Following up on my posts of February 7, 2013 and November 28, 2012, the agenda for next week's meeting of the Pennsylvania DEP's Environmental Justice Advisory Board includes a scheduled discussion of the status of the Department's draft Permit Review Process Public Participation Policy. After I return from the meeting next week, I'll provide an update on the draft policy, and particularly any revisions made as a result of earlier public comment. Stay tuned....
As I train back from the second day of the Environmental Law Forum, here are some takeaways from the presentations I attended today:
· 1. The Environmental Hearing Board Roundtable session continues to be one of the most useful and entertaining sessions at the Forum.
The five judges of the EHB offered pointers and procedural insights on practice before the Board, covering the pre-hearing phase and the hearing itself. One particularly interesting discussion related to what seems to be an uptick (perhaps driven by Marcellus Shale appeals) in party requests to designate discovery materials, and sometimes motion exhibits, as confidential business information (CBI). The judges are very cognizant of the balance to be struck between protection of documents that fit within the scope of the CBI rules on the one hand, and the public interest in open and transparent proceedings on the other. The panel’s general sense was that even when the parties to the appeal jointly request CBI designation, the Board cannot simply defer to the parties’ characterization, but must take a hard look at the materials to ensure they truly are CBI.
· 2. Water quality, air quality, and mining cases are driving the most appeals that come before the EHB, with oil and gas matters not far behind.
It’s not surprising to see water quality and mining at the top of the list, as they are two areas in which statutory fee shifting provisions exist, making appeals in these areas attractive to third party community groups or environmental organizations.
· 3. Keep your eyes peeled for revisions to the EHB Rules.
Draft rules are now wending their way through final state agency reviews before publication in the Pennsylvania Bulletin. The revisions will cover the EHB’s move to mandatory electronic filing (other than for Notices of Appeal, which may be filed electronically or in hard copy); clarification of the timing of responses to dispositive motions in third party appeals; and the deletion of outdated rules that pertain to the Pennsylvania Costs Act, which lapsed in 2007. The proposed rules could be published within the next month, and would become effective later this year.
· 4. My colleague Phil Hinerman’s Insider’s Guide to the Pennsylvania Environmental Hearing Board is an indispensable resource for practitioners.
Phil’s EHB practice guide got a nice shout-out from the panelists in the Skills session on Appeals.
· 5. Even state practitioners would do well to sit in on the annual session led by Temple Law Professor Todd Aagaard and Widener Law Professor Jim May on Federal Environmental Decisions.
Todd and Jim engagingly summarized a variety of federal appeals court and U.S. Supreme Court decisions from the past year, and drew out trends and analysis with applicability to Pennsylvania environmental law, such as the 6th Circuit’s recent decision in the Summit Petroleum case defining adjacency for purposes of aggregation of air sources, which litigants have already sought to rely upon in litigation pending before the EHB.
As usual, on top of the great programming that the Forum puts on every year, it was great to see former colleagues and old friends, and to meet new friends. Thanks to the organizers, course planners, and faculty.
Earlier this month, the Pennsylvania Senate Environment Resources and Energy Committee took up Senate Bill No. 411, designed to foster the use of mine influenced water for hydraulic fracturing and other gas well development. The bill, originally proposed by Senator Richard Kasunic, was unanimously approved by the committee and can now move on to the full Senate.
The bill would amend Pennsylvania’s Environmental Good Samaritan Act (the “Act”) in several respects:
- By expanding or adding definitions under the Act to make clear that projects that withdraw, divert, and use mine influenced waters for fracking or other gas well development, industrial or other water supply, or other beneficial uses, with and in some cases without treatment, are eligible for the protections of the Act;
- By expanding the scope of immunity afforded under the Act to include such projects, as well as limiting the legal liability of landowners, mine operators, and water pollution abatement project operators involved in treating mine influenced water from such projects for any costs, injury or damages resulting from the approved uses;
- By exempting the operators and backers of such projects from certain requirements or liabilities under the Surface Mining Conservation and Reclamation Act, the Hazardous Sites Cleanup Act, the Solid Waste Management Act, and the Clean Streams Law; and
- By modifying existing exceptions to the immunity afforded under the Act to clarify that those exceptions would not apply to those who use, allow the use of, or provide mine influenced waters as part of a water pollution abatement project for fracking or other gas well development, industrial or other water supply, or other beneficial uses.
S.B. 411 still has a long way to go before it, or some further amended version, winds up on the Governor’s desk. But on the heels of PA DEP’s recent White Paper (PDF), which I blogged about last month, it appears that the use of mine influenced waters in fracking and gas well development has bipartisan traction in the state Senate. We will continue monitoring the bill and will provide further updates as the legislative process unfolds.
