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Ohio EPA’s proposed changes to biocriteria rules could affect point source dischargers.

Posted in Environment

Facilities with a permitted outfall that discharges into a waterbody with water quality attainment challenges could be impacted by a recently proposed rule from Ohio EPA (OEPA). OEPA is proposing to revise the existing biocriteria rules by making it easier to modify point source effluent limits upstream of waterbodies that are not attaining biocriteria.

Currently, if point sources are in compliance with all effluent limits (both specific chemicals and whole effluent), then OEPA carries the burden of showing that point sources are the primary cause for the non-attainment of biological criteria. Under the proposed rule, that burden is lowered to only require that the point source is contributing to the non-attainment of biological criteria. With the revised language, it could be substantially easier for OEPA to lower or tighten effluent limits for upstream point sources. Under the proposed rule, therefore, point sources discharging to waterbodies that are not attaining biocriteria could be exposed to heightened regulatory controls.

The draft rules, along with other supporting documents, are available at https://epa.ohio.gov/dsw/dswrules#1353910795-draft-biocriteria-rules-oac-chapters-3745-1-and-3745-2.  Interested parties have until July 19, 2021 to submit comments on these draft rules. Please contact Kristin Watt, Mark Norman, or Nat Morse with any questions about these proposed rules.

Public Comment Period Opens as Ohio EPA Issues Draft Revisions to Reasonably Available Control Technology (“RACT”) Requirements for Control of VOC and NOx Emissions

Posted in Energy, Environment

Ohio EPA has proposed rules that will require additional Volatile Organic Compound (VOC) and Nitrogen Oxide (NOx) emission controls for certain manufacturing and industrial operations located in the Cincinnati and Cleveland 2015 ozone nonattainment areas.  On May 17, 2021, Ohio EPA issued public notice of draft revisions to Ohio Administrative Code (OAC) Chapter 3745-21, “Carbon Monoxide, Photochemically Reactive Materials, Hydrocarbons, and Related Materials Standards.”  Ohio EPA then published notice of draft revisions to the NOx RACT rule (OAC 3745-110) on May 20, 2021.

The Cincinnati ozone nonattainment area includes facilities located in Butler, Clermont, Hamilton, and Warren Counties. The Cleveland ozone nonattainment area includes facilities located in Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, and Summit Counties.  Both the Cleveland and Cincinnati nonattainment areas failed to meet the ozone standard during the 2018-2020 ozone monitoring seasons and, thus, are going to be subject to more stringent RACT requirements due to the anticipated reclassification of the Cincinnati and Cleveland nonattainment areas from marginal to moderate.  See our prior Client Alert regarding Ohio EPA’s anticipated regulatory changes to address nonattainment of the 2015 Ozone NAAQS.

Draft Revisions to OAC 3745-21 for Control of VOCs

The purpose of Ohio EPA’s draft revisions to OAC 3745-21 is two-fold: (1) to satisfy Ohio EPA’s 5-year rule review requirements, and (2) to implement mandatory Reasonably Available Control Technology (RACT) requirements for the Cincinnati and Cleveland 2015 ozone nonattainment areas.  Revisions stemming from the 5-year rule review requirements are mostly minor changes to provide rule clarification.  However, the draft revisions to implement RACT requirements in the Cincinnati and Cleveland ozone nonattainment areas are more substantive in nature.

To ensure Ohio’s rules meet RACT requirements for the Cleveland and Cincinnati ozone nonattainment areas, Ohio EPA proposed revisions to compliance schedule requirements for certain coating and printing line operations as well as a new rule (OAC 3745-21-11) to require facilities in the Cincinnati and Cleveland nonattainment areas with the potential to emit > 100 tons per year of VOC and that are not already controlled pursuant to other requirements in OAC 3745-21 to submit a RACT study within one year of the effective date of the rule.  Ohio EPA also proposed revisions to several sections of OAC Chapter 3745-21 to expand VOC control requirements to the Cincinnati nonattainment area for the following facilities/operations:

  • Aerospace Manufacturing and Rework Facilities (See 3745-21-19)
  • Shipbuilding and Ship Repair Operations (Marine Coatings) (See 3745-21-20)
  • Storage of Volatile Organic Liquids in Fixed Roof Tanks and External Floating Roof Tanks (See 3745-21-21)
  • Offset Lithographic Printing and Letterpress Printing Facilities (See 3745-21-22)
  • Industrial Solvent Cleaning Operations (See 3745-21-23)
  • Flat Wood Paneling Coatings (See 3745-21-24)
  • Reinforced Plastic Composites Production Operations (See 3745-21-25)
  • Surface coating of miscellaneous metal and plastic parts (See 3745-21-26)
  • Boat Manufacturing (See 3745-21-27)
  • Miscellaneous Industrial Adhesives and Sealants (See 3745-21-28)
  • Automobile and Light-duty Truck Assembly Coating Operations, Heavier Vehicle Assembly Coating Operations and Cleaning Operations Associated with These Coating Operations (See 3745-21-29)

A copy of Ohio EPA’s Public Notice, Business Impact Analysis, Synopsis of Changes, and revised rules are available on Ohio EPA’s website.  Comments on the draft revisions to OAC 3745-21 are due to Ohio EPA on or before June 18, 2021.

Draft Revisions to NOx RACT Rule OAC 3745-110

Like VOCs, NOx is a precursor compound which can form ozone.  As such, the draft revisions to the NOx RACT Rule are a necessary counterpart to Ohio EPA’s draft revisions to OAC 3745-21 to facilitate Ohio’s attainment and maintenance of the NAAQS for ozone.  The NOx RACT rule establishes NOx emission limits for four source categories: (1) boilers, (2) stationary combustion turbines, (3) stationary internal combustion engines, and (4) reheat furnaces.  Ohio EPA’s draft revisions to the NOx RACT Rule include expanding the requirements for NOx RACT to the Cincinnati nonattainment area, updating (i.e. ratcheting-down) the presumptive NOx RACT emissions limitations, and amending certain compliance requirements.

A copy of Ohio EPA’s Public Notice, Business Impact Analysis, Synopsis of Changes, and revised rules are available on Ohio EPA’s website.  Comments on the draft revisions to OAC 3745-110 are due to Ohio EPA on or before June 22, 2021.

UPDATE: Ohio Waives Clean Water Act 401 Certification for 16 Nationwide Permits

Posted in Energy, Environment

The U.S. Army Corps of Engineers recently determined that Ohio waived its right to issue a water quality certification (WQC) under section 401 of the Clean Water Act (CWA) for the 16 new Nationwide Permits (NWPs) that went into effect on March 15, 2021. Ohio’s 401 WQC waiver means that an applicant seeking to obtain one of the 16 new NWPs for a particular project does not need to obtain a 401 WQC certification from Ohio EPA before submitting the NWP application to the Army Corps.

On January 13, 2021 the U.S. Army Corps of Engineers published a final rule reissuing and modifying 12 existing NWPs and issuing four new NWPs under Section 404 of the CWA. Section 404 of the CWA prohibits the discharge of dredge or fill material into a “water of the United States” (WOTUS) without a permit. NWPs are an activity-specific type of CWA Section 404 permit issued by the Army Corps for certain projects that are similar in nature and have been determined to result in minimal degradation to WOTUS and, as such, allow for an expedited permitting process.

The NWPs, with the appropriate regional conditions, are intended to apply throughout the U.S. However, the NWPs are not valid until the appropriate state agency: (a) certifies, under Section 401 of the CWA, that the discharge of dredged or fill material into WOTUS authorized under a particular NWP does not violate state water quality standards, or (b) waives certification pursuant to 40 CFR 121.9. With respect to the 16 NWPs covered under the January 13, 2021 final rule, the Army Corps issued the Ohio-specific Regional Conditions on October 13, 2020 and set a deadline of December 12, 2020 (before the new NWPs were finalized) for Ohio to submit its 401 water quality certification (WQC) for the 16 NWPs. Ohio EPA did not finalize its 401 WQC until March 4, 2021. As a result, the Army Corps determined that Ohio waived its right to issue a 401 WQC for the 16 NWPs.

The 16 new NWPs, which went into effect on March 15, 2021, are listed below.

