Draft Technical Regulations on Oil and Gas Exploration and Exploitation (South Africa)

The South Africa Department of Mineral Resources has released draft technical regulations on oil and gas exploration and production, including shale gas and hydraulic fracturing. These draft regulations were gazetted on 15 October 2013, with public consultation pegged for 30 days.

The draft technical regulations are found here.

The purpose of the technical regulations is to update the current regulatory framework, particularly in relation to Hydraulic Fracturing, and prescribe the American Petroleum Institute (API) standards for aspects such as well casing and blowout protection.

Agrofuels and Biofuels Update (EU)

COM (2012) 595 is the European Commission’s Proposal for a Directive of the European Parliament and of the Council amending Directive 98/70/EC concerning the quality of petrol and diesel fuels (EU Fuel Quality Directive) and amending Directive 2009/28/EC concerning the promotion of the use of energy from renewable sources (EU Renewable Energy Directive). COM (2012) 595 proposes to limit global land conversion for biofuel production. The use of food-based biofuels to meet the 10% renewable energy target of the Renewable Energy Directive will be limited to 5%.

Directive 2009/28/EC (the Renewable Energy Directive) sets binding targets for the development of renewable energy (RE), which is to account for 20 % of all energy consumption by 2020. Member States are given a high degree of flexibility in implementation, in that they are free to decide which sector (electricity, heating/cooling or transport) they wish to focus on.

This flexibility is qualified when it comes to the transport sector, however: here the Directive requires a minimum share of 10% of energy consumption. Initially the plan was to stipulate this share in the form of biofuels, but following criticism from the EESC and the EP (other EU statutory consultees) it is agreed that other types of renewable energy (such as electricity from renewable sources used in cars and trains; biogas; etc.) could be deployed.

Thus, the amendments being proposed intend to restrict “conven­tional agrofuels” and effect a transition to “advanced biofuels”, which supposedly do not pose a risk of indirect land-use change. Biofuels defined as “advanced” by the Commission are liquid fuels, including those manufactured from biogenic rubbish/waste or algae. The Commission believes that their production should be supported because they are not currently commercially available in large quantities. Incentives are to be provided by increasing the weighting of advanced biofuels towards the 10% target for transport set in Directive 2009/28/EC.

The proposal is to:
(A) limit the contribution of conventional biofuels to the targets set by the Renewable Energy Directive to no more than 5% of energy use in transport, or no more than half the 10 % target;
(B) encourage “advanced biofuels” (with no or low indirect land-use change), not least by weighting them in calculations so that they contribute more to the targets in the Renewable Energy Directive than conventional agrofuels;
(C) improve the greenhouse gas performance of biofuel production processes (reduce emissions) by increasing the emission savings achieved with new facilities;
(D) improve reporting of greenhouse gas emissions by obliging Member States and fuel suppliers to report emissions linked to indirect land-use change caused by biofuels.

Progress on COM (2012) 595 may be observed here

Perfluorinated Compounds (PFCs)

A perfluorinated compound (PFC) is an organofluorine compound with all hydrogens replaced by fluorine on a carbon chain—but the molecule also contains at least one different atom or functional group. Thus, PFCs have properties similar to fluorocarbons (a wholly carbon and fluorine containing compound) as they are fluorocarbon derivatives. They have unique properties to make materials stain, oil, and water resistant, and are widely used in diverse applications. PFCs persist in the environment as persistent organic pollutants, but unlike PCBs, they are not known to degrade by any natural processes due to the strength of the carbon–fluorine bond.

The OECD’s Portal on PFCs is here.

The USEPA web information on PFOA and related PFCs is here.

Cross-State Air Pollution Rule (CSAPR) Update (US)

The Cross-State Air Pollution Rule (CSAPR, 2011) replaced and strengthened the 2005 Clean Air Interstate Rule (CAIR), which the U.S. Court of Appeals for the D.C. Circuit ordered EPA to revise in 2008. The court had allowed CAIR to remain in place temporarily while EPA worked to finalize the replacement rule.

EPA information on the CSAPR and CAIR is here.

