Source: https://eem.jacksonkelly.com/2016/03/index.html
Timestamp: 2019-04-26 12:24:23+00:00

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The West Virginia Department of Environmental Protection’s (“WVDEP”) Division of Air Quality (“DAQ”) recently issued two General Permits regulating air pollution in the oil and gas industry, both of which have been challenged by the West Virginia Oil and Natural Gas Association (“WVONGA”) as exceeding the Agency’s authority. During the public comment process, DAQ dismissed complaints about perceived flaws in each permit by stating that dissatisfied parties are always free to apply for an individual permit. DAQ’s response to public comments raises an interesting question, in addition to those raised in the industry appeals: Can the availability of an individual permit be used to justify certain overreaches or legal deficiencies in a general permit?
DAQ issued General Permit G70-B on November 2, 2015, in part to establish annual emission caps on certain pollutants emanating from gas well pad sites, such as volatile organic compounds, methane, and sulfur dioxide. Section 8.1.2.5 of G70-B limits the heat input of flaring equipment to 30 MMBtu. Flaring occurs at gas wells during the drilling and testing phase. The practice can be used to determine the production capabilities of a well, as well as the pressure and flow rates. Flaring is primarily a safety measure designed to prevent accumulation of unsafe levels of pressure and/or gas. Numerous commenters questioned the reasonableness of the heat input limit and asserted that it was too low to provide for the safe operation of natural gas wells. In responding to public comments questioning the heat input limit, the agency responded that, “[i]f the total MDHI of all units would exceed 30 MMBTU/hr or greater, the applicant would be required to apply for a 45CSR13 permit.” Essentially, DAQ’s response to concerns about the flare limitation was to tell operators they are always free to go through the more cumbersome process of obtaining a Reg. 13 individual permit if they wish to use higher heat inputs for flaring. If, however, the 30 MMBtu limit makes it impossible to operate a well safely, G70-B becomes unusable for oil and gas exploration.
WVONGA and Antero Resources Corporation appealed General Permit G70-B to the West Virginia Air Quality Board (“AQB”) on two grounds: (1) the limit placed on heat input for flaring devices was arbitrarily low; and (2) DAQ exceeded its statutory authority in prescribing leak detection requirements more stringent than those found in proposed federal rules in contravention of W.Va. Code 22-5-4(a)(4). The parties settled the appeal after DAQ agreed that the heat input limit would increase from 30 to 36MMBtu and that the leak detection and reporting requirements would be revised to apply only to closed vent systems.
Based on a review of several completed air studies to date, including the results from the well pad development monitoring conducted in West Virginia’s Brooke, Marion, and Wetzel Counties, no additional legislative rules establishing special requirements need to be promulgated at this time. The existing regulatory framework provides a basis for implementation of requirements to minimize and mitigate human health and environmental impacts.
June 28, 2013 Office of Oil and Gas Report to Legislature.
The registration under any general permit is a voluntary process and is not required. Permit condition 3.2.8 is a reasonable condition under 45CSR13 Section 5.11. Furthermore, this permit condition meets the intent and purpose of West Virginia Code §22-5-1. Therefore, no changes will be made to this permit condition.
December 18, 2015 Response to Public Comment.
WVONGA filed an appeal of G35-C with the West Virginia Air Quality Board (“AQB”), alleging a number of deficiencies with the General Permit. With regard to the noise and light, WVONGA argues that WVDEP exceeded the scope of its statutory authority in attempting to expand its reach to nuisances associate with gas exploration under the guise of protecting air quality. The public comment process and WVONGA’s appeal of G35-C have raised at least two interesting issues concerning the scope of DAQ’s authority and its attitude towards general permits. First, DAQ does not appear to have statutory authority to regulate noise and light. Second, it dismissed concerns over its apparent lack of authority by reminding concerned parties that operators are always free to go through the considerably more cumbersome process of obtaining an individual permit.
Does the APCA grant DAQ authority to regulate noise and light?
