THE SHELL CONSENT ORDER – WHAT HAPPENED, WHAT DOES IT MEAN, AND WHAT COMES NEXT?

On May 24, 2023, the Pennsylvania Department of Environmental Protection (DEP) entered into a Consent Order and Agreement (COA) with Shell. This COA orders Shell to pay $5 million into a fund that benefits the community in Beaver County plus an additional $4.9 million in civil penalties to the state’s Clean Air Fund.

Background: Why Was the COA Necessary?

The facility, the Shell Polymers Monaca Site, is an ethylene cracker plant located in Potter and Center Townships in Beaver County, Pennsylvania. Shell’s plan to open and operate the facility was first approved by the Pennsylvania Department of Environmental Protection in 2015, with amendments in March 2021 and September 2022. The Plan Approval allowed Shell to begin operations at the facility, but it set limits on the amount of air pollutants that could be released from the facility over a 12-month period.

Shell is currently operating within the commissioning phase, meaning they are starting up operations and getting the equipment running.  However, beginning in September 2022, they began to approach their 12-month limits on several types of air contaminants.  Over the next six months, the facility went past their limits, including:

• The facility exceeded its rolling 12-month limit on Volatile Organic Compounds (VOCs) in each month between October 2022 to April 2023;

• Carbon Monoxide (CO) emissions exceeded the 12-month limitations between February and April of 2023, and;

• Nitrogen Oxides (NOx) and Hazardous Air Pollutant (HAP) emissions exceeded their limits in every month between December 2022 and April 2023.

• Each air contaminant and each month in which it was exceeded counts as one violation of the approved plan.

Additionally, Shell’s facility had multiple flaring violations, wastewater treatment violations, and violations of good operating practices of an air contamination source. This activity is unlawful under the Air Pollution Control Act, Pennsylvania’s law that governs air quality and emissions. Shell attributes some of the violations to malfunctions in its equipment. As a result, the facility temporarily shut down on March 25, 2023 to make repairs.

The Present: What does the COA Do?

A consent order is an agreement between an administrative agency like the Department of Environmental Protection and a private party such as Shell that can be used to enforce the agency’s rules. In this case, the Department of Environmental Protection has ordered Shell to lower their emissions and comply with their original Plan Approval, and Shell has agreed to the Department’s terms by signing it as well. The consent order adds several new mandatory monitoring and reporting requirements for Shell as the facility resumes operations. Shell will be required to do additional modeling of the malfunctioning flares, monthly reporting of the facility’s emissions, and details of their plans for making repairs.

            Further, Shell is required to set aside $5 million in a community fund “to benefit the environment, health and quality of life of the community near the Facility.” DEP required their Office of Environmental Justice to create the rules for this $5 million community fund.  To help create these rules, the Office of Environmental Justice created a steering comprised of DEP members and local community organization representatives to determine where these funds are invested. The Steering Committee created and approved a Environmental Mitigation Community Fund Protocol which details the process by which the $5 million can to be spent.  The Protocol includes some of these requirements:

• All eligible projects will be based in Beaver County.

• One project must provide independent and regular air monitoring.

• One project must  educate and engage the community on how it can create ongoing solutions to improve to health and qualify of life in communities close to the Shell plant.

• Only Beaver County nonprofits or entities that partner with them can apply.

• A disclaimer must be attached to all publicity, press release, and/or advertisement of approved Community Projects, which reads: “This Community Project was funded, in whole or part, by the Environmental Mitigation Community Fund created pursuant to a Consent Order and Agreement that was executed between Shell Chemical Appalachia, LLC and the Pennsylvania Department of Environmental Protection, regarding violations of the Air Pollution Control Act and regulations.”

• The fund will be overseen and administered by an independent trustee.

The COA also describes the civil penalties that Shell will need to pay because of its air pollution violations between September 2022 and April 2023. DEP is requiring Shell to pay a penalty of $4,935,023 to the state’s Clean Air Fund.

Moving Forward: What Comes Next?

It is important to understand that this consent order does not shut down the Shell Polymers Monaca facility. Shell resumed operations at the facility in early June. However, they are now legally bound to the terms of the consent order and agreement and have admitted to the violations that DEP stated. If they do not comply with the additional reporting, modeling, and monitoring requirements, Shell will be required to pay an additional $1,000 for each day that they are not in compliance with the new plan approval.

Within 60 days of the COA, Shell will meet with DEP to come up with the protocol on how projects will be selected and supported to benefit the community. This will determine how the $5 million community fund will be spent and who will determine what gets funding.

