Massachusetts Gov. Baker Issues Comprehensive Climate Change Strategy

Posted in Climate Change, Greenhouse Gas, Massachusetts

The 2008 Massachusetts Global Warming Solutions Act (GWSA) set ambitious goals for reducing greenhouse gas (GHG) emissions and mitigating the potential risks posed by climate change.  Last week, Gov. Baker demonstrated a significant commitment to those goals by issuing Executive Order 569 Establishing an Integrated Climate Change Strategy for the Commonwealth (EO 569).  The implications of EO 569 are far-reaching and substantial for companies operating in the Commonwealth.

EO 569 specifies a number of concrete actions to further reduce GHG emissions and respond to climate change in Massachusetts:

Additional Interim GHG Reduction Targets.  Under the GWSA, state-wide GHG reduction targets were previously set for 2020 (25% below the 1990 baseline) and 2050 (80% below the 1990 baseline).  EO 569 requires that additional interim reduction goals be created for 2030 (to be set before December 31, 2020) and 2040 (to be set before December 31, 2030).

  1. Reduced GHG Emissions from the Transportation Sector.  The Massachusetts Department of Transportation will develop regional strategies to reduce GHG emissions from the transportation section consistent with the emission reduction goals established under the GWSA.
  2. Comprehensive Energy Plan.  EO 569 calls for a comprehensive state-wide energy plan, with particular emphasis on conservation, energy efficiency and other demand-reduction approaches to reduce energy consumption.  This plan must be created within two years and updated every five years thereafter.  In addition, the EO identifies the need for continued “reform of the regional wholesale electricity energy and capacity markets” to ensure that clean energy mandates are achieved in the “most cost-effective manner.”
  3. Climate Adaptation Plan.  The Energy and Environmental Affairs and Public Safety Secretariats are tasked with preparing a state Climate Adaptation Plan. This plan will provide information on climate trends and extreme weather impacts, guide state agencies and municipalities on developing resiliency and adaptation measures, and identify how natural resources can be used to “enhance climate adaptation, build resilience and mitigate climate change.”  The plan will be updated every five years.  In addition, the Secretariats must establish frameworks for state agencies and municipalities to use for conducting their own vulnerability assessments and developing and implementing adaptation plans in response.
  4. New GHG Emission Reduction Regulations.  Earlier this year, the Massachusetts Supreme Judicial Court ruled that the GWSA mandates promulgation of volumetric GHG emission limits, which limits must decline on an annual basis.  EO 569 establishes a specific schedule for the Massachusetts Department of Environmental Protection to issue regulations in order to comply with that ruling, including publishing notice of the proposed regulations by December 16, 2016 and holding a public hearing by February 24, 2017.  In addition, the EO identifies specific GHG sources to be considered for emissions reductions, including:  (i) natural gas distribution system leaks, (ii) emission permits for existing, new, and expanded sources, and (iii) the transportation sector.
  5. Climate Change Coordinator.  In an effort to bring some consistency to various state-level climate change initiatives, EO 569 creates a Climate Change Coordinator position within the Executive Office of Energy and Environmental Affairs.  This coordinator will lead in the development and implementation of the state-wide Climate Adaptation Plan, as well as performing vulnerability assessments.

Like all Executive Orders, EO 569 applies only to actions taken by the state government and is not directly enforceable against the private sector.  That said, EO 569 will have significant consequences for the private sector.  Parties seeking new or renewed air permits will likely be required to demonstrate efforts to reduce GHG emissions as a condition of those permits.  EO 569 will increase opportunities for companies offering energy conservation, energy efficiency and demand-response services and products in the Commonwealth.  Major GHG sources can anticipate mandatory emissions reductions, which will become more stringent over time.  The climate change vulnerability assessments and resulting Climate Adaptation Plan will affect real estate owners and developers – possibly including more stringent permitting standards in areas deemed to be at higher risk from future storm events.  And large power purchasers can hope that EO 569 will bring some price relief to one of the most expensive energy markets in the U.S.

