Ohio has recently received its fair share of media attention for high-profile contamination cases. There is, of course, the train derailment in February of this year, but it’s another case that oil and gas producers might want to pay closer attention to.
In November of 2022, the EPA filed a Complaint in the United States District for the Southern District of Ohio against Utica Resources Operating, LLC (“Utica Resources”). The Complaint asserted a violation of the Clean Air Act and sought significant civil penalties totaling over $100,000 per day of the violation, which began in 2015.
As laid out in the Complaint, the EPA alleged that Utica Resources violated new source performance standards promulgated under Section 111 of the Clean Air Act.[1] Specifically, the new standards relating to oil and gas production[2] are triggered when a storage vessel is capable of leaking more than six tons of volatile organic compounds (“VOCs”) annually. In other words, if damage to a storage vessel could result in more than six tons of leaked VOCs, the vessel will be subject to the new standards.
Ultimately, Utica Resources’ storage facility fell within the purview of these standards, and the company’s failure to prevent uncontrolled and polluted emissions resulted in liability. The case was set for litigation, but with all eyes on Ohio after the East Palestine train derailment, Utica Resources perhaps chose wisely in settling. Rather than litigating the matter, Utica Resources and the EPA agreed to the issuance of a Consent Decree by the court. The Consent Decree requires Utica Resources to update fifteen of its facilities, to the tune of $1.9 million. These updates are required to bring the company into compliance under the Clean Air Act. A significant percentage of this mandated spending must go toward updating equipment to reduce pollution.
With the current political climate, this may mean increased inspections and far fewer opportunities to self-correct. Existing regulations are also likely to be strengthened in the coming years. With new regulations knocking at the door, prudent operators need to consider how new laws impact the maintenance and upkeep requirements of their storage facilities in Ohio and beyond.
[1] 42 U.S.C. § 7411.
[2] 40 C.F.R. Part 60, Subpart OOOO.
Andrew represents companies active in the oil and gas industry in both litigation and arbitration matters, from risk management to trial. He also advises clients on compliance and regulatory issues and handles proceedings in front of administrative agencies / governmental bodies, including the Ohio Department of Natural Resources and the Ohio Department of Commerce.
In addition to his energy practice, Andrew has broad experience in commercial and business litigation, including breach of contract / lease claims, construction disputes, non-compete / non-solicitation disputes, trade secrets, business torts, and real property-related claims. He is OSHA certified in Construction Safety and Health and has drafted and reviewed numerous construction contracts.