Articles, Alerts & Perspectives

Washington, DC

Renewables Law Blog

(By Ashleigh Krick)

On July 12, 2021, Ohio Governor Mike DeWine signed into law Senate Bill 52 providing counties with the authority to block the construction of certain large solar and wind facilities in unincorporated townships.  The law goes into effect on October 11, 2021.  In short, Senate Bill 52 allows county commissioners to establish restricted areas in unincorporated townships prohibiting the construction of solar developments with generating capacity over 50 MWs and wind farms with over 5 MWs of generating capacity.  If a township is incorporated, it retains jurisdiction to regulate whether the development occurs rather than defer to the county commissioners. Senate Bill 52 also contains requirements pertaining to public meetings in the counties that the facility will be located and decommissioning requirements.  Practically speaking, Senate Bill 52 means that even if a solar or wind company obtains the necessary land rights to construct a solar or wind facility, counties can block its construction.

Senate Bill 52 follows a string of legislative actions in Ohio that appear to have stifled development and investment in solar and wind in the state.  For example, in 2014, Ohio passed legislation requiring wind farms to be setback a minimum of 1,125 feet from the nearest adjacent property line.  In contrast, oil and gas production wells are only required to be located at least 100 feet from the nearest homes.  Since Ohio enacted the wind farm setback requirement, only one wind farm has been approved in the state.

While the full impact of Senate Bill 52 is unknown at this time, solar and wind developers can expect some counties to begin using their authority to restrict the location of solar and wind developments after the law goes into effect in October. …

The Legal Intelligencer

(by Matt Wood)

Over the past few months, Governor Tom Wolf’s administration, the Pennsylvania Department of Environmental Protection (DEP), and other governmental stakeholders, have made strides toward better understanding and addressing contamination of state waters with perfluoroalkyl and polyfluoroalkyl substances (PFAS).  Specifically, recent sampling efforts of certain public water systems (PWSs) and surface waters have resulted in new information about the prevalence of PFAS in state waters and have informed DEP actions toward regulating certain PFAS compounds.

Public Water Source Sampling

On June 3, 2021, the Wolf administration released sampling results from an approximately two-year long statewide effort to sample PWSs for certain PFAS compounds.  PFAS are a group of manmade chemicals used in numerous industrial, commercial, and consumer products.  Prominent examples include non-stick and waterproofing applications and as chemical components of fire fighting foams.  In recent years, PFAS chemicals have been discovered in the environment, including in groundwater (some used as drinking water sources), and in humans, plants, and animals and some studies suggest that PFAS can negatively affect human health.  Because they do not break down naturally in the environment (including in the human body), they are commonly called “forever” chemicals.

In September 2018, Governor Wolf created via Executive Order a PFAS Action Team to investigate and address potential PFAS concerns in the Commonwealth.  The Action Team, made up of agency heads from multiple Pennsylvania agencies, subsequently developed a plan to sample PWSs for PFAS.  Specifically, the Action Team identified PWSs within a half-mile of potential PFAS sources (such as military, fire training, and manufacturing facilities).

In June 2019, the DEP started sampling these PWSs (as well as other locations outside of the half-mile radius of potential sources to establish a baseline).  …

Smart Business 

(by Sue Ostrowski featuring Kate Cooper)

“With the pandemic, our clients suddenly cared a lot about whether their contracts included a force majeure provision, what it said, what it meant and how it could be interpreted,” says Cooper.

Smart Business spoke with Cooper about force majeure provisions and how approaches to them are changing.

What are force majeure provisions?

Force majeure provisions govern the conduct of both parties if unexpected or unforeseeable events result in a party being unable to deliver on the terms of the contract, with an emphasis on the unforeseeable. They’re designed to cover unexpected events and potentially allow you to delay delivering on a contract. But the provisions are not a get-out-of-jail free card, and in most circumstances, they do not let a party to a contract completely off the hook.

The disruption to the supply chain caused by the pandemic and government shutdowns has drawn renewed attention to these clauses. For example, when suppliers couldn’t deliver to their customers, those disruptions had a knock-on effect down the supply chain. Companies aiming to avoid breaching their contracts were hopeful that their force majeure provisions would provide them with relief. However, many were disappointed to find that what they wanted to do — whether that be delay performance obligations, or even terminate the contract entirely — wasn’t permitted by the language of the specific provisions set forth in their contracts.