EPA: Research Shows Herbicide Glyphosate Unlikely to Cause Cancer

Posted in Chemicals, EPA

Introduction

The Environmental Protection Agency (EPA) recently concluded that the available data at this time suggest that the herbicide, glyphosate, is “not likely to be carcinogenic to humans.”

The EPA’s Office of Pesticide Programs (OPP) undertook the glyphosate study as part of its periodic review of pesticides registered under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the federal statute governing the registration and use of pesticides. These reviews are conducted at least every fifteen years to determine if pesticides (a term which encompasses herbicides like glyphosate) still meet the criteria for FIFRA registration.

According to the report, “In epidemiological studies, there was no evidence of an association between glyphosate exposure and numerous cancer outcomes; however, due to conflicting results and various limitations identified in studies investigating [non-Hodgkin’s lymphoma], a conclusion regarding the association between glyphosate exposure and risk of [non-Hodgkin’s lymphoma] cannot be determined based on the available data.” U.S. EPA Off. of Pesticide Programs, Glyphosate Issue Paper: Evaluation of Carcinogenic Potential, at § 6.7 (Sept. 12, 2016). The report goes on to state: “Overall, animal carcinogenicity and genotoxicity studies were remarkably consistent and did not demonstrate a clear association between glyphosate exposure and outcomes of interest related to carcinogenic potential.” Id. The release of the 227-page issue paper precedes an EPA-organized meeting of independent scientists that is scheduled for October 18. At the meeting, which will take place at the OPP headquarters in Arlington, Virginia, outside scientists will review the EPA’s findings

Background 

Glyphosate is a non-selective, phosphonomethyl amino acid herbicide registered to control weeds in various agricultural and non-agricultural settings. An herbicide with a broad range of agricultural, commercial, and household applications, glyphosate has been the subject of intense debate surrounding its potential link to non-Hodgkin’s lymphoma and various other forms of cancer.

In March 2015, the International Agency for Research on Cancer (IARC), a subdivision of the World Health Organization (WHO), determined that glyphosate was a probable human carcinogen. The IARC also recommended that the Joint Meeting on Pesticide Residue (JMPR), another arm of the WHO, reevaluate glyphosate in light of the IARC’s findings.

Later, in November 2015, the European Food Safety Authority (EFSA) determined that glyphosate was unlikely to pose a carcinogenic hazard to humans. Additionally, in response to the IARC’s recommendation, the JMPR released its evaluation in May 2016, concluding that glyphosate was unlikely to pose a carcinogenic risk to humans from exposure through diet.

Moving Forward

The EPA’s October 18 meeting will have significant implications for food manufacturers and agrochemical companies alike. Following the meeting, the EPA plans to release its final report in early-2017. In the report, the EPA is expected to make its final determination as to whether companies may continue to use and sell glyphosate and, if so, create guidelines for doing so. We intend to closely monitor this meeting and plan to outline the EPA’s final report on our blog once it is released.

 

Aaron S. Klein* contributed to this post                            

(not admitted to the practice of law)

Israel Posts Information and Schedule Regarding Upcoming Bidding Round for New Oil and Gas Exploration Licenses

Posted in Energy, Environment, Natural Resources

Israel’s Ministry of National Infrastructure, Energy and Water Resources has posted on a dedicated website new information concerning the first round of bidding for offshore oil and gas exploration activity.  Israel’s Exclusive Economic Zone (EEZ) in the Mediterranean Sea is divided into 69 exploration areas or blocks.  The Ministry plans to conduct successive rounds for new exploration areas in the EEZ.  In the first round, the Ministry will offer for competitive bidding 24 blocks that are located in the central part of the offshore area. The Ministry states that the 24 blocks were chosen based on seismic and geologic data indicating a high potential for promising geological structures; some of the blocks are adjacent to the substantial deep water gas discoveries in Israel’s EEZ, including the Tamar and Leviathan fields.  The Ministry’s website offers a map showing Israel’s offshore EEZ, including the blocks to be offered for bidding and blocks covered by existing leases and licenses.

