Energy and Environment Monitorwww.eem.jacksonkelly.com

Court Denies Motion to Supplement Complaint With Hendryx Studies

On January 23, 2012, a federal judge denied a motion by anti-mining groups to add a NEPA-based health effects claim to a pending challenge to a “fill” permit issued by the Corps of Engineers. In Ohio Valley Environmental Coalition, et al. v. U.S. Army Corps, et al., Civil Action No. 3:11-0149 (S.D. W.Va. 2012), Doc. No. 84 (“Order”), the Court ruled that the proposed additional claim was “futile.” This case involves a challenge to a permit issued by the Corps of Engineers under Clean Water Act §404 permit for Highland Mining Company’s Reylas Surface Mine located in Logan County, West Virginia. Plaintiffs’ motion claimed that the Corps violated the National Environmental Policy Act (“NEPA”) by failing to supplement its Environmental Assessment (“EA”) of the Reylas permit in light of “new” studies authored by West Virginia University Professor Michael Hendryx. Hendryx, who has three psychology degrees but none in medicine, toxicology or epidemiology, has published several controversial papers purporting to find correlations between health conditions and proximity to coal mining. Even though Hendryx’s papers do not claim that mining “causes” the health effects examined, many blogs and news outlets have cited the reports as evidence that mining is causing health effects such as cancer and birth defects.

The most recent iteration of the Reylas permit was issued by the Corps on September 20, 2011 after the Corps suspended an earlier version of the permit to reexamine portions of its decision document. Soon after the Corps re-issued the permit, OVEC filed a motion for a preliminary injunction and moved to supplement an earlier complaint with its NEPA-based health effects claim.

NEPA is triggered by “major federal actions” and requires an Environmental Impact Statement when such an action will “significantly affect the quality of the human environment.” The Corps’ permit action is considered a “federal action.” Here, the Corps evaluated the application and determined in an EA that the permitted action would not have a significant effect, thereby concluding that no EIS was necessary. OVEC sought to force a reexamination of that decision by relying on the recent Hendryx publications.

NEPA regulations require a federal agency to supplement draft or final environmental impact statements when there are “significant new circumstances or information relevant to the proposed action or its impacts.” 40 C.F.R. §1502.9. The Supreme Court previously held that no supplementation is required if there is no remaining federal action. SUWA, 542 U.S. 55, 72 (2004). The Court ruled that “[t]he major federal action which triggers NEPA compliance in this case is the issuance of a permit, not the mining activity.” Order, p. 3. Determining that the permit had been issued, the Court held that there was no remaining major federal action and hence no new NEPA “trigger.”

Plaintiffs advanced two arguments: (1) that the duty to supplement the EA continued because the impacts of the proposed action were not completed; and (2) that the permit was effectively an “ongoing action” because the Corps retained oversight authority and the power to revoke or modify Highland’s permit at any time. Order, p. 4-5. The Court rejected Plaintiffs’ arguments, determining that “[n]either of Plaintiffs’ inconsistent positions can be correct.” According to the Court, Plaintiffs’ first argument “simply cannot be correct in a world where the impacts of permitting decisions are potentially permanent.” Order, p. 4. Rejecting Plaintiffs’ second argument, the Court observed that while the Corps retains oversight authority, the issuance of the permit is the major federal action requiring NEPA compliance. Order, p. 5. Additionally, the Court stated that following Plaintiffs’ interpretation of relevant case law, applying NEPA after the issuance of the permit, would “render agency decisionmaking intractable, always awaiting updated information only to find the new information outdated by the time a decision is made.” Order, p. 5.

An interesting sidelight to the NEPA claim was the on-going effort by Highland Mining to examine the underpinnings of Hendryx’s work. Highland had issued subpoenas to West Virginia University and to Hendryx. WVU and Hendryx moved to quash the subpoenas as unduly burdensome and as seeking “privileged” peer-review comments. A judge in the Northern District of West Virginia had denied the motion to quash and ordered WVU and Hendryx to produce responsive documents on February 6, 2012. The Court’s ruling denying the motion to add the supplemental claim has mooted the bases of the subpoenas, and may slow or thwart efforts to examine Hendryx’s work in detail.

This article was authored by Matthew S. Tyree, Jackson Kelly PLLC. For more information on the author see here.