• NWP 12 – Oil or Natural Gas Pipeline Activities
• NWP 21 – Surface Coal Mining Activities
• NWP 29 – Residential Developments
• NWP 39 – Commercial and Institutional Developments
• NWP 40 – Agricultural Activities
• NWP 42 – Recreational Facilities
• NWP 43 – Stormwater Management Facilities
• NWP 44 – Mining Activities
• NWP 48 – Commercial Shellfish Mariculture Activities
• NWP 50 – Underground Coal Mining Activities
• NWP 51 – Land-Based Renewable Energy Generation Facilities
• NWP 52 – Water-Based Renewable Energy Generation Pilot Projects
• NWP 55 – Seaweed Mariculture Activities
• NWP 56 – Finfish Mariculture Activities
• NWP 57 – Electric Utility Line and Telecommunications Activities
• NWP 58 – Utility Line Activities for Water and Other Substances

Ohio Court of Appeals Addresses Adverse Possession of Minerals Among Co-Tenants

Posted in Energy

The 7th District Court of Appeals in Ohio recently addressed what elements a co-tenant must satisfy to adversely possess a severed oil and gas interest against his co-tenants. See, Tomechko v. Garrett, 2021-Ohio-1377. In Tomechko, the appellants were the owners of the surface and one-half of the minerals. The appellees were the heirs and devisees of the owners of the other one-half of the minerals. In 1989, the appellants’ predecessor-in-interest signed an oil and gas lease with Trans Atlantic Energy Corp. Trans Atlantic drilled two wells on the appellants’ property, which began producing oil and gas around 1991. In 2013 and 2014, the appellees signed leases with another oil and gas operator. Upon learning of the appellees’ interest in the oil and gas, Trans Atlantic’s successor-in-interest proportionately reduced the appellants’ royalty interest.

The Court first addressed the threshold issue of whether the appellees’ ancestors’ reservation of “minerals” in 1977 included oil and gas. The Court applied existing case law as well as ordinary rules of contract interpretation to resolve the issue. First, the Court acknowledged that the term “minerals” under Ohio case law generally includes oil and gas. Second, the Court reviewed the reservation clause at issue and concluded that the word “minerals” included oil and gas because (i) there was oil and gas activity in the area at the time the appellees’ ancestors made the reservation and (ii) there was no limiting language in the reservation clause evidencing an intent to restrict “minerals” to hard minerals.

Next, the Court analyzed whether the appellants adversely possessed the appellees’ oil and gas when they entered into an oil and gas lease in 1989, which leased all of the oil and gas under the property as to all depths. In order to establish adverse possession in Ohio, “a party must prove by clear and convincing evidence, exclusive possession and open, notorious, continuous, and adverse use for a period of twenty-one years.” However, a “tenant in common cannot assert title by adverse possession against his co-tenant unless he shows a definite and continuous assertion of adverse right by overt acts of unequivocal character clearly indicating an assertion of ownership of the premises to the exclusion of the right of the co-tenant.”

The Court held that the appellants adversely possessed the appellees’ oil and gas because they leased and produced the appellees’ oil and gas and the lessee paid the appellants for such production. Further, although the two wells drilled on the appellants’ property were only producing from shallow formations, the Court held that the appellants also adversely possessed the deep formations because “[a]dverse possession of the deep rights should follow the shallow rights due to the alteration of the surface and subsurface from drilling and removing the oil and gas.” In this case, the appellants adversely possessed the deep formations based on their “adverse possession of the shallow rights, the permeating nature of the drilling and production of oil and gas, and the lease with Trans Atlantic which provided for drilling to all strata.”

 

Supreme Court of Ohio Further Clarifies Exception Under the Marketable Title Act in Erickson v. Morrison

Posted in Energy

On March 16, 2021, the Supreme Court of Ohio expanded upon its prior decision in Blackstone v. Moore, 2018-Ohio-4959, holding that a reference in a deed that described a previously severed mineral interest, but without identifying the name of the interest owner, was specific under R.C. 5301.49(A), and thus prevented the extinguishment of the interest under the Marketable Title Act.  See Erickson v. Morrison, Slip Opinion No. 2021-Ohio-746.  Read more about that decision in our Client Alert.

