EPA Proposes to Require $7+ Billion of Financial Assurances from U.S. Hardrock Mining Industry Under CERCLA Section 108(b)

Last week the EPA officially published its proposal to impose over $7 billion of financial assurance requirements on the owners and operators of currently active or idle hardrock mines and mineral processing facilities. 82 Fed. Reg. 3388 (Jan. 11, 2017).  These proposed requirements are intended to cover estimated response costs, natural resource damages, and health assessment costs for which an owner or operator could be liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) should a hazardous substance release occur.  The EPA estimates that 221 hardrock mining facilities would be subject to these proposed requirements, which would be in addition to financial assurance already required by other federal or state agencies for things such as closure and reclamation.  The deadline for submitting comments on the EPA’s proposal is March 13, 2017.Capture

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Sage Grouse Update: BLM Issues Draft Environmental Impact Statement (DEIS) on Proposed Withdrawal of 10 Million Acres

On the last business day of 2016 the BLM released the DEIS on its proposed 20-year withdrawal of approximately 10 million acres of “sagebrush focal areas” (SFAs) in six western states from mineral location and entry under the General Mining Law.  At the same time, the BLM temporarily “segregated” almost 400,000 more acres in Nevada that the State of Nevada has proposed as a substitute for nearly 500,000 acres within SFAs considered by the State to have high mineral potential or limited sage-grouse habitat.  As described in our article last year in the American Bar Association’s mining newsletter, the BLM started this process in September 2015 as a key part of the justification for not listing the greater sage-grouse under the Endangered Species Act.  (That article also describes what the BLM’s proposal means for mining on these lands in Idaho, Montana, Nevada, Oregon, Utah, and Wyoming, and the multiple lawsuits that have been filed challenging the federal government’s actions.)

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Draft Resource Management Plan Amendment Released for Central California Federal Lands

On January 6, 2017, the federal Bureau of Land Management (“BLM”) issued a notice of Draft Resource Management Plan Amendment (“DRMP Amendment”) and Draft Environmental Impact Statement (“DEIS”) for oil and gas leasing and development on federal lands administered by the BLM, Central Coast Field Office (“Planning Area”).  82 Fed. Reg. 1754 (Jan. 6, 2017).  The DRMP Amendment and DEIS describe and analyze alternatives for the planning and management of leasing and development in the Planning Area, as required by the National Environmental Policy Act and the Federal Land Policy and Management Act.  The BLM administers approximately 284,000 acres of surface estate and 793,000 acres of federal mineral estate within the Planning Area.

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In Effort to Increase Both Transparency and Safety, PHMSA Releases Civil Penalty Framework

The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA”) issued a General Policy Statement for civil penalties (“Penalty Framework”) on October 17, 2016.  The Penalty Framework allows a respondent in a PHMSA enforcement case to request a proposed civil penalty calculation related to its case, and provides a penalty range with corresponding factors used in calculating the penalty amount.  Prior to publishing the Penalty Framework, the PHMSA only provided its civil penalty framework upon request.

In imposing a civil penalty, the PHMSA must consider five factors:

(1) The nature, circumstances and gravity of the violation, including adverse impact on the environment;

(2) The degree of the respondent’s culpability;

(3) The respondent’s history of prior offenses;

(4) Any good faith by the respondent in attempting to achieve compliance; and

(5) The effect on the respondent’s ability to continue in business.

49 U.S.C. § 60122.

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Pipeline Operators Take Note: PHMSA Issues Interim Emergency Pipeline Safety Rules – Should You Be Concerned?

On October 3, 2016, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), within the U.S. Department of Transportation, released a new rule on its authority to issue emergency orders for pipeline safety.  The Interim Final Rule, titled “Pipeline Safety: Enhanced Emergency Order Procedures,” comes as a result of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (“PIPES”).  PIPES was signed into law by President Obama in June 2016 and allows the PHMSA to impose emergency restrictions, prohibitions, and safety measures on gas or hazardous liquid pipeline facilities to address safety concerns.

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ICYMI: Litigator Willa Perlmutter Establishes Mine Safety Practice at Stoel Rives

Willa Perlmutter Stoel Rives MSHA Attorney

In case you missed it, Stoel Rives LLP welcomed Willa B. Perlmutter to the firm’s Natural Resources group this past July. Willa is based in our Portland office, but is serving our clients from Alaska to California and all points east—above ground and beneath. She is accustomed to working effectively and efficiently with in-house counsel and business representatives of mining companies at both the corporate and plant level.

Previously with Crowell & Moring in Washington, D.C., Willa counsels mine operators and other industrial clients on compliance under the Mine Safety and Health Act, represents them during government and internal investigations, and defends them against administrative enforcement actions issued by various regulatory agencies such as MSHA and OSHA. Willa understands the needs of mining industry clients, having focused on mine safety law for the past two decades. She represents clients whose businesses span the spectrum of mined materials, including metals/non-metals, industrial materials and coal. Her extensive litigation experience provides even greater depth to the services we can offer our clients. Further, our clients will benefit from the positive and constructive relationships Willa has cultivated with policymakers and operational staff at MSHA and OSHA.

You can catch up with Willa at the following industry events:

Stoel Rives’ Mining Industry team is highly experienced in advising mine owners and operators across the entire spectrum of legal concerns changing the ways businesses locate, extract and use minerals. As lead counsel for aggregate, base and precious metal, industrial mineral and coal mines, the team provides environmental, permitting, land use, health and safety, labor and employment, IP, litigation, transactional and financing counsel. With their depth of industry experience, the team members are able to develop creative and practical solutions for their clients’ increasingly complex issues.