Administrative agencies and their executive officers are creatures of statute and delegates of the Legislature. Their power is dependent upon statutes, so that they must find within the statute warrant for the exercise of any authority which they claim. They have no general or common-law powers but only such as have been conferred upon them by law expressly or by implication.
Syl. Pt. 2, Mountaineer Disposal Serv., Inc. v. Dyer, 156 W.Va. 766, 197 S.E.2d 111 (1973). DAQ does not possess general police powers; rather, its authority to regulate gas wells is confined to those powers delegated to it by the APCA. If the APCA does not mention noise and light, DAQ cannot regulate it.
Can the mere availability of an individual permit be used to justify deficiencies in a general permit?
Second, DAQ’s response to comments on both G70-B and G35-C is somewhat troubling. Instead of addressing the substance of certain comments regarding potential defects in the general permits, the agency simply responded that unsatisfied parties weren’t obligated to use the general permit. DAQ’s position seems to be that both legal and technical deficiencies can all be excused by the fact that use of a general permit is a privilege, not a right. This sentiment would allow DAQ, or any agency for that matter, to include exceedingly onerous conditions in general permits, rendering them unusable by the regulated industry. Such an approach would contravene the policy of general permits, which is to establish a simplified, streamlined permitting process for whole categories of minor sources, thereby reducing the administrative burden on both industry and the agency. DAQ’s comments also undermine the spirit of the legislature’s mandate that it issue general permits to non-major stationary sources. See W.Va. Code 22-5-11(g). The legislature clearly understands the value of general permits and has commanded DAQ to use them. DAQ’s response to comments indicates that it views W.Va. Code 22-5-11(g) as a legislative suggestion rather than a mandate.
The AQB held an evidentiary hearing on WVONGA’s appeal on March 22, 2016. It will render a decision after the parties submit post-hearing briefs.
EPA has released a pre-publication copy of a proposed rule to expand its risk management program under § 112(r)(7) of the Clean Air Act. EPA has long maintained a risk management program (“RMP”) under § 112(r) of the Clean Air Act for “stationary sources” that hold “regulated substances” in excess of threshold quantities. See 40 C.F.R. Part 68. These facilities have been required to assess potential release impacts, undertake steps to prevent releases, plan for emergency responses and summarize this information in a risk management plan submitted to EPA.
In 2013, in response to an explosion at the West Fertilizer facility in Texas, President Obama issued an executive order requiring EPA to review the hazards covered by the existing risk management program and expand, implement and enforce the RMP to address any additional hazards. See Executive Order 13650, “Improving Chemical Facility Safety and Security” (Aug. 1, 2013).
The proposed rule would make three changes to the accident prevention program. First, it would require all facilities with Program Two or Three processes to conduct a root cause analysis as part of an incident investigation of a catastrophic release or an incident that could have reasonably resulted in a catastrophic release.
Second, the proposed rule would require regulated facilities with Program Two or Three processes to contract with independent third parties to perform a compliance audit after the facility has a reportable release. The existing rule includes a compliance audit component, but facilities are allowed to utilize self-audits. The proposed rule would require that these audits be outsourced to third-party contractors.
The third proposed revision would add an element to the process hazard analysis (“PHA”), which is updated every five years. Specifically, facility owners or operators with Program Three regulated processes in identified industrial codes would be required to conduct a “safer technology and alternatives analysis” as part of their PHA and to evaluate the feasibility of any identified inherently safer technology. Current PHA requirements include consideration of active, passive and procedural means to control hazards. The proposed rule adds a required consideration of inherently safer technology alternatives. The industries included in this requirement are: paper manufacturing; petroleum and coal products manufacturing; and chemical manufacturing. EPA explained that processes in these industrial codes have a disproportionate share of reportable releases.
Owners or operators of all facilities with Program Two or Three processes would be required to coordinate with local emergency response agencies at least annually to ensure that resources and capabilities are in place to respond to an accidental release of a regulated substance.