The bid documents for the upcoming round contain all the required information for bidding, including a description of the offering, the required qualifications and assessment criteria, license model, instructions for submission and the relevant forms and tables for submitting an application.  Potential bidders can obtain the tender documents by contacting Dina Levant, Coordinator, Foreign Relations and Information, Natural Resources Administration, via email at dinal@energy.gov.il or phone (972-2-5316042).  Interested parties wishing to remain initially anonymous may also acquire the tender documents through legal counsel.   

The Ministry also published the following bid timeframe:

            Publication of tender documents        Nov. 15, 2016

            Roadshow event in Houston              November 2016 (date TBD)

            End of Q&A                                       Jan. 31, 2017

            Closing Date                                       March 28, 2017

The Ministry also states that it has prepared a data package for potential bidders containing comprehensive information on the Levant Basin’s geology including highlights of the Petroleum System and Basin Analysis study performed by Beicip FranLab in 2015.  Importantly, the Ministry states on its website that purchasing the tender documents, including the data package, is a pre-condition for participation in the bidding round.  Details on the cost of the package can be obtained from Dina Levant at the same contact information noted above.  The data package includes, among other things:  (1) information from 19 wells that were drilled offshore Israel between 1970 and 2013 (list of wells and location map); (2) 2D seismic data acquired between 1970 and 2013 covering the entire bid area (raw field tapes can be purchased for additional cost); and (3) bathymetric, gravity and magnetic data covering most of the bid area. 

Greenberg Traurig is the only major international law firm with a registered office in Israel.  Together with the firm’s Energy and Natural Resources practice group, we are positioned to support clients on a wide range of legal issues relevant to world energy markets, including the upcoming Israel offshore bidding process.  We will continue to provide updates on the latest developments in the offshore bidding process through our GT Israel Law Blog.

For additional information about the upcoming offshore bidding round, please contact Joey Shabot (Tel Aviv, Israel – shabotj@gtlaw.com), Ken Minesinger (Washington, DC – minesingerk@gtlaw.com), Allan Reiss (New York, NY – reissa@gtlaw.com) or Derek Anchondo (Houston, TX – anchondod@gtlaw.com).

Multiple Challenges Filed Against Massachusetts Small MS4 Stormwater General Permit

Posted in EPA, Massachusetts, Permitting, Stormwater, Water

The long odyssey of the Massachusetts Small MS4 stormwater general permit continues – the latest chapter involving four separate appeals filed in two courts seeking to modify the permit’s terms.  Issued by U.S. EPA New England, the general permit authorizes stormwater discharges from small municipal separate storm sewer systems (“MS4”) located in Massachusetts. While the permit regulates stormwater discharges by municipalities, the permit has the potential to affect commercial, industrial and residential property owners who discharge stormwater in those municipalities.  Therefore, the relevance of these pending appeals is not limited to municipal governments.

U.S. EPA previously issued a general permit in 2003 to authorize stormwater discharges from Massachusetts small MS4s.  (As Massachusetts remains one of four “non-delegated” states, U.S. EPA is the Clean Water Act permit issuing authority in Massachusetts).  This permit regulated stormwater discharges from designated MS4s in Massachusetts (excluding Boston and Worcester, which have been issued individual permits).  When the 2003 permit expired in 2008, policy and technical debates delayed re-issuance of a new MS4 general permit.  

In 2010, U.S. EPA proposed issuing two MS4 general permits – one for municipalities in the North Coastal watershed and one covering all other designated Massachusetts MS4s.  After extensive public comment, U.S. EPA abandoned the dual general permits and re-issued a single, statewide draft general permit in 2014.  After more public comment and debate, including a not-so private disagreement with the Massachusetts Department of Environmental Protection (“MassDEP”) over compliance costs and implementation schedules, U.S. EPA finally re-issued the Small MS4 general permit last April (General Permits for Stormwater Discharges from Small Municipal Separate Storm Sewer Systems in Massachusetts) (“Small MS4 Permit”), along with eight appendices.  

The Small MS4 Permit has an effective date of July 1, 2017 to allow municipalities sufficient time to plan and to obtain funding for implementation of the new permit.  Notices of Intent to discharge under the Small MS4 Permit must be filed 90 days later (September 29, 2017).

