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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.

Proposed Emergency and Hazardous Chemical Inventory Forms (Tier I and Tier II) Changes

On Monday August 8, 2011 the United States Environmental Protection Agency proposed to revise the Emergency and Hazardous Chemical Inventory Forms (Tier I and Tier II) under Section 312 of the Emergency Planning and Community Right-to-Know Act (EPCRA) to add new data elements and revise some existing data elements.  Comments must be received on or before October 7, 2011.  

EPA is proposing the following changes to the Tier I and Tier II forms.   

Facility Identification

Under facility identification EPA is proposing to add new data elements for facility phone number, latitude and longitude and number of full-time employees.  In addition EPA is proposing the addition of facility identification numbers used in the Risk Management Program (Chemical Accident Prevention under section 112(r) of the Clean Air Act and the Toxic Release Inventory (TRI) program under section 313 of EPCRA.  

In addition to the number of full-time employees local emergency responders requested that EPA require facilities such as hotels, colleges, universities and convention centers to report the total number of people that may occupy a building at any given time.  US EPA is not including this in proposed changes but is accepting comments on this data element. 

Name of the Facility’s Parent Company and Owner or Operator of the Facility

States and LEPCs have informed EPA that some facilities have sites in remote locations and do not have operators present at all times.  EPA is proposing to require facilities to provide information on the facility’s parent company and the owner or operator of the facility, such as name, address and phone number, as well as the Dun and Bradstreet number of the facility’s parent company.  EPA is also proposing that the facility owner or operator provide their e-mail address.   

Facility Emergency Coordinator

Currently a facility must inform the LEPC of any changes to the facility emergency coordinator within 30 days after changes have occurred. EPA is proposing that the facility emergency coordinator be identified on the Tier I and Tier II forms, since LEPCs and other emergency response coordinators may need this information during an emergency. 

Tier I and Tier II Information Contacts

Since the information reported under EPCRA section 312 is used by LEPCs to improve emergency response plans, these entities may need to contact the facility regarding information that is reported on the Tier I and Tier II reporting forms.  EPA is proposing to require the name, title, phone number and e-mail address of the person knowledgeable or responsible for completing the information on the Tier I and Tier II forms.

Subject to Emergency Planning Under Section 302 of EPCRA 

LEPCs requested that EPA require facilities to report if they are subject to emergency planning notification under EPCRA section 302 to improve the emergency response plans in their community.  EPA is proposing to add a new data element to indicate if facilities are subject to the emergency planning notification under EPCRA section 302. 

Subject to Chemical Accident Prevention Under Section 112(r) of the Clean Air Act

In addition to the information reported under EPCRA section 312, LEPCs and States use the information reported in RMPs to improve the emergency response plans in each community.  In order to better serve this purpose, EPA is proposing to add a new data element to both the Tier I and Tier II forms to indicate whether the facility is subject to chemical accident prevention under section 112(r) of the CAA. 

Range Codes and Ranges for Reporting Maximum Amount and Average Daily Amount

In order for the States, local agencies and emergency response officials to have information on the maximum amount and average daily amount that are closer to the actual amounts present at the facility, EPA is proposing to narrow the ranges that are in the existing regulations.  The existing and proposed range codes are presented in the table below.  

Range Codes	Current Range (in lbs)	Proposed Range (in lbs)
01	0 – 99	0 – 99
02	100 – 999	100 – 499
03	1,000 – 9,999	500 – 999
04	10,000 – 99,999	1,000 – 4,999
05	100,000 – 999,999	5,000 – 9,999
06	1,000,000 – 9,999,999	10,000 – 24,999
07	10,000,000 – 49,999,999	25,000 – 49,999
08	50,000,000 – 99,999,999	50,000 – 74,999
09	100,000,000 – 499,999,999	75,000 – 99,999
10	500,000,000 – 999,999,999	100,000 – 499,999
11	1 billion – higher than 1 billion	500,000 – 999,999
12	--	1,000,000 – 9,999,999
13	--	10,000,000 – Greater than 10 million

Specific Tier II form proposed revisions

 EPA is proposing to revise some existing data elements on the Tier II federal inventory form.  

