Environmental Law ReSource : Environmental Lawyer & Attorney : Reed Smith Law Firm : Climate Change, Sustainability

This post was written by Arash Amai.

As discussed in this client alert, "Estidama" is the first sustainability program implemented in the Emirate of Abu Dhabi. The program focuses on the sustainable construction and operation of buildings and is a key aspect of the "Plan Abu Dhabi 2030", an effort to positively influence the design, development, and construction of every project in Abu Dhabi. Although still in development, one aspect of Estidama is a voluntary green building rating system called the Pearl Rating System. Additional elements of the Pearl Rating System are expected to be released in April 2010.

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This post was written by Ariel Nieland.

On March 22, 2010, Governor Rendell signed Senate Bill 297 into law in the Commonwealth of Pennsylvania. This bill, originally proposed by Senator Yaw in February of 2009, provides for increased record-keeping and reporting requirements including requiring Marcellus Shale well operators to submit annual and semi-annual reports specifying, among other things, "the amount of production on the most well-specific basis available" and the status of each well. The bill also requires the DEP to post Marcellus Shale well data online. This new requirement will significantly impact the availability of natural gas producers' production information, which was previously kept confidential for five years.
 

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This post was written by Kevin Abbott and Nicolle Snyder Bagnell.

The Pennsylvania Supreme Court issued a much-anticipated opinion interpreting Pennsylvania's Minimum Royalty Act, 58 P.S. 33, today, holding that royalties should be calculated "at the wellhead, as provided by the net-back method in the Lease…" The case, as well as 70 others filed in Pennsylvania, were brought by lessors unhappy with their leases because the recent interest in natural gas in the Marcellus Shale resulted in some of their neighbors getting better lease terms. The Plaintiffs argued that the Act requires a guaranteed minimum royalty on the gross proceeds of the sale of the natural gas and, as a result, any contractual agreement to share in post-production costs necessarily reduces the royalty that the lessor receives. They sought an interpretation of the Act which would result in the invalidation of tens of thousands of leases entered into since 1979. Such a result would have crippled the revival of the natural gas exploration industry in the Commonwealth. The defendants and the industry argued that the plain language of the Act does not prohibit lessors and lessees from agreeing to share in post-production costs. The sole purpose of the Act, as evidenced by its companion provision in 58 P.S. § 34, was to prohibit lessees from paying a flat rate for production -- a common practice prior to the Act’s passage in 1979 -- and to instead require a minimum royalty of one-eighth of the gas produced. The Court's opinion today resolves that issue squarely in favor of the oil and gas industry. Not only did the Court decline to invalidate the leases at issue, but also determined that post production expenses could be permissibly deducted under the Act.

Kevin Abbott and Nicolle Bagnell of Reed Smith represented the Industry Amicus, the Pennsylvania Oil and Gas Association, the Independent Oil and Gas Association and Chesapeake Appalachia LLC.

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This post was written by Jennifer Smokelin.

On March 22, 2010, USEPA signed a proposed rule for the mandatory reporting of greenhouse gases (GHGs) from facilities that inject carbon dioxide underground for the purposes of geologic sequestration or enhanced oil and gas recovery. Geologic sequestration is the long-term containment of carbon dioxide in subsurface geologic formations.

USEPA is proposing that all facilities that inject CO2 for the purpose of long-term geologic sequestration or to enhance oil and gas recovery report basic information on CO2 injected underground. In addition, geologic sequestration facilities that inject CO2 specifically for the purpose of long-term containment in subsurface geologic formations would also be required to:

• Develop and implement an USEPA approved site-specific monitoring, reporting, and verification (MRV) plan.
• Report the amount of CO2 geologically sequestered using a mass balance approach.

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This post was written by Jennifer Smokelin.

The U.S. Environmental Protection Agency (USEPA) is proposing to include additional emissions sources in its first-ever national mandatory greenhouse gas (GHG) reporting system. On March 22, 2010, USEPA signed a proposed rule for the mandatory reporting of vented and fugitive methane (CH4) and carbon dioxide (CO2) emissions from petroleum and natural gas industry facilities emitting 25,000 metric tons or more of carbon dioxide equivalent per year. USEPA estimates the total cost of reporting to the private sector would be about $60 million for the first year and $25 million in subsequent years. This translates to an estimated average cost of $18,000 per facility for the first year and $8,000 in subsequent years.

