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

This post was written by Nicolle Bagnell and Ariel Nieland.

According to an article in the Pittsburgh Post-Gazette, the regional offices of the Pennsylvania Department of Environmental Protection ("DEP") have been told that they must seek pre-approval from Harrisburg before taking ANY action regarding Marcellus development, including permitting and enforcement. Recently-appointed Secretary of DEP Michael Krancer must now approve all final actions. The DEP indicated that this policy was put into effect to ensure that Marcellus development was being handled consistently throughout the state; regardless, this is a very unusual step for the DEP to take.

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This post was written by Nicolle Bagnell and Ariel Nieland.

The Marcellus Shale legislative season remains in full bloom as another severance tax bill was introduced in the Pennsylvania General Assembly this week. Senate Bill 905 proposes a 2% tax on the gross value of natural gas at the wellhead where the amount produced is between 60,000 to 150,000 cubic feet/day (cf/d). For wells that have been in production longer than three years, the tax rate would increase to 5%. As with House Bill 833, SB 905 provides for "stripper wells" (those wells producing less than 60,000 cf/d) to be exempted from the tax unless certain exceptions apply. SB 905 also provides for the establishment of a Natural Gas Severance Tax Fund, which would be distributed at the county and municipality level to preserve and improve local water supplies, maintain and improve wastewater systems, and for other purposes related to "the health, welfare and safety consequences of severing natural gas in municipalities within the county."

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This post was written by David Wagner.

Please join us for the second of three teleseminars on air quality issues affecting oil and gas development in Marcellus Shale On Tuesday, April 12, 2011 from 12 p.m. - 1 p.m., Reed Smith and AECOM will discuss the Pennsylvania Department of Environmental Protection’s issues related to greenhouse gases in the Marcellus Shale. In particular, we will cover (1) sources of greenhouse gases, (2) reporting, and (3) Title V implications. This event will feature Jennifer Smokelin and David Wagner of Reed Smith and Tom Bianca of AECOM. To participate, please contact Sandy Petrakis by April 11.

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This post was Eric McLaughlin and John Lynn Smith.

The California Air Resources Board (CARB) hit a road block on the way to implementing a key element of its plan to reduce global warming when a California court found that the agency’s adoption of the plan violates the California Environmental Quality Act (CEQA), creating uncertainty for the regulated community whose operations are subject to the cap-and-trade program central to that plan.

At issue is CARB’s implementation of its Scoping Plan, the key document that specifies the various greenhouse gas (GHG) reduction measures to achieve the goals of California’s Global Warming Solutions Act of 2006, commonly known as AB 32. A ruling by San Francisco Superior Court Judge Ernest Goldsmith, finalized on March 18, 2011 (Ruling), granted a Petition for Writ of Mandate challenging the Scoping Plan, primarily due to the agency’s failure to adequately consider alternatives to its adopted cap-and-trade program.

While the Ruling is a significant impediment to the GHG reduction measures in CARB’s Scoping Plan and AB 32 as a whole, it is a temporary one that is unlikely to threaten the long-term implementation of those measures. The Ruling does, however, require CARB to analyze the impacts of alternatives to the Scoping Plan’s cap-and-trade program, and to provide that analysis to the public, in order for the Scoping Plan to move forward. In the interim, the Ruling creates uncertainty for those members of the regulated community whose operations are subject to the first round of the cap-and-trade program, which is scheduled to take effect in January 2012.
 

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This post was written by Mark Mustian.

On March 16, 2011, the U.S. Environmental Protection Agency (USEPA) proposed a new regulation in its decades-long attempt to regulate air toxics emissions and criteria air pollutants from large coal- and oil-fired boilers used in electricity generation. While this is USEPA’s first national standard to reduce mercury emissions from electric utility boilers, the proposal would also regulate other air toxics, especially particulate matter, and would reduce carbon dioxide emissions. In addition, the proposed regulation would modify New Source Performance Standards for electric utility boilers. This post provides some background information, a summary of the proposed regulation, a brief analysis of its costs and benefits, and the next steps.

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This post was written by Jennifer Smokelin.

Dubbed a sister bill to the “FRAC Act” (which targets water emissions from hydraulic fracturing), last week Reps. Jared Polis (D-CO), Maurice Hinchey (D-NY) and Rush Holt (D-NJ) introduced the “BREATHE Act,” for “Bringing Reductions to Energy’s Airborne Toxic Health Effects.” According to a release from Rep. Polis, the bill specifically:

• Closes the NESHAP exemption. While some emissions requirements exist for individual wells, oil and gas drilling is exempted from aggregated “major source” requirements under the National Emission Standards for Hazardous Air Pollutants (NESHAP).
• In practical terms, would prompt the industry to follow NESHAP’s required use of best available and currently used emissions control technology.
• Closes the hydrogen sulfide (H2S) exemption. Hydrogen sulfide, which emitted from oil and gas operations, is currently exempt from regulation as a hazardous air pollutant under the Clean Air Act.

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This post was written by Jennifer Smokelin.