Chemical Information

EPA is proposing to modify the chemical information reporting section of the Tier II inventory form to make it more user-friendly for States and local agencies, as well as the emergency response officials. This revision will also benefit facilities by clarifying how to report mixtures on the Tier II form.  In order clarify the reporting of pure chemicals vs. mixtures, the proposed Tier II form has separate entries for mixtures and pure chemicals.  The entry for mixtures includes a separate line for mixture name, amount of mixture present, the ESH(s) name, and amount of EHS(s) present.  Facilities still have the option to report the mixture or the hazardous chemical component.  

Storage Types and Conditions

The Tier II form currently requires facilities to report the codes for types of storage and storage conditions.  In order to make the form more user-friendly and also to have information readily available to emergency response officials in an emergency, EPA proposes that facilities list the types of storage and storage conditions on the Tier II form rather than noting the reporting the codes.   

This article was excerpted from publically available information, and was authored by Joyce Gentry, Acacia Environmental Group LLC.  For more information on the author see here.

West Virginia Operators of Regulated Underground Storage Tanks to Have Required Training by August 2012

If your company has an underground storage tank (UST) or multiple USTs, the personnel responsible for operation and maintenance of the USTs and those individuals on-site who would be responsible for responding to emergencies are required to complete required training on or before August 8, 2012, in accordance with West Virginia Legislative Rules Title 33 CSR 30-7.  The state regulations are federally mandated for states that regulate USTs.  This requirement applies to those companies that may have one UST to fuel an emergency generator to large service station chains and everyone in between. 

The regulations identify three types of individuals that require training: 

Class A Operator.  Responsibilities include management of the UST system in order to achieve and maintain regulatory compliance.  These responsibilities are to be performed by the own/operator. 

Class B Operator.  Responsibilities include implementation of daily on-site operations and maintenance of the UST systems.  This individual performs record keeping and reporting. 

Class C Operator.  These individuals control or monitor the dispensing of regulated substances and are responsible for the initial response to releases or alarms.  The Class C Operator must be onsite during all hours of operation.  For facilities that are not manned, the West Virginia Department of Environmental Protection (WVDEP) has provided a guidance document policy that requires at least one Class C Operator to be available to respond immediately to calls from the facility and who is able to reach the site within 60 minutes. 

According to the WVDEP guidance document regarding this training, Class A Operator responsibilities must be performed by the own/operator and cannot be assigned to an outside party.  The Class B Operator  responsibilities could be assigned to an outside party, upon request and approval by the WVDEP.  The provisions for prohibiting contracting out these services to an outside party are not addressed in the Legislative Rules and appear to be a policy developed by the WVDEP.   A copy of the guidance document is available on the WVDEP website at http://www.dep.wv.gov/WWE/ee/ust/Documents/oper_trng_guidance_doc.pdf.   The guidance document identifies the contents of the training and further defines the duties of UST system operators. 

A list of vendors providing training for each of the three classifications is available on the WVDEP website at http://www.dep.wv.gov/WWE/ee/ust/Pages/USTOperatorTraining.aspx.  

Training will include testing to measure all aspects of the individual’s knowledge and skills to competently operate UST systems.  

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

State Officials Criticize EPA’s Use of ‘Guidance’

While the EPA’s April 2010 Guidance Memorandum regarding coal-mining permits is already subject to a lawsuit brought by the State of West Virginia and the National Mining Association (NMA), other states are chiming in against EPA’s use of such “interim guidance.” 

The Environmental Council of the States (ECOS) has approved nine resolutions drafted by various state environmental secretaries protesting EPA’s use of “interim guidance.”  These state officials claim that such guidance frustrates the states’ abilities to navigate their respective rulemaking processes and, quite simply, obey the law. 

