E2 Law Blog : Environmental Lawyers & Attorneys : Greenberg Traurig Law Firm : Climate Change, Energy Legislation

From K.B. Battaglini of GT Houston:

Just weeks after EPA proposed new regulations to cut greenhouse gas emissions produced by natural gas drilling, a leading energy group issued a report claiming that EPA overestimated the amount of methane thought to be flared or vented from gas drilling operations.  According to the report from IHS Cambridge Energy Research Associates (IHS CERA), EPA used out-of-context data sets and poor assumptions, and erroneously doubled its greenhouse gas estimates in 2010.  Written by IHS CERA directors Mary Lashley Barcella, Samantha Gross and Surya Rajan, the report argues that upstream greenhouse gas emissions that appear to make the production of natural gas seem bad for the environment are based on a fundamentally flawed EPA formula.  IHS CERA argues that EPA overstated both the problem and the effect of new regulations. 

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From Todd Sumner of GT Tallahassee:

The Governors' Wind Energy Coalition (GWC) submitted a GWC Letter to President Obama (July 2011) which set forth a punch list of action items that the Administration should pursue in order to facilitate further development of the U.S. wind industry including the newly emerging offshore wind sector. The GWC, comprised of 24 governors (Democrats, Republicans, Independents), from diverse regions of the U.S., called for the Administration to extend for at least 7 years the production tax credit and the investment tax credit in order "to have a consistency in policy to support the continued development of and wind manufacturing in the United States."  The GWC also emphasized other steps that should be taken by the Administration including :

- establish a combined intergovernmental state-federal task force on wind energy development;

- restore collaboration on wind deployment and expand technology development;

- improve siting collaboration;

- expedite the Deployment of Offshore Wind;

- identify transmission priorities for Power Marketing Administrations; and

- release completed DOE analytical information.

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From K.B. Battaglini of GT Houston:

The Marcellus Shale contains about 84 trillion cubic feet of recoverable natural gas, and 3.4 billion barrels of recoverable natural gas liquids, according to a just-released assessment by USGS of geological and engineering data.  These estimates are significantly more than the last USGS assessment in 2002, which estimated 2 trillion cubic feet of natural gas and .01 billion barrels of natural gas liquids. 

The new volumetric assessment must be tempered by legal and technical accessibility issues.  In other words, it is not likely that all of the recoverable gas will be recovered.

In reporting on this development, the New York Times slanted the results by proclaiming in a headline that "Geologists Sharply Cut Estimate of Shale Gas."  But the USGS did not cut its 2002 estimate, but rather increased it.  Instead, the Times compared the USGS's volumetric assessment with a prior estimate made by the Energy Information Administration of 410 trillion cubic feet of natural gas.  Upon learning of the just-released assessment by USGS, the EIA downgraded its prior estimate, saying "we consider the USGS to be the experts in this matter" and "they're geologists and we're not."  So, rather than proclaiming that "Geologists" had cut their estimate, the Times headline should have stated that the "EIA downgraded its estimate based upon a geological assessment." 

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On August 18, 2011, the Internal Revenue Service (IRS) issued final regulations regarding the types of facilities that qualify as "solid waste disposal facilities" under section 142(a)(6) of the Internal Revenue Code and therefore are eligible for financing with tax-exempt private activity bonds. In their GT Alert, Carla Young and Vanessa Albert Lowry examine the new regulations.

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In this month's Pennsylvania Law Weekly / Legal Intelligencer column, I examine the recent Pennsylvania Commonwealth Court decision, Energy Conservation Council v. Public Utility Commission, No. 951 C.D. 2010 (July 11, 2011), and the Environmental Rights Amendment to the Pennsylvania Constitution.

To read the article, click here.

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From Hamilton Hackney of GT Boston:

EPA recently withdrew a proposed rule that sought to impose a numeric turbidity standard and ongoing monitoring obligations on construction sites 10 or more acres in size. This move follows an industry challenge to the rule and suggests that the agency’s efforts to transition stormwater regulations away from Best Management Practices and towards numeric standards and analytical monitoring may be faltering.

The backstory: In December, 2009, EPA issued a rule as part of 40 C.F.R. Part 450, regulating stormwater discharges from construction sites of one acre of more. Construction sites 10 or more acres in size were required for the first time to meet a numeric standard for turbidity (280 nepholometric turbidity units or NTUs) and conduct analytical sampling of their discharges to confirm compliance with the standard. The rule resulted from a lawsuit filed by environmental groups in 2004, which lead to a court order mandating EPA to establish a numeric turbidity standard for construction stormwater discharges by December, 2009.