December 10, 2013 – the Supreme Court heard oral arguments in EPA’s appeal from the vacatur (order to set aside or annul a proceeding) of the Cross-State Air Pollution Rule (CSAPR) in EPA v. EME Homer City Generation, L.P.

Background – In 1963, in response to growing concerns of pollution, the US Congress passed the Clean Air Act (CAA). The CAA requires the Environmental Protection Agency (EPA) to set certain air quality standards for harmful pollutants, and includes a “Good Neighbor” provision requiring states to adopt plans that prohibit pollution that would “contribute significantly” to other states’ nonattainment of these standards. However, the CAA does not define “significant contribution.”

Specifically – the Clean Air Act, 42 U.S.C. 7401 et seq. (Act of CAA), requires the EPA to establish National Ambient Air Quality Standards (NAAQS) for particular pollutants at levels that will protect the public health and welfare. 42 U.S.C. 7408, 7409. “[W]ithin 3 years” of promulgation of a [NAAQS],” each State must adopt a state implementation plan (SIP) with “adequate provisions” that will, inter alia, “prohibit” pollution that will “contribute significantly” to other States’ inability to meet, or maintain compliance with, the NAAQS. 42 U.S.C. 7410(a)(1), (2)(D)(i)(I). If a State fails to submit a SIP or submits an inadequate one, the EPA must enter an order so finding. 42 U.S.C. 7410(k). After the EPA does so, it “shall promulgate a [f]ederal implementation plan” for that State within two years. 42 U.S.C. 7410(c)(1).

In 2011, the EPA finalized a rule known as the “Transport Rule”, the CSAPR. Mirroring the language of the “good neighbor” provision, the Transport Rule defines emission reduction obligations for several upwind states that “contribute significantly” to downwind states’ nonattainment of the EPA’s air quality standards. In determining what constitutes a significant contribution, the EPA balanced achievable emission reductions against the cost of achieving those reductions.

However, in EME Homer City Generations v. EPA, the D.C. Circuit struck down the Transport Rule and rejected the EPA’s analysis for determining what constitutes a significant contribution in this context.

In December 2013, the Supreme Court was presented with questions about the EPA’s interpretation of its statutory grant of authority under the CAA as well as questions about the jurisdiction of the D.C. Circuit to hear the challenges presented. This case also raises concerns about federal intervention in state affairs and public health concerns posed by the EPA’s interpretation of the CAA. Should the Supreme Court decide this case on the merits, the Court’s decision will significantly affect the EPA’s grant of authority to regulate interstate pollution.

The information set out below is informed by the article by Stephanie Sebor, Winston & Strawn LLP, here.

On the question of whether a state is excused from adopting an interstate transport SIP until after EPA has quantified the state’s good neighbor obligations, the EPA answered in the negative, emphasizing that the Clean Air Act places the initial burden on the state to ascertain whether its emissions contribute significantly to downwind nonattainment with the NAAQS. Justice Roberts noted that “EPA has an easier job” quantifying each state’s good neighbor contributions than the individual states who have “no possible way to know . . . the burden [EPA] expect[s] them to address.”

The state respondents, lead by Texas, argued that the EPA had directed the states in the 1998 NOx SIP Call not to submit interstate transport SIPs until after EPA had quantified each state’s good neighbor obligations, which excused the states from the requirement to adopt a SIP until after EPA completed its quantification.

The Court also heard arguments on whether EPA permissibly defined each upwind state’s significant contribution based upon the cost-effective emission reductions achievable in the state, rather than each state’s proportionate responsibility for downwind nonattainment. The industry petitioners argued that EPA’s interpretation was arbitrary and capricious because it would force certain states to make greater emissions reductions than their proportionate contributions would require simply because it is less costly for them to do so. Justice Scalia appeared to agree, noting that Congress’s intent was not for EPA impose a plan upon the states that achieves “the most efficient reduction of pollution no matter where that pollution came from.” EPA argued that its interpretation of the statute is permissible because an overriding policy objective of the Clean Air Act is to achieve emissions reductions in the most cost-effective manner possible. EPA also emphasized that it is “impossible” to implement the straight proportionality approach the D.C. Circuit instructed EPA to follow when vacating CSAPR. Justice Kennedy appeared to be sympathetic to the Agency’s argument, stating that “the word ‘significantly’ does import a judgmental component.”