Environmental Groups Notify EPA of Planned Coal Ash Suit

On January 18, 2012, Earthjustice notified the EPA of its intent to sue the agency over an alleged failure to properly regulate coal ash under the Resource Conservation and Recovery Act (“RCRA”).   Earthjustice sent the notice on behalf of eleven different environmental groups, including the Sierra Club, Kentuckians for the Commonwealth and Appalachian Voices. 

In the written notice, Earthjustice alleges that EPA is required to review and revise RCRA regulations relating to coal ash every three years (note: RCRA actually requires only that regulations be reviewed and revised every three years “where necessary”).  Earthjustice alleges that EPA has failed to fulfill this responsibility, noting that the agency has failed to follow through on proposed rulemaking aimed at coal ash.  EPA is currently in the process of reviewing and evaluating more than 450,000 comments it has received regarding potential coal ash regulation by the agency.  

On a related front, the US House of Representatives passed a bill in October 2011 that would prevent EPA from regulating coal ash as a hazardous waste.  Supporters of that legislation note that coal ash has long been used beneficially in products such as concrete and wallboard.  The coal industry often uses coal ash with alkaline properties in the reclamation process. Currently, the bill – which has been criticized by the Obama Administration -- remains stuck in committee in the US Senate.    

According to Earthjustice, the EPA has failed to move forward on the regulation of coal ash due to “politics and pressure from corporate lobbyists.”  Earthjustice did not comment on the lobbying efforts of the Sierra Club or other affiliated organizations opposed to coal or coal ash.  In 2011, New York City Mayor Michael Bloomberg donated $50 million to the Sierra Club to be used for its anti-coal campaign. 

RCRA requires citizens to provide 60 days’ notice of their intent to file suit.  The letter from Earthjustice was issued to comply with RCRA’s notice requirement.    

This article was authored by M. Shane Harvey, Jackson Kelly PLLC. For more information on the author see here.

WV EQB Lifts Conductivity Stay But Probably Provides No Real Help To Mine Operators

The West Virginia Environmental Quality Board (“EQB” or “Board”) has lifted a stay it earlier imposed on the use of an NPDES permit for a surface mine.  It is unlikely, though, that the Board’s order will have any immediate effect or will avert potential layoffs. 

The stay, issued in the fall of 2010, prohibited the use of a new NPDES permit issued to Patriot Mining which did not impose effluent limits on conductivity, total dissolved solids (“TDS”) or sulfate.  The Sierra Club had argued in 2010 that absent limits on these parameters, discharges from the mine would cause violations of the State “narrative” water quality standards.  The EQB granted a stay pending resolution of the appeal.  

West Virginia’s narrative water quality standards prohibit certain in-stream conditions.  The standards are set out at WVCSR §47-2-3.2.e & 3.2.i and provide that: 

3.2.e.   Materials in concentrations which are harmful, hazardous, or toxic to man, animal or aquatic life; 

3.2.i.    Any other condition, including radiological exposure, which adversely alters the integrity of the waters of the State including wetlands; no significant adverse impact to the chemical, physical, hydrologic, or biological components of aquatic ecosystems shall be allowed. 

Historically, the West Virginia Department of Environmental Protection (“WVDEP”)  has used a biologic index known as the West Virginia Stream Condition Index (“WVSCI”) as the primary tool for determining whether waterbodies met the narrative standards.  The WVSCI is used to compare the numbers, types and proportions of so-called pollution-intolerant aquatic insects (measured at the “family” level) in undisturbed “reference” streams with the populations in disturbed streams.  At some point, a difference in scores between a disturbed site and a reference site is considered sufficient to find that a disturbed stream is “impaired” or not meeting the narrative standard.  

WVDEP does not have numeric criteria for conductivity, TDS or sulfate.  It has also evaluated the correlation between each parameter and WVSCI scores and determined that there is a poor correlation between them.  Because of that, WVDEP does not believe it can adopt a reasonable numeric standard on these parameters which would not be greatly over- or under-protective of WVSCI scores. 

The Sierra Club, however, claimed in the appeal that when insect populations are evaluated at the “genus” level, rather than the “family” level used in the WVSCI, there are clearer correlations between the insect populations found and the levels of conductivity, TDS and sulfate.  It contended that significant impacts to those populations occur at conductivity = 300 μS/cm, and sulfate = 50 mg/l, and argued that these levels should serve as in-stream aquatic life criteria used to impose effluent limits.  Without significant dilution or expensive treatment, such as reverse osmosis, however, these standards are generally considered unachievable by most surface mines.  The Sierra Club’sexperts suggested that there was not necessarily a causal link between conductivity and TDS on the one hand and insect impacts on the other, but that unspecified individual ions comprising the conductivity and TDS were likely culprits.  Its experts also suggested that the WVSCI was not as precise a test as a genus-level insect index and should, therefore, not be used.  

