Court Finds Balance in Coal and Conservation
On February 12, 2010, the United States District Court for the Southern District of West Virginia entered an order denying a motion by Loadout, LLC and Coal River Mining, LLC (Loadout) to stay the Court's previous Order of November 24, 2009 related to the failure of the United States Corps of Engineers (Corps) to properly provide public notice pursuant to the Clean Water Act regarding certain coal permit applications filed by Loadout and Fola Coal Company (Fola Coal), concluding that Loadout failed to show sufficient economic harm as a result of being enjoined from further construction of the valley fills necessary for continued mining operations.
The Court's November 24, 2009 Order concluded that the Corps' procedural error effectively denied the plaintiffs' procedural due process rights i.e., a meaningful opportunity to comment upon and protest the permit applications filed by the companies. The Court directed the Corps to re-advertise and re-evaluate the applications, taking into account any new information submitted during the comment period. The Court also entered an injunction preventing the companies from undertaking further construction of the valley fills, pending the Corps' reconsideration of the permit applications.
On motion by Fola Coal, and without any opposition from the plaintiffs, the Court stayed the injunction as to the Fola Coal's valley fill operations. Fola Coal had submitted evidence of the significant economic effects the injunction would have upon not only Fola Coal and its employees, but also upon the county where the mine was located (the county's tax collections and its general population would suffer financially if the mine were shut down as a result of the injunction).
Subsequently, Loadout filed its motion for stay of the injunction, which the Court denied, noting that unlike Fola Coal, Loadout had failed to submit any evidence of the potential economic harm to the local community, and further, that the plaintiffs were opposed to Loadout's motion. The Court also noted that Loadout had not made any effort to ask the Corps to re-advertise or re-consider their permit applications.
In considering Loadout's motion, the Court weighed the following factors: (i) the significance of the harm that would be authorized under the requested stay; (ii) any procedural or other rights affected by the requested stay; (iii) the plaintiffs' opposition or lack thereof; and (iv) whether the company requesting the stay had provided a sufficient evidentiary basis in light of the specific facts pertinent to the permit at issue to conclude that the public interest warrants relief. In weighing such factors, the Court stated that it was attempting to achieve a balance between the importance of coal to West Virginia's economy and the value of preserving and protecting West Virginia's tremendous natural resources.
Robert D. Pollitt
Chase Tower - Eighth Floor
707 Virginia Street E.
Charleston, WV 25301
304-353-8137
robert.pollitt@steptoe-johnson.com
West Virginia Bill Proposes Increased Regulation of the Natural Gas Industry
A bill has been introduced in the West Virginia Senate that attempts to regulate public highway use by the natural gas industry. Senate Bill No. 643 proposes requiring the West Virginia Public Service Commission and West Virginia Division of Highways to work together to identify natural gas resource transportation routes; implement permitting, training, and accident reporting requirements for well owners and infrastructure developers; and establish a penalty scheme to address issues of non-compliance.
The bill drafters identify the rapid development of the Marcellus Shale formation as the impetus for the legislation. They allege that increased exploration will deteriorate the state's highway infrastructure and result in a higher incidence of traffic accidents and vehicle fatalities. To address the perceived ills, the legislation proposes the establishment of vehicle weight and size limitations, and the designation of roads as temporary natural gas resource transportation routes in areas in which natural gas drilling activities are underway.
The legislation would also require gas well owners to obtain permits in order to transport natural gas exploration equipment across designated natural gas resource transportation routes. Although the bill is not clear with regard to precise permitting requirements, it identifies, among other things, driver training, drug and alcohol testing, daily recordkeeping, maintenance of vehicle pull off areas, mandatory accident reporting, and limitations on hours of operation as potential areas for administrative rulemaking.
Violations of the bill's permitting and reporting requirements would result in steep penalties. Proposed penalties include the assessment of fines up to $50,000.00, suspension and/or revocation of a natural gas resource transportation permit, and suspension and/or revocation of a West Virginia Department of Environmental Protection well drilling and operations permit. In addition, well owners could be held liable under the bill for permitting and reporting violations committed by contractors and subcontractors.
If enacted, Senate Bill No. 643 will require the natural gas industry to participate in new permitting processes; implement additional training, recordkeeping, and reporting requirements; and submit to increased fines and penalties. These proposed changes have the potential to impact the way the natural gas industry conducts business and exploration within the state of West Virginia.
Click here to view the current version of S.B. 643.
Armando Benincasa
Chase Tower - Eighth Floor
707 Virginia Street E.
Charleston, WV 25301
304-353-8137
armando.benincasa@steptoe-johnson.com
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