Industry Groups Push Back Against Environmental Activists in Suit Over Oil & Gas Waste Disposal Regs.

As we discussed earlier, environmental activists have asked the Environmental Protection Agency (“EPA”) to update its oil and gas drilling waste disposal rules under the Resource Conservation and Recovery Act (“RCRA”).  The groups sought to force the EPA’s hand by suing the EPA in an attempt to get a court order requiring the EPA to update its regulations.

Under RCRA, non-hazardous solid waste, which includes oil and gas production waste, is governed by Subtitle D. Subtitle D focuses on state and local governments as the primary regulating entities for the management of non-hazardous solid waste. It establishes minimum federal technical standards and guidelines for state solid waste regulations.  The EPA is required to review and approve state Subtitle D waste disposal programs to ensure that they meet the minimum standards.

Section 2002(b) of RCRA requires the EPA to review and, if necessary, revise at least once every three years the Subtitle D regulations. The activists have asked the EPA to revise its Subtitle D regulations and set clear requirements to govern the storage and disposal of oil and gas waste amid a “patchwork of [state] requirements with varying protections.” Continue Reading

Wyoming Court Strikes Down BLM Hydraulic Fracturing Rule; Existing Appeal Remains Pending (For Now)

UPDATE: Quickly following on the heels of the Wyoming federal district court’s order striking down the Bureau of Land Management’s (BLM) hydraulic fracturing rules, the state governments of North Dakota, Wyoming, Colorado, and Utah have now moved to dismiss the pending Tenth Circuit appeal of the district court’s preliminary injunction order.  Those state government indicated in their brief that they had unsuccessfully attempted to reach out to counsel for the BLM and the environmental groups who filed that appeal, but expected those parties will oppose the dismissal motion.

Separately, the BLM and the intervening environmental groups each filed notices seeking to directly appeal the district court’s June 21 order and judgment striking the BLM’s rules to the Tenth Circuit.  While it remains unclear exactly how this matter will now proceed on appeal, it seems likely that the Tenth Circuit will combine or consolidate all of these appeal issues in one way or another.

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As we’ve previously reported, a Wyoming federal court issued a preliminary injunction order last year that temporarily halted the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands.  Since that time, the case has split into two proceedings: the Wyoming court moved forward with conducting a full legal analysis of the BLM’s final rule, while several environmental groups who had intervened in the lawsuit appealed the preliminary injunction order to the Tenth Circuit Court of Appeals.  This week we received some clarity on one of those proceedings, while the other remains pending.

District Court Strikes Down BLM Final Rule

On June 21, the Wyoming court struck down the BLM’s final rule, finding the agency lacked the legal authority to promulgate those regulations.

In his order, Judge Scott Skavdahl premised his opinion on whether Congress delegated requisite authority to the BLM to regulate hydraulic fracturing on public lands, and “not whether hydraulic fracturing is good or bad for the environment or the citizens of the United States.”  Ultimately, Judge Skavdahl held, a federal agency “may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.”

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EPA Issues Expansive, Costly New Source Performance Standards for Oil and Gas Sector

Widely anticipated on both sides of the aisle, on May 12, 2016, the U.S. Environmental Protection Agency (“EPA”) released final regulations to curb emissions of methane and volatile organic compounds (“VOC”) from additional new, modified, and reconstructed sources in the oil and gas industry.  The Final Rule, titled,  ‘Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources’ (“Final Rule”), amends the new source performance standards (“NSPS”) for the oil and natural gas source category.  This action follows EPA’s publication of proposed regulations in August 2015, and is extremely significant because it is the first instance of such regulation of VOC and methane emissions by the EPA.  In addition to yesterday’s announcement, the EPA is completing final Control Techniques Guidelines for reducing VOC emissions from existing oil and gas sources in ozone nonattainment areas, which are expected to be released later this spring.

Background: The Climate Action Plan

Over the past few years, the Obama Administration has taken an aggressive stance on climate change regulation, and the Final Rule is the Administration’s most recent action to specifically address methane and short-lived climate pollutants.  In June 2013, the Administration released the Climate Action Plan which directed the EPA and other federal agencies to develop a comprehensive regulatory scheme to reduce methane emissions.  In March 2014, as a follow-up to the Climate Action Plan, the Obama Administration issued the Climate Action Plan: Strategy to Reduce Methane Emissions.

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Environmentalists Sue EPA to Force Update of Drilling Waste Regulations

On May 4, 2016, a coalition of environmental organizations (“Plaintiffs”) filed suit against the U.S. Environmental Protection (“EPA”) in U.S. District Court for the District of Columbia to compel the EPA to promulgate revised regulations and guidelines for the disposal, storage, transportation, and handling of oil and gas wastes.  Environmental Integrity Project et al. v. Gina McCarthy (Case No. 1:16-cv-00842).  In the Complaint, Plaintiffs state that the Resource Conservation and Recovery Act (“RCRA”) requires the EPA to review and revise regulations for drilling wastes every three years.  42 U.S.C. § 6912(b).  According to Plaintiffs, the EPA last conducted a review of the regulations in 1988, but has since failed to update the regulations.  Further, the EPA has not updated the guidelines for state solid waste management plans as required under RCRA.

The environmental organizations are the Environmental Integrity Project, Natural Resources Defense Council, Earthworks, Responsible Drilling Alliance, San Juan Citizens Alliance, West Virginia Surface Owners’ Rights Organization, and the Center for Health, Environment and Justice. Continue Reading

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