The EQB generally agreed and in March 2011 issued an order requiring that WVDEP impose effluent limits on each of the three parameters.  Significantly, however, it did not determine or suggest that the threshold numbers advocated by the Sierra Club were appropriate.  The EQB also ruled that WVDEP was obligated to impose limits on manganese and selenium, and to do a further analysis whether arsenic limits were necessary. 

WVDEP and Patriot Mining appealed the order with respect to conductivity/TDS/sulfate.  In an order dated September 20, 2011, the Circuit Court of Kanawha County ruled that the EQB had not adequately explained the legal bases for its order; that WVDEP was entitled to deference in its interpretation of the narrative standards; and that the Board had failed to discuss the role of the WVSCI in measuring compliance with the narrative standard.  The Court remanded the matter to the EQB. 

On remand, Patriot Mining moved to dissolve the stay, arguing that there was no summarizing requirement to impose limits on conductivity/TDS and sulfate; that the Sierra Club was unlikely to prevail on remand; and that Patriot and its employees would suffer real harm while there would be little impact to the receiving stream, which already had high levels of the three parameters which would not increase appreciably with the new mine.  By order of November 10, 2011, the EQB dissolved the stay, but its order did little to provide real help to Patriot. 

The Board’s dissolution order determined that on the balance of equities the stay should be dissolved because there was little evidence that the mine would contribute to any substantial impact on the insect population or to the levels of the three parameters in the receiving stream.  However, the Board also stated that the Sierra Club was likely to prevail on the merits on remand—a fact which suggests that it may again require WVDEP to impose effluent limits on conductivity/TDS/sulfate that cannot be obtained without techniques so expensive as to destroy the economics of the operation. 

This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author see here.

OSM Sued Over Ten Day Notice Policy

Farrell-Cooper Mining Company, a small mining company in Oklahoma, has sued the U.S. Office of Surface Mining (“OSM”) challenging the issuance of two 10-day notices (“TDN”) to the state involving two of Farrell-Cooper’s state-issued coal mining permits.  TDNs are the mechanism by which OSM can initiate oversight over conditions existing on sites permitted by states with OSM-approved programs under the Surface Mining Control and Reclamation Act (“SMCRA”).  

SMCRA allows OSM to take direct enforcement action against mine operators in primacy states for violations of performance standards or permit conditions, but only after a state fails to respond “appropriately” to a TDN advising it that OSM believes a violation exists.  See 30 U.S.C. §1271(c).  In the event a state does not respond appropriately (by taking enforcement action or explaining why no violation exists), the OSM “shall” inspect “the . . . mining operation at which the alleged violation is occurring. . . .”  30 U.S.C. §1271(a)(1).  If, as a result of the inspection, OSM finds a violation, it shall issue either a cessation order (if there is imminent harm) or a notice of violation (“NOV”) “to the permittee” fixing a time for abatement of the violation.  30 U.S.C. §1271(a)(2) & (3).  Historically, because the statute speaks to “inspections” of “mining operations” and issuance of NOVs “to the permittees,” OSM has generally limited the application of this section of the statute to “on the ground” violations of performance standards.  It generally has not used this authority to oversee individual state permit decisions.  In fact, when an OSM field office attempted to use its TDN authority to review a state permit decision in West Virginia, former Assistant Interior Secretary Rebecca Watson intervened and informed complaining citizens that OSM did not possess the authority to veto state permit decisions. 

In June 2009, however, the Interior Department signed a memorandum of understanding with USEPA and the Corps of Engineers which committed OSM to determine how it could “more effectively conduct oversight of state permitting . . . activities” under SMCRA—polite language for requiring OSM to rescind the Watson letter.  By memo of November 15, 2010, OSM Director Pizarchik rejected the rationale of the Watson letter and advised his staff that OSM would henceforth use its TDN oversight authority with respect to “alleged violations of permitting requirements” in addition to violations of performance standards.  That memo was subsequently embodied in a draft policy document. 