The new rule applied to all construction sites - residential, commercial, and infrastructure - over 10 acres in size. EPA estimated that the rule would affect over 82,000 construction and development companies, result in the removal of 4 billion pounds of year of sediment and pollutants from construction site stormwater discharges, and cost $953 million annually to comply with.

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On August 22, the West Virginia Department of Environmental Protection (WVDEP) filed an emergency rule to increase oversight of horizontal drilling of natural gas wells.  The emergency rule adds additional permit and operational requirements focused on hydraulic fracturing, or "fracking."  If a permit applicant disturbs more than three acres of land, the applicant must submit an erosion and sediment control plan and a site construction plan.  If an operator will be using more than 210,000 gallons of water during a one-month period, the applicant must also include a water management plan with its permit application.  The water management plan must include information on the type of water source, the anticipated volume of each water withdrawal, the plan for its management and disposal, and a listing of all fracking additives.  Operational requirements include well casing requirements, notification requirements, and information gathering requirements for all water used in connection with fracking activities.  In addition, operators must issue public notice in a newspaper at least 30 days prior to drilling at a well pad for the first time.

This emergency rule follows Executive Order No. 4-11, issued by Governor Earl Ray Tomblin on July 12, which directed the WVDEP to issue rules on horizontal drilling.  This is merely considered a stop-gap measure by both the Governor and the WVDEP, who plan to work with the legislature toward a "comprehensive approach."  The rule will become effective upon approval by the Secretary of State and remain in effect for 15 months.

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 From K.B. Battaglini of GT Houston: 

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 From Samantha Corson of GT Philadelphia:

On August 15, the New Jersey Department of Environmental Protection (NJDEP) Site Remediation Program took a big step toward completing the transition from DEP oversight to private oversight of remediation of contaminated sites by releasing a proposed final rule package ("Final Rules") for the Administrative Requirements for the Remediation of Contaminated Sites ("ARRCS") and Technical Requirements for Site Remediation ("Tech Regs").

The privatization process began in 2009 with the adoption of the Site Remediation Reform Act ("SRRA") which called for the creation of the Licensed Site Remediation Professional ("LSRP") program that will supplant the DEP command and control model of oversight. Under SRRA, all sites must be transitioned to LSRP oversight by May 2012.

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From Joseph Z. Fleming at GT Miami:

Whether there is global warming, climate change, or not, other nations are increasingly taking action to reduce the “carbon” footprint in a manner that will impose an ever-increasing footprint on the American workplace. An example recently occurred with the E.U.’s determination that U.S. carriers must comply with E.U. emissions reductions or, in the alternative, pay fines which could add up to billions of dollars. The United States has officially complained about this policy. The outcome is not final.  

The dispute may be a harbinger of an increasing trend to impose restrictions related to climate change, which may be faced by American employers. In addition to this newly reported development, recent reports (see here and here) have confirmed that the Foreign Trade Agreements proposed by the United States with other nations increasingly contain not only labor but environmental standards, some of which are stricter than those in the United States. 

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From K.B. Battaglini of GT Houston:

The Natural Gas Subcommittee of the Secretary of Energy Advisory Board issued its Ninety-Day Report today, stating that hydraulic fracturing can continue safely as long as companies disclose more about their practices and monitor their environmental impact.  The report constitutes a qualified endorsement of shale gas exploration.  Members of the Subcommittee include MIT professor John Deutch, Environmental Defense Fund president Fred Krupp, and Kathleen McGinty, former Secretary of the Pennsylvania Department of Environmental Protection who also served as Chair of the White House Council on Environmental Quality during the Clinton Administration.  The Advisory Board was established at the request of President Obama, as part of his "Blueprint for a Secure Energy Future."  The Environmental Protection Agency, which regulates air and water quality, is conducting its own study of the effects of hydraulic fracturing.  EPA intends to release a report of its findings in 2012.

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From K.B. Battaglini of GT Houston:

 In what appears to be a reaction to recent New York Times articles asserting that some Marcellus Shale gas companies were overbooking their natural gas reserves, the Securities and Exchange Commission is issuing subpoenas to investigate the accuracy of financial statements.  New York Congressman Maurice Hinchey asked the SEC to investigate the issue following publication of the assertions in the New York Times, which questioned how gas companies calculate and publicly disclose performance of shale gas wells.  Hinchey wants the SEC to consider updating its oil and gas reserve reporting requirements to provide greater disclosure to investors and the public, and proposed that financial statements be subjected to third-party audits.  However, financial statements are now widely subjected to independent audits, and Arthur Brisbane, public editor of the New York Times, has cast considerable doubt on the source material for the articles, describing them as having "serious shortcomings."  The conclusions reached in the article have also been challenged by a number of sources, including a M.I.T. Study Group and a UBS Investment Analyst.  The SEC has not announced whether it will continue issuing subpoenas.

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