Updating my November 28, 2012 post, the Department is in the process of finalizing updated guidance for its policy covering public participation in the permit review process. The existing policy, Document ID 012-0900-003 (PDF copy here), was last updated in July 2005. At the February 5, 2013 meeting of the Environmental Justice Advisory Board, staff from the Department’s Policy Office briefed the members of the EJAB and other attendees on the upcoming revised guidance, which the Department expects will be published for public comment around the end of February 2013. Some highlights of the presentation:
- The update will remove outdated references, such as to the old Money-Back Guarantee Program, and will clarify policies in an effort to achieve consistency across the regional offices.
- The update will emphasize the actual elements of public participation as opposed to internal Department procedures supporting public participation.
- Other goals include:
- improving efficiency in the permitting process while honoring the requirements of public participation;
- clarifying the types of public participation available for particular actions;
- clarifying DEP’s role at public information meetings and public hearings;
- clarifying when it is appropriate to schedule a hearing or other applicable public participation meeting;
- establishing standards for conduct at public informational meetings and public hearings (addressing such things as time management; fairness issues; use of demonstrative exhibits, props and signs; disruptive behavior; and public safety issues);
- to the extent possible, harmonizing the elements of and requirements for public participation across the relevant environmental statutes.
Note that the updated guidance expected at the end of the month will address only the public participation policy that is applicable to Department permits or plan approvals with a public comment process (the policy does not apply to Notices of Intent for coverage under general permits or to permits by rule). An update to the separate Enhanced Public Participation Policy for Environmental Justice (EJ) communities (PDF copy here) is still several months away from being ready for public comment. I’ll update the blog as each of the updated policies are released for comment, and I encourage those of you who interact with the Department on permits to submit your input on the policies as proposed.
Finally, in another follow-up to my November 28, 2012 post, the EJAB members were also advised at our February meeting that the Department’s eMap PA online map application has been updated with 2010 Census data. The new data resulted in the designation of 185 additional census tracts in the Commonwealth as EJ Areas. If you have a project proposed in an area that might fall within the eligibility criteria for an EJ Area, I encourage you to check eMap PA and to review the existing EJ Public Participation Policy.
For the past several months, PADEP has been working internally and with stakeholders to develop policy supporting the use of mine influenced waters (“MIW”) in the natural gas extraction process — that is, using acid mine drainage and mine pool water, from Pennsylvania’s long history of coal mining, for fracking. The concept is that the impacted mine waters, which typically require treatment before discharge to surface waters, could serve as a substitute for the natural gas extraction industry’s withdrawal of millions of gallons of water from the same freshwater sources that also support aquatic life, our drinking water, and recreational uses. If workable and done safely, it’s a clear win-win — the gas extractors can use MIW that is already plentiful but has no higher use absent expensive long-term treatment, while preserving the Commonwealth’s natural resources.
Last week, PA DEP released a white paper entitled “Utilization of Mine Influenced Water for Natural Gas Extraction Activities” (the “White Paper”; link is to PDF). The document attempts to address storage and liability issues, which, if left unresolved, would significantly increase the legal risk and lower the economic incentive for transporting and using MIW. The White Paper also provides procedural guidance for those seeking to submit proposals to use acid mine drainage waters in the development of gas wells.
The storage options covered by the White Paper either would require new permitting, or might involve modification of existing well permits and Water Management Plans. One option, known as nonjurisdictional impoundment, would also require showings that the MIW (a) will not result in water pollution and (b) meets a specified set of parameters based upon EPA’s NPDES standards for mine drainage (measured at the source, prior to storage). The other storage options cited in the White Paper would not require that the MIW meet such parameters.
The White Paper’s proposed long-term liability solutions are somewhat more limited. The challenge for expanding the use of MIW into fracking applications is that Pennsylvania’s Clean Streams Law has been interpreted by state courts to impose long-term treatment obligations on those who pump water from abandoned mine pools and thereby create a discharge. As the White Paper notes, long-term treatment of MIW is expensive and labor- and capital-intensive. So PADEP offers two options for users of MIW for fracking to limit their liability under current law and policy: First, some operators could structure their project to fit within the scope of the Environmental Good Samaritan Act, which provides fairly broad protection from civil liability under state law to certain eligible parties for projects involving treatment of MIW, with specified exceptions. Second, PADEP could enter a Consent Order and Agreement with the MIW user under which the Department would agree not to hold the user liable for long-term treatment obligations, so long as the user meets project-specific conditions.
The CO&A would theoretically limit the user’s liability to the state, but would not address civil liability to third parties. For the user who cannot meet the requirements of the Environmental Good Samaritan Act, though, a CO&A may be the next best available option to protect against at least the long-term treatment liability that could otherwise attach. In some circumstances, a belt-and-suspenders approach that employs both the Environmental Good Samaritan Act and a CO&A might make sense. In any case, early communications with PADEP's program staff will be critical. Natural gas extractors who are considering MIW projects should consult environmental counsel to discuss how to take full advantage of the available protections against liability under Pennsylvania law and how best to navigate the process within PADEP.
