President Trump’s recent executive orders have benefited the oil pipeline industry in a number of ways, including most notably, giving the final “okay” to the Dakota Access Pipeline. But some legislative mandates have been out of the reach of the President’s pen. On April 27, the federal Pipeline and Hazardous Materials Safety Administration (“PHMSA”), within the Department of Transportation, released a final rule revising its maximum penalties for violations of pipeline safety laws. The rule titled, Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties, was issued pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires federal agencies to adjust their civil monetary penalties annually to account for changes in inflation. So what’s changed?
An executive order, secretarial order, and lawsuit challenging said secretarial order, all in the span of less than 36 hours and all concerning federal coal leasing. The Trump administration on Wednesday reversed a 2016 Obama administration moratorium on federal coal leasing, and environmental organizations have already filed suit challenging this change of direction. While the effect on coal mining from this Trump administration reversal is uncertain, the now-defunct moratorium likely had a relatively small practical effect on federal coal leasing.
By way of background, in January 2016 then Secretary of the Interior Sally Jewell issued Secretarial Order No. 3338. This order directed the Bureau of Land Management (BLM) to (i) prepare a Programmatic Environmental Impact Statement (PEIS) under the National Environmental Policy Act (NEPA) to review the federal government’s coal leasing program, and (ii) imposed a “pause” on federal coal leasing while the PEIS was prepared. As a result, the BLM would neither process new applications for coal leases nor conduct lease sales for pending applications until the PEIS was complete. However, Secretary Jewell’s order exempted five categories of coal leasing decisions from the moratorium (e.g., when the NEPA process had already been completed and a record of decision had already been issued by either the BLM or the applicable federal surface management agency). Yesterday, current Secretary of the Interior Ryan Zinke implemented President Trump’s Energy Independence Executive Order by revoking Secretary Jewell’s order through his own Secretarial Order No. 3348. (The executive order was not focused just on federal coal leasing. Here is an analysis of its potential impact on the broader energy industry, and here is an analysis of its rescission of President Obama’s 2015 natural resource mitigation memorandum.) Continue Reading
Both houses of the Idaho Legislature unanimously approved House Bill 301a last week following a seven-hour negotiation and two days of hearings earlier this month. Supported by Governor Otter, this bill will (among other things) amend the forced pooling provisions enacted just 12 months ago. In fact, House Bill 301a is the latest in a series of legislative actions taken since exploration and development operations commenced in western Idaho in 2010. The Idaho Department of Lands’ website shows nine producing wells plus six shut-in wells as of last month.
Changes to Idaho’s current oil and gas statutes brought by House Bill 301a include:
- Decreasing the default spacing unit for a vertical gas well from 640 acres to 160 acres and allowing federal minerals to be excluded from a spacing unit if the U.S. Bureau of Land Management fails to auction a lease for such minerals for at least six months. Continue Reading
Following up on last week’s post about Oregon legislative proposals, here are some of the mineral-related bills currently pending in the Washington State Legislature:
Oil and Gas
SB 5462 and HB 1611 – These two almost identical bills are follow-ups to the Oil Transportation Safety Act that was enacted in Washington two years ago. Among other things, SB 5462 and HB 1611 would (i) require that railroads transporting crude oil and petroleum products demonstrate financial ability to pay for a “worst case spill”; (ii) obligate refineries to account for different types of crude oil in their emergency planning and training; (iii) impose a public notice requirement if a refinery proposes to export more than 10% of its annual production; (iv) allow the Department of Ecology to share confidential information regarding oil transportation with elected local officials responsible for emergency response agencies; (v) levy oil spill response and administration taxes on crude oil and petroleum products delivered via pipeline to bulk oil terminals; and (vi) give the state’s Energy Facility Site Evaluation Council (EFSEC) jurisdiction over crude oil pipelines that are at least five miles (rather than the current 15 miles) long. Continue Reading
The Oregon Legislature’s 2017 session officially kicked off last week. A variety of mineral-related bills have been introduced. Here are some of the ones to follow:
SB 3 – SB 3 is primarily focused on suction dredge mining. It would build on the 2013 enactment of a moratorium, currently in effect until 2021, on the use of motorized equipment engaged in small-scale precious metal mining of placer deposits (i) within and upstream of spawning habitat for salmon and bull trout, and (ii) 100 yards upland from such areas if water quality could be impacted. SB 3 would wrap Pacific lamprey spawning habitat into the moratorium, but would eliminate the prohibition on upland use of such equipment starting in 2019. Instead, the use of such equipment, regardless of the size of the operation, within 100 yards upland of any river’s ordinary high water line would be subject to the Department of Geology and Mineral Industries’ (“DOGAMI”) existing exploration and operating permit programs, including the associated reclamation requirements. Starting in 2021, suction dredge mining would be permanently prohibited in a wide variety of locations unless the mining concerned a federal mining claim and the prohibition would violate federal law. In those areas where suction dredge mining was allowed, it would require a removal-fill permit issued by the Department of Environmental Quality (“DEQ”) rather than the Department of State Lands. SB 3 would also provide that the surface mining exclusion certificate required under ORS 517.753 only applies to commercial sand, gravel, and crushed stone operations. Continue Reading
On January 23, and for the first time in nearly 40 years, the Mine Safety and Health Administration (“MSHA”) issued new rules governing the way in which metal/non-metal mine operators must conduct their regular workplace examinations. A Final Rule on “Examinations of Working Places in Metal and Nonmetal Mines” was published in the Federal Register on Monday, January 23, and will become effective on May 23, 2017.
Hours after the new President took office on January 20, however, his Chief of Staff ordered the withdrawal of all regulations finalized by the Obama administration but not yet published in the Federal Register. The directive seemed to include the workplace exam rule, which was scheduled to be published in the Federal Register the next business day, January 23. However, the instruction from the White House came after the decision deadline for the Federal Register’s January 23 issue, and the new MSHA rules were published as planned. For that reason, the Labor Department’s current position is that the workplace examination rules were not affected by the memorandum and that the May 23 effective date remains in place. However, a new Assistant Secretary for Mine Safety and Health has not yet been named, so it is possible that the incoming head of MSHA will take steps to amend the rules or even withdraw them entirely.
The new rules, which will replace the current version of 30 C.F.R. §§ 56/57.18002, require that a competent person designated by the mine operator examine each working place at the mine at least once per shift. Although the timing of the examinations is flexible, depending on what is necessary to ensure miners’ safety, they must be completed before miners begin work in the areas subject to the rule. For the first time, examiners must note on the examination record any adverse conditions they find that cannot be addressed immediately, and miners must be notified about those adverse conditions before they start work.
The rules also impose new recordkeeping requirements on mine operators. Exam records must include the name of the examiner, the date the examination was carried out, the locations that were looked at and, as noted, any adverse conditions that were found. Operators must also record the date on which corrective action was taken – but not what action was taken, or who made the fix. As has always been the case, mine operators must keep examination records for one year, but now they must make them available (and provide copies) to both MSHA inspectors and representatives of miners upon request.
To learn more about the new rules, please see our legal alert.
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.
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.)
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.
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.