Underscoring the risks of Marcellus Shale formation gas well leases that we discussed in our post of December 4, 2011 is an EcoWatch article posted yesterday by New York attorney Elisabeth Radow, "Homeowners and Gas Well Drilling: Boon or Bust." It contains a thorough and extensive analysis of numerous issues relating to gas well drilling and leases for such activities and the risks for property owners who enter into such leases. Accompanying the analysis are a series of photographs of actual well drilling sites by photographer J Henry Fair, best known for his Industrial Scars series, in which he "researches our world’s most egregious environmental disasters and creates images that are simultaneously stunning and horrifying". Mr. Fair’s work has been featured in national and international media and has been exhibited world wide. The article and photographs make for sobering reading and viewing for anyone who has entered into such a lease or is considering such a lease. Property owners who may enter into such leases should be fully cognizant of the significant environmental and legal risks of these transactions. This article provides valuable information on these issues.
Congressional Research Services issues CRS Report to Congress on "Proposed Keystone XL Pipeline: Legal Issues"
CongressionalResearchService
On January 23, 2012, the Congressional Research Services issued a Report to Congress on "Proposed Keystone XL Pipeline: Legal Issues." The entire report (PDF, 29 pp.) can be found here. The report analyzes a variety of legal issues, including: the sources of Presidential and State Department legal authority regarding cross-border facilities, reconciling the Executive and Legislative roles related to foreign commerce and judicial interpretations of those roles, constitutional concerns related to potential action by States related to the pipeline, preemption issues, the National Environmental Policy Act (NEPA) process for permitting of the pipeline, and the availability of judicial review of actions taken under Executive Order 13337. The Report to Congress provides a typically thorough review of the issues and is required reading for persons interested in the legal issues arising from the Keystone XL proposal. The Summary of the Report states, in part: "New legislative activity with respect to the permitting of border-crossing facilities, a subject previously handled exclusively by the executive branch, has triggered inquiries as to whether this raises constitutional issues related to the jurisdiction of the two branches over such facilities. Additionally, as states have begun to contemplate taking action with respect to the pipeline siting, some have questioned whether state siting of a pipeline is preempted by federal law. Others argue that states dictating the route of the pipeline violates the dormant Commerce Clause of the Constitution which, among other things, prohibits one state from acting to protect its own interests to the detriment of other states. This report reviews those legal issues. First, it suggests that legislation related to cross-border facility permitting is unlikely to raise significant constitutional questions, despite the fact that such permits have traditionally been handled by the executive branch alone pursuant to its constitutional “foreign affairs” authority. Next, it observes generally that state oversight of pipeline siting decisions does not appear to violate existing federal law or the Constitution. Finally, the report suggests that State Department’s implementation of the existing authority to issue presidential permits appears to allow for judicial review of its National Environmental Policy Act determinations."
A companion report from CRS focusing on policy issues associated with the proposal, "Keystone XL Pipeline Project: Key Issues" (CRS Report R41668), is also available here.
"Murder on Main Street" - The duty of sellers to disclose "property defects" to their buyers
[Update: As we predicted, the Superior Court opinion in this matter has been vacated and reargument has been granted. 2012 Pa. Super. LEXIS 30 (2012)]
The house with four bedrooms, 2-1/2 baths, two car garage and a white picket fence seemed to be the young couple's dream home, and - from all appearances - it was. Or was it? Not if you overheard the whispers of the neighbors. Or read the front page of the local newspaper from over a year ago.
In Milliken v. Jacono, 2011 Pa. Super. 254, __ A.3d __ (2011), the Pennsylvania Superior Court held that sellers of residential real estate and their agents should have told their buyer that a previous owner had murdered his wife in the house, and then committed suicide. [The full opinion of the Court can be found at http://lawyersusaonline.com/wp-files/pdfs-3/milliken-v-jacono.pdf. The case seems certain to provoke litigation concerning the extent of a seller's obligation to disclose non-physical property defects unless the Pennsylvania legislature steps in and joins the many other states which have addressed the question of stigmatized property with statutory language.
While property can be sold by its sellers in an "as is condition", i.e., with all of its faults, the era of "caveat emptor" (or "buyer beware") is largely gone. This case certainly advances the trend toward requiring disclosures. With very limited exceptions, sellers of residential real estate in Pennsylvania are required by the Real Estate Seller Disclosure Law to disclose to their prospective purchasers "any material defects with the property known to the seller." The statute lists 16 subjects of mandatory disclosure, 12 of which relate to the physical condition of the property such as its roof, plumbing, heating, air conditioning, and the presence of insect infestation or hazardous substances. (Other questions relate to the seller’s expertise in "areas related to the construction and conditions of the property and its improvements", the duration of seller’s possession, and legal matters such as title, condominium, and use limitations). Sellers are required to deliver to their prospective buyers a written, signed, and dated disclosure statement before an agreement of sale is signed.