Looking to the future, PADEP notes that it might be appropriate to develop a general permit covering the use of MIW for fracking, or even to rework its oil and gas regulations in a way that would directly address the issue. Importantly, the MIW policy appears to have earned support across a wide spectrum of stakeholders, from the oil and gas industry to environmental organizations. Indeed, the White Paper expressly envisions the creation of partnerships between industry and watershed groups to help foster MIW uses. Time will tell whether the mechanisms and options set forth in the White Paper will help promote this new use for impaired mine discharges, or whether further regulatory or legislative actions will be necessary for the concept to reach its full potential.
The TMDL regulatory scheme is taking hold in many sectors of our country. In fact, even the wine growing industry in Napa and Sonoma Valleys are being impacted by proposed regulations. If interested (and yes, Pennsylvania has a growing wine industry too), see Philip Hinerman's recent post at Fox Rothschild's Legal Tastings blog.
The year comes to a close today with the Pennsylvania Supreme Court having yet to rule on the constitutionality of Act 13’s provisions concerning the ability of municipalities to control Marcellus Shale development through local zoning rules (those provisions were overturned by the Commonwealth Court in a closely divided decision in July 2012). Despite the legal uncertainties that remain, 2012 saw significant growth of the unconventional gas industry in Pennsylvania:
- Pennsylvania is now reportedly second only to Texas in number of workers employed in the unconventional oil and gas industry, although that number likely includes some non-permanent residents who moved to PA for work in the industry.
- Marcellus Shale wells in Pennsylvania and West Virginia now account for about 25 percent of all U.S. shale gas production, nearly double the production reported for the Marcellus play in 2011.
Last week saw the release of the U.S. Environmental Protection Agency’s progress report on its research studies into water use in hydraulic fracturing operations. EPA – relying in part on data from Pennsylvania drilling sites and waterways – is looking specifically at the following research questions:
1. What are the possible impacts of large volume water withdrawals from ground and surface waters on drinking water resources?
2. What are the possible impacts of surface spills on or near well pads of hydraulic fracturing fluids on drinking water resources?
3. What are the possible impacts of the well injection and fracturing process on drinking water resources?
4. What are the possible impacts of surface spills on or near well pads of flowback and produced water on drinking water resources?
5. What are the possible impacts of inadequate treatment of hydraulic fracturing wastewaters on drinking water resources?
EPA is expected to release its conclusions in a final report in 2014.
Last week also brought the expected news that current EPA Administrator Lisa P. Jackson will step down once President Obama’s second term begins. As speculation builds about the President’s nominee for the EPA’s top spot, I anticipate that – even though most regulation of unconventional gas operations occurs at the state level – the agency’s direction on the regulation of hydraulic fracturing and other aspects of unconventional oil and gas development will be a significant issue when the U.S. Senate holds confirmation hearings for the new Administrator in early 2013.
This raises an intriguing question: would a nominee from outside the EPA’s current management structure, particularly one experienced with Marcellus Shale development, find an easier path to confirmation in the newly seated Senate than someone from within the agency? That may depend on how difficult a confirmation battle the Obama Administration is prepared to support, in a second-term environment in which even rumored nominees for the top spots at the Departments of State and Defense have found themselves the subject of strong opposition.
On December 5, 2012, US EPA issued a “Revised Enforcement Guidance Regarding the Treatment of Tenants under the CERCLA Bona Fide Prospective Purchaser Provision.” US EPA undertook this effort to encourage reuse of contaminated properties for renewable energy development. However, the updated guidance is broad enough to apply to other tenant situations and may justify consideration of "all appropriate inquiries" in more lease situations.
The problem that US EPA is trying to address with this guidance is that a key Superfund 'landowner liability protection' (think limited and conditioned defense to liability) – for bona fide prospective purchasers (42 USC §§ 9601(40), 9607(q)(1)(C) and 9607(r)(1)), which provides a defense even where an acquirer knows of the existence of contamination at the time of acquisition – is not available to those who lease contaminated property unless the tenant’s landlord meets the requirements of the defense. In other words, according to the language of CERCLA itself, a tenant’s bona fide prospective purchaser defense must be derived from the defense of an eligible landowner.
This can be an obstacle to attracting renewable energy projects to contaminated properties. Most renewable energy project developers do not want to buy contaminated land. They do, however, need sufficient rights in the property developed to justify and secure the significant financial investment that will be needed, for example, to put a solar farm on a closed and capped landfill. A lease with a term tailored to the project’s horizon may provide the right balance and allow the developer to ensure that it is not stuck owning unwanted land and potential liability when the project has run its course.