The Farrell-Cooper situation involves a dispute over approximate original contour (“AOC”), where the state-issued permits allowed the company to create last cut lakes at two of its mines.  According to the complaint, OSM and the state of Oklahoma formed a team to investigate the legislative history of AOC, and the team issued a report in 1997 approving such techniques.  However, in 2010, OSM issued a draft oversight report on AOC and found that the state had not properly implemented its approved program by failing to require mines to be reclaimed to AOC.  

In January 2011, OSM issued two TDNs to Oklahoma attacking the Farrell-Cooper permits and reclamation plans for its mines.  Farrell-Cooper has since received a notice of violation (“NOV”) from OSM.  The complaint will almost certainly be met with the standard governmental defenses that : 1) a TDN is not a final agency action; 2) the operator must exhaust its administrative remedies in appealing the NOVs; and 3) that this is not an attack on the permit, but rather of a failure to meet on-the-ground performance standards. 

This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author see here.

Jackson Kelly Only Firm in U.S. to Receive Law Firm of the Year Recognition in Mining Law

Charleston, W.Va., Nov. 1, 2011 – Jackson Kelly PLLC has been named the first U.S. News – Best Lawyers^® Law Firm of the Year in Mining Law. This is according to the recently-released U.S. News Media Group and Best Lawyers^® 2011-2012 “Best Law Firms” rankings. Jackson Kelly is the only law firm to receive the national recognition in mining law which makes this award a significant achievement. The firm’s ranking will be featured in U.S. News & World Report’s Money issue, on newsstands November 15, 2011.

In addition, the following practice groups were ranked tier one in Charleston, WV: Administrative/Regulatory Law, Banking and Finance Law, Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law, Commercial Litigation, Corporate Compliance Law, Corporate Law, Criminal Defense: White-Collar – Litigation, Employee Benefits (ERISA) Law, Employment Law – Management, Energy Law, Environmental Law, Government Relations Practice, Health Care Law, Information Technology Law, Insurance Law, Labor Law – Management, Legal Malpractice Law – Defendants, Litigation – Bankruptcy, Litigation – Environmental, Medical Malpractice Law – Defendants, Mergers & Acquisitions Law, Mining Law, Natural Resources Law, Oil & Gas Law, Personal Injury Litigation – Defendants, Project Finance Law, Public Finance Law, Real Estate Law, Securities / Capital Markets Law, Tax Law, Water Law and Workers' Compensation Law – Employers. 

According to U.S. News Media Group and Best Lawyers®, Jackson Kelly has the most first-tier rankings in West Virginia in Criminal Defense: White-Collar – Litigation as well as Health Care Law. 

In Lexington, KY., the firm was honored with the following tier one rankings: Commercial Litigation, Mass Tort Litigation/Class Actions – Defendants and Product Liability Litigation – Defendants. 

In Morgantown, WV., tier one rankings were given to: Commercial Litigation, Criminal Defense: White-Collar – Governmental Investigations, Criminal Defense: White-Collar - Litigation, Health Care Law, Personal Injury Litigation – Defendants, Public Finance Law, Real Estate Law, Tax Law, Trusts & Estates Law and Workers' Compensation Law – Employers. 

The firm’s mining law group was also ranked tier one in Pittsburgh, PA. 

These rankings, which are presented in tiers, showcase 9,633 different law firms ranked nationally in one or more of 75 major legal practice areas and in metropolitan or state rankings in one or more of 119 major legal practice areas. An important addition to this year’s rankings is the naming of one “Law Firm of the Year” in each of the 75 nationally ranked practice areas. According to the organization, law firms, such as Jackson Kelly, that received this designation had an impressive overall performance in research and are receiving the first award of this kind by U.S. News and Best Lawyers^®.

Jackson Kelly PLLC is a national law firm representing leading global corporations, national companies, entrepreneurs and individuals in areas of law such as environmental, business, labor and employment, federal and state workers’ compensation, civil litigation and occupational safety and health. The firm has offices in Colorado, Indiana, Kentucky, Pennsylvania, West Virginia and the District of Columbia.

Use of Flame-Retardant Clothing in Oil & Gas Operations

The Occupational Safety & Health Administration (“OSHA”) issued an enforcement policy to field inspectors for flame-retardant clothing in Oil & Gas Drilling, Well Servicing and Production-Related Operations.  This memorandum was intended to clarify OSHA’s policy citing the personal protective equipment (“PPE”) standard 29 CFR §1910.132(a), and for the failure to provide and use flame-retardant clothing (“FRC”) in oil and gas operations.  OSHA states this clarification is needed for Regional Administrators when inspections are conducted within the oil and gas industry. 