The Court’s decision is expected by June 2014. If the Court splits 4-4, the effect would be to uphold the D.C. Circuit’s vacatur of CSAPR.

Athabasca Jackpine Mine Expansion Update (Canada)

The information set out below is informed by:
(A) Shell Canada here;
(B) the Athabasca Chipewyan First Nation (ACFN) request filed January 3, 2014 of the Federal Court to review the Crown’s December 2013 decision to approve the Joint Review Panel report and decision to authorize Shell’s Jackpine Mine Expansion project proposal, and declare the decision invalid and unlawful, here; and
(C) the article by Catherine Lyons and Joseph Hoffman of Goodmans LLP here.

The Jackpine Mine Expansion is a potential future development of Athabasca oil sands mining leases in northern Alberta that extend to the north of the current Jackpine Mine, operated by Shell on behalf of the Athabasca Oil Sands Project owners, Shell Canada Energy (60%), Chevron (20%) and Marathon Oil Canada (20%).

The regulatory application was submitted in 2007 and describes a potential 100,000 barrels per day oil sands mining expansion, including additional mining areas, associated processing facilities, utilities and infrastructure.

In October 2012, a public hearing held in Fort McMurray, Alberta, gave interested individuals and organizations an opportunity to ask questions about the Project and to provide their views to the Joint Review Panel.

The Joint Review Panel for the Jackpine Mine Expansion Project is an independent federal-provincial body, mandated by the Canadian Minister of the Environment and the Chairman of the Alberta Energy Regulator (formerly Alberta Energy Resources Conservation Board) to assess the environmental effects of the proposed project and ultimately decide whether it is in the public interest.

In July 2013, the Joint Review Panel issued its Decision Report, deeming the Jackpine Mine Expansion Project to be in the public’s interest and recommending it for approval. The Decision Report made 88 recommendations, however, to mitigate the adverse impacts identified.

In December 2013, the Federal Minister of Environment issued a Decision Statement, setting out the conditions with which Shell must comply during the development, operation and reclamation of Jackpine Mine Expansion. This Decision (issued December 6) is the first to be made under the Canadian Environmental Assessment Act, 2012 S.C. 2012 c. 19, s. 52 (“CEAA 2012”), and is issued alongside referral to the Federal Cabinet.

In his consideration of the report of the Panel, the Federal Environment Minister held that the Project would likely cause significant adverse environmental effects. This determination triggered the provisions of the CEAA 2012, requiring a referral to Federal Cabinet. The Federal Cabinet subsequently determined that the significant adverse environmental effects are justified in the circumstances. The Project could therefore proceed subject to conditions set out by the Environment Minister in the Decision Statement. Generally, the conditions can be classified as:

1. preserving plants, aquatic and terrestrial wildlife;

2. implementing environmental mitigation measures;

3. considering Project effects on First Nations;

4. submitting annual reports; and

5. establishing plans for closing Jackpine Mine.

If Shell Canada does not comply with the conditions set out in the Decision Statement, it will face compliance and enforcement action. This may include financial penalties of up to $400,000 per day if convicted for a continuing offence.

A final decision to proceed with the Project would come in the form of a Final Investment Decision by the Athabasca Oil Sands Project joint venture owners, Shell (60%), Chevron (20%) and Marathon (20%).

The Project is within ACFN’s traditional lands. It is part of the ACFN application to the Federal Court that it participated in the various processes relating to the Project over the course of six years, including lengthy regulatory hearings before a Joint Review Panel, and it consistently and repeatedly raised its concerns about the Project with Canada and sought meaningful protection for its Treaty 8 rights, as promised by section 35 of the Constitution Act, 1982.

ACFN assert that (the nation of) Canada breached its duties to consult and accommodate ACFN with respect to the Project and the manner in which the Project will impact ACFN’s constitutionally protected section 35 rights. In addition, the process, and mitigation offered, was inconsistent with the requirements of the federal Species at Risk Act, the Migratory Birds Convention Act, as well as international agreements and conventions to which Canada is a signatory.