Since its issuance in April, four separate appeals have been filed challenging the Small MS4 Permit. (The deadline for filing appeals expired last week, so additional appeals are not anticipated).  The Center for Regulatory Reasonableness (a for-profit corporation acting as a “multi-sector coalition of municipal and industrial entities”) filed an appeal in the D.C. Circuit Court of Appeals in July, claiming that the Small MS4 Permit exceeds U.S. EPA’s statutory authority.  Center for Regulatory Reasonableness v. United States Env. Protection Agency, Docket No. 16-1246 (D.C. Cir.).  The public interest group Conservation Law Foundation has moved to intervene in that case.

Last week, three additional appeals were filed in the First Circuit Court of Appeals.  The first was filed by the National Association of Homebuilders and the Homebuilders Association of Massachusetts, Inc. (National Assoc. of Home Builders v. United States Env. Protection Agency, Docket No. 16-2081 (First Cir.). The second was filed by the Massachusetts Coalition of Water Resources Stewardship, Inc. (a non-profit corporation whose members include municipal and quasi-governmental drinking water, wastewater and stormwater agencies) and the Town of Fanklin (Massachusetts Coalition of Water Resources Stewardship, Inc. v. United States Env. Protection Agency, Docket No. 16-2082 (First Cir.).  A third appeal was filed by the City of Lowell.  City of Lowell v. United States Env. Protection Agency, Docket No. 16-2096 (First Cir.).  None of the petitions for review filed in those appeals specified the grounds for appeal.

These cases reflect the wide range of interests potentially affected by the Small MS4 Permit.  While municipalities unquestionably are affected the most by the cost and complexity of implementing the Small MS4 Permit, property owners may face increased local fees and  regulatory requirements imposed to support municipal efforts to comply with the Small MS4 Permit.

From a litigation perspective, the key questions going forward will be how and where these pending appeals are consolidated and what additional parties may intervene in these appeals.  In particular, it remains to be seen whether MassDEP seeks to intervene and, if so, to what extent it will support U.S. EPA’s position in the litigation, given their past policy disagreements.  That question is made all the more interesting given that MassDEP co-signed the permit and is in the process of seeking delegated authority over Clean Water Act permitting in Massachusetts – which would leave it responsible for enforcing the Small MS4 Permit.

During the eight years of rulemaking process needed to re-issue the Small MS4 Permit, there was extensive debate over what cost and compliance burdens should be imposed on municipalities (and indirectly on property owners within those municipalities).  Issuance of the Small MS4 Permit last April did little to quell that debate – rather, it simply shifted the debate from the administrative rulemaking docket to the judicial docket.  

 

U.S. EPA Settles Public Interest Groups’ Challenge to Industrial Stormwater Multi-Sector General Permit

Posted in Clean Water Act, EPA, Stormwater, Water

U.S. EPA recently entered into a settlement agreement with public interest groups regarding stormwater permitting requirements that will likely have significant consequences to industrial stormwater dischargers throughout the U.S. 

In states not authorized to issue Clean Water Act permits (currently Massachusetts, New Hampshire, Idaho and New Mexico), USEPA retains responsibility for regulating stormwater discharges associated with industrial activity.  In most instances, these industrial stormwater discharges are authorized and regulated pursuant a series of general permits that are collectively referred to as the Industrial Stormwater Multi-Sector General Permit (MSGP).

After the U.S. EPA reissued the Industrial Stormwater MSGP in June 2015, public interest groups filed lawsuits challenging the permit as failing to adequately protect waterbodies. Last week, the government and the plaintiffs reached a settlement agreement which, while leaving the current Industrial Stormwater MSGP unchanged, will have long-term consequences for industrial stormwater dischargers in the four nondelegated states, as well as in the delegated states (which use the Industrial Stormwater MSGP as a template for their state stormwater permits).

