Opinion
2022-017-B
04-13-2023
US TRINITY SERVICES, LLC, d/b/a TRINITY ENERGY SERVICES v. COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION
For the Commonwealth of PA, DEP: John Herman, Esquire Anna Zalewski, Esquire For Appellant: Martin R. Siegel, Esquire Erica Townes, Esquire
For the Commonwealth of PA, DEP: John Herman, Esquire Anna Zalewski, Esquire
For Appellant: Martin R. Siegel, Esquire Erica Townes, Esquire
OPINION AND ORDER ON U.S. TRINITY SERVICES' MOTION FOR SUMMARY JUDGMENT AND DEPARTMENT OF ENVIRONMENTAL PROTECTION'S MOTION FOR PARTIAL SUMMARY JUDGMENT
Steven C. Beckman, Chief Judge and Chairperson
Synopsis
The Board finds that spent horizontal directional drilling fluids resulting from the construction of a gas pipeline fall within the definition of "solid waste" in the Solid Waste Management Act. The Board also finds that the spent drilling fluids must be managed as residual waste pursuant to Section 78a.68a(k) of the oil and gas regulations. As to the question of whether spent drilling fluids and drill cuttings from pipeline construction fall within the definition of residual waste, we find that there are questions of law and fact that must be more fully developed and, therefore, summary judgment is not appropriate on this issue.
OPINION
Background
This matter involves an appeal by U.S. Trinity Services d/b/a Trinity Energy Services (Trinity), challenging a civil penalty assessment issued by the Department of Environmental Protection (Department). Trinity is an oil and gas pipeline contractor and was the prime contractor for Sunoco Pipeline, L.P in connection with the construction and installation of the Mariner East 2 (ME2) pipeline in Westmoreland, Cambria and Indiana Counties from approximately October 2015 to December 2020. As part of its work on the ME2 pipeline, Trinity engaged in horizontal directional drilling, a technique that utilizes directional drilling fluid that acts as a lubricant and performs other functions. Use of this technique generates spent horizontal directional drilling fluids (spent drilling fluids) and drill cuttings that must be disposed of by the operator.
The facts set forth in the Background are taken from the parties' Statements of Undisputed Material Facts.
Trinity initially arranged to have its spent drilling fluids transported to a Department-authorized processing facility for solidification prior to disposal. However, beginning in July 2017 Trinity began to solidify the spent drilling fluids on its own without first seeking and acquiring Department authorization. Trinity utilized a site in Westmoreland County (designated as Site A) and a site in Cambria County (designated as Site B) to receive spent drilling fluids from pipeline installation activities and to solidify the material with Portland cement and mulch before arranging for its transport to a landfill for disposal. The Department did not authorize the use of Sites A and B for the purpose of solidifying the spent drilling fluids. Additionally, on September 27, 2017, Trinity transported and stored drill cuttings from the construction of the ME2 pipeline at a site in Indiana County (designated as Site C).
On February 18, 2022, the Department issued an Assessment of Civil Penalty (civil penalty assessment) in the amount of $50,000, alleging that Trinity transported spent drilling fluids to Sites A and B in Westmoreland and Cambria Counties and processed those materials in violation of the Solid Waste Management Act and the underlying regulations. The Department further alleged that Trinity failed to properly characterize the waste prior to its disposal and that it transported and stored drill cuttings at Site C in Indiana County in violation of the residual waste regulations.
Trinity has moved for summary judgment and the Department has moved for partial summary judgment. Both parties have filed responses and replies. This matter is now ripe for disposition.
Standard of Review
Summary judgment is appropriate when the record, including pleadings, depositions, answers to interrogatories and other related documents, shows that there is no genuine issue of material fact in dispute and the moving party is, therefore, entitled to judgment as a matter of law. 25 Pa. Code § 1021.94a; Pa.R.C.P. No. 1035.1-1035.2; Muth v. DEP, 2022 EHB 337, 338-39; Holbert v. DEP, 2000 EHB 796, 807- 808. In evaluating whether summary judgment is proper, the Board views the record in the light most favorable to the nonmoving party. Muth, supra; Stedge v. DEP, 2015 EHB 31, 33. Summary judgment may only be granted in cases where the right to summary judgment is clear and free from doubt. Tri-Realty Co. v. DEP, 2016 EHB 214, 217.
Discussion
The Department's civil penalty assessment alleges the following violations:
1) Trinity engaged in the unlawful processing of solid waste and operation of a solid waste transfer facility without a permit at Sites A and/or B. (Assessment of Civil Penalty, para. G-O.)
2) Trinity failed to properly characterize solidified drilling fluid waste as residual waste prior to its disposal. (Assessment of Civil Penalty, para. P-T.)