Steven Brown, ECOS’s executive director, has recently drafted a report criticizing EPA’s guidance memos and explaining how states ought to review permits for water pollution and mountaintop-removal coal mining to comply with the Clean Water Act.

Brown feels that the EPA is attempting to speed along the rulemaking process, noting that the agency has sometimes directed regional offices to reject permits that do not follow the April 2010 guidance.  According to Brown, this creates a problem where state laws do not permit their agencies to be any stricter than the federal rules require.

“There’s a strong desire among some people to right what they believe is an environmental wrong,” Brown said.  “That’s fine.  They should do that.  But they should use the laws and procedures that are in place, and the court decisions over the years, to do it – not come up with some cheap shortcut that is impossible for states to implement….  One could certainly imagine what life would be like if sheriff’s offices took such shortcuts, or the FBI did.  It wouldn’t be a very pleasant place to live, now would it?”  (Greenwire, March 23). 

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

New Law Raises WVSCMRA Fees For Coal Companies But Also Provides Tax Credit For Investment In Safety Technology

House Bill 2955 was introduced with the express purpose of authorizing the Division of Mining and Reclamation to raise fees on coal mine operators.  To that end, H.B. 2955 included the following fee increases:  

            - W.Va. Code 22-3-8(a)(4) – permit application fee raised from $1,000 to $3,000;

            - 22-3-19(a)(4) – renewal application fees raised from $2,000 to $2,500;

            - 22-3-19(b)(2) – applications for significant revision of permit now subject to $500 fee;

            - 22-3-19(b)(3) – applications for incidental boundary revisions now subject to $500 fee;

            - 22-3-19(d) – applications for permit transfer now subject to $1,500 fee; $1,000 for permit assignment;

            - 22-3-19(e) – requests for inactive status now subject to $500 fee. 

See H.B. 2955, Introduced Version; available at http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb2955%20intr.htm&yr=2011&sesstype=RS&i=2955. 

While the precipitous increase in mining-related fees imposes unwelcome additional financial burden upon the coal industry, the final version of H.B. 2955 includes a tax credit for investments in mine safety technology to help off-set the burden of the new fees.  See H.B. 2955, Enrolled Version – Final Version; available at http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=HB2955%20SUB%20ENR.htm&yr=2011&sesstype=RS&i=2955.  The final version of the bill includes the fee increases but also amends Chapter 11 of the West Virginia Code by adding sections 11-13BB-1 through 13, which provide the tax credit.  The Mine Safety and Technology Task Force is tasked with submitting the list of approved safety technology to the Director for approval.  The amount of the credit is equal to 50% of the qualified investment in safety technology and may be applied to reduce a coal operator’s business franchise tax and corporate net income tax over a five year period.  The bill is currently awaiting the Governor's signature. 

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

Kentucky Threatens to Give Boot to Federal EPA

The Associated Press reports that the Kentucky Legislature took a vote on Thursday, February 24, 2011 on a symbolic resolution declaring that the EPA is over-regulating the state’s coal industry.  The proposed resolution contends that the EPA has violated federal law - as well as the Kentucky and United States Constitutions - by blocking the opening of new mines.  The resolution would ultimately declare Kentucky a “sanctuary state,” free from the authority of the EPA.  State Senator Brandon Smith, Chairman of the Senate Energy and Environment Committee, is sponsoring the resolution.  While he believes that the resolution is popular, he does not think that it will be enforceable.  “I’m not foolish enough to believe we are going to make [the EPA] do anything,” Smith said.  “But we have to get back to where we feel like they’re not the enemy, that they’re not trying to shut us down.”  Kentucky Coal Association President Bill Bissett characterized the resolution as “a message about protecting Kentucky jobs and our economy from appointed bureaucrats in Washington D.C.”  

Although the resolution would be unenforceable, it reflects a national campaign by lawmakers against the authority of the EPA.  For example, Rep. Harold Rogers (R-Ky), Chairman of the House Appropriations Committee, has already proposed a $1.9 billion cut the amount of money requested for the EPA this year by President Obama.    