The settlement obligates the U.S. EPA to take a number of actions in connection with reissuing the Industrial Stormwater MSGP at the end of its five-year term. Those actions include funding a study to be conducted by the National Research Council (NRC) which will:

  1. Evaluate the effectiveness of the current benchmark monitoring provisions in the Industrial Stormwater MSGP;
  2. Evaluate the current numeric retention standards and the relative merits of infiltration versus discharge treatment for improving water quality; and
  3. Prioritize industry sectors for the development of numeric effluent limitations or other stormwater control measures, as well as evaluate the need for additional monitoring requirements in certain situations (e.g., discharges to impaired waterbodies).

The target date for completing the NRC study is August 2018, and the U.S. EPA has agreed to consider the NRC’s recommendations when drafting the next version of the Industrial Stormwater MSGP for reissuance. The U.S. EPA has also agreed to evaluate effluent limitations from other jurisdictions prior to finalizing the effluent limitations in the revised Industrial Stormwater MSGP.

Equally important, the settlement agreement establishes a new three-tier structure for responding to exceedances of the benchmark monitoring thresholds. This new structure will require permittees to take more aggressive action (Additional Implementation Measures) to respond to benchmark monitoring exceedances.

Other significant requirements in the settlement agreement include: (i) potentially delaying authorization to discharge stormwater if the facility is subject to a pending stormwater enforcement action (including any citizens suit); (ii) potentially prohibiting stormwater discharges from surfaces paved with coal tar sealant; and (iii) potentially expanding monitoring requirements for discharges to impaired waterbodies.

Finally, the settlement agreement obligates the U.S. EPA to pay $165,000 in attorneys’ fees to the plaintiffs.

Industrial operations that currently discharge, or may in the future discharge, stormwater should recognize that this settlement agreement seeks to ensure that the next iteration of the Industrial Stormwater MSGP will have substantially more stringent stormwater monitoring and control requirements. Members of the regulated community should start to plan for that possibility as they evaluate and update their stormwater management systems. Likewise, they should also anticipate the need to participate vigorously in the public comment process that will precede issuance of the next Industrial Stormwater MSGP to ensure that the U.S. EPA has a complete and balanced administrative record to guide its regulatory decision-making.

  

 

 

 

Court Weighs In on the ERA After ‘Robinson Township’

Posted in Court Cases, Natural Resources, Pennsylvania, State & Local

The Commonwealth Court of Pennsylvania recently denied a petition seeking declaratory and mandamus relief to require the Pennsylvania Public Utility Commission and a group of executive government officials to regulate greenhouse gases consistent with Article I, Section 27 of the Pennsylvania Constitution.  Funk v. Wolf, No. 467 M.D. 2015 (Pa. Commw. Ct. July 26, 2016).  In 2013, the plurality opinion in Robinson Twp., Washington Cnty. v. Pa. Pub. Util. Comm’n, 83 A.3d 901 (Pa. 2013), created uncertainty as to how state government actors were expected to apply Article I, Section 27, commonly referred to as the Environmental Rights Amendment.

The Commonwealth Court doubled-down on a finding that the Court is not bound by the plurality opinion in Robinson Township regarding judicial review of government decisions that implicate the Environmental Rights Amendment.  The Court returned to the traditional three-prong test.

Read more in my Legal Intelligencer/Pennsylvania Law Weekly column here.

Independent Scientific Panel Faults the EPA’s Landmark Hydraulic Fracturing Study

Posted in Chemicals, Environment, Hydrofracking, Pennsylvania, Texas

In a detailed, 180-page report released Aug. 11, the EPA’s Science Advisory Board (SAB) faulted the clarity and conclusions of the agency’s landmark study on the environmental impacts of hydraulic fracturing, the high-pressure injection of water, sand and chemicals to break open shale and other “tight” geologic formations to release gas and other hydrocarbons.

In that study, formally dubbed “Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources (External Review Draft)” and released in June 2015, the EPA famously concluded that it “did not find evidence that these [hydraulic fracturing] mechanisms have led to widespread, systemic impacts on drinking water resources in the United States.”

That conclusion, according to the independent technical review panel of scientists from academia, industry and environmental groups, was not adequately supported by the limited evidence the EPA gathered in carrying out its study: “The SAB finds that the EPA did not support quantitatively its conclusion about lack of evidence for widespread, systemic impacts of hydraulic fracturing on drinking water resources, and did not clearly describe the system(s) of interest (e.g., groundwater, surface water), the scale of impacts (i.e., local or regional), nor the definitions of ‘systemic’ and ‘widespread.’”