To assist the real estate industry in complying with this law, the General Assembly directed the Pennsylvania State Real Estate Commission to prepare a form for these disclosures. The Commission did so, but in addition to the specific disclosures required by the statute, it included in its form a final question for each seller: "Are you aware of any material defects to the property, dwelling or fixtures which are not disclosed elsewhere on this form?" The form defines a "material defect" as "a problem with the property or any portion of it that would have a significant adverse impact on the value of the residential real property or that involves an unreasonable risk to people on the land." [The Commission's form is at http://www.pacode.com/secure/data/049/chapter35/s35.335a.html.] The statutory emphasis on the physical conditions of property - and the omission of any reference to non-physical, non-legal matters - was accepted by many lawyers and real estate agents as not requiring disclosure of other property characteristics that might affect value, including those which fall within the real estate agent’s mantra, "location, location, location."
But in holding otherwise, the Superior Court stated that the failure to disclose not only violated the requirements of the disclosure law, but constituted common law fraud because of the affirmative misrepresentation that there were no other "problems" with the property. To prove the "materiality" of the failure to disclose, the buyer was prepared to introduce testimony from two real estate appraisers that the crimes had diminished the value of the property by ten to fifteen percent. Notably, the Court chastised the sellers and the real estate agents for making inquiries to the Pennsylvania Real Estate Commission and the Pennsylvania Association of Realtors for advice in deciding whether they were required to disclose the murder/suicide to the buyers (both said "no"), stating "Instead of expending this effort, they would have been better served by simply acting in good faith and disclosing this fact." This language is of particular concern to attorneys, suggesting as it does that if a question regarding disclosure is important enough to require legal consultation, then disclosure is required.
The Court did acknowledge there would be concerns that it was "proceeding down a slippery slope." In her dissenting opinion, Judge Kate Ford Elliott walked us down that slope by questioning whether a seller must disclose lesser crimes such as burglaries, or the proximity of sex offenders, or that there is a sewage plant across the way that can be smelled on humid days. She even raises the circumstance of a house erected on ancient Indian burial grounds. Such a seller might be advised to bring Ghostbusters through the home before putting it on the market so as to remove the "defect." Or find the buyers who will say, "I ain’t afraid of no ghosts."
The concerns associated with the sale of stigmatized properties are prevalent enough that the National Association of REALTORS® has produced an entire "Field Guide" on the subject for the guidance of its members. See http://www.realtor.org/library/library/fg703. The association defines "stigmatized property" as one which ‘‘has been psychologically impacted by an event, which occurred or was suspected to have occurred on the property, such event being one that has no physical impact of any kind."
We will be not be surprised if this decision is reversed on a motion to reconsider, or on appeal to the Pennsylvania Supreme Court. Moreover, not only is the Pennsylvania real estate sales industry certain to press for a legislative "bright line" concerning a seller’s obligation, but also for immunity to sellers and their agents for failure to disclose non-physical "defects".
Speaking of Lead Poisoning, EPA Finalizes New Rules on Air Pollution from Secondary Lead Smelters; Will Affect Exide Laureldale, PA Facility
Today's Federal Register contains the Environmental Protection Agency's new Clean Air Act rules on air pollution from secondary lead smelters. The new rule, amending the 1997 National Emissions Standard for Hazardous Air Pollutants for secondary lead smelters, imposes more stringent emission limits for lead compounds, adds work practice standards for mercury emissions, and imposes new requirements for testing, monitoring and record keeping. In promulgating the new rule, EPA "determined that the risks associated with emissions from this source category are unacceptable primarily due to fugitive emissions of lead." The timing of the issuance of this final rule is ironic, as the lead emission standards are ultimately based on the outdated and lax "level of concern" for lead poisoning that the CDC's Advisory Committee on Childhood Lead Poisoning voted yesterday to cut in half. See our post of January 4, 2011.
Moreover, although the rule is generally effective immediately, the compliance date for the revised stack and fugitive lead emission standards at existing sources -- such as existing sources at the Exide facility in Laureldale, PA - won't be effective for another two years: January 6, 2014.
The Exide facility was recently featured in an investigative report by the Center for Public Integrity as one of America's "poisoned places."
