Tuesday, March 17, 2015 Houston, TX. 1:15 2:30 p.m. A CLOUD OF DOUBT EMERGING AIR ISSUES IN THE OIL PATCH

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Gwendolyn Patrick
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$Hubbard Director, Environmental Towerstone Group As drilling and production activities have increased, particularly due to hydraulic fracturing, environmental issues$ $Although issues relating to fracking have been getting most of the attention, air quality is now emerging as a concern.$

1 Tuesday, March 17, 2015 Houston, TX 1:15 2:30 p.m. A CLOUD OF DOUBT EMERGING AIR ISSUES IN THE OIL PATCH Presented by Michael R. Goldman Shareholder Guida, Slavich & Flores, P.C. Jeffrey M. Hubbard Director, Environmental Towerstone Group As drilling and production activities have increased, particularly due to hydraulic fracturing, environmental issues regarding such activities have become increasingly prominent. Although issues relating to fracking have been getting most of the attention, air quality is now emerging as a concern. The issue is complicated by the fact that the various operations may have different air quality regulatory implications and both federal and state laws. This session will give an overview on current thinking about air quality issues, the most important risks arising from air quality, and how to address those issues contractually and through the risk management and insurance program. Copyright 2015 International Risk Management Institute, Inc. 1

2 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 2

3 Michael R. Goldman Shareholder Guida, Slavich & Flores, P.C. Michael R. Goldman, a shareholder in Guida, Slavich & Flores, P.C., has focused his practice on environmental litigation. He represents public and private clients in cases arising under the federal, state, and local environmental laws. Mr. Goldman has successfully represented clients in cost recovery and contribution actions and negotiated settlements in complex hazardous waste cleanup matters. He has also represented clients in commercial litigation as well as insurance defense matters. Mr. Goldman has represented individuals and businesses in state and federal courts in many diversified areas. He has a B.S. in microbiology from the University of Texas and a J.D. from South Texas College of Law. Mr. Goldman was named a Texas Super Lawyer for Environmental Litigation in 2013 and a Rising Star for 2010, 2011, and 2012 by Thompson Reuters Services published in Texas Monthly magazine. He has served as program chair of the Dallas Bar Energy Law Section, vice president of the Environmental Law Section of the Tarrant County Bar Association, and fellow of the Dallas Bar Foundation. Mr. Goldman has given many presentations on a variety of environmental law topics and has authored numerous articles. Jeffrey M. Hubbard Director, Environmental Towerstone Group Jeffrey M. Hubbard is director, environmental, with Towerstone Group in Dallas, Texas. Mr. Hubbard is a graduate of the University of North Texas, where he obtained a B.B.A. with an emphasis in insurance and finance. He began his career in risk management with a Fortune 1,000 building products manufacturer, where he had day-to-day risk management responsibilities. During this period, he had oversight of one of the largest building products litigation cases in the United States. He then served as a risk management consultant for an electric utility during its bankruptcy. Mr. Hubbard joined AIG Environmental in 1993 as an environmental risk analyst and rose to the level of regional manager. During his tenure there, Mr. Hubbard assisted primarily large, multinational corporate clients with the creation and implementation of environmental risk management strategies. He was recruited by Aon Risk Services in 2003 and became the Southwest regional manager of its environmental practice. He then joined JLT/Alliant in November 2003 and led its environmental risk practice until joining Zurich North America in June of In August of 2011, Mr. Hubbard and his associate Richard Calvert joined XL Environmental to create a local underwriting presence in Texas, Arkansas, and the surrounding states. 3

4 In an effort to serve the community, Mr. Hubbard currently serves on the Crosspoint Youth Football League as a member of the Board of Directors and has previously served on the University of North Texas s Finance Insurance Real Estate and Law Curriculum Advisory Board. He has also served as the insurance editor for Brownfield News. 4

5 A CLOUD OF DOUBT Presented by Michael Goldman, Esq., and Jeffrey Hubbard A CLOUD OF DOUBT In business, we all want blue skies. 2 5

6 A CLOUD OF DOUBT But some days, our business environment looks like a stormy sky. 3 A CLOUD OF DOUBT NONE of us wants to experience a mushroom cloud in our business. 4 6

7 A CLOUD OF DOUBT Potential Storm Cloud/Mushroom Cloud Issues Plaintiff Litigation Insurance Law Issues Emerging Technical Issues 5 A CLOUD OF DOUBT: LITIGATIONA Current Claims/Litigation Situations Parr v. Aruba: air emissions at well sites Citizens for Pennsylvania s Future v. Ultra Res., Inc., No. 11-cv-1360, 2012 U.S. Dist. LEXIS (M.D. Pa. Sept. 24, 2012) Mitchell v. Encana Oil & Gas (USA), Inc., No. 10-cv (N.D. Tex. Dec. 15, 2010) Strudley v. Antero Res. Corp., No. 11-cv-2218 (Dist. Ct. Denver May 9, 2012). Center for Biological Diversity v. Bureau of Land Mgmt., No (N.D. Cal. filed Dec. 8, 2011) 6 7

8 A CLOUD OF DOUBT: LITIGATIONA Current Claims/Litigation Situations Environmental Processing Sys., L.C. v. F.P.L. Farming LTD 7 A CLOUD OF DOUBT: INSURANCE LAW Recent Rulings Affecting Insurance Coverage Linn Energy v. Liberty: underground resources and the pollution exclusion Pioneer v. Steadfast: on-site versus off-site and the CCC exclusion Superior Crude Gathering v. Zurich: transit and loading/unloading 8 8

