RMMLF Mineral Law Newsletter
(By Joseph K. Reinhart, Sean M. McGovern, Daniel P. Hido and Gina N. Falaschi)
Continuing from previous publications of this Newsletter, this report provides updates on the Pennsylvania Environmental Quality Board’s (EQB) proposed CO2 Budget Trading Program rulemaking, which would link Pennsylvania’s program to and implement the Regional Greenhouse Gas Initiative (RGGI) within the commonwealth. See Vol. XXXVIII, No. 1 (2021), Vol. XXXVII, No. 4 (2020), Vol. XXXVII, No. 3 (2020), Vol. XXXVII, No. 2 (2020), Vol. XXXVII, No. 1 (2020), Vol. XXXVI, No. 4 (2019) of this Newsletter.
After the public comment period closed in January 2021, the Independent Regulatory Review Commission (IRRC) issued its comments on the proposed rule on February 16, 2021. See Comments of the Independent Regulatory Review Commission, Environmental Quality Board Regulation #7-559 (IRRC #3274), CO2 Budget Trading Program (Feb. 16, 2021).
The IRRC’s comments, based on criteria in section 5b of Pennsylvania’s Regulatory Review Act, 71 Pa. Stat. § 745.5b, addressed the significant objections to the proposed rule from the members of the regulated community and general assembly. The comments recommended that EQB explain the choice to institute the program through regulation rather than legislation, provide analysis of its statutory authority to enact the proposal, and consider recommendations from commentators on public health, safety, and welfare, economic or fiscal impact, and adequacy of data. The IRRC also asked EQB to consider delaying the implementation of the rulemaking for one year to give the regulated community an opportunity to adjust business plans to account for increased costs associated with Pennsylvania joining RGGI. Under the Regulatory Review Act process, EQB will respond to these comments, and other public comments, when finalizing this rulemaking.
On March 10, 2021, the Pennsylvania Department of Environmental Protection (PADEP) announced a set of equity principles to help inform the public on the implementation of the RGGI program and investments of the program’s proceeds. See Press Release, PADEP, “Wolf Administration Announces Equity Principles to Guide Investments Through Regional Greenhouse Gas Initiative” (Mar. 10, 2021). The RGGI Equity Principles are (1) inclusively gathering and considering input from the public related to decisions made under RGGI; (2) protecting public health and welfare, mitigating any adverse impacts on human health, especially in environmental justice communities, and seeking to ensure environmental and structural racism are not replicated in the engagement process; and (3) working equitably and with intentional consideration to distribute environmental and economic benefits of the proceeds of allowance auctions. PADEP has also joined with the Delta Institute to engage with impacted communities to identify a path for an equitable transition for all Pennsylvania residents. The Delta Institute will develop a plan to invest RGGI auction proceeds to diversify Pennsylvania’s economy and assist communities that are affected by changes in the energy sector.
At the April 8, 2021, Air Quality Technical Advisory Committee meeting, PADEP presented updates on the status of and revised language for the proposed implementation of the RGGI program. PADEP summarized the key proposed changes and public comments received and updated power sector modeling. Proposed changes to the regulation include adjustment of the waste coal set-aside, expansion of the cogeneration set-aside, clarification of the strategic use set-aside, the addition of annual air quality impact assessment, and the incorporation of the RGGI Equity Principles into the preamble. PADEP made a similar presentation to the Citizens Advisory Council (CAC) on April 20, 2021. PADEP presented the updated modeling and the CAC voted on the proposal at its May 19, 2021, meeting.
PADEP’s proposal continues to meet opposition from the regulated industry and the general assembly. In January 2021, Senator Joe Pittman introduced Senate Bill 119, 204th Leg., Reg. Sess. (Pa. 2021), which would require legislative approval before PADEP could impose a carbon tax on employers engaged in electric generation, manufacturing, or other industries operating in the commonwealth, or enter into any multi-state program, such as RGGI, that would impose such a tax. The bill had its first consideration in the Senate on April 27, 2021, and second consideration on May 12, 2021. This bill is similar to Senate Bill 950 from the legislature’s previous session, a version of which was passed as House Bill 2025 and was vetoed by Governor Tom Wolf in September 2020. See Vol. XXXVII, No. 4 (2020) of this Newsletter.