Note: In 2000, our firm and our co-counsel at Williams, Cuker and Berezofsky (now, Williams Cedar) successfully concluded federal litigation on behalf of victims of environmental pollution from the Exide/General Battery Facility with a court decree which provided for the remediation of our clients' contaminated properties and future environmental compliance. We brought successful federal claims under the Clean Water Act, Clean Air Act and Resource Conservation and Recovery Act ("RCRA"). A copy of the court opinion on summary judgment cross-motions (LEAD Group, et al. v. Exide, United States District Court, E.D. Pa., 1999) is here. A copy of the consent decree is available upon request.
The Perils of Natural Gas Well Drilling / "Fracking" Leases in Pennsylvania's Marcellus Shale
The New York Times' exposé of the problems with natural gas/hydraulic fracturing continues with an illuminating article, "Learning Too Late of the Perils in Gas Well Leases." As the article says, "Americans have signed millions of leases allowing companies to drill for oil and natural gas on their land in recent years. But some of these landowners — often in rural areas, and eager for quick payouts — are finding out too late what is, and what is not, in the fine print." While some landowners have been paid significant sums under these leases, others are discovering they are paying a costly price for "permitting industrial activity in their backyard." Problems caused by the fine print in such leases can include: (1) the refusal by the gas company to compensate for damages to water supplies, livestock or crops; (2) noise and light pollution, 24 hours/7 days a week; (3) losing control over the use of the property, as most leases grant gas companies broad rights to determine where they can cut down trees, store chemicals, build roads and drill wells; (4) industrial waste disposal on the property; (5) enduring indefinite extensions without additional landowner approval.
Another article in the series, "Rush to Drill for Natural Gas Creates Conflicts With Mortgages" , describes the mortgage problems that such leases can create. Some banks refuse to issue mortgages on properties subject to these leases. Many mortgages require permission from the lender before they sign a lease; signing without permission can put a homeowner in instant default. Many gas well drilling leases will permit the gas company to operate in ways that violate rules in the mortgage.
An archive of more than 1,000 Pennsylvania gas leases can be viewed online on the New York Times website here. The archive can be used to compare lease terms and evaluate costs and benefits. An archive of documents relating to the problems with mortgages caused by gas leases is available here.
According to John Quigley, former Secretary of Pennsylvania's Department of Conservation and Natural Resources, "at least seven million acres -- 25 percent of the state’s land area -- has been leased for drilling. About 4,000 Marcellus wells have been drilled in Pennsylvania so far, and over the next several decades, tens of thousands -- maybe hundreds of thousands -- of wells will be drilled."
Landowners who have signed -- or who are asked to sign -- natural gas well drilling leases should be aware of these potential problems, and have the leases and other real estate documents reviewed by counsel.
EcoWatch: New National Environmental News Service
EcoWatch has launched its new national news service in partnership with Waterkeeper Alliance, the first media source to focus exclusively on news from more than 700 environmental organizations across the country. EcoWatch offers original content in its Insights column from national leaders in the environmental movement. It will provide nationwide and state-by-state environmental news, and content in five major areas: water, air, food, energy and biodiversity.
“The current assault on America’s environmental laws, like the Clean Water Act, creates a pressing need to educate and engage people to protect our infrastructure, the air we breathe, the water we drink, to provide our children with the same opportunities for dignity and enrichment as our parents gave us,” said Robert F. Kennedy, Jr. founder and president of Waterkeeper Alliance. “This website encourages people to be part of the solution and engage in democracy.”
The site is well-designed and content-rich, offering objective information and deep insight from voices we need to hear.
Chrin Landfill Agrees to Pay $114,00 DEP Fine for Odor & Air Violations
Chrin Brothers Sanitary Landfill has agreed to pay a $114,000 fine to the Pa. Department of Environmental Protection for odor, air pollution and waste management violations, according to an article in the Express-Times (Easton, PA). It also agreed to withdraw an appeal of the fine which had been pending before the state Environmental Hearing Board. (We reported that appeal in our post of January 31.) In addition to paying the fine, Chrin also agreed to improve its waste and odor management practices.
According to the article by reporter Colin McEvoy, "Chrin said the landfill will adopt new off-site odor-minimization procedures and implement twice-daily patrols to monitor the landfill perimeter for potential odors. The company will also instruct its haulers on proper management of particularly odorous loads to avoid problems during disposal, he said, and will deploy a rapid-response team to inspect those loads whenever they are accepted." Chrin also agreed to give up any further appeal rights.