On March 14, the U.S. Environmental Protection Agency (USEPA) made good on a promise to consider excluding emissions of carbon dioxide (CO2) from bioenergy and other biogenic sources (biomass) for the purposes of the Best Available Control Technology (BACT) analysis and applicability to the Prevention of Significant Deterioration (PSD) program. It published a proposed rule that would defer, for a period of three years, greenhouse gas (GHG) permitting requirements for CO2 emissions from biomass-fired and other biogenic sources. USEPA is also making available a guidance document, Guidance for Determining Best Available Control Technology for Reducing Carbon Dioxide Emissions from Bioenergy Production, to assist facilities and permitting authorities with permitting decisions until the proposed rule is finalized. USEPA will accept public comments on the Proposed Deferral (but not, of course, on the Guidance) for 45 days following publication in the Federal Register. Also, look for a hearing in Washington, D.C. on the matter, tentatively scheduled for 15 days after publication in the Federal Register.

After a background discussion of the issue, this post addresses the significant actions the Proposed Deferral and Guidance take with regard to: (1) timing, (2) applicability, and (3) the co-firing question.

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This post was written by David Wagner.

The U.S. Environmental Protection Agency issued a final rule today extending the deadline for reporting 2010 data under the Greenhouse Gas (GHG) Reporting Program to September 30, 2011. The original deadline was March 31, 2011, and the new deadline falls just about 2 years after the initial rule was issued. Under the GHG Reporting Program entities required to submit data must register with the electronic GHG reporting tool (e-GGRT) no later than 60 days before the reporting deadline. With the extension, the new deadline for registering with e-GGRT is August 1, 2011.

The GHG Reporting Program primarily covers GHG-emitting facilities, fossil fuel suppliers, and industrial gas suppliers whose aggregate GHG emissions exceed 25,000 metric tons carbon-dioxide equivalent per year. It also covers facilities in certain emissions intensive source categories (e.g., cement manufacturing and petroleum refining). 

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This post was written by David Wagner .

As always, we covered the latest in greenhouse gas regulation in our quarterly teleseminar and here are the audio and slides from yesterday’s event. We discussed:

• Possible delays in the implementation of the Tailoring Rule (Larry Demase)
• GHG permitting and biomass: EPA's permitting deferral and its affect on industries that use biomass (Jennifer Smokelin)
• Congressional efforts to develop a Clean Energy Standard (David Wagner)
• Developments in a recent California court decision addressing what additional work the California Air Resources Board must perform prior to implementing AB32 (Todd Maiden)

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This post was written by Nicolle Bagnell and Ariel Nieland.

Reed Smith, represented by Nicolle Bagnell, attended the Science Advisory Board Panel's public meeting on March 7, 2011 in Washington D.C. The purpose of the panel, comprised of a distinguished group of 22 professors and practitioners ranging in expertise from public health, hydrogeology, water quality engineering and environmental justice, is to provide an independent review of the U.S. Environmental Protection Agency's (USEPA's) proposed Hydraulic Fracturing Study Plan for scientific soundness of the draft plan. The panel was selected from nominations made in response to a request in the Federal Register last July. In addition to the Panel's review, USEPA received over 300 sets of public comments on the draft plan. There were also twelve speakers who provided 5-minute commentaries either in person or by phone and roughly 50 members of the public who attended the meetings.

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This post was written by Jennifer Smokelin.

The Pennsylvania Department of Environmental Protection (DEP) yesterday announced results of in-stream water quality monitoring for radioactive material in seven of the Commonwealth’s rivers. Seven river testing stations – which monitor “raw water” in the river before it enters public water suppliers’ intakes where the water receives further treatment – that were evaluated are Monongahela at Charleroi in Washington County, South Fork Ten Mile Creek in Greene County, Conemaugh in Indiana County, Allegheny at Kennerdell in Venango County, Beaver in Beaver County, Tioga in Tioga County, and the West Branch of the Susquehanna in Lycoming County. All seven samples showed levels at or below the normal naturally occurring background levels of radioactivity.

According to the Associated Press, a review of state records shows most of the gas-drilling wastewater that was treated and discharged by sewage plants in the second half of 2010 found its way into eight (8) waterways, seven of which were tested (above) by DEP. The eighth waterway, Blacklick Creek in southwestern Pennsylvania - is a tributary of the Conemaugh, one of the 7 tested locations. The tests were conducted in November and December of 2010 at stations downstream of wastewater treatment plants that accept flowback and production water from Marcellus Shale drilling. DEP said that these sampling stations were installed last fall specifically to monitor stream quality for potential impacts of Marcellus development.

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This post was written by Nicolle Bagnell and Ariel Nieland.

In addition to a number of other Marcellus Shale-related bills introduced in the Pennsylvania House and Senate over the past few months, Senate Bill 722 was also laid on the table last week. The bill proposes to amend the Oil and Gas Act in order to spell out exactly what would happen to leased land that neither contains a well nor is included in a production unit. The bill is, in effect, a statutory version of a Pugh Clause commonly found in oil and gas leases. According to the language of the bill, any land covered by a lease, but not included in the unit, would be released.