9 A CLOUD OF DOUBT: EMERGING CLAIMS Current Claims Issues Microbiological corrosion, the CGL and pollution policies Waste disposal issues: disposal sites, illegal dumping DOT pipeline, flowlines and gathering line releases Legacy pollution issues/historical pollution claims Vendor policies: devil in the details Hydraulic fracturing bans Pollution Issues/Historical Pollution Claims Environmental Risk Allocation Issues Vendor Policies Details that might surprise you. 9 A CLOUD OF DOUBT: LITIGATION FACTS SET: Parr v. Aruba 10 9

10 A CLOUD OF DOUBT: LITIGATION COVERAGE CONSIDERATIONS: Parr v. Aruba Gradual allegations were of long-term exposure to air emissions from tanks and wellhead Venting was done intentionally Fines were levied by the Texas Commission on Environmental Quality No allegation of control of well event 11 A CLOUD OF DOUBT: LITIGATION FACT SET: Citizens for Pennsylvania s Future v. Ultra Res., Inc., No. 11-cv- 1360, 2012 U.S. Dist. LEXIS (M.D. Pa. Sept. 24, 2012) 12 10

11 A CLOUD OF DOUBT: LITIGATION COVERAGE CONSIDERATIONS: Citizens for Pennsylvania s Future v. Ultra Res., Inc., No. 11-cv-1360, 2012 U.S. Dist. LEXIS (M.D. Pa. Sept. 24, 2012) 13 A CLOUD OF DOUBT: LITIGATION FACT SET: Mitchell v. Encana Oil & Gas (USA), Inc., No. 10-cv (N.D. Tex. Dec. 15, 2010) 14 11

12 A CLOUD OF DOUBT: LITIGATION COVERAGE CONSIDERATIONS: Mitchell v. Encana Oil & Gas (USA), Inc., No. 10-cv (N.D. Tex. Dec. 15, 2010) 15 A CLOUD OF DOUBT: LITIGATION FACT SET: Strudley v. Antero Res. Corp., No. 11-cv-2218 (Dist. Ct. Denver May 9, 2012) 16 12

13 A CLOUD OF DOUBT: LITIGATION COVERAGE CONSIDERATIONS: Strudley v. Antero Res. Corp., No. 11-cv (Dist. Ct. Denver May 9, 2012) 17 A CLOUD OF DOUBT: LITIGATION FACT SET: Center for Biological Diversity v. Bureau of Land Mgmt., No (N.D. Cal. filed Dec. 8, 2011) 18 13

14 A CLOUD OF DOUBT: LITIGATION COVERAGE CONSIDERATIONS: Center for Biological Diversity v. Bureau of Land Mgmt., No (N.D. Cal. filed Dec. 8, 2011) 19 A CLOUD OF DOUBT: LITIGATION FACT SET: Environmental Processing Sys., L.C. v. F.P.L. Farming 20 14

15 A CLOUD OF DOUBT: LITIGATION COVERAGE CONSIDERATIONS: Environmental Processing Sys., L.C. v. F.P.L. Farming 21 A CLOUD OF DOUBT: INSURANCE LAW FACT SET: Linn Energy v. Liberty underground resources and the pollution exclusion 22 15

16 A CLOUD OF DOUBT: INSURANCE LAW COVERAGE CONSIDERATIONS: Linn Energy v. Liberty underground resources and the pollution exclusion 23 FACT SET: Pioneer v. Steadfast A CLOUD OF DOUBT: INSURANCE LAW 24 16

17 A CLOUD OF DOUBT: INSURANCE LAW COVERAGE CONSIDERATIONS: Pioneer v. Steadfast 25 A CLOUD OF DOUBT: INSURANCE LAW FACT SET: Superior Crude Gathering v. Zurich transit and loading/unloading 26 17

18 A CLOUD OF DOUBT: INSURANCE LAW COVERAGE CONSIDERATIONS: Superior Crude Gathering v. Zurich transit and loading/unloading 27 A CLOUD OF DOUBT: EMERGING CLAIMS Microbiological corrosion, the CGL and pollution policies Pollution issues/historical pollution claims Environmental risk allocation issues Vendor policies: details that might surprise you 28 18

19 A CLOUD OF DOUBT: EMERGING CLAIMS Waste disposal issues: disposal sites, illegal dumping Pollution issues/historical pollution claims Environmental risk allocation issues Vendor policies: details that might surprise you 29 A CLOUD OF DOUBT: EMERGING CLAIMS DOT pipeline, flowlines, and gathering line releases Pollution issues/historical pollution claims Environmental risk allocation issues Vendor policies: details that might surprise you 30 19

20 A CLOUD OF DOUBT: EMERGING CLAIMS Legacy pollution issues/historical pollution claims Pollution issues/historical pollution claims Environmental risk allocation issues Vendor policies: details that might surprise you 31 A CLOUD OF DOUBT: EMERGING CLAIMS Hydraulic fracturing bans Pollution issues/historical pollution claims Environmental risk allocation issues Vendor policies: details that might surprise you 32 20

A CLOUD OF DOUBT: EMERGING CLAIMS Vendor policies: devil in the details Are combined forms watering down requested coverage? Are you getting what you actually required?

21 A CLOUD OF DOUBT: EMERGING CLAIMS Vendor policies: devil in the details Are combined forms watering down requested coverage? Are you getting what you actually required? Full professional liability versus the bodily injury/property damage endorsement Pollution Issues/Historical Pollution Claims Environmental Risk Allocation Issues Vendor Policies Details that might surprise you

22 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 22

Tuesday, March 5, 2013 Houston, TX. 2:45 4:00 p.m. ENVIRONMENTAL LIABILITY INSURANCE

Tuesday, March 5, 2013 Houston, TX 2:45 4:00 p.m. ENVIRONMENTAL LIABILITY INSURANCE Presented by Jeffrey M. Hubbard Assistant Vice President, Senior Underwriter XL Insurance Various approaches may be used