Regarding the $4.9 million in civil penalties, those fees only cover Shell’s past violations. If the facility exceeds its 12-month limitations in any month going forward, they will be required to pay additional fines for each contaminant that is over the limit for each month in which the limit was exceeded. Shell estimated that they should achieve compliance with all of their 12-month limitations by November of 2023. This may result in DEP imposing additional fines for exceedances in the coming months as they continue operations.

By Lillian Ostrander, Fair Shake Legal Intern

Proposed Aliquippa Steel Manufacturing Plant - What You Need To Know

Photograph of an artist’s rendering of the proposed 72 Steel manufacturing plant, in Chrissy Suttles, Company to build $218 million steel plant on former J&L land in Aliquippa, Beaver County Times (May 16, 2023), https://www.timesonline.com/story/news/local/2023/05/16/company-to-build-218-million-steel-plant-on-former-jl-land-in-aliquippa-beaver-county/70219169007/.

On May 16, 2023, 72 Steel held a groundbreaking ceremony to announce its plans to build a new steel manufacturing plant in Aliquippa, PA. 72 Steel will build the proposed plant at the former Jones & Laughlin/LTV steel mill site. 72 Steel is a Brooklyn, NY based company that distributes steel products primarily from their Brooklyn service center. Private investors associated with 72 Steel from New York and New Jersey will fund the projected $218 million plant. 72 Steel is also looking to receive federal tax credits made possible by the Biden Administration’s Bipartisan Infrastructure Law, allocating funds to workforce hubs such as Pittsburgh.

This Aliquippa facility will make steel parts for 72 Steel’s products using an Electric Arc Furnace (EAF). The plant is projected to produce 500,000 tons of steel rebar a year with the potential to expand to steel beam and anchor production. The Aliquippa plant will be 72 Steel’s first venture into steel manufacturing.  72 Steel expects a production capacity and output value of $400 million. Despite the ambitious planning, 72 Steel has yet to close on the property according to the current landowner, Chuck Betters. Also, 72 Steel has yet to complete the appropriate local and state land development permits prior to construction. Much of the permitting process includes opportunities for public participation and comment. The permits listed below are the anticipated stamps of approval 72 Steel needs to satisfy prior to construction.

Local Permits

At the local level, 72 Steel (through its developer) must satisfy multiple different permits and zoning requirements before it can begin constructing the manufacturing plant. Below is a list of local permits and opportunities for public participation.  See Fair Shake's Commenting Tips for ideas and strategies for public commenting.

Preliminary Land Development Plan

72 Steel must submit a preliminary land development plan application that complies with the Aliquippa Subdivision and Land Development Ordinance (SALDO). The plan will include a comprehensive description of the steel plant development including land surveys, erosion plans, stormwater management plans, construction details, phasing schedules, traffic impact studies and other SALDO required documentation. 72 Steel will submit the application to the zoning officer who sends it to the city engineer and planning commission. The city engineer and planning commission will submit recommendations of approval, approval with conditions, or disapproval. Both the city engineer and the planning commission consider the SALDO, zoning ordinances, and other city ordinances that are relevant. If recommended for approval, the city council may hold a public hearing or meeting discussing the application and will make a final approval decision no later than ninety days after filing.

Before approval, the city will provide a complete preliminary application for public review and public written or oral comment. The public comments (written or oral) will be received at a public hearing or the next Aliquippa City Council meeting at City Hall where members of the public or organizations can request to be placed on the agenda. Upon a final preliminary approval decision, members of the public can file an appeal to the City Council decision within thirty days in the Court of Common Pleas. In the case of an appeal, the appellant (person appealing) must establish that the approved development directly affects the person’s property rights. The preliminary approval process provides some of the most opportunities for public participation.

Final Land Development Plan

Once a preliminary plan is approved, 72 Steel will file a final land development plan application. This approval process is similar to the preliminary plan process except that a condition of the final approval is the completion of a developer’s agreement. This process typically involves less deliberation since most of the issues were discussed in the preliminary approval process.

Similarly, to the preliminary approval process, the public is invited to review and comment on the final plan application. However, there are more opportunities for City Council consideration during the preliminary plan stage since most of the land development plan is set in place at the final stage. Members of the public whose property rights are directly affected by the land development activities can waive their right to appeal at the preliminary stage until the final plan is approved.

Zoning Concerns

Since the site is located within an Industrial (I) zoning district, 72 Steel will most likely not have to request any zoning adjustments. In the case that it does, some of the zoning related concerns may include zoning variances, conditional use applications, special exceptions, rezoning, or substantive changes to the Zoning Ordinance.

The city will make all proposed zoning issues known to the public and will provide opportunities for public comment. Members of the public can attend the specified zoning hearing board meeting to challenge zoning variances, special exceptions, rezoning, or any substantive changes to the Ordinance as a protestant. Members of the public can attend the specified city council meeting to challenge any conditional use applications as a protestant. To qualify as a protestant, the zoning exception or change in question must directly affect the individual’s property rights.