How is the conversation regarding force majeure changing?

It will be difficult to argue that the pandemic is an unforeseeable event now that we are a year and a half into COVID-19, meaning that COVID-19 (and pandemics generally) will need to be specifically referenced in the provision in order for it to be enforceable in most jurisdictions. …

The PIOGA Press

(by Ashleigh Krick)

On June 7, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an advisory bulletin (ADB) reminding owners and operators of gas and hazardous liquid pipeline facilities of a self-executing mandate from the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020” (PIPES Act of 2020).

Statutory mandate

The mandate, codified at Section 114(b) of the PIPES Act of 2020, provides that by December 27, 2021, “each pipeline operator shall update the inspection and maintenance plan prepared by the operator under section 60108(a) of title 49, United States Code, to address the elements described in the amendments to that section made by [Section 114(a)].”

Section 114(a) of the PIPES Act of 2020 added to 49 U.S.C. § 60108(a) that, in deciding on the adequacy of an inspection and maintenance plan, PHMSA or a certified state authority must consider the extent to which the plan will contribute to “eliminating hazardous leaks and minimizing releases of natural gas from pipeline facilities” and “the extent to which the plan addresses the replacement or remediation of pipelines that are known to leak based on the material (including cast iron, unprotected steel, wrought iron, and historic plastics with known issues), design, or past operating and maintenance history of the pipeline.”

Additionally, Section 114(a) added to 49 U.S.C. § 60108(a) that inspection and maintenance plans must “meet the requirements of any regulations promulgated under section 60102(q).” Section 60102(q) is a new rulemaking mandate from Section 113 of the PIPES Act of 2020 that requires PHMSA to issue new leak detection rules for operators of regulated gas gathering, transmission, and distribution lines by December 27, 2021.

Section 114(a) also provided that PHMSA or a relevant state authority must review each plan not later than December 27, 2022, and then every five years. …

Pittsburgh, PA

Renewables Law Blog

(By Anna Jewart)

On June 4, 2021, following 21 nights of public hearings held over the course of 15 months, a conditional use application for a proposed 75 megawatt solar energy system filed by Brookview Solar I, LLC, was denied by operation of law due to a two-two tie vote, with one abstention, by the Board of Supervisors of Mount Joy Township, Adams County.  The applicant faced many of the same challenges and opposition frequently levied against traditional energy sources.

In November 2019, the applicant submitted its application for a solar energy field, proposed to be sited across eleven properties totaling approximately 374 acres of land located largely within the Township’s Baltimore Pike Corridor District (“BPC”) and partially within its Agricultural District (“AC”).  Solar energy systems are a permitted use in the AC district and permitted as a conditional use within the BPC district under the Township Zoning Ordinance, subject to extensive use-specific regulations.  The Board began holding public hearings on the application in January 2020 and concluded in March of 2021.  On June 4, 2021, a motion to approve the application with conditions resulted in a 2-2-1 vote, as did a motion to deny the application.  Under Pennsylvania case law, where a judicial or quasi-judicial body is equally divided, the subject matter with which it is dealing must remain in status quo, in this case resulting in a denial of the application.  Due to the 2-2-1 vote, the Township did not prepare official written findings, but submitted two draft decisions in support of the Board’s motions to deny and approve the application, as well as an official decision simply noting the denial as an operation of law.  The applicant appealed to the Adams County Court of Common Pleas on June 28, 2021. …

Pittsburgh, PA

Renewables Law Blog

(By Bruce Rudoy)

A financial rebound is in progress as COVID-19 becomes less of a driver to business and our general livelihood, and it is one that is apparent in the renewables sector. Experts see growth fueled not just by pent-up demand, but also growing attention to ESG considerations and renewables’ financial advantages.

Corporate merger and acquisition activity was up significantly with solar developers expanding their pipelines, oil and gas companies diversifying into renewables, and funds buying up renewable assets.

According to Mercom CEO Raj Prabhu, Solar project acquisitions reached a record high in the second quarter, he said, with more than 24.7 GW of capacity acquired. That total came from 34 corporate M&A deals, compared to 20 in the first quarter of this year and 13 in the second quarter of 2020.