Chesapeake Bay Foundation and Pennsylvania Environmental Council Issue New Proposal to Reform Pennsylvania Laws on Natural Gas Drilling
The Chesapeake Bay Foundation (CBF) and the Pennsylvania Environmental Foundation (PEC) have submitted a legislative proposal to the Corbett administration and state lawmakers "designed to help ensure safe and responsible Marcellus Shale drilling and gas extraction in Pennsylvania." The proposal sets forth detailed amendments to the Pennsylvania Oil and Gas Act to confer additional authority to regulate and manage deep shale and unconventional drilling techniques that were not contemplated when the law was enacted. The proposal was provided to Governor Corbett’s Marcellus Shale Commission and members of the Pennsylvania General Assembly.
The proposed amendments are based on the findings of a PEC report issued last year called “Developing the Marcellus Shale” which outline a series of environmental policy and planning recommendations for unconventional shale gas development. The PEC/CBF press release states: "These amendments are aimed at restoring public confidence in the industry’s ability and commitment to responsible drilling and environmental compliance. The proposal includes 50 specific amendments to the Act which reform the permit process to allow for greater stakeholder input and set clear environmental protection standards for the hydraulic fracturing process and the infrastructure that should be required for shale gas extraction."
The organizations propose to split the gas well drilling permit process into two phases that require enhanced collection and review of site-specific data prior to approval. The proposal also calls for a number of tighter restrictions in the Pennsylvania Oil and Gas Act.
A copy of the press release can be found here. A PDF of the complete, detailed legislative proposal is here.
Rising Currents: Re-Visioning New York City Through the Lens of Climate Change
"Rising Currents", a current exhibition at the Museum of Modern Art presents a dazzling synthesis of environmental science, art, architecture and visionary design. The work, by five interdisciplinary teams of design and architectural firms, re-visions the urban landscape of New York City to confront a world altered by rising sea levels and storm surges induced by climate change.
The exhibit space dramatically presents a series of design ideas expressed through display boards, multimedia, physical models, and computerized data visualizations.
The design work is supported by a foundation of detailed scientific analysis, documented in Guy Nordenson's remarkable book, On the Water|Palisade Bay (a product of beautiful design in its own right - kudos to Lizzie Hodges). The teams used the tools of science - fluid dynamic modeling, geographic information systems, quantitative analysis of dynamic systems - to inform environmentally and socially sustainable landscape and infrastructural designs.
The resulting design strategies seek to offer protection to the urbanized spaces of Lower Manhattan and Palisade Bay from rising seas and increased storm intensity and frequency. In some cases, they do so by inviting the water to enter and to accommodate its presence through softened infrastructure and landscapes which "rethink the thresholds of water, land, and city". The design objectives include construction "of an archipelago of islands and reefs along the shallow shoals of the New York–New Jersey Upper Bay to dampen powerful storm currents as well as encourage the development of new estuarial habitats","revitalize the waterfront by designing a broad, porous, 'fingered' coastline which combines tidal marshes, parks, and piers for recreation and community development."
The visualization of these new spaces forces the viewer to re-evaluate the relationship between "natural" forces and human activity which now so dramatically influences them. This is an exhibit for the scientist, the artist, and the concerned citizen in each of us. A detailed exhibition blog provides more information. The exhibit runs through October 11, 2010.
(Exhibition photography © 2010 Armen Elliott Photography, www.armenphotography.com).
Green Maps® Go Mobile: "What's Green Near You?"
GreenMap®,the global award-winning community & environmental mapmaking system, is launching its new mobile platform for smartphones, PDAs and other hand-held devices, making its Open Green Map system available to mobile phone users on-the-go.
The Lehigh Valley's first Green Map - the Environmental Features of the City of Easton, Pennsylvania is now available for mobile users. The Green Map was created through a partnership between Easton's Environmental Advisory Council and Lafayette College's Mapping Urban Ecology course. Mobile smartphone users can now access the Open Green Map system and by entering their location will see a list of "green" and community sites nearby. Each site references more detailed information and is linked to Google Maps.
Now in its 15th year, Green Map System has engaged communities worldwide in mapping green living, nature and cultural resources with a unique system of mapping icons and adaptable tools. The system promotes inclusive participation in sustainable community development with perspective-changing Green Maps that chart local natural, cultural and social resources.
From Green Map: "Open Green Map creates an interactive space for everyone to share their insights, images and impacts about local green sites of all kinds. Open Green Map connects the booming 'go local,' green development and ecotourism movements, empowering widespread participation in critical local environment, climate and equity issues worldwide. Based on open source and familiar mapping technologies like Google Map, Open Green Maps are always available, easily updated, expanded and explored in online, mobile and custom formats, to celebrate sustainability and social resources without barriers."
Among its honors, Green Map System is a recipient of the US National Sustainability Award in New Communications Tools, listed among the 100 United Nations Best Practices, a Technology Benefiting Humanity Laureate, and a Stockholm Challenge finalist.