Other Local Permits

Once the final land development plan is approved, 72 Steel will submit building permit applications to the city council. There is little opportunity for public participation at this stage since building permits are usually not made available to the public.

---

State Permits

72 Steel (through its developer) will have to apply for permits at the state level as well. State permits come with their own opportunities for public participation. .  See Fair Shake's Commenting Tips for ideas and strategies for public commenting. These permits are listed below.

NPDES Permits for Discharges of Stormwater Associated with Construction Activities

72 Steel will have to apply for a NPDES stormwater permit for construction and postconstruction stormwater discharges which may contain various types of pollutants. In this application, 72 Steel will need to include their plans to control stormwater erosion, post construction management, as well as their compliance with the Beaver County Act 167 Plan for stormwater management. When the application is submitted to the PA Department of Environmental Protection (DEP), the public will be notified through the most recent volume of the PA Bulletin under the Department of Environmental Protection section.

72 Steel has yet to apply for a NPDES construction permit (as recent as Bulletin Number 26, Volume 53, July 1, 2023) but once the notice is published, the public can access permit information upon DEP request. Members of the public can submit comments on the application anytime before a final decision is made on the application. After a NPDES construction permit is issued, it can be appealed to the Environmental Hearing Board within 30 days of issuance.

NPDES Permits for Discharge of Sewage and Water Quality Management: (Part II) Permits

72 Steel will also have to apply for an NPDES and water quality management permit to treat the wastewater discharged by the steel manufacturing plant. This permit differs from the previously mentioned NPDES permit since it regulates wastewater from operation rather than construction stormwater. Similarly, to the NPDES construction permit, 72 Steel has yet to apply for a NPDES water quality management permit (as recent as Bulletin Number 26, Volume 53, July 1, 2023). This permit has the same procedures for public participation as the NPDES construction permit.

Act 537 Sewage Approval

Unless the plant falls under an Act 537 exception (individual on-lot systems or a sewage extension that does not overload the current system), 72 Steel needs to receive sewage facility planning approval. If the municipality approves 72 Steel’s application for a sewage modification, Aliquippa Water Authority will submit a proposed Act 537 sewage modification to the DEP. Once the modification request reaches the DEP, the DEP will either approve of a revision or supplement to the existing Act 537 Plan.

The DEP will notify the public of 72 Steel’s new sewage plan, as well as where public comments will be received. After submission to the DEP, The City of Aliquippa is not required to conduct a public hearing on an Act 537 revisal. However, the city may hold a meeting or hearing at the request of concerned citizens regarding the sewage plan modification. After the DEP posts notice of a sewage plan approval, members of the public can appeal to the Environmental Hearing Board within 30 days.

Highway Occupancy Permits

72 Steel may require a Highway Occupancy permit from the Pennsylvania Department of Transportation (PennDOT) if the steel manufacturing plant needs state highway access for construction or operation purposes. An example of highway use may be to install and access utility lines. There are little opportunities for public participation since highway occupancy permits are typically not made available to the public. However, if the access to a highway is deemed a “major federal action”, PennDOT would have to follow the National Environmental Policy Act (NEPA) procedures for public participation, attached here.

---

Federal Opportunity

Community Benefits Plan through Biden Administration’s Bipartisan Infrastructure Law          

72 Steel may apply for some funding opportunities from the Bipartisan Infrastructure Law and through the Department of Energy (DOE). Many DOE funding opportunities require a “community action plan” as part of the application. The plan requires companies to write how they will make sure their work benefits the local community. The plan will include twenty percent of the grading criteria for proposals and includes details about how the development will meet four core policy priorities, including: investing in the workforce; engaging communities and labor; advancing diversity, equity, inclusion, and accessibility; and implementing Justice 40.  This is an opportunity for community to be advocate for strong community benefits that are needed and transparent.  See Fair Shake’s Community Benefit Agreement for more information and resources on community benefits.

---

Concluding Thoughts

Since 72 Steel is still in its initial stages of development, there are plenty of opportunities for public participation in both the local and state permitting processes. As listed above, some of these actions include making a written or oral public comment or challenging approvals in the proper court or tribunal. Participating in these types of actions helps ensure the public’s wishes and concerns are heard with the new industrial development in the Aliquippa area. There are also changes to local laws - such as new zoning rules, local law changes, and stronger community benefits protection - that can help to create transparency and protections for future developments to help all Aliquippa residents stay healthy, well, and happy. SeeFair Shake’s Community Democracy River

Battle RGGI: How the carbon emissions program has highlighted Pennsylvania’s political strife over environmental issues.