In addition to introducing legislation, Senate Republicans sent Governor Wolf a letter on April 21 advising him that they will reject all future nominees to the Public Utility Commission (PUC) due to the Governor’s recent actions related to joining RGGI. See Letter from Senate Republicans to Governor Wolf (Apr. 21, 2021). The group has committed not to confirm any PUC nominees until Governor Wolf either removes Pennsylvania from RGGI or submits the compact to the general assembly for approval.
PADEP is currently working on the comment response document. PADEP expects to present the final regulation to EQB in summer 2021. If EQB adopts the final regulation, the regulation will be presented to the Pennsylvania House and Senate Environmental Resources & Energy Committees and the IRRC for action. If approved by the three committees, the regulation will be submitted to the Attorney General’s Office, and upon approval, published in the Pennsylvania Bulletin.
IRRC Approves Final Rulemaking on Water Supply Replacement for Coal Surface Mining
As reported in Vol. XXXVI, No. 4 (2019) of this Newsletter, on November 2, 2019, the Pennsylvania Environmental Quality Board (EQB) published a proposed rule revising the water supply replacement regulations under 25 Pa. Code chs. 87–90. See 49 Pa. Bull. 6524 (proposed Nov. 2, 2019). The final-form regulation was submitted to the Independent Regulatory Review Commission (IRRC) on February 25, 2021. On April 15, 2021, the IRRC issued an order approving the regulation. See IRRC Approval Order (Apr. 15, 2021); see also 51 Pa. Bull. 2468 (May 1, 2021). The Senate and House Environmental Resources & Energy Committees also approved the final regulation on April 14, 2021.
Among other changes, the final rule reserves current 25 Pa. Code §§ 87.119 (surface coal mining) and 88.107 (anthracite mining) and replaces those provisions with the extensively revised new sections 87.119a and 88.107a. The most notable changes in these new sections include:
- Water Supply Survey. Pre-mining water supply surveys are often used to establish baseline water supply conditions. The current regulations only generally refer to such surveys. In contrast, sections 87.119a(a) and 88.107a(a) of the final rule specify that the survey must include the location and type of the water supply, the existing and reasonably foreseeable uses of the supply, the chemical and physical characteristics of the water, historical and recent water quantity measurements, and sufficient sampling to document seasonal variations in hydrologic conditions.
- Water Supply Replacement Obligations. Sections 87.119a(b) and 88.107a(b) clarify that if a water supply has been affected to a demonstrable extent by mining, the operator must restore or replace the water supply with a permanent source adequate for the purposes served and “reasonably foreseeable uses” of the water supply. Subsection (c) requires operators to provide a temporary water supply within 24 hours if the water supply owner/user is without a readily available alternative source of water. Under subsection (d), the Pennsylvania Department of Environmental Protection (PADEP) may provide a temporary water supply and seek to recover costs from the operator.
- Adequacy of Restored or Replaced Water Supply. Sections 87.119a(f) and 88.107a(f) require a restored or replaced water supply to be as reliable and permanent as the previous supply, not require excessive operation and maintenance (O&M) or result in increased cost to the user without compensation, and provide the water supply owner/user with as much control and accessibility as the previous water supply. The final rule expands the concept of “adequate quality,” requiring the restored or replaced water supply to be comparable to the previous supply as documented in the water supply survey, or meet the requirements of the Pennsylvania Safe Drinking Water Act (SDWA). PADEP may require the restored or replaced water supply to be of equivalent quality to the pre-mining supply, even if this requires water of better quality than SDWA standards, if the water supply user demonstrates that such quality is necessary to meet the use served by the original supply. Finally, “adequate quantity” means the restored or replaced water supply must deliver the amount of water necessary to satisfy the purposes served by the supply as documented in the pre-mining survey, including any “reasonably foreseeable uses,” which includes “the reasonable expansion of use where the quantity of the water supply available prior to mining was adequate to supply the foreseeable uses.”
- Reimbursement. Sections 87.119a(e) and 88.107a(e) of the final rule are new provisions that require operators to reimburse water supply owners/users who replace the water supply themselves when it is later determined that the operator is responsible for the water supply problem. The operator may dispute costs that appear to be excessive based on the pre-mining survey.
- Operation and Maintenance. New sections 87.119a(g) and 88.107a(g) contain detailed procedures for determining O&M costs and requiring the operator to post a bond to assure payment of increased O&M costs so that the restored or replaced water supply does not result in increased costs to the user.