The SAB echoed this critique throughout its report, faulting, for example, the EPA’s conclusion that spills of hydraulic fracturing fluid had not reached groundwater as “supported only by an absence of evidence rather than by evidence of absence of impact.” The Board called on the EPA to make multiple textual corrections, to seek data from other sources and to explain the failure to include prospective case studies and status updates on federal and state investigations into alleged hydraulic fracturing impacts in Dimock, PA, Pavillion, WY and Parker County, TX.

The Board’s critique was not unanimous, however. Four Board members filed a written dissent, finding that the EPA’s conclusion regarding a lack of “widespread, systemic impacts” was “clear, unambiguous, concise, and does not need to be changed or modified.”

The agency has yet to indicate how it plans to respond to the SAB report. The President sought $12.1 million in the FY 2016 budget for research on hydraulic fracturing, with $4 million earmarked for responding to comments received from the SAB and the public. In light of the SAB’s far-ranging critique, it is not clear whether that funding will suffice.

The Certainties and Uncertainties of EPA’s Civil Penalties Increases

Posted in Articles, EPA

Recent legislation and an even more recent U.S. Environmental Protection Agency (EPA) rulemaking will cause civil monetary penalties for violations of federal environmental laws to increase significantly, beginning Aug. 1; subsequently, penalties will increase annually to track inflation. President Obama signed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 on Nov. 2, 2015, (Section 701 of Public Law 114-74). This law created a mandate for all federal agencies to adjust civil monetary penalties upwards to match inflation, both initially in the summer of 2016 and annually thenceforth. Penalty adjustment tracking inflation has been required since 1990, but adjustments have been minor and have not kept pace with the actual rate of inflation. The Improvements Act was passed to give this requirement teeth.

 Read more in my in my Legal Intelligencer/Pennsylvania Law Weekly column here.

 

New York State Regulator Finalizes Definitions Under Amended Brownfield Program Relating to Eligibility For Tangible Property Credits For New York City Brownfield Projects

Posted in Brownfields, Legislation, New York, Regulatory, Uncategorized

On July 29, the Department of Environmental Conservation (DEC) adopted a new rule for the Brownfields Cleanup Program (BCP) to effectuate the brownfield amendments passed by the Legislature last year. Under amendments to the BCP passed in connection with the executive budgeting process, the Legislature sought to limit the availability of certain tangible property tax credits in New York City to Brownfield properties that are: (i) located in an En-Zone as defined by the New York State Department of Labor; (ii) slated for use for affordable housing; (iii) are “upside down” properties where the cost of remediation will exceed the projected value of the remediated properties; or (iv) are “underutilized.” The new rule helps to clarify the scope of some of those eligibility requirements, namely the affordable housing and underutilized categories.

The rule—which provides the definitions for “affordable housing,” “underutilized,” and “brownfield site”—was originally proposed by the DEC on June 10, 2015, and received extensive public comment through Aug. 29. After incorporating additional concerns, the current rule was noticed for additional comments on March 9, 2016; because there were only minimal clarifications provided for the definition of “underutilized,” the slightly amended March 9 proposed rule was adopted, effective Aug. 12, 2016.

The rule itself provides four definitions that end up providing the contours of the tax credit:

  • “Brownfield site” was redefined to comport with the definition provided by the 2015 amendments, meaning “any real property where a contaminant is present at levels exceeding the soil cleanup objectives or other health-based or environmental standards, criteria or guidance adopted by the Department that are applicable based on the reasonably anticipated use of the property, in accordance with applicable regulations.” There were no significant changes between the proposed rule and the adopted rule.
  • Under both rules, “Affordable housing project” was defined as “a project that is developed for residential use or mixed residential use that must include affordable residential rental units and/or affordable home ownership units.” Additionally, projects must be subject to a federal, state, or local affordable housing program.
    • In a rental project “a percentage of the residential rental units in the affordable housing project to be dedicated to tenants at a defined maximum percentage of the area median income based on the occupants’ households annual gross income.”
    • In an ownership project, the project must “set[] affordable units aside for homeowners at a defined maximum percentage of the area median income.”
  • The primary changes between the originally proposed rule and the adopted rule came in the definition of “underutilized.” Under both definitions, underutilized property means nonresidential “real property on which no more than 50 percent of the permissible floor area of the building or buildings is certified by the applicant to have been used under the applicable base zoning”
    • The original rule applied the same requirements for all nonresidential real property—property “other than residential or restricted residential”—regardless of the type of proposed use. Under the proposed rule, additional gradation was added for the distinction between primarily industrial projects and primarily commercial projects. To qualify, the proposed use of a property must be either
      • The 75 percent industrial; or
      • 75 percent of commercial and industrial combined.
    • The new rule does not apply the same requirements for industrial properties, which previously had to have a full showing of tax delinquency or structural deficiencies. Now, only a property with proposed commercial uses must show that it would not be feasible to develop the project without substantial government assistance and that it meets one of the following conditions:
      • property tax payments have been in arrears for at least five years immediately prior to the application;
      • a building is presently condemned, or presently exhibits documented structural deficiencies, as certified by a professional engineer, which present a public health or safety hazard; or
      • There are no structures.
    • The time frame for nonuse—the certification by the municipality that no more than 50 percent of the permissible floor area has been used under applicable zoning—has been reduced from five (5) years to three (3) years.

The revision to the definition of “underutilized” is a modest improvement to DEC’s prior definition, under which few or no properties would likely have qualified. However, these modest changes still do not remove the significant hurdles an applicant for any commercial development would face in qualifying for tangible property Brownfield credits in New York City. The definition still curiously defines current underutilization of a property by focusing on future end use, which makes little sense as it seems that the future use of a property should not be determinative of whether a property’s current condition is underutilized. The definition appears to show that DEC does not want to provide tangible property credits to residential projects within the City of New York, and wants to make it extremely challenging for commercial developments to obtain the tax credit as well. The requirement that an applicant convince the regulator that it has met a vague standard – that the project would not be feasible to develop without substantial government assistance – is a poison pill likely to deter most applicants from even attempting to obtain tax credits for nonindustrial or nonaffordable housing projects, which may have been the agency’s intent by including such a vague and onerous standard within the definition. In the event that an applicant could surmount the biggest hurdle – establishing that the project would not have been developed without “substantial” government assistance – the remaining requirements would not appear to be difficult to satisfy for any “soft” development site that is underbuilt pursuant to existing zoning. In such case it would appear that demolition of any structures at the project site would trigger eligibility as long as an applicant could demonstrate that less than 50 percent of the permissible floor area had been used prior to demolition.

CNH Issues Bidding Guidelines and Agreements for the First Pemex Farm-Out (Trion Project)

Posted in Energy, GT Alert, Oil & Gas

From Jorge Aleman Juarez  of GT Mexico City and  Derek J. Anchondo of GT Houston:

On July 27, 2016, the Commissioners of Mexico’s National Hydrocarbons Commission (the CNH) held a meeting to discuss and approve the invitation to bid, the Bidding Guidelines, and the exploration and production license agreement (the License Agreement) for the selection of the partner(s) for PEMEX Exploration and Production (PEP) for the exploration and production of hydrocarbons in deep waters in the Trion field through the first farm-out to be carried out by PEP.

The Trion field is located within the Perdido area offshore the Gulf of Mexico, which crosses the border into both the United States and Mexico.  It is located 39 Km from the nautical border of the United States and is near the “Great White” field.  Therefore, it is expected that Trion may have similar production capabilities.  Trion has a surface of 1,284 km2 (797.8 miles2), and, according to the information provided by the CNH, the field has a depth of 2,090 to 2,570 meters (6,856 to 8,431 feet).  PEP has previously drilled two oil and gas wells – Trion 1 and Trion 1DL – within the Trion area and, according to the CNH, has already conducted 3D seismic studies in the entire area.  According to PEP, the Trion area has certified 3P reserves of approximately 485 MMBOE.

Read more here.

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