AQB to Decide WVONGA Challenge to General Permit
March 31, 2016
By: Chris M. Hunter
The West Virginia Department of Environmental Protection’s (“WVDEP”) Division of Air Quality (“DAQ”) recently issued two General Permits regulating air pollution in the oil and gas industry, both of which have been challenged by the West Virginia Oil and Natural Gas Association (“WVONGA”) as exceeding the Agency’s authority. During the public comment process, DAQ dismissed complaints about perceived flaws in each permit by stating that dissatisfied parties are always free to apply for an individual permit. DAQ’s response to public comments raises an interesting question, in addition to those raised in the industry appeals: Can the availability of an individual permit be used to justify certain overreaches or legal deficiencies in a general permit?
DAQ issued General Permit G70-B on November 2, 2015, in part to establish annual emission caps on certain pollutants emanating from gas well pad sites, such as volatile organic compounds, methane, and sulfur dioxide. Section 18.104.22.168 of G70-B limits the heat input of flaring equipment to 30 MMBtu. Flaring occurs at gas wells during the drilling and testing phase. The practice can be used to determine the production capabilities of a well, as well as the pressure and flow rates. Flaring is primarily a safety measure designed to prevent accumulation of unsafe levels of pressure and/or gas. Numerous commenters questioned the reasonableness of the heat input limit and asserted that it was too low to provide for the safe operation of natural gas wells. In responding to public comments questioning the heat input limit, the agency responded that, “[i]f the total MDHI of all units would exceed 30 MMBTU/hr or greater, the applicant would be required to apply for a 45CSR13 permit.” Essentially, DAQ’s response to concerns about the flare limitation was to tell operators they are always free to go through the more cumbersome process of obtaining a Reg. 13 individual permit if they wish to use higher heat inputs for flaring. If, however, the 30 MMBtu limit makes it impossible to operate a well safely, G70-B becomes unusable for oil and gas exploration.
WVONGA and Antero Resources Corporation appealed General Permit G70-B to the West Virginia Air Quality Board (“AQB”) on two grounds: (1) the limit placed on heat input for flaring devices was arbitrarily low; and (2) DAQ exceeded its statutory authority in prescribing leak detection requirements more stringent than those found in proposed federal rules in contravention of W.Va. Code 22-5-4(a)(4). The parties settled the appeal after DAQ agreed that the heat input limit would increase from 30 to 36MMBtu and that the leak detection and reporting requirements would be revised to apply only to closed vent systems.
DAQ issued G35-C on December 18, 2015 to regulate air pollutants from eligible natural gas compressor stations and dehydration facilities. General Permit G35-C replaces General Permit G35-B, with the inclusion of language aimed at addressing potential noise and light issues. In 2012, WVDEP’s Office of Oil and Gas commissioned a study by Dr. Michael McCawley, a professor at West Virginia University’s School of Public Health, on air quality, light and noise levels near active gas wells pursuant to a legislative mandate. See W.Va. Code 22-6a-12(e) (the Natural Gas Horizontal Well Control Act). DAQ cited Dr. McCawley’s study as grounds for using West Virginia’s Air Pollution Control Act (“APCA”) to regulate noise and light, which seems to contradict the Office of Oil and Gas’s conclusion that McCawley’s findings did not demonstrate the need for more regulation in addition to the existing 625-foot setback from the center of well pads to the nearest occupied dwelling:
Based on a review of several completed air studies to date, including the results from the well pad development monitoring conducted in West Virginia’s Brooke, Marion, and Wetzel Counties, no additional legislative rules establishing special requirements need to be promulgated at this time. The existing regulatory framework provides a basis for implementation of requirements to minimize and mitigate human health and environmental impacts.
In its response to public comments questioning its authority to regulate noise and light under the APCA, WVDEP echoed its response to comments on G70-B, this time more explicitly stating that operators who didn’t like the vague noise and light restrictions were free to apply for an individual permit:
The registration under any general permit is a voluntary process and is not required. Permit condition 3.2.8 is a reasonable condition under 45CSR13 Section 5.11. Furthermore, this permit condition meets the intent and purpose of West Virginia Code §22-5-1. Therefore, no changes will be made to this permit condition.
WVONGA filed an appeal of G35-C with the West Virginia Air Quality Board (“AQB”), alleging a number of deficiencies with the General Permit. With regard to the noise and light, WVONGA argues that WVDEP exceeded the scope of its statutory authority in attempting to expand its reach to nuisances associate with gas exploration under the guise of protecting air quality. The public comment process and WVONGA’s appeal of G35-C have raised at least two interesting issues concerning the scope of DAQ’s authority and its attitude towards general permits. First, DAQ does not appear to have statutory authority to regulate noise and light. Second, it dismissed concerns over its apparent lack of authority by reminding concerned parties that operators are always free to go through the considerably more cumbersome process of obtaining an individual permit.
Does the APCA grant DAQ authority to regulate noise and light?
First, as pointed out in public comments, the APCA does not provide DAQ with authority to regulate noise and light. See W. Va. Code § 22-5-1 et seq. The APCA allows DAQ to regulate stationary air pollution. See W. Va. Code § 22-5-3. “Stationary air pollution,” however, is defined as “the discharge into the air by the act of man of substances (liquid, solid, organic or inorganic) in a locality, manner and amount as to be injurious to human health or welfare, animal or plant life, or property, or which would interfere with the enjoyment of life or property.” W.Va. Code § 22-5-2(6). It is hard to fathom how this could be read as a grant of authority to regulate noise and light. Moreover, a common principle of statutory interpretation (the express mention of one thing implies the exclusion of another) weighs against finding a grant of authority in the APCA to regulate noise and light. It is well-settled in West Virginia that a State agency’s authority is circumscribed by its authorizing statute:
Administrative agencies and their executive officers are creatures of statute and delegates of the Legislature. Their power is dependent upon statutes, so that they must find within the statute warrant for the exercise of any authority which they claim. They have no general or common-law powers but only such as have been conferred upon them by law expressly or by implication.
Syl. Pt. 2, Mountaineer Disposal Serv., Inc. v. Dyer, 156 W.Va. 766, 197 S.E.2d 111 (1973). DAQ does not possess general police powers; rather, its authority to regulate gas wells is confined to those powers delegated to it by the APCA. If the APCA does not mention noise and light, DAQ cannot regulate it.
Can the mere availability of an individual permit be used to justify deficiencies in a general permit?
Second, DAQ’s response to comments on both G70-B and G35-C is somewhat troubling. Instead of addressing the substance of certain comments regarding potential defects in the general permits, the agency simply responded that unsatisfied parties weren’t obligated to use the general permit. DAQ’s position seems to be that both legal and technical deficiencies can all be excused by the fact that use of a general permit is a privilege, not a right. This sentiment would allow DAQ, or any agency for that matter, to include exceedingly onerous conditions in general permits, rendering them unusable by the regulated industry. Such an approach would contravene the policy of general permits, which is to establish a simplified, streamlined permitting process for whole categories of minor sources, thereby reducing the administrative burden on both industry and the agency. DAQ’s comments also undermine the spirit of the legislature’s mandate that it issue general permits to non-major stationary sources. See W.Va. Code 22-5-11(g). The legislature clearly understands the value of general permits and has commanded DAQ to use them. DAQ’s response to comments indicates that it views W.Va. Code 22-5-11(g) as a legislative suggestion rather than a mandate.
The AQB held an evidentiary hearing on WVONGA’s appeal on March 22, 2016. It will render a decision after the parties submit post-hearing briefs.
This article was authored by Chris M. Hunter, Jackson Kelly, PLLC.