In the first half of 2021, solar project acquisitions reached 39.3 GW, more than doubling the 14.7 GW acquired in the first half of 2020.

Venture capital funding in particular has experienced a strong recovery. Funding for VC was 680% higher in the first half of the year, compared with last year, with $1.6 billion raised in 26 deals, according to Mercom.

Renewables have been rapidly gaining market share for years. In 2020, the United States saw its fifth consecutive year of renewables consumption growth, reaching a record high of 12% of the country’s total consumption, according to the U.S. Energy Information Administration (EIA).

EIA estimates solar energy accounted for about 11% of last year’s renewable energy consumption, and “overall, 2020 U.S. solar consumption increased 22% from 2019.”

By comparison, the agency said fossil fuel consumption fell last year by 9% to “the lowest level in nearly 30 years.”

The trend is represented globally as well. …

GOWV News

(by Jennifer Hicks)

The United States District Court for the Northern District of West Virginia recently held that a 2018 amendment to W. Va. Code § 22-6-8 (the “Flat Rate Statute”) “clearly does not apply retroactively.” Although the Supreme Court of Appeals of West Virginia has not yet addressed this issue, this federal court decision is indicative of how the highest court in West Virginia may answer the question raised by plaintiffs in royalty litigation across West Virginia: Does the 2018 amendment apply retroactively to alter the way royalties are paid for wells drilled on a flat rate lease before May 31, 2018?

In Corder v. Antero Resources Corporation, Civil Action No. 1:18-cv-30 (N.D. W.Va. May 12, 2021), the Court analyzed several issues related to the payment of oil and gas royalties pursuant to various royalty provisions. One of the leases at issue was what is commonly referred to as a “flat rate” lease, under which the lessee was required to pay “$100 per year for each and every gas well obtained on the premises[.]”

Flat rate leases are governed in West Virginia by W. Va. Code § 22-6-8, which was originally enacted in 1982 and first amended in 1994, to require that no permit for a flat rate well would be issued unless the lessee swore by affidavit that it would pay the lessor no less than one-eighth of the total amount paid to or received by or allowed to the lessee at the wellhead for the oil and gas so extracted, produced or marketed. In 2017, in Leggett v EQT Prod. Co., 800 S.E.2d 850, 862 (W.Va. 2017), the Supreme Court of Appeals of West Virginia interpreted this language as allowing a pro-rata deduction or allocation of all reasonable post-production expenses actually incurred by the lessee, and held that a lessee may utilize the “net-back” or “work-back” method to calculate royalties owed to a lessor pursuant to a lease governed by W. …

RMMLF Mineral and Energy Law Newsletter

(By Joseph K. Reinhart, Sean M. McGovern & Matthew C. Wood)

On September 4, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published notice of its final technical guidance titled “Guidelines for Implementing Area of Review (AOR) Regulatory Requirement for Unconventional Wells,” No. 800-0810-001 (Sept. 4, 2021) (AOR Guidance). See 51 Pa. Bull. 5757 (Sept. 4, 2021). The AOR Guidance clarifies the AOR as “1,000 feet in all directions” from the plan view projections for horizontal and vertical unconventional wells. See 25 Pa. Code § 78a.52a(a). Vertical buffer distance for offset wells located within the AOR is 1,500 feet for all unconventional wells. See 25 Pa. Code § 78a.73(c). The final guidance document was effective upon date of publication, replacing PADEP’s 2016 guidance. Operators should reference the AOR Guidance regarding well placement and offset wells, for evaluating and monitoring nearby wells to prevent communication between wells, and for reporting and resolving incidents. The AOR Guidance also serves as an overview of PADEP’s well adoption permitting process.

Final issuance of the AOR Guidance followed a 60-day public comment period during which PADEP received approximately 55 comments from 10 commenters and made several changes to the draft version. Key changes to the AOR Guidance, as identified in the Pennsylvania Bulletin, include:

• clarifying the ability of operators to survey an area that extends beyond the prescriptive AOR regulatory language;
• removing language assigning responsibility for recently plugged offset wells to the operator who had completed the plugging;
• relocating language pertaining to briefing the hydraulic fracturing operations team about adjacent operator coordination;

…