A flash fire is a fire that spreads rapidly through a diffuse fuel, such as dust, gas, or vapors from an ignitable liquid, without the production of damaging pressure. The intensity of a flash fire depends on the amount of gas or size of the vapor cloud. Hydrocarbon (oil and gas) flash fires generate temperatures of 1,000 to 1,900 degrees Fahrenheit. A flash fire requires oxygen and ignition source that is normally present in oil and gas related operations.  This could be in several forms, including but not limited to; electrical systems, handheld electrical tools, motors, generators, hot work activities, and static electricity.  

The potential for flash fires increase when the drilling process hits formations or zones of hydrocarbons and gas. Potential exposure to flash fires occurs when the drilling contacts an active gas or hydrocarbon zone.  The pressure from the underground gas or hydrocarbon could "kick" the well fluids up the hole to the drilling rig floor or platform causing a flash fire. If this kick is not contained or controlled by the blowout preventers (BOP) or rig engineering controls, OSHA states there is a high potential of a flash fire due to the presence of ignition sources on or in the vicinity of the drilling platform.  Potential flash fires can occur during servicing operations where wells that are active or in production involving the access and extraction of oil and gas.  Other servicing operations also include work on inactive wells, such as stimulating, plugging, or capping.  Production-related operations that may also have the potential for flash fires include transferring the well fluids to the surface, then separating, storing and gauging, or otherwise preparing the product for delivery.

Each of these operations typically uses both engineering and administrative controls to reduce, but may not fully eliminate, the potential for a flash fire. Flammable liquids or gas could be released and then migrate to ignition source because of an inadequacy or failure in these engineering and administrative controls. Examples of inadequacies/failures of engineering controls include BOP malfunction, hydraulic failure, gauge or indicator equipment error or malfunction, power disruption, and valve failure. Engineering controls are subject to failure due to inadequate design, installation, inspection, testing, and maintenance. Administrative control failures include deviation from standard operating procedures, failure to close valves, failure to activate the emergency shutdown system, and failure to activate the BOP. Administrative controls are subject to failure when procedures have not been adequately developed, implemented, audited, and enforced.

OSHA can cite 29 CFR §1910.132(a) for the failure to provide and ensure the use of FRC in oil and gas drilling, well servicing, or production-related operations when there is a potential for flash fire hazards.  During drilling operations, FRC is usually not needed during initial rig up and normal drilling operations prior to reaching active hydrocarbon zones, unless other activities warrant their use such as  fracing a previously drilled well while rigging a well in close proximity. A potential for flash fire exists when active gas or hydrocarbon zones are reached. OSHA states FRC shall be worn by exposed employees working on the well site prior to drilling into identified gas or hydrocarbon zones.  OSHA also states appropriate FRC shall also be worn when there is a history of fluid or gas kicks from underground producing zones.  Once FRC is identified for use, OSHA states employees should wear appropriate FRC until the final casing is cemented and the well is effectively closed. 

The potential for flash fire also exists in production-related operations that fall outside of drilling and well servicing. OSHA states that FRC needs to be determined during production-related operations, such as equipment openings (e.g., line breaking or valve changes), gauging, transfer of hydrocarbons, maintenance operations of production equipment, hot work operations, tank heating, using open flames or the start-up of operations.  

OSHA states other sections of the PPE standard may also apply to oil & gas operations.  These include 29 CFR §1910.132(b) where there is a failure to assure that “employee-owned” FRC is properly maintained and sanitary.  29 CFR §1910.132(c) may be cited where the employer fails to provide FRC that is of safe design and construction for work being performed. Employers may consult other standards such as National Fire Protection Association (“NFPA”) standards.  NFPA 2112 and 2113 may be used to help comply with this section.  OSHA may cite 29 CFR §1910.132(d) where the employer fails to conduct a hazard assessment to identify the potential for burn hazards where employees have occupational exposure(s) to flash fires.   

This article was authored by Linda Tennant, Acacia Environmental Group LLC.  For more information on the author see here.

 

References:          

“Enforcement Policy for Flame-Resistant Clothing in Oil & Gas Drilling, Well Servicing and Production Related Operations”; Occupational Safety & Health Administration, March 19, 2010; “Clarification of Terms “Active Hydrocarbon Zone”; Occupational Safety & Health Administration, October 19, 2010.