3) Trinity engaged in the unlawful storage and disposal of residual waste, in the form of drill cuttings, at Site C. (Assessment of Civil Penalty, para. U-X.)
Solid Waste
Although both parties' motions focus on the question of what constitutes residual waste, we believe it is important to look first at the broader question of what constitutes "solid waste." The Solid Waste Management Act, Act of 1980-97, P.L. 380, as amended, 35 P.S. §§ 6018.101 -6018.1003 (SWMA) defines "solid waste" as "any waste, including but not limited to, municipal, residual or hazardous wastes, including solid, liquid, semisolid or contained gaseous materials." Id. at § 6018.103 (Definition of "solid waste.") Although the definition of "solid waste" excludes "drill cuttings," this exemption pertains only to drill cuttings generated during the drilling of an oil or gas well where the cuttings are disposed of at the well site. No such exemption applies to drill cuttings generated during pipeline construction. Id. at § 6018.103 (Definition of "solid waste" and "drill cuttings.") A plain reading of the statutory language leads us to conclude that spent drilling fluids and drill cuttings resulting from pipeline construction activities constitute "solid waste." Trinity acknowledges that the spent drilling fluids and drill cuttings from its operation were discarded materials that were sent to Sites A, B and C as a prelude to disposal. (Trinity's Statement of Undisputed Material Facts, para. 11, 13; Brief in Support of Trinity's Motion for Summary Judgment, p. 6.) There is no factual dispute that these materials are "waste."
The Department's motion focuses only on Trinity's activities with regard to the spent drilling fluids. There appears to be no factual dispute that Trinity engaged in the processing and transport of these waste materials. Trinity admits that it received spent drilling fluids from pipeline installation activities at Sites A and B, solidified these materials for disposal without prior authorization from the Department, and arranged for their transport to a landfill. (Trinity's Statement of Undisputed Material Facts, para. 10-14.) Pursuant to Section 610 of the SMWA, a permit is required for the processing and transport of solid waste. 35 P.S. § 6018.610(2) and (4). Because we find that spent drilling fluids from pipeline construction are solid waste, Trinity's unpermitted activities with regard to these materials were a violation of the SWMA. Therefore, to the extent the Department bases its civil penalty assessment on the unpermitted processing and transport of solid waste by Trinity, we find that the Department is entitled to judgment on this issue.
Residual Waste
The term "solid waste" encompasses various categories of waste, including "residual waste." The Department's civil penalty assessment alleges that Trinity failed to properly characterize solidified spent drilling fluid as residual waste. It further alleges that Trinity engaged in the unlawful storage of residual waste by storing drill cuttings at Site C without authorization. For the reasons set forth below, we find that neither party has definitively answered the question of whether spent drilling fluid and drill cuttings constitute residual waste.
"Residual waste" is defined in the SWMA as the following:
(i) Any garbage, refuse, other discarded material or other waste including solid, liquid, semisolid, or contained gaseous materials resulting from industrial, mining and agricultural operations.
(ii) Any sludge from an industrial, mining or agricultural water supply treatment facility, waste water treatment facility or air pollution control facility, provided that it is not hazardous.Id. at § 6018.103 (Definition of "residual waste.") The regulations define "residual waste" as follows:
Residual waste-Garbage, refuse, other discarded material or other waste, including solid, liquid, semisolid or contained gaseous materials resulting from industrial, mining and agricultural operations and sludge from an industrial, mining or agricultural water supply treatment facility, wastewater treatment facility or air
pollution control facility, if it is not hazardous. The term does not include coal refuse as defined in the Coal Refuse Disposal Control Act. The term does not include treatment sludges from coal mine drainage treatment plants, disposal of which is being carried on under and in compliance with a valid permit issued under the Clean Streams Law.25 Pa. Code § 287.1. Trinity points out that neither definition includes spent drilling fluids or drill cuttings generated during pipeline construction. Trinity also directs us to the Department's website which includes a listing of examples of "residual waste." (Exhibit 5 to Trinity's Motion for Summary Judgment.) The rather extensive list does not include spent drilling fluids or drill cuttings as an example of residual waste.
Additionally, Trinity argues that these materials fail to meet the second prong of the definition of residual waste because they are not materials "resulting from an industrial, mining or agricultural operation." While it is clear that pipeline construction is not mining or an agricultural operation, the question then becomes is it an industrial operation? Although the SWMA does not define "industrial operation," it defines "industrial establishment" as "[a]ny establishment engaged in manufacturing or processing, including, but not limited to factories, foundries, mills, processing plants, refineries, mines and slaughterhouses." 35 P.S. § 6018.103 (Definition of "industrial establishment.") Trinity argues that pipeline construction is neither manufacturing nor processing and, therefore, cannot be classified as an industrial operation.