Additionally, all facilities with Program Two or Three processes would be required to conduct notifications exercises annually to ensure their emergency contact information is accurate and complete.
Finally, the proposed rule would require all facilities subject the emergency response program requirements of subpart E (“Responding Facilities”) conduct a full field exercise at least once every five years and one tabletop exercise annually in the remaining years. Additionally, responding facilities that have an RMP reportable accident would also have to conduct a full field exercise within one year of the accident.
The proposed rule would require all facilities to provide certain basic information to the public through easily accessible means such as a facility website. If no website exists, the owner or operator may provide the information at public libraries or government offices or use other appropriate means.
In addition, a subset of facilities would be required upon request to provide the local emergency planning committee (“LEPC”) or other local emergency response agencies with summaries related to their activities on compliance audits, emergency response exercises, and acts of history and investigation reports.
The proposed rule would also require all facilities to hold a public meeting for the local community within a specified timeframe after an RMP reportable accident. This provision is to ensure that first responders and members of the community have easier access to appropriate facility chemical hazard information.
Finally, EPA claims that its proposed rule clarifies and simplifies RMP submissions.
The Delaware Riverkeeper Network has sued FERC in federal court in Washington, D.C., claiming that FERC’s reliance on regulatory fees from the gas industry creates a “structural bias” that denies the Riverkeeper’s due process rights. The Complaint cites as an example of the bias the fact that FERC has approved 100 percent of the pipeline projects it has reviewed and has never fined a certificate holder for a violation of environmental conditions of a certificate.
The animus for the lawsuit is the plaintiffs’ opposition to the PennEast natural gas transmission pipeline in the Delaware River watershed. The Complaint follows on the heels of a letter dated January 14, 2016 by the plaintiffs and others to Senators Bernie Sanders and Elizabeth Warren complaining that FERC is biased in favor of certificate applicants.
Two groups of states, one led by West Virginia and one by North Dakota, have filed amicus briefs in the U.S. Supreme Court supporting landowners claiming a right to challenge jurisdictional determinations by the Corps of Engineers. Likewise, amicus briefs were submitted by the National Association of Homebuilders and the American Farm Bureau Federation.
Historically, developers and others seeking to conduct operations in areas that might contain “waters of the United States” have sought a “jurisdictional determination” from the Corps of Engineers to determine whether a “fill” permit is necessary under § 404 of the Clean Water Act. It is not uncommon for the project proponent and the Corps to disagree; the Corps may take the position that waters will be filled while the project proponent believes that the project will stay outside of jurisdictional waters. Historically, though, where the Corps has determined that a project will intrude on waters of the United States, the project proponent has had no opportunity to challenge that determination without either subjecting itself to criminal penalties or ensnaring itself in years of expensive permit applications and litigation.
The Corps has long taken the position that its jurisdictional determinations are not final agency actions subject to review under the Administrative Procedure Act. Instead, it claims that a project proponent can ignore its jurisdictional determination and proceed with a project at its own risk if the proponent believes that it will be operating outside of jurisdictional waters. Essentially, this devolved into a game “Chicken,” by which the Corps dared project proponents to go forward without Corps approval—something few publicly-traded companies would dare do. Alternatively, the Corps has said that project proponents can complete the project application process and then, when a permit decision is final, challenge the jurisdictional determination which underlies the permit decision. That requires the project proponent to complete an application process and then pursue administrative and judicial challenges thereafter—again, a process that has deterred many projects.
In 2015, the Eighth Circuit Court of Appeals ruled that the Corps’ jurisdictional determinations were immediately challengeable in federal court under the Administrative Procedure Act. See Hawkes Co., Inc. v. U.S. Army Corps of Engineers, 782 F.3d 994 (8th Cir. 2015). That decision is on appeal to the U.S. Supreme Court where states and developers have weighed in on the side of developers. The states have taken the position that absent any judicial review, the Corps’ jurisdictional determinations are not subject to effective review and thereby undermine the sovereignty of states and their agencies.

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