This week, in an attempt to stop the spread of the novel coronavirus, the states of California and New York both issued executive orders mandating non-essential workers remain in their places of residence. As discussed in more detail below, both executive orders allow certain essential personnel—including energy sector personnel—to continue to work outside of their place of residence.

California

On March 19, 2020, the Governor of the State of California issued Executive Order N-33-20 mandating that all citizens remain at their place of residence except as needed to maintain continuity of operation in 16 sectors designated by the federal government as Critical Infrastructure Sectors (see below). The order went into effect immediately upon issuance and remains in effect until further notice. Individuals are permitted to leave home to facilitate authorized necessary activities. In addition to the 16 federally-identified critical sectors, the California order also identifies gas stations, pharmacies, grocery stores, take-out and delivery restaurants, banks, and laundromats as essential services allowed to remain open. The order can be found here.

New York

On March 20, 2020, the Governor of the State of New York announced his intent to issue an Executive Order mandating that 100% of the non-essential workforce stay home and that all non-essential businesses close. We have not yet been able to review the expected order, but a prior order was accompanied by guidance defining “essential businesses” to include, among others: utilities, including power generation fuel supply and transmission; transportation infrastructure; chemical manufacturing; and gas stations. The guidance also states that if a business is not listed but is believed to be essential, a designation may be requested. A link to the prior guidance, which includes a link to request designation as an essential service, is here. To date, the NY orders do not appear to be referencing the 16 federally-designated Critical Infrastructure Sectors.

CISA Critical Infrastructure Sectors

The federal Cybersecurity & Infrastructure Security Agency (“CISA”) has identified sixteen critical infrastructure sectors whose assets, systems, and networks, whether physical or virtual, are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof. Employees of these certain critical sectors are permitted to leave their homes for work even in states where executive orders require other non-essential members of the workforce to remain in their places of residence. The list includes the energy sector, as well as the dams sector, the nuclear reactors, materials and waste sector, and the transportation systems sector, each of which is considered particularly interdependent with the energy sector. The full list of 16 Critical Infrastructure Sectors is: (1) chemical; (2) commercial facilities; (3) communications; (4) critical manufacturing; (5) dams; (6) defense industrial bases; (7) emergency services; (8) energy; (9) financial services; (10) food and agriculture; (11) government facilities; (12) healthcare and public health; (13) information technology; (14) nuclear reactors, materials, and waste; (15) transportations systems; and (16) water and waste water systems. Individuals employed in these sectors are permitted to continue to work outside of their place of residence.

With regard to the energy sector, CISA has provided a non-exhaustive list of types of energy employees that are considered critical to infrastructure (See the link to: CISA Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response). These essential workers include, but are not limited to, employees of the electricity, petroleum, and natural and propane gas industries. CISA has provided lists of essential employees specifically encompassed within these sub-sectors of the energy industry.

Essential employees in the electricity industry include the following: those who maintain, ensure, or restore the generation, transmission, and distribution of electric power; those needed for safe and secure operations at nuclear generation facilities; those at generation, transmission, and electric blackout facilities; mutual assistance personnel; environmental remediation/monitoring technicians; and control technicians.

Essential employees among petroleum workers include the following: those involved with petroleum and crude oil product storage, pipeline, and marine transport; those involved in petroleum refinery facilities; petroleum security operations center employees and workers who support emergency response services; employees of petroleum operations control rooms/centers; those involved with petroleum drilling, extraction, production, processing, refining, transporting and retail for end-use fuels; those involved with onshore and offshore operations for maintenance and emergency response; and retail fuel center employees.

Essential employees among natural and propane gas workers include the following: those involved with natural gas transmission and distribution pipelines; those involved with the underground storage of natural gas; employees of natural gas processing plants; employees of liquified natural gas facilities; those involved with natural gas emergency response and customer emergencies; those involved with drilling, production, processing, refining, and transporting natural gas for use as end-use fuels; those involved with propane gas services and maintenance restoration, including call centers; and employees of propane gas, storage, transmission, and distribution centers.

It is important to note that CISA states clearly that these lists are not exhaustive and there are other workers in the energy sector, not listed, who may also qualify as essential to the operation of infrastructure. The CISA list and supporting materials, including links to materials on the energy sector, can be found here.

UPDATE 3/22/2020:

In response to the spread of the COVID-19 virus, a number of states in addition to California and New York have recently issued stay-at-home orders. Additional states that have issued such orders include:  Connecticut, Illinois, Louisiana, New Jersey, New Mexico, and Pennsylvania.  California, Connecticut, Illinois, and Louisiana define essential businesses or essential workers with reference to the CISA critical infrastructure sectors, sometimes supplemented by a state-specific list.  The remaining states have issued individual guidance as to which workers and businesses may continue to operate. This update briefly summarizes some of the developments within the 48 hours since our original client alert was issued.

California

See original client alert.

Louisiana

On March 22, 2020, the Governor of Louisiana issued Proclamation Number 33 JBE 2020 directing, inter alia, that “all individuals within the state of Louisiana are under a general stay-at-home order and are directed to stay at home unless performing an essential activity.” The definition of an “essential activity” includes “[g]oing to and from an individual’s workplace to perform a job function . . . deemed essential worker functions.” The Louisiana order incorporates the 16 CISA Critical Infrastructure Sectors. The Louisiana proclamation can be found here.

New York

The New York order is now available and can be found here.

Illinois

On March 20, 2020, the Governor of Illinois issued Executive Order 2020-10, which requires all residents to stay at their place of residence and all business and operations to cease all activities. The order exempts Essential Business and Operations, which includes Essential Infrastructure. Essential Infrastructure includes, among other things, the operation and maintenance of electric and gas utilities; electrical (including power generation, distribution, and production of raw materials); and oil and biofuel refining.  Essential Business and Operations also includes manufacturing companies, distributors, and supply chain companies producing and supplying essential products and services in and for industries such as energy, petroleum and fuel, and mining. The order provides that:  “Essential Infrastructure shall be construed broadly to avoid any impacts to essential infrastructure, broadly defined.” The Illinois order can be found here. 

New Jersey

On March 21, 2020, the Governor of New Jersey issued Executive Order No. 107, which requires non-essential retail businesses to close. The order requires residents to remain home unless, among other reasons, they are reporting to or performing their job. Businesses involved with operations relating to manufacturing, industrial, ports, heavy construction, and other commercial operations