Stream Buffer Zone Rule Hearing

I. Introduction 

On September 26, 2011, a Congressional hearing of the U.S. House Energy & Mineral Resources Subcommittee of the Natural Resources Committee was held in Charleston, West Virginia to examine the Office of Surface Mining and Reclamation’s (OSM) Stream Protection rulemaking and its impact on jobs.  This hearing was held as part of the Committee’s investigation into OSM’s decision to re-write the revised Stream Buffer Zone Rule issued in December of 2008.  

II. Background of the Stream Buffer Zone Rule 

Prior to the 1977 passage of the Surface Mine Control and Reclamation Act (“SMCRA”), rock removed to access coal seams by surface mining methods was often not returned to mined areas and simply dumped downhill of mined areas where it choked nearby streams and contributed sediment to downstream areas.  Although SMCRA required the return of most spoil to mined areas and placement of “excess” spoil into stable spoil disposal areas, it expressly recognized need to place excess spoil in “fills” located in small headwater streams in steep-sloped Appalachia. 30 U.S.C. §1265(b)(22)(D) (authorizing fills in watercourses so long as drains are constructed). These fills are also regulated by the Corps of Engineers under §404 of the Clean Water Act.  33 U.S.C. §1344.  OSM had long limited disturbances within 100 feet of most streams (known as the “Stream Buffer Zone Rule”) unless closer disturbances would not violate water quality standards or adversely affect the water quantity, quality or other environmental resources of the stream.  30 C.F.R. §816.57.  Until a 1999 federal court ruling (Bragg v. Robertson), the Stream Buffer Zone Rule (“SBZ”) was never interpreted to restrict valley fills or the ponds constructed to control sediment from these fills—because those activities were expressly authorized by SMCRA as primary measures to control sedimentation.  73 Fed. Reg. 75814, 75814-75818 (Dec. 12, 2008).  In Bragg v. Robertson, however, a federal district court judge in the Southern District of West Virginia ruled that the 1983 SBZ prohibited valley fills. 

The Fourth Circuit ultimately vacated the district court opinion in 2001.  However, because it ruled that district court never had jurisdiction, it did not address merits of the SBZ rule dispute—leaving application of SBZ rule to fills in a state of confusion.  In order to clarify the confusion, OSM proposed an initial rule in 2004 clarifying that SBZ rule is a sediment control measure that does not prohibit valley fills.  69 Fed. Reg. 1036 (Jan. 7, 2004).  OSM later conducted EIS and re-proposed an expanded rule in 2007.  72 Fed. Reg. 48890 (Aug. 24, 2007).  In December of 2008, OSM issued a clarification of the stream buffer zone rules after a five-year process that included 40,000 public comments, two proposed rules, and 5,000 pages of environmental analysis from 5 different agencies. The final rule codified coal surface mining practices that had been in effect for over 30 years by clarifying that the SBZ does not prohibit excess spoil fills but requires the applicant to demonstrate that it has minimized the length and number of valley fills and because fills are expressly authorized by §404 of the Clean Water Act.  73 Fed. Reg. 75814 (Dec. 12, 2008). 

After anti-mining groups challenged OSM’s 2008 SBZ rule in federal court, OSM attempted to simply cast the rule aside by admitting “serious legal deficiencies” and requesting the Court to remand and vacate the rule. National Parks Conservation Association v. Kempthorne, 1:09-cv-00115 (D.D.C.).  By Memorandum Opinion and Order dated August 12, 2009, Judge Kennedy refused to allow the Agency to simply withdraw the rule without following established statutory procedures for repealing an agency rule. OSM entered into a settlement agreement with the plaintiffs whereby it agreed to issue new regulations replacing the 2008 SBZ rule.  

On June 11, 2009, the Secretary of the Department of the Interior, the Administrator of the U.S. Environmental Protection Agency (EPA), and the Acting Assistant Secretary of the Army (Civil Works) entered into a memorandum of understanding (MOU designed to reduce the environmental consequences of surface coal mining operations in six Appalachian states. 75 Fed. Reg. 34667 (June 18, 2010); 75 Fed. Reg. 22723 (April 30, 2010). The June 11, 2009 MOU committed OSM to making revisions to key provisions of current SMCRA regulations, including the Stream Buffer Zone Rule and Approximate Original Contour requirements.  