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

WV Surface Mine Board Vacates NOVs Issued by WVDEP in Wake of Ex Parte Communications with Assessment Officer

At a hearing held on January 19, 2011, the WV Surface Mine Board vacated two NOVs issued four years apart to Clear Fork Coal Company.  In 2006, WVDEP issued an NOV under the West Virginia Surface Coal Mining and Reclamation Act.  The NOV charged Clear Fork with failing to maintain the lowest practicable impoundment pool level in accordance with a rule which applied only to impoundments permitted or expanded after 2003.  Clear Fork challenged the NOV before an assessment officer, who vacated the NOV on grounds that the rule did not apply.  Four years later, in 2010, WVDEP issued a nearly identical NOV.  Clear Fork challenged that NOV to the same assessment officer, who again vacated the NOV on the same grounds.  The day after the assessment officer issued his decision, however, WVDEP enforcement personnel contacted the assessment officer, provided additional information and asked him to reverse his decision.  After these contacts, the assessment officer did reverse his decision and purported to re-instate the 2006 NOV. 

Clear Fork appealed to the Board, arguing that the ex parte contacts by WVDEP enforcement personnel with the assessment officer violated WVDEP rules, which require notice of assessment conferences and provide the public with the right to attend.  Clear Fork also offered to submit a plan to keep the pool level pumped down to the level recognized by WVDEP as the lowest practical level in a finding that the 2010 NOV had been abated.  WVDEP did not dispute the facts, but argued that its concerns about the condition of the impoundment trumped any procedural irregularities.  

By a vote of 6-0, the Board granted a directed verdict to Clear Fork based on the opening statements, and vacated both NOVs.  The Board also ordered Clear Fork to submit a plan amendment to WVDEP within 30 days.  No written order has yet been entered.  

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

WV Quarry Board Affirms Permit

At a hearing held January 19, 2011, the WV Quarry Board affirmed WVDEP’s decision to renew a quarry permit held by Capitol Cement.  See S&A Homes v. WVDEP, et al., Appeal No. 2010-18-SMB.  The quarry dates to the 19th century, but is used to supply limestone to an adjacent state-of-the-art cement plant.   The renewal was challenged by S&A, a home developer which acquired a nearby tract around 2002 and which has proven unable to sell many homes in a depressed market.  

Among other things, S&A claimed that WVDEP failed to require more specificity in Capitol’s mining and reclamation plan as a condition of the renewal.  The Quarry Board, which hears de novo challenges to permit decisions, granted summary judgment on several issues on grounds that the century-old quarry is grandfathered from the reclamation provisions of the West Virginia Quarry and Reclamation Act.  It granted a directed verdict to WVDEP on the remaining claims at the end of S&A’s case.  The Board has not yet entered a written order. 

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

D.C. District Court Denies NMA Request for Preliminary Injunction Against EPA, But Says NMA is Likely to Win on its Legal Theories -- Eventually

            Attached is an opinion issued on January 14 by the D.C. District Court in National Mining Association v. EPA, No. 10-1220 (D.D.C.).  In this case, NMA challenged EPA’s MIRA, its Enhanced Coordination Process (“ECP”) and its April 2010 Guidance—all relating to the review of §404 Permits.  The EPA policies at issue were issued in the wake of the Fourth Circuit Court of Appeals’ decision in OVEC v. Aracoma, 556 F.3d 177 (4th Cir. 2009). That decision, issued in February 2009, threatened to free a backlog of dozens of permit applications that had been stalled pending resolution of the Fourth Circuit case.  For many of those applications, EPA’s time to review them had expired and the Corps was required to consider its record as “complete” with respect to EPA.  One of the new policies (the ECP) was designed to force the Corps to let EPA provide another round of comments.  The April 2010 Guidance was designed to force states to impose conductivity limits on discharges associated with surface mines. 

            The new opinion denied EPA’s motion to dismiss the case on grounds that there was no final agency action, that the case wasn’t ripe, and that NMA lacked standing.  The opinion is an easy read and clearly written on these issues. 