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This post was written by Nicolle Snyder Bagnell.

The U.S. Environmental Protection Agency (USEPA) officially announced its plans today to initiate a study of hydraulic fracturing and its potential impact on water quality and public health. USEPA is re-allocating $1.9 million for this comprehensive study in 2010 and seeks additional funding for 2011. Hydraulic fracturing has gained the attention of Congress this year in large part due to the increased scrutiny of its use in the development of the Marcellus Shale in Pennsylvania, New York, West Virginia and other Appalachian states. USEPA is still in the early stages of designing the study and is seeking input from its Science Advisory Board. Click here for more information.

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This was written by Jennifer Smokelin and David  Wagner.

Overshadowed by the activities in the final few days at the Copenhagen climate change conference, the UN agreed to revise some elements of its Clean Development Mechanism (CDM). Despite ongoing concerns about the long-term (post-2012) future of CDM, these reforms are significant.

Perhaps most significantly, the CDM reforms direct the CDM Executive Board to establish new procedures for stakeholders to appeal decisions. This on the heels of the CDM Executive Board’s controversial recent decision to reject applications from ten Chinese wind energy projects. The Executive Board has also been granted permission to streamline registration and issuance procedures for emission reduction projects and provide new funding to accelerate the development of CDM projects in countries with fewer than ten CDM approved projects in operation. Following a number of investigations which found that some of the firms tasked with independently verifying that CDM projects deliver real emission cuts had been cutting corners, the reforms also call for an improved system of “continuous performance monitoring” of these third-party certifiers.

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This post was written by David Wagner.

Reed Smith attorney Jennifer Smokelin participated in a seminar sponsored by the Climate Decision Making Center (CDMC) on March 8, 2010 and addressed her time spent at the United Nations' Framework Convention on Climate Change (UNFCCCC or COP 15) in December 2009. Jennifer's presentation, which is available here, discussed COP 15 and the likely affect of the Copenhagen Accord from the perspectives of two stakeholder groups: business and industry non-governmental organizations (BINGOs) and the general citizenry. In particular, Jennifer analyzed the commitments offered thus far under the Copenhagen Accord, compared them to commitments under the Kyoto Protocol and what that means for business and the environment, and opined regarding likely US actions to implement the Copenhagen Accord.

The CDMC is anchored at Carnegie Mellon University's Department of Engineering and Public Policy. It was founded in 2004 with a five-year, $6.9 million grant from the National Science Foundation. Collaborating investigators and graduate students are located at the University of British Columbia, the University of California at Berkeley, the University of Calgary, Oxford University, Stanford University, Pacific Risks, and The Wharton School at the University of Pennsylvania. At the CDMC, researchers are studying the limits in our understanding of climate change, its impacts, and the strategies that might be pursued to mitigate and adapt to change.
 

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This post was written by Lou Naugle, Chris Rissetto and  David Wagner .

Almost 10 years after the United States committed in an international agreement to strengthen its hazardous waste regulations, the U.S. Environmental Protection Agency (EPA) issued a final rule that governs the shipping of hazardous waste between the United States and other countries. Details on the new rule can be found in The Sentinel, Reed Smith's quarterly newsletter that discusses export, customs and trade developments.

According to EPA, the new measures will increase regulatory oversight of the international shipping of hazardous waste and provide stricter controls. The final rule, which will be effective on July 10, 2010, is also designed to make international shipment regulations under the Resource Conservation and Recovery Act more consistent with those of the Organization for Economic Cooperation and Development (OECD), a consortium of 31 Member countries that includes the United States. Key changes to the rules include:

• Modifying the requirements concerning international shipment of hazardous waste destined for recovery among OECD countries;
• Establishing notice and consent requirements for SLABs intended for reclamation in another country;
• Changing the hazardous waste import-related requirements for U.S. hazardous waste management facilities to confirm that individual import shipments comply with the terms of EPA’s consent; and
• Revising the EPA address to which exception reports concerning hazardous waste exports are to be sent.

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This post was written by Siobhan Hayes.

In earlier postings we introduced the UK’s Carbon Reduction Commitment (Energy Efficiency) Scheme (“CRC”). From 1 April 2010 the CRC Regulations will apply and many franchisors will be responsible for the carbon emissions of their franchisees. Franchisors will need information from their franchisees and may incur costs under the CRC that may not be easily recovered from franchisees.
 

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