III. The Hearing 

The following members of the House Energy and Mineral Resources Subcommittee attended the hearing and gave opening statements: Chairman Lamborn (R-Colo.), Mr. Johnson (R-Ohio), and Mrs. Capito (R-W.Va.). Congressmen Lamborn and Johnson stated that the Obama Administration’s own estimates projected the direct loss of 7,000 jobs nationwide as a result of the new rule.  Congressman Johnson also suggested that the Administration had colluded with environmental groups by practically inviting them to sue OSM over the 2008 version of the SBZ. Congresswoman Capito touted the economic benefits of coal mining to the State of West Virginia and discussed the potential adverse impacts of the proposed change.  

Governor Tomblin criticized EPA and other regulatory agencies for relentlessly pursuing an anti-coal agenda.  He also questioned whether the changes to the SMZ rule were consistent with Congress’s mandate in SMCRA to “assure that the coal supply essential to the Nation’s energy requirements and to its economic and social well-being is provided and strike a balance between protection of the environment and agricultural productivity and the Nation’s need for coal as an essential source of energy.” 

Thomas Clarke, Director of the West Virginia Department of Environmental Protection criticized OSM and EPA for seizing regulatory authority that legitimately resided with the States.  Mr. Clarke pointed out that, in making quantum shifts in regulatory policy that are Congress’ business to make, OSM was creating unnecessary regulatory uncertainty.  Mr. Clarke defended West Virginia’s own regulatory scheme and criticized EPA’s failure to adequately involve the states in preparing its Environmental Impact Statement related to the rule.  The following individuals also testified in opposition to OSM’s actions: 

- Jason Bostic of the West Virginia Coal Association

- Roger Horton, West Virginia Co-Chair Mountaintop Mining Coalition

- Michael Carey,  President Ohio Coal Association

- Katharine Fredriksen, Senior Vice President Environmental & Regulatory Affairs CONSOL Energy, Inc. 

Anti-mining activists, Bo Webb and Maria Gunnoe spoke in favor of OSM and EPA revising the SBZ.  

This article was authored by Chris M. Hunter, Jackson Kelly PLLC. For more information on the author see here.

Senator Manchin Responds to Rep. Conyers’ Attack on Coal

Rep. John Conyers (D-Mich.) opened the EPA’s Environmental Justice Conference recently with negative statements directed towards the coal industry and West Virginia in general.  Conyers, the ranking member of the House Judiciary Committee, said that: 

“There’s a big campaign going on about how you clean coal, and we want to examine that as critically and fairly as we can, but here’s the problem: I’ve been to West Virginia, and that’s about all they’ve got there.” 

Conyers also suggested that labor unions could assist coal workers find new, non-coal jobs. 

Conyers’ remarks caught the attention of Sen. Joe Manchin (D-W.Va.), who responded with a letter to Conyers: 

“I am very troubled to hear about your recent negative comments about our beautiful state of West Virginia, and the important role coal plays not only in our state, but in our country.” 

This article was authored by Douglas J. Crouse, Jackson Kelly PLLC. For more information on the author see here. 

http://www.opensecrets.org/news/2011/08/clean-coal-lobbying-aflcio-super-pac.html

WV DEP Issues Emergency Regulations Regarding Horizontal Wells

The West Virginia Department of Environmental Protection, Office of Oil and Gas, filed its emergency oil and gas rules relating to drilling horizontal wells as directed by Governor Tomblin in July. The rules will become effective after approval by the Secretary of State and can remain in effect for as long as fifteen months without legislative approval.

 High points of the new regulations for horizontal wells include:

1.         Erosion and Sediment Control Plan. The new rules establish requirements for erosion and sediment control plans to be submitted with the application for a well permit. E&SC plans for well sites (not including roads and pipelines) disturbing more than three acres (“horizontal well sites” for purposes of this summary) must be certified by and constructed according to plans developed by a registered professional engineer and in compliance with Best Management Practices established by the agency. The plans will be considered permit conditions, meaning that stop work orders and monetary penalty assessments can be issued for violations. The plan must be in writing, describe the sequencing of activities, and include certain drawings.

2.         Site Construction Plan.  Applications for horizontal well sites must include a site construction plan certified by a registered professional engineer. Again, the plan will be considered a permit condition and failure to follow it can result in stop work orders and penalty citations for violations. The site construction plan must include a written narrative and maps showing detailed information. Certain activities are required, such as clearing the site of woody materials, cutting and stacking logs, stockpiling topsoil for re-use. A plan view map, inter alia, must ”clearly identify the limit of disturbance” for the project and identify existing structures, roads, water bodies, “and other critical areas within the area that would most likely be affected by the construction.” Several detailed requirements are mandated for the manner in which the site must be constructed.

