PERSPECTIVES ON ENFORCEMENT

& COMPLIANCE

STEPHEN C. SMITH

STEPTOE & JOHNSON PLLC

AWMA OIL & GAS ENVIRONMENTAL

COMPLIANCE CONFERENCE

MAY 14, 2014
Disclaimer

• This presentation reflects my personal opinions 

formed over the course of my career which 

includes 3 years as an agency enforcement 

attorney, 17 years in private practice and almost 9 

years as Deputy General Counsel, Environmental 

Director of a limestone mining and lime 

manufacturing company operating in a dozen 

states and one province. These opinions do not 

necessarily reflect the views of Steptoe & 

Johnson PLLC or our clients. 
Overview of Presentation

• There ought to be a law against that!

– Incidents in the Utica and Marcellus Plays

• Perception of the need for enforcement or gaps 

can lead to more laws/regs

• Be Responsible

• Be Environmental Stewards

– Internal Actions

– External Actions

• Conclusion
There ought to be 

a law against that!

• Donora Smog of 1948

– 20 people die in 24 hours

• Cuyahoga River on fire

– Toxic and flammable industrial discharges 

• Toxic waste buried at Love Canal

– There goes the neighborhood

– Here comes Superfund
Donora Smog

• Donora, PA (30 miles east of Washington, PA)

• Steel mills, zinc smelter and other industries 

operating in area

• October 30-31, 1948 (pop = 14,000)

• Unusual, yellow dense fog hung over Mon 

River valley

• 500 residents become sick
Donora Smog (cont)

• 20 people die in 24 hours

– Ages 52-85 with chronic heart/pulmonary diseases

• “Worst air pollution disaster in U.S. history” NPR 

“Smog Deaths in 1948 Led to Clean Air Laws” 

(April 22, 2009)

• Led to local, state and federal (1955) air pollution 

laws

– Allegheny County enacted smoke ordinance in 1946

• AWMA began in Pittsburgh in 1955
Cuyahoga River 

• Cuyahoga River flows into Lake Erie at 

Cleveland, OH

• Several industries (steel, oil, chemical) 

operating on its banks

• In June 1969, “oil slick” caught fire near 

Republic Steel plant

• Cleveland Mayor Stokes demanded action

• Led to Clean Water Act of 1972
Love Canal

• Hooker Chemical buried tons of toxic waste in 

aborted canal in Niagara Falls, NY 1940-1950s 

• City bought site for $1 in 1953

• About 100 homes and school built on site

• 1978, waste migrated to surface 

• Homes evacuated 
Love Canal (cont)

• NY bought homes from residents

• President Carter approves emergency funds 

• Congenital birth defects documented 

• Led to passage of Superfund (CERCLA) in 1980

• Time Magazine listed Love Canal as #4 in its 

2010 list of history’s greatest environmental 

tragedies
So what... that’s past history

• Do not forget how we got here

• Consider other stakeholder perspectives

• Enforcement of env laws demonstrates 

protection of human health/environment

• More laws can be expected if:

– (Perception of) inadequate enforcement, or

– Gaps in laws expose risks

• Examples (next 2 slides)
Robinson Twp Decision

• In 2012, Pa enacted Act 13 amending Oil & Gas Act

• Impact fees to localities 

• Preempted municipal ordinances/local permit review 

• Statewide uniformity in regulating O&G operations

• December 2013, Pa Sup Ct (plurality) held Act 13 to be 

unconstitutional (violates Env Rights Amendment 

and/or Due Process)

• Chief Justice “By any responsible account, the 

exploitation of the Marcellus Shale Formation will 

produce a detrimental effect on the environment....”
WV Tank Act

• January 9, 2014- 10,000 gallons of a chemical 

used by coal industry leaked from AST into Elk 

River 

• Just upstream of water intake for treatment plant 

supplying 300,000 people 

• Illness and major inconvenience to Charleston, 

WV

• Gap in regulations prompted WV to enact “AST 

Water Resources Protection Act”

– NOTE- New law will impact O&G operators 
Future of Environmental 

Compliance? 

• Expect environmental regulation to escalate

– Goal of zero emission/closed loop operations

– Compliance will be more challenging

• Companies with robust compliance programs 

may have competitive advantage

• Consider internal/external strategies for 

developing compliance programs
Internal Efforts

• Core values- environmental stewardship

• Commit $$$ to develop env resources 

– Retain & support environmental professionals

– Develop internal expertise understanding regulations, 

permitting, reporting 

– Support participation in industry trade groups

• Avoid organizational “silos” 

– Include environmental leadership in strategic planning

– Benefits flow between operations and environmental
Internal: Participate in 

Trade Groups

• API

• Marcellus Shale Coalition

– Numerous committees and work groups

• PIOGA

– Environmental Committee

• OOGA

• WVONGA

• Participate in rulemaking reviews, comments
External - Communities

• Know your community and neighbors

– Who will be impacted by operations?

– Hunters (camps)

– Fishermen

– Sporting clubs

– Local newspapers

– Who commented/objected to a similar permit?

– Consider pre-permit meeting with neighbors

– Which NGOs are active in area?
External – Agency Relationship

• Develop a positive relationship with agency 

personnel

– District inspectors/supervisors

– Permitting personnel

– Become aware of historical enforcement

– Become familiar with program guidance and 

technical manuals 
Professional Networks

• AWMA

• Consultants

– With experience in your industry in your area

• Counsel

– State and federal issues

• Other operators

• Trade associations

• NGOs
NGO’s

• Consider dialogue with NGOs

– Env Defense Fund joined with Anadarko, Encana , & Noble 

Energy to support more stringent methane regs in Colo

– “Our families live here and breathe the air”- Noble Energy

• Attending January 2014 MSC meeting: 

– Keystone Elk Country Alliance

– Ruffed Grouse Society

– National Wild Turkey Federation

• Create desirable game habitat

• Demonstrate stewardship & community involvement
When Enforcement Strikes

• Thorough investigation

• Careful communications

• Consider company goals

– Reputation

– Relationships

– Costs

• Learn from experience

– What changes should be made, if any? 
Conclusion

• Regulation of energy operations will escalate

– Perception of carbon as dirty fuel

– Some NGO’s see O&G as enemy of renewables

– President Obama’s Methane Reduction Strategy

– Threat of municipal regulation 

• Be responsible

• Be environmental stewards

• Force critics to cite facts not fears
Thank you

• Stephen C. Smith

Of Counsel

• Steptoe & Johnson PLLC

11 Grandview Circle, Suite 200

Canonsburg, PA 15317

O: 724-873-3186 F: 304-933-8735 C: 412-522-

3638

stephen.smith@steptoe-johnson.com

www.steptoe-johnson.com