            The Court also denied NMA’s motion for a preliminary injunction, but the opinion is nonetheless favorable as to the merits of NMA’s case.  In ruling on requests for preliminary injunctions, courts are required to examine the strength of the plaintiff’s legal case and to determine whether, absent the injunction, the plaintiff will suffer irreparable harm.  The Court ruled that NMA was likely to prevail on the merits of its claims that EPA’s policies are legislative rules adopted in violation of the Administrative Procedure Act’s notice and comment requirements.  It also determined that EPA’s policies are likely outside of its statutory authority.  Here, the Court noted that Congress intended to give EPA a limited role under Section 404, and that the ECP process is outside the scope of that role.  Most importantly, the Court also stated that “it seems clear that with the implementation of the Guidance Memorandum the EPA has encroached upon the role carved out for the states by setting region-wide conductivity standards.”  While the Court will not be bound by these preliminary conclusions when it finally rules on the merits of the case, they are powerful statements which indicate the likely direction of the Court. 

            The Court denied the preliminary injunction request because it found that industry’s affidavits were insufficient to prove the level of irreparable harm necessary to secure an injunction.  The Court determined that industry had not shown that its damages are sufficiently certain to occur or imminent.  Although the Court observed that the inability to earn income can constitute irreparable harm where sovereign immunity bars an action against the government to recoup the money, it also observed that industry had failed to show that it could not make up the losses when the permits are finally issued.  It is possible that the Court could alter its opinion on this issue if a member of industry can demonstrate more concrete and certain harm, though the standard in the D.C. District Court is a difficult one to meet.  

            Presumably, the next step in the case will be for the establishment of a schedule for resolving the merits of the case.  

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

EPA "Vetoes" Spruce Permit

On Thursday, January 13, 2011, EPA issued a final decision prohibiting a subsidiary of Arch Coal from using a "fill" permit issued in January 2007 by the U.S. Army Corps of Engineers for the Spruce No. 1 Surface Mine. EPA's action, commonly called a "veto", comes more than a decade after the mine was originally proposed by Arch. EPA's new action relies heavily on claims that "fills" associated with the mine will have adverse impacts on downstream water quality which will in turn cause unacceptable impacts on aquatic life. However, all discharges of water from the fill area are regulated by an NPDES permit. That permit was issued by WVDEP after EPA withdrew objections to it years ago. 

The veto marks the 13th time since 1972 that EPA has used its Clean Water Act veto authority, and the first time EPA has vetoed a previously permitted mine. 

Arch issued a strong statement saying it was “shocked and dismayed” by EPA’s assault on a permit that was legitimately issued by the U.S. Army Corps of Engineers, and vowed to continue fighting for the mine. 

“We believe this decision will have a chilling effect on future U.S. investment,” said Arch spokeswoman Kim Link.  

The government’s decision likewise drew a sharp response from the mining industry and West Virginia politicians, who say it exemplifies a regulatory overreach that threatens to destroy the state’s coal industry.  

National Mining Association President Hal Quinn said EPA’s action threatens the certainty of all similar permits that have been issued. Spruce No. 1 went through a “robust 10-year review” process, he said, and the project has complied with every permit requirement.  

“This news is devastating,” said acting Gov. Earl Ray Tomblin, a Democrat. “The Spruce No. 1 permit was issued years ago and it’s hard to understand how the EPA at this late stage could take such a drastic action.”   

Democratic U.S. Sen. Joe Manchin called the ruling “fundamentally wrong” and “a shocking display of overreach” that will cost jobs. Manchin called EPA’s retroactive action “an unprecedented power grab, period.”   

“This is not just an assault on the coal industry. It’s an assault on every job market in the U.S. economy.” Manchin said. “It might be West Virginia and the coal industry today. It will be your industry tomorrow.”  

Democratic U.S. Sen. Jay Rockefeller responded with similar sentiment, firing off an angry letter to Obama, declaring EPA’s action wrong and unfair.  

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