It is the Department's contention that both spent drilling fluids and drill cuttings are residual waste. However, its motion focuses solely on Trinity's activities with regard to spent drilling fluids. The Department argues that spent drilling fluids fall within the definition of residual waste, i.e., "discarded material or other waste.. .resulting from industrial...operations." 35 P.S. § 6018.103; 25 Pa. Code § 287.1. In support of its contention that Trinity's operation is "industrial," it includes photographs of Sites A and B where the processing of spent drilling fluids took place.
Without conceding its position that spent drilling fluids constitute "residual waste," the Department acknowledges that the SWMA's classification of waste, including residual waste, "lack[s] some precision." (Department's Brief in Support of its Motion for Partial Summary Judgment, p. 8.) Therefore, it argues, "regulations have been promulgated to more specifically define how various wastes are to be regulated." (Id.) Specifically, the Department directs us to Section 78a.68a(k) of the oil and gas regulations which governs horizontal directional drilling for oil and gas pipelines. It states as follows: "Horizontal directional drilling fluid returns and drilling fluid discharges shall be managed in accordance with Subpart D, Article IX (relating to residual waste management)." 25 Pa. Code § 78a.68a(k). There is no question that Section 78a.68a(k) clearly provides the Department with authority to require spent drilling fluids to be managed as residual waste. Therefore, to the extent that Trinity failed to manage its spent drilling fluids in compliance with Chapter 278 of the regulations (dealing with residual waste), the Department is entitled to summary judgment on this issue.
Trinity appears to concede this point. In its response brief, it states that if the Board concludes the spent drilling fluids were residual waste, then the Department is entitled to summary judgment, and "the same is true if the Board concludes that the spent horizontal directional drilling fluids were not residual waste but that 25 Pa. Code § 78a.68a(k) required that they be managed as such in this specific matter." (Trinity's Brief in Support of Response, p. 2.) However, Trinity argues that the Department should not be able to rely on 25 Pa. Code § 78a.68a(k) in this matter because the civil penalty assessment does not reference this section of the regulations. Trinity asserts that the Department's reliance on Section 78a.68a(k) violates its right to due process.
We disagree that Trinity's due process rights will be violated by the application of 25 Pa. Code § 78a.68a(k) to this matter. First, Trinity has provided no case law in support of its proposition that the Department is precluded from relying on legal authority not set forth in its initial action. Second, we have held on numerous occasions that a party's right to due process is met by the opportunity to appeal a Department decision to the Board. Kiskadden v. DEP, 2015 EHB 377, 427-28; Brockway Borough Municipal Authority v. DEP, 2015 EHB 221, 247; Kiskadden v. DEP, 2014 EHB 642, 643-44. As the Department points out, the Board satisfies due process by including findings in its adjudication. The Board's responsibility in this matter is to make a de novo determination of whether the Department had the authority to issue the civil penalty assessment and whether that assessment is supported by the law and the facts. Smedley v. DEP, 2001 EHB 131, 156; O'Reilly v. DEP, 2001 EHB 19, 32. We find no basis for excluding Section 78a.68a(k) in our consideration of this matter.
Because we find that 25 Pa. Code § 78a.68a(k) is applicable here, we need not reach the question of whether spent drilling fluids fall within the definition of residual waste. Regardless of how this type of waste is classified, there is no question that it must be managed as residual waste. We believe that a determination of whether spent drilling fluids are, in fact, residual waste involves questions of law and fact that need to be more fully developed. For instance, if spent drilling fluids are residual waste, we question why the Department promulgated a regulation saying they should be managed as a residual waste. Likewise, there are questions of law and fact regarding the issue of whether drill cuttings from pipeline construction fall into the classification of residual waste. These questions need to be more fully developed and are not appropriate for resolution in the context of the parties' summary judgment motions.
In accordance with our findings herein, we enter the following order:
ORDER
AND NOW, this 13th day of April, 2023, it is hereby ordered as follows:
1) Trinity's Motion for Summary Judgment is denied.
2) The Department's Motion for Partial Summary is granted in part as follows:
a) The spent drilling fluids at issue in this appeal are solid waste.
b) Trinity engaged in the processing of solid waste and operation of solid waste transfer facilities at Sites A and B without authorization from the Department.
c) Trinity failed to manage the spent drilling fluids at issue in this appeal in accordance with Subpart D, Article IX of the Department's regulations (dealing with residual waste management).
MICHELLE A. COLEMAN, Judge, BERNARD A. LABUSKES, JR. Judge, SARAH L. CLARK Judge