- Presumption of Liability. New sections 87.119a(j) and 88.107a(j) clarify the statutory presumption contained at 52 Pa. Stat. § 1396.4b(f)(2) that an operator is responsible for pollution or diminution of water supplies within 1,000 feet of the boundaries of areas affected by surface mining operations, and the defenses available to operators to rebut the presumption.
The final rulemaking package is available at http://www.irrc.state.pa.us/docs/3245/AGENCY/3245FF.pdf. The revised regulations will go into effect upon publication in the Pennsylvania Bulletin.
OSMRE Publishes 2020 Pennsylvania Evaluation Report
In March 2021, the Pittsburgh Field Office of the federal Office of Surface Mining Reclamation and Enforcement (OSMRE) released its annual evaluation report of the regulatory and abandoned mine reclamation programs administered by the Pennsylvania Department of Environmental Protection (PADEP). The report covers the 2020 evaluation year, which ran from July 1, 2019, to June 30, 2020. The report is issued pursuant to OSMRE’s authority under the federal Surface Mining Control and Reclamation Act (SMCRA) to oversee the implementation of state programs that have been approved as meeting the mini-mum requirements of SMCRA.
The first half of the report addresses PADEP’s administration of SMCRA’s regulatory program. The report notes that PADEP reported over 1,100 inspectable sites, including 700 active sites, and performed over 11,000 full or partial inspections. OSMRE conducted 84 oversight inspections, including 71 in the bituminous region and 13 in the anthracite region. Of the 71 inspections in the bituminous region, 40 did not identify any violations. Of the 31 inspections where violations were identified, OSMRE identified a total of 58 violations, 53% of which related to hydrologic balance. OSMRE, “2020 Pennsylvania Annual Evaluation Report,” at 10–12 (Mar. 2021).
The report similarly includes an evaluation of off-site im-pacts from mining. The report notes that PADEP identified a total of 48 off-site impacts related to 34 permits during the evaluation year, with 96% of permits causing no off-site im-pacts. Forty-four of the 48 off-site impacts related to hydrology. Those off-site impacts are classified as major (9), moderate (12), or minor (23). OSMRE noted that of the 141 total violations identified during oversight inspections, 18 involved off-site im-pacts, and 13 of those related to hydrology. Id. at 21–23.
The second half of the report addresses PADEP’s administration of SMCRA’s abandoned mine land (AML) reclamation program and highlights various PADEP AML projects, accomplishments, and initiatives. The report concluded that PADEP effectively administers both the regulatory and AML programs. Id. at 32, 50. The 94-page report is available at https://www. odocs.osmre.gov/ (to access the report, select “Pennsylvania” and “2020” in the respective state and year fields and “Annual Evaluation Reports” in the category field).
Pennsylvania to Become a Leader in Solar Energy Production
On March 22, 2021, Governor Tom Wolf announced a clean energy initiative that would produce nearly 50% of state government’s electricity through seven new solar energy arrays totaling 191 megawatts to be built around the state. See Press Release, Gov. Tom Wolf, “Gov. Wolf Announces Largest Government Solar Energy Commitment in the U.S.” (Mar. 21, 2021). Pennsylvania PULSE (Project to Utilize Light and Solar Energy), a part of the initiative, will go into operation on January 1, 2023.
Solar arrays will be built in seven locations in six counties: Columbia, Juniata, Montour, Northumberland, Snyder, and York. The Pennsylvania Department of General Services contracted with Constellation, a Pennsylvania Public Utility Commission-licensed electric generation supplier, to secure a 15-year fixed-price supply agreement. The project is expected to deliver 361,000 megawatt-hours of electricity per year, or about half the electricity used by state government annually.
To date, this is the largest government-backed commitment to solar energy announced in the United States.
PADEP Publishes Final Revised Policy on Civil Penalty Assessments for Coal Mining Operations
On February 27, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published the final revision to Technical Guidance Document (TGD) No. 562-4180-306, titled “Civil Penalty Assessments for Coal Mining Operations.” 51 Pa. Bull. 1083 (Feb. 27, 2021). The TGD makes several major changes to the procedures for calculating civil penalty amounts for coal mining violations, the most significant of which is the addition of new procedures for calculating water quality violations under section 605 of the Clean Streams Law, 35 Pa. Stat. § 691.605. No revisions were made to the version of the TGD that was published for public comment on October 3, 2020, which is discussed in detail in Vol. XXXVII, No. 4 (2020) of this Newsletter.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