Under the revised policy issued last week, US EPA indicates that it will use its enforcement discretion not to pursue a tenant that meets the criteria of the bona fide prospective purchaser defense (including for example, conducting a pre-lease Phase I) even though the tenant is not a itself a “purchaser,” and even where the tenant’s landlord is not eligible for the defense, for example, because he or she owned the property when disposal occurred there.
This may help get more solar farms on more closed landfills (or other renewable energy projects at contaminated sites), which is a very good idea for a number of reasons, including the long term security and operation and management of the property. First, though, the basic economics of the project must be strong enough to overcome the inherent complications and associated additional time and costs, as well as lingering risks, involved in building on land where significant contamination remains. With strong fundamental project economics, the additional costs and lingering risks can be managed. US EPA’s sincere, though much conditioned, message in this revised guidance that it will be reluctant to pursue such developers will help. For more on US EPA’s encouragement of the development of renewable energy projects on contaminated sites see Re-Powering America’s Land.
Of course, any potential liability under Pennsylvania’s or other state’s law would also need to be sorted through as well. In that regard, it is worth noting that Act 2 releases of liability can extend to a person “who develops or otherwise occupies the identified site.” See 35 P.S. §6026.501(a)(2).
Vapor intrusion, the migration of a volatile chemical from subsurface contamination into the indoor air of a building, was not viewed as a significant exposure pathway in 1995 when Act 2 was written into law. It is viewed as significant now. The emerging importance of this pathway poses unique challenges for DEP and responsible parties under Act 2. It also has the potential to undermine some of the predictability that Act 2 is designed to provide. Managing the risks related to vapor intrusion under Act 2 requires understanding the issues, including the steps that DEP has already taken to address them and the changes that are likely to come. We cover these issues briefly in this post.
Part of the challenge of vapor intrusion for DEP, and the regulated community, is structural -- vapor intrusion exposures are not considered in development of Statewide Health Medium Specific Concentrations (MSCs) for soil and groundwater under Act 2. Perhaps more in theory than practice, this means that achieving MSCs for a volatile contaminant below a building does not ensure that the contaminant is not present at unacceptable levels in the indoor air – the MSCs are not calculated to be protective for vapor migration to indoor air (though they may be protective for most substances in any event). More problematic is that the “point of compliance” for attainment of groundwater MSCs is the property boundary. This means that under the attainment criteria established in the Act 2 statute itself, high levels of a volatile chemical – a source for vapor intrusion to indoor air -- could be left in groundwater under an on-site building as long as the groundwater MSC is achieved at the property boundary.
DEP has taken steps to address these issues.
In January 2004, the DEP Clean Standards Science Advisory Board (CSSAB) issued Section IV.A.4 of the Technical Guidance Manual -- Pennsylvania Vapor Intrusion into Buildings from Groundwater and Soil under the Act 2 Statewide Health Standard (2004 SHS VI Guidance). This guidance states, “Indoor air quality (IAQ) from the vapor intrusion of contaminants into buildings from groundwater and soil is not assessed under the Statewide Health standard in the Act 2, Chapter 250 regulations.” Though not itself a regulation, the guidance provides “additional screening requirements . . . to prevent unacceptable risk” from vapor intrusion in the context of Statewide health standard sign-offs. The guidance provides decision matrices to be followed under the Statewide health standard; includes MSCs for Indoor Air Quality; screening values that can be used to evaluate groundwater and soil data if site conditions match the underlying assumptions; and a framework for evaluating vapor intrusion risks. DEP also developed valuable questions and answers on vapor intrusion in the Land Recycling Q and A Database (Category: Vapor Intrusion).
In January 2011, DEP made the evaluation of vapor intrusion part of the law in promulgating a regulatory provision at Section 250.312 for Statewide Health Standard signoffs: “The final report must include, as appropriate, an assessment of the vapor intrusion pathway.”
In addition, in March 2011, DEP re-convened the CSSAB Vapor Intrusion Subcommittee, to support an update of the 2004 SHS VI Guidance. Preliminary work was done by the DEP and the subcommittee in 2011. After a hiatus, the next meeting of the subcommittee is scheduled for late January 2013. As a member of that subcommittee I will keep you posted as appropriate. At this point, I expect a guidance more focused on sub-slab and indoor air sampling -- consistent with recent New Jersey VI Guidance and the recently ‘leaked’ revision of the USEPA guidance, substantial revision to some of the screening values, and that includes discussion of proceeding directly to the installation of mitigation systems in lieu of extended investigation. Mitigation systems can be relatively inexpensive and work well. The downside is the environmental covenant that will be required if mitigation is to be relied on in a release of liability.
One recommendation, if you plan to rely on an existing Act 2 release of liability for any site where volatile contaminants remain, seek out good advice on whether vapor intrusion has the potential to undermine the certainty you expect from the release of liability.