In addition, ACFN assert Canada did not implement many central recommendations of the Joint Review Panel, and with very limited exceptions did not implement ACFN’s proposals either. Also Canada did not provide concrete and equivalent alternative accommodation to address the serious impacts of the Project.

In addition, ACFN assert the Federal Cabinet in approving the project, provided no reasons nor explanation at all for why the significant adverse impacts of the Project were justified.

Changes to the Regulations Governing Eagle Permitting (US)

50 CFR Parts 13 and 22
[Docket No. FWS-R9-MB-2011-0054; FF09M21200–134–FXMB1231099BPP0]
RIN 1018–AX91
Eagle Permits; Changes in the Regulations Governing Eagle Permitting

This is a new federal rule to provide legal protection for the lifespan of wind farms and other projects if companies obtain permits and make efforts to avoid killing protected birds.

Companies would have to take additional measures if they killed or injured more eagles than they had estimated they would, or if new information suggested that eagle populations were being affected. The permits would be reviewed every five years, and companies would have to submit reports of how many eagles they killed. Now, such reporting is voluntary, and the Interior Department does not release the information.

Here is the Globe and Mail news report of the change.

EU Law Updating to EU Classification and Labelling (CLP)

Brussels, December 4, 2013. The Committee of Permanent Representatives (COREPER I) approved by the Lithuanian EU Council Presidency, the European Parliament and the Commission informally agreed text on updating references and terminology of five EU Directives to bring them into line with the applicable EU chemical classification and labelling legislation.

The new Directive (derived from COM (2013) 102) will necessitate changes in National Law.

See here for the PreLex status of COM (2013) 102, and access to the relevant documents. We expect this document to become EU Law shortly.

The EU Directives involved are as follows:

(A) Council Directive 92/58/EEC on minimum requirements for the provision of safety and/or health signs at work;
(B) Council Directive 92/85/EEC on measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding;
(C) Council Directive 94/33/EC on protection of young people at work;
(D) Council Directive 98/24/EC on protection of the health and safety of workers from the risks related to chemical agents at work;
(E) Council Directive 2004/37/EC on protection of workers from the risks related to exposure to carcinogens or mutagens at work.

Each contains references to the previous classification and labelling system, and following updating to EU CLP, the national law will change, and risk assessment and chemical labelling and signage should be redone in workplaces.

Subscribers to Cardinal’s paid-for ISO/OHSAS Legal Registers will see the changes consolidated into the EU and National Law supplied. We will also Email Alert at the time.

New Clean Air Policy Package (EU)

A new Clean Air Policy Package is adopted by the European Commission in December 2013.

Here is the link to the new EU Clean Air Package. See below extracts from the Commission’s Q&A document:

What are the main components of the clean air policy package?

(A) A Clean Air Programme for Europe, which describes the problem and sets out new interim objectives for reducing health and environmental impacts up to 2030. It also defines the necessary emission reduction requirements for the key pollutants and the policy agenda that will be necessary to achieve the objectives.

(B) A revised National Emission Ceilings Directive (NECD), containing updated national ceilings (caps) for six key air pollutants (PM, SO2, NOx, VOCs, NH3 and CH4) for 2020 and 2030.

(C) A new Directive for Medium-sized Combustion Plants between 1 and 50 MWth.

(D) A ratification proposal for the amended Gothenburg Protocol under the 1979 UNECE Convention on Long-Range Transboundary Air Pollution.

What is the difference between EU air pollution emission ceilings and EU air quality standards?

EU national emission ceilings are upper limits for total emissions of certain air pollutants that Member States will have to respect by a certain date, to push down background concentrations and limit transboundary air pollution. Existing ceilings are in place for 2010, as set out in the UNECE Gothenburg Protocol in 1999 and the EU National Emission Ceilings Directive, NECD (2001/81/EC). New ceilings (which are called national emission reduction commitments) for 2020 were agreed recently in a revised Gothenburg Protocol, and are proposed for 2020 and 2030 in a revised NECD as part of the clean air policy package.

