazardous air pollutants (HAPs). On October 1, 2020, U.S. EPA issued a final rule amending the general provisions of the National Emission Standards for Hazardous Air Pollutants (NESHAP), at 40 CFR Part 63, Subpart A.
The final rule implements the plain language reading for the definitions of “major source” and “area source” under Section 112 of the Clean Air Act (CAA). Notably, the final rule also amends the NESHAP applicability provision in 40 CFR 63.1 by adding a new paragraph – (c)(6) – that specifies that a major source can be reclassified as an area source at any time upon limiting its potential to emit HAP to below the major source threshold of 10 tons/year for any single HAP and 25 tons/year of any combination of HAP. Once the reclassification becomes effective, the source is subject to any applicable area source NESHAP requirements in 40 CFR Part 63. U.S. EPA’s final rule effectively codifies a January 25, 2018 guidance document reversing the Agency’s long-standing controversial policy that any facility subject to major source NESHAP requirements would always remain subject to those requirements, even if the facility’s processes changed or controls were implemented that eliminated or permanently reduced that facility’s potential to emit HAP.
Facilities in a position to take advantage of reclassification under U.S EPA’s final rule should be mindful of the new notification procedures and record keeping and reporting requirements under the final rule. Please contact us with any questions or for assistance regarding your facility’s permitting and emission requirements.
A pre-publication version of the final rule is available here. The final rule will become effective 60 days after it is published in the Federal Register.
On September 23, 2020, the Supreme Court of Ohio ruled that fact issues prevented a lower court from granting summary judgment to the State of Ohio on a takings claim involving the indefinite suspension of a Trumbull County injection well. See State ex rel. AWMS Water Solutions, L.L.C. v. Mertz, 2020-Ohio-4509.
Read more about this decision after the break.
This post provides important updates to our August 17, 2020 post regarding U.S. EPA’s amendments to the 2012 and 2016 New Source Performance Standards (NSPS) for the Oil and Natural Gas Industry (40 CFR 60, Subpart OOOO and 40 CFR 60, Subpart OOOOa).
First, U.S. EPA published the final amendments in the Final Register on September 14, 2020. The amendments to the NSPS became effective upon publication in the Federal Register.
Next, on the same day that U.S. EPA published the amendments to the NSPS in the Federal Register, several environmental groups filed a Petition for Review in the D.C. Circuit Court challenging U.S. EPA’s amendments. On September 15, 2020, the Petitioners filed an emergency motion for stay and vacatur of U.S. EPA’s amendments. Today, the D.C. Circuit issued an Order that U.S. EPA’s amendments to the NSPS be administratively stayed pending further review and order by the Court regarding Petitioner’s emergency motion for stay and vacatur of the amendments. The Court also ordered that any additional motions to stay in the consolidated cases be filed by September 18, 2020, with EPA’s response to the motion(s) to stay due on September 28, 2020, and any replies be submitted by October 5, 2020.
We will continue to track this case and provide updates on new developments.
This post updates an earlier post outlining the USEPA’s and Ohio EPA’s COVID-19 enforcement policies.
USEPA’s general policy to not seek penalties for compliance monitoring and reporting violations ended this week on August 31, 2020. Violations that occur on and after September 1 are no longer protected by the “enforcement discretion” of the COVID-19 policy. However, the policy reserves the USEPA’s right to exercise discretion on a case-by-case basis for noncompliance caused by COVID-19 going forward as long as the entity made a “reasonable attempt to comply with guidance from the Centers for Disease Control and Prevention or other agencies” to control the spread of COVID-19.
Ohio EPA’s policy, which required regulated entities to apply for regulatory flexibility and “alternative approaches to maintaining compliance,” also ended on August 31, 2020 when the Agency stopped considering new requests for flexibility. Requests submitted prior to August 31, 2020 will still be considered by the Agency.
Do not hesitate to reach out to a Vorys environmental attorney with any questions regarding the applicability of either policy to noncompliance instances prior to, or after, August 31, 2020.
In Fonzi, the Court will consider issues over the extent of a landowner’s duty to exercise reasonable diligence in notifying mineral owners of an abandonment under the ODMA, the mineral owner’s burden in challenging the sufficiency of that notice, and the parties’ rights when a landowner files a quiet title asserting that no savings events occurred within the twenty-year period preceding the abandonment notice.
Read the full text of the five propositions of law that the Court accepted below the break.
On August 13, 2020, U.S. EPA issued two final rules amending the 2012 and 2016 New Source Performance Standards (NSPS) for the Oil and Natural Gas Industry. The first rule makes policy amendments to the 2012 NSPS, 40 CFR Part 60, Subpart OOOO, and the 2016 NSPS, 40 CFR Part 60, Subpart OOOOa, (the “Policy Amendments”); the second rule makes technical amendments to the 2016 NSPS (the “Technical Amendments”).
The Policy Amendments remove the transmission and storage segment from the regulated “source category” under Subpart OOOO and Subpart OOOOa. In doing so, U.S. EPA rescinded all NSPS requirements applicable to the transmission and storage segment. Additionally, the Policy Amendments recognize that controls used to reduce VOC emissions also reduce methane emissions and, thus, rescind the methane standards for the production and processing segments of the oil and gas industry.
The Technical Amendments address several issues raised in petitions for reconsideration of NSPS Subpart OOOOa. Notably, the Technical Amendments reduce the regulatory burden associated with multiple aspects of the NSPS, including the following:
• Exempting qualifying low-production wells from fugitive emissions monitoring requirements, and reducing the frequency of fugitive monitoring from quarterly to semi-annually for gathering and boosting compressor stations;
• Incorporating state fugitive emissions standards for well sites and compressor stations in certain states, including Ohio;
• Providing authorization to utilize additional methods of monitoring to demonstrate pneumatic pumps are operating with no detectable emissions; and
• Establishing separate criteria for calculating potential VOC emissions from individual storage tanks that part of a controlled tank battery.
Click here for a pre-publication version of the Policy Amendments, and click here for a pre-publication version of the Technical Amendments. The Policy Amendments and the Technical Amendments become effective on the date of publication in the Federal Register. Combined, the final rules are expected to save the oil and gas industry millions of dollars in compliance costs each year.
On June 1, 2020, the Seventh District Court of Appeals once again addressed the level of diligence required to identify holders of a severed mineral interest under the 2006 version of Ohio’s Dormant Mineral Act (2006 DMA). In Fonzi v. Gary D. Brown & Eclipse Res., 2020-Ohio-3631, the appellee-surface owner filed his notice of abandonment by publication after conducting a search of the public records of Monroe County, Ohio, where his property was located, as well as a brief internet search. Again emphasizing that what constitutes reasonable due diligence will depend on the facts and circumstances of each case, the Court held that the appellee-surface owner did not exercise reasonable due diligence. Consequently, it was improper for the appellee-surface owner to serve his notice of abandonment by publication.
In Fonzi, the deed containing the mineral reservation (Severance Deed) indicated that the grantors, Harry Fonzi II and Elizabeth Fonzi (the parents of the appellants), resided in Washington County, Pennsylvania. Rejecting the appellee-surface owner’s contention that the law does not require a surface owner to search public records outside of the county where the land is located, the Court found that it was “per se unreasonable” for the appellee-surface owner not to extend his search to the public records of Washington County, Pennsylvania, as the Severance Deed gave him actual knowledge that the reserving parties resided there. Had he searched the public records of Washington County, Pennsylvania, he would have easily located Harry Fonzi II’s estate records which identified the appellants-holders. The fact that the reserving parties lived in another state “[did] not relieve the [appellee-surface owner] of the burden to conduct a reasonable, diligent search.” Based on the foregoing, the Court held that the appellee-surface owner failed to comply with the notice requirements of the 2006 DMA. It is also worth noting that the Court clarified an aspect of its earlier decision in Sharp v. Miller, stating that when determining the sufficiency of a surface owner’s diligence, the focus is on the “process employed” (i.e., the search itself) and not the end-result of the search (i.e., the discovery or non-discovery of heirs).
In addition to the issue of diligence required under the 2006 DMA, the Court also addressed a matter of first impression, namely, the level of evidence required to prove that a purported heir of a holder of a severed mineral interest is, in fact, an heir. The trial court held that the appellants-holders lacked standing to bring the initial action as they had not proved they are the successors-in-interest to the reserving parties. Here, the Court found that, based on Harry Fonzi II’s estate records and an heirship-related affidavit presented at the trial court level, the appellants-holders presented sufficient evidence to demonstrate that they are the successors-in-interest to the reserving parties.
On July 6, 2020, the U.S. Supreme Court issued an Order partially granting a motion to stay a Montana District Court’s injunction barring the use of the Army Corps’ streamlined Nationwide Permit 12 (NWP 12) governing pipeline and other utility construction activities that impact a water of the United States regulated under the Clean Water Act. The District Court held that the Army Corps failed to engage in programmatic consultation with federal wildlife agencies before issuing NWP 12 in 2017, as required under the Endangered Species Act. After initially ordering a complete vacatur of NWP 12, the District Court narrowed its order on May 11, 2020, to an injunction prohibiting the use of NWP 12 for new pipeline projects.
The Army Corps and industry appealed the District Court’s decision to the U.S. Court of Appeals for the Ninth Circuit. The Army Corps also filed an application to the U.S. Supreme Court requesting that the Court stay the District Court’s injunction pending the outcome of the appeal in the Ninth Circuit. The Supreme Court stayed the District Court’s order, except as it applies to the Keystone XL pipeline project.
A side note regarding the appeal in the Ninth Circuit: On May 15, 2020, a coalition of 18 states, including Ohio, filed an amicus brief with the Ninth Circuit in support of the Army Corps and industry-Appellants’ case. The States argue that the District Court’s decision is flawed and, if upheld, that needed infrastructure projects will be significantly more costly and time-consuming, and potentially unfeasible.