On July 1st, Commonwealth Court Judge Michael Wojcik granted a preliminary injunction against Pennsylvania’s entrance into the Regional Greenhouse Gas Initiative (RGGI). This halted Governor Wolf’s two-year effort to join eleven other eastern states in the cooperative effort to reduce CO2 emissions. On July 11th, he appealed the decision to the State Supreme Court, effectively lifting the preliminary injunction. 

The question at issue is whether Gov. Wolf can enter RGGI through executive order - something that RGGI opponents staunchly deny. They argue that Gov. Wolf’s order undermines the legislature’s exclusive authority to impose taxes and enter interstate agreements. As an energy powerhouse, Pennsylvania’s entrance would significantly strengthen RGGI and become a  “political litmus test” for carbon pricing programs. RGGI would arguably be the most significant step Pennsylvania has ever taken to address climate change, and the battle over it has brought political tensions around environmental issues to the forefront.  

RGGI is the first market-based cap-and-trade program that establishes a regional limit on CO2 pollution. Each participating state has an individual CO2 Budget Trading Program based on the RGGI Model Rule. Over time, the regional cap declines so that CO2 emissions decrease in a formulaic way. Within RGGI states, electric power plants are required to bid for allowances at quarterly auctions, authorizing them to emit 1 short ton of CO2 pollution. Auction proceeds are then invested into strategic energy and consumer benefit programs. RGGI states have added nearly $5 billion to their economies since the program began. 

Entering RGGI has been the centerpiece of Gov. Wolf’s plan to combat climate change. Describing RGGI as a “historic, proactive, and progressive approach that will have significant positive environmental, public health, and economic impacts,” Gov. Wolf has been intent on joining the program since he signed Executive Order 2019-07 back in October 2019. The executive order required the Department of Environmental Protection to submit a proposed rulemaking to the Environmental Quality Board by July 2021 that would “establish a carbon dioxide budget consistent in stringency to that established in the RGGI.” According to the Wolf administration, this is a solution that 72 percent of Pennsylvanians support.  

  Environmental groups also consider Pennsylvania’s entry into RGGI as a top priority. Pennsylvania is the third largest power producer in the nation, and would become RGGI’s largest emitter if the state were to enter the program. According to the EPA, the state had 85 million tons of CO2 emissions in 2021. Under RGGI regulation, emissions would fall to 58 million tons by 2030. Mark Szybist, a lawyer at the Natural Resources Defense Council, describes Pennsylvania’s entrance as a “springboard” to a more expansive clean energy industry in the state. 

On the opposing side, RGGI has been a unifying enemy for Republican lawmakers, coal and energy interests, and labor unions. The Senate Republican Caucus believes that the program will “result in the loss of good paying jobs and harm [the] state’s economy.” The Industrial Energy Consumers of Pennsylvania argues that RGGI will result in increased electricity costs to residents and put industrial manufacturers at a “competitive disadvantage to facilities in other states and countries.” Pennsylvania lawmakers disapprove of the “one sided-decision” made by Gov. Wolf, underscoring the importance of engaging the legislature in a decision that would heavily affect “communities and families whose livelihood is built upon important sectors of our energy economy.” Lawmakers attempted to pass the Senate Concurrent Regulatory Review Resolution 1, which would have disabled the state from joining RGGI, but the bill was vetoed by Gov. Wolf last December.  

An end to this contentious RGGI battle seems far from sight. A final decision could rest with the Supreme Court or by an agreement between Gov. Wolf and the General Assembly, but elections this fall might add further challenges. Republican candidate Doug Mastriano has promised to get Pennsylvania out of RGGI on “Day 1,” describing RGGI as a threat to national security. Democratic candidate Josh Shapiro is drawing criticism for his reservations about the program. Shapiro stated, “we need to take real action to address climate change, [and] protect and create energy jobs…as governor, I will implement an energy strategy which passes that test, but it’s not clear to me that RGGI does.” 

For a state that has a long history of fossil fuel dependence, heightened political tension around the topic of environmental restraint is neither surprising nor unprecedented. The problem is that we don’t have time for political jockeying. Pennsylvania’s climate has increased 2.8 degrees Fahrenheit since 1970, higher than the national average. The state must act fast to reign in its carbon emissions, and RGGI is a place to start. The program would hopefully create a path forward for more legislation that confronts climate change and symbolize Pennsylvania’s commitment to environmental issues. As Battle RGGI rages on, all eyes should be on Pennsylvania’s elections this fall. There is no time like the present to be informed about the candidates’ views on RGGI, and head to the polls.  

By Gabrielle Hughes, Fair Shake Legal Intern