EU air quality standards are local concentration limit values for the air pollutants most harmful to health, as set out in the EU ambient air quality Directive, AAQD (2008/50/EC), which have to be respected everywhere in the EU with a view to provide a general protection for all against harmful air pollution levels. Achieving the air quality standards often require a combination of local measures addressing particular air pollution hotspots, and reducing background emissions by implementing the NECD. The AAQD entered into force as late as 2010, and has not been revised as part of the air policy review.

Why was the existing EU air quality standards in the Ambient Air Quality Directive not revised? Are they not too weak compared to the WHO standards?

The existing air quality standards in the Ambient Air Quality Directive (AAQD) were carefully examined in the review, and it is clear that they are insufficient in relation to the WHO air quality guidelines on air pollution, which represent the levels where health risks are minimized. But it is also clear that further tightening existing EU air quality standards will be ineffective unless we see real cuts in air pollution from the main sources. As many Member States are currently facing infringement cases for failing to reach existing standards, proposing stricter standards at this point in time may prove counter-productive. Instead, the new policy proposes stricter emission ceilings in the revised NECD and, together with new source legislation, this will pave the way for tightened standards in the Ambient Air Quality Directive at a later stage.

Nevertheless, the Commission will also consider simplifying the implementing measures of the Ambient Air Quality Directive without revising the core obligations, in the context of comitology.

Why is a new Directive to cut emissions from Medium-sized Combustion Plants needed?

The review of air policy that preceded this package of measures revealed a gap in EU source legislation for smaller energy plants for street blocks or large buildings, and small industry installations (1-50 MWth). This new instrument is designed to close this gap and make a significant contribution to reduce pollution of NOx, SO2 and PM by setting limit values for new and existing installations, together with a simple registration scheme. In this way, the Directive will help deliver a significant part of Member States’ emission reduction obligations. The Directive is also necessary to avoid possible trade-offs between air quality and increased biomass use, which may otherwise result in increased air pollution.

Does this proposal go far enough – isn’t the time frame of 2050 to achieve the WHO air quality guidelines is too far away?

The WHO air quality guidelines are very challenging, especially in air pollution hotspots such as large cities. The proposed policy is based on available technology, and represents a careful balance between benefits and costs. It sets the pathway to significant improvements in the long term, but with the help of larger, more structural changes, such as moving to a low carbon economy, progress will be faster. If we agree on an ambitions post 2020 climate package, for which the Commission will present a proposal in 2014, overall air policy objectives can be reached well before 2050.

Factory Occupational Health Breaches Eventually Lead to Fines (UK)

Section 2(1) of the Health and Safety at Work etc Act 1974 states: “It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees.”

Section 21 of the Act covers Improvement Notices.

Section 37 covers director culpability.

Westminster Magistrates’ Court heard 27 November about:
(A) failure to test ventilation systems for extracting potentially harmful wood dust
(B) failure to provide suitable respiratory protective equipment (RPE), controls or any health surveillance for employees working with hazardous spray paints
(C) failure to control noise exposure
(D) failure to provide adequate information, training and supervision to protect workers from hazards, including inhaling chemicals such as isocyanate during spraying processes.

Two Improvement Notices had been served requiring action to be taken to stop health and safety from being compromised, and to protect workers undertaking hazardous activities. However, a follow up inspection in April revealed both were ignored. The court was told that little had changed and that there were still serious faults.

After the hearing HSE Inspector Saif Deen said:

“Employers have a duty to protect their workers, but this company carried out high risk activities, such as paint spraying and work that exposed employees to prolonged, high levels of noise, with disregard for their health and safety. The seriousness of these breaches was reflected in the Improvement Notices issued, which both the company and Stephen Morrison ignored. They failed to address the fact that workers were placed at unnecessary risk because of the inadequate RPE provisions, and the complete lack of health surveillance. They were being exposed to potentially harmful sprays and noise, and yet the company had no means of monitoring whether it was causing harm. Sunbeam Wood Works, under the lead of Mr Morrison, displayed poor performance over the period of our investigation. HSE will not hesitate to take action against duty holders who shirk their responsibilities in this way.”

The HSE Press Release is here.