3.         Water Management Plan.  Applications for horizontal wells must also include an estimate of the volume of water to be used in drilling, fracking or stimulating. If at least 210,000 gallons will be used in any month, a water management plan must be filed with the application. Again, the water management plan will be considered a permit condition. A water management plan can be submitted on a well-by-well or on a watershed basis. The plan must cover volumes of water withdrawals, months when used, planned management and disposition of wastewater from fracking, stimulation and production. A listing of additives (i.e., disclosure of frack fluids) actually used must be submitted as a part of the completion report. As expected, the plan has to identify designated and existing water uses and public intakes within a mile downstream of withdrawal locations; a demonstration that sufficient in-stream flow will be maintained, meaning that the pass-by flow must protect the identified use of the stream immediately downstream of the point of withdrawal. Methods must be identified to “minimize significant adverse impact” to aquatic life – a term not defined in the regulations.

4.        Well Site Safety Plan.  Well site safety plans must be filed with the horizontal well application to address measures to be employed to protect the safety of persons on-site, the general public, and the environment. The plan must cover all aspects of drilling, completion and production activities and provide a 24-hour contact for the well operator and be provided to local emergency personnel seven days before work commences. Once again, the plan becomes a condition of the permit. The plan must cover a host of requirements, including an evacuation plan for personnel and area residents, school identification, and on-site MSDS sheets for all materials and chemicals at the site. Regular safety meetings must be held and documented before and during drilling, completion and work-over operations.

5.         Water Quality and Quantity Protection.  Requirements in the new regulations to protect water quality and quantity both surface and ground water systems during and after drilling and during reclamation include:

• Maintain sufficient pass-by flow in streams;
• Casing, sealing or managing wells to keep fluids or gas from entering ground or surface waters;
• Use best management practices to prevent, to the extent practicable, adding suspended or dissolved solids to streams or runoff outside the permit area;
• Within 48 but no less than 24 hours in advance, notify DEP of water withdrawal locations by latitude and longitude and verify sufficient flow;
• Post signs with specified information at water withdrawal locations and notify DEP and remove signs when finished;
• Maintain records of water used in fracking and production operations, quantity of flowback, produced waters, transportation of water transported, collection and delivery of water transported, and identity of water haulers;
• Dispose of drill cuttings in an approved solid waste facility or manage them on-site in a manner approved by DEP and
• Prudently drill through fresh water zones to minimize disturbance and construct the well and case and cement the well in accordance with standards developed by DEP and in a manner to provide control of the well at all times, prevent migration of gas and fluids into fresh groundwater and coal seams, and prevent pollution of or diminution of fresh groundwater. Specific casing and cementing standards are adopted.

6.         Public Notice Requirement for Municipalities.  A public notice for the first well to be drilled on a drill pad within the boundaries of a municipality must be published in a local newspaper. A permit will not be issued until at least 30 days after public notice. The notice must contain, inter alia, a contact telephone number for more information. While a public notice is required, there is still no statutory or regulatory mechanism providing the public with any right to protest (other than surface owners where the well is drilled and coal owners/operators).

To view the Emergency Rule in its entirety, click here.

This article was authored by Steven M. Green, Jackson Kelly PLLC. For more information on the author see here.

West Virginia Judge Overturns Morgantown Horizontal Drilling Ban

Earlier this year, the City of Morgantown, West Virginia adopted an ordinance which prohibited the drilling of deep, horizontal gas wells and hydraulic fracking within one mile outside of the city limits.  Similar bans were under consideration by several other cities within the State.  

Prior to the adoption of the ordinance, Enrout Properties (“Enrout”) leased to Northeast National Energy (“Northeast”) the right to extract Marcellus Shale gas from the property.  Northeast then sought and obtained two drilling permits from the State to extract gas from the Marcellus formation using fracking techniques. 

After Morgantown adopted the ordinance, Northeast and Enrout sued the city seeking to set aside the ordinance.  By order issued August 12, 2011, the Circuit Court of Monongalia County, West Virginia ruled that the ordinance was pre-empted by the comprehensive State regulatory program for gas wells. 

Jackson Kelly represented one of the two plaintiffs in the case. 

This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author see here.