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This post was written by Mark Mustian.

After some ten years in the making, last week the U.S. Environmental Protection Agency (USEPA) issued a final rule aimed at regulating emissions of hazardous air pollutants from industrial, commercial, and institutional boilers located at major source facilities. A major source facility emits or has the potential to emit 10 or more tons per year (tpy) of any single air toxic or 25 tpy or more of any combination of air toxics. USEPA also finalized a related rule to reduce emissions from industrial, commercial, and institutional boilers located at area source facilities. An area source facility has the potential to emit less than 10 tpy of any single air toxic or less than 25 tpy of any combination of air toxics.

The rules, known as the Boiler Maximum Achievable Control Technology or “Boiler MACT” rules, will affect a significant number of entities. USEPA estimates that there are about 13,800 boilers located at large sources of air pollutants, including refineries, chemical plants, and other industrial facilities. USEPA estimates that there are about 187,000 boilers located at small sources of air pollutants, including universities, hospitals, hotels and commercial buildings that may be covered by these standards.

For key requirements of the Boiler MACT rules and some implications, please click on “continue reading.”

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This post was written by Nicolle Bagnell and Ariel Nieland.

Several new Marcellus Shale-related bills have been introduced in the Pennsylvania Senate and House of Representatives since the start of 2011. House Bill 833, first introduced on March 1, 2011 and known as the Natural Gas Severance Tax Act, proposes to impose a tax on natural gas extraction of 30 cents per 1,000 cubic feet. The bill also provides an exemption for wells with low production rates (less than 60,000 cubic feet/day) known as "stripper wells" to incentivize operators' continued use of those wells in lieu of drilling new wells. House Bill 33, which was introduced on February 9, 2011 and shares many of the same legislative sponsors as H.B. 833, proposes a tax of 5% on all gas extracted plus an additional 4.6 cents per 1,000 cubic feet. This tax rate is the same as that proposed under Senate Bill 352, which was introduced on February 1, 2011. House Bill 234, introduced on January 26, 2011, would provide for further reporting requirements for operators producing gas from "unconventional shale formations" (including the Marcellus, Burket, Utica, Mandata, and Rhinestreet Shale formations, etc.). House Bill 232, also introduced on January 26, 2011, provides for additional restrictions on well locations and permits, as well as wastewater disposal requirements and a cumulative impacts study.

In addition to the introduction of new bills, several new regulations addressing well casing requirements, which the Pennsylvania General Assembly approved in the fall of 2010, went into effect in early February upon publication in the Pennsylvania Bulletin. We previewed these requirements in November 2010.

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This post was written by Jennifer Smokelin.

Here’s another change in environmental policy related to Marcellus Shale by the new Pennsylvania Governor. On February 26, 2011, the Pennsylvania Department of Environmental Protection (DEP) published a notice rescinding the Interim Guidance for Performing Single Stationary Source Determinations for the Oil and Gas Industries (initially published in December 2010). They also announced the intent to re-open the public comment period on the proposed Air Quality Permit Exemptions Policy and Proposed Revisions to the General Plan Approval and/or General Operating Permit for Nonroad Engines (found here).

In its notice, DEP indicated that it is appropriate to seek a comprehensive public comment period on all three of these topics together to guide the Department on what, if any, guidance or action might be taken on any one or more of them. Further, DEP acknowledged outright that there are a number of potentially interrelated air quality topics regarding gas exploration and extraction activities within the Marcellus Shale which should be considered together, that is: (1) performing single stationary source determinations; (2) General Plan Approval and/or General Operating Permit BAQ-GPA/GP-11; and (3) the list of air quality plan approval and operating permit exemptions which were topics covered in the actions noted previously. With regard to the exemption list, DEP is particularly interested in comments related to Exemption B.38 on oil and gas exploration and production facilities and operations. Public comments will be accepted until May 26, 2011.

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This post was written by David Wagner.

We’re celebrating one year’s worth of climate change teleseminars with, you guessed it, another climate change teleseminar. Please join us on Wednesday, March 16 from Noon to 1 p.m. (EDT) for the First Quarterly Report on Climate Change in 2011. In this one-hour teleseminar, Larry Demase, Jennifer Smokelin, Todd Maiden and Dave Wagner will provide a regulatory update on significant international, national and state issues concerning climate change and the future of GHG regulation. In particular, the topics are:

• A delay in the implementation of the Tailoring Rule? An exemption for GHG permit applications in process prior to January 2, 2011?
• GHG permitting and biomass: EPA's permitting deferral and its affect on industries that use biomass.
• Congressional efforts to develop a Clean Energy Standard that would require electric utilities to generate electricity from "clean" energy sources, including nuclear, coal with carbon capture and storage, and natural gas.
• Developments in a recent California court decision addressing what additional work the California Air Resources Board must perform prior to implementing AB32.

If you would like to attend, please email Sandy Petrakis.

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