Ohio EPA Division of Air Pollution Control hosts Program Advisory Group Meeting

Posted in Energy, Environment

On January 20, 2021, the Ohio EPA’s Division of Air Pollution Control (DAPC) hosted a “Program Advisory Group” (PAG) meeting via Microsoft Teams to inform interested stakeholders of recent and upcoming DAPC activities. The topics discussed during the PAG meeting included: anticipated regulatory changes to address non-attainment of the 2015 Ozone National Ambient Air Quality Standard (NAAQS); a report on improvements in air permitting efficiency, and current air permit projects including new exemptions and permits-by-rule for certain sources; amendments to the nuisance and malfunction rules under OAC 3745-15; updates to the eBusiness Center online portal; and DAPC staffing and budget changes.

This post focuses on Ohio EPA’s anticipated regulatory changes to address non-attainment of the 2015 Ozone NAAQS. Notably, Ohio EPA reported that the current 3-year monitoring data shows Cleveland and Cincinnati, which are designated as marginal non-attainment areas, will not meet the 70 ppb Ozone standard by the prescribed attainment date (August 3, 2021). As a result, the Cleveland and Cincinnati non-attainment areas will be “bumped-up” from marginal to moderate non-attainment, triggering additional requirements to reduce NOx and VOC emissions. Anticipated regulatory changes include:

• Reassessing the NOx Reasonably Available Control Technology (RACT) that is currently in place in the Cleveland non-attainment area to ensure the established RACT is still appropriate;
• Implementing the NOx RACT in the Cincinnati non-attainment area;
• Adopting oil and gas Control Technique Guidelines (CTGs) to reduce VOC emissions in Cleveland, and several other CTGs in Cincinnati;
• Reassessing the non-CTG VOC RACT already in place for certain sources, and add other sources not already covered; and
• Expanding the emissions inspection and maintenance program (i.e. E-check) that is in place in Cleveland to the Cincinnati area.

The non-attainment requirements present significant challenges for new and modified “major sources” in the non-attainment areas, including a New Source Review emissions offset ratio of 1.15:1. During the PAG meeting, Ohio EPA noted that, in the past, the agency has primarily relied on the minimum control measures required under the federal Clean Air Act to meet the NAAQS. However, in order to meet the Ozone NAAQS by the next attainment date (August 3, 2024) and avoid another bump-up to serious non-attainment, Ohio EPA will be evaluating additional emissions reductions beyond what is federally mandated, including making RACT rules applicable in counties outside the non-attainment areas or even statewide. Ohio EPA also plans to evaluate control measures for non-road emissions sources (e.g. railroad, marine off-road, and compressor engines).

We will continue to monitor these issues and provide updates on any new developments.

D.C Circuit Court of Appeals Vacates Affordable Clean Energy Rule

Posted in Energy, Environment

On January 19, 2021, the United States Court of Appeals for the D. C. Circuit issued an Order vacating U.S. EPA’s 2019 Affordable Clean Energy Rule (ACE Rule). The 2019 ACE Rule replaced the 2015 Clean Power Plan as a means of regulating greenhouse gas (GHG) emissions from power plants. The Court held that, while U.S. EPA has the authority to regulate GHG emissions, “the central operative terms of the ACE Rule . . . hinged on a fundamental misconstruction of Section 7411(d) of the Clean Air Act.” The Court also held that the extended compliance schedules for reducing GHG emissions under the ACE Rule are arbitrary and capricious.

Per the Court’s Order, the ball is back in U.S. EPA’s court to develop and implement a new regulatory framework for GHG emissions from power plants. We will continue to monitor this issue and will report on any new developments.

Supreme Court of Ohio Construe’s State’s Saltwater Injection Well Permitting Scheme

Posted in Energy

In a recent mandamus action, the Supreme Court of Ohio had the opportunity to construe Ohio’s saltwater injection well permitting scheme. See State ex rel. Omni Energy Group, L.L.C. v. Ohio Dept. of Natural Resources, Div. of Oil & Gas Resources Mgt., Slip Opinion No. 2020-Ohio-5581. In Omni, the Court discussed whether (1) the Division of Oil & Gas Resources Management had the right to call a public meeting concerning Omni’s permit application, (2) Omni had a right to compel the Division to rule on the validity of objections received to its permit application, and (3) the Division could schedule a hearing on those objections after a certain statutory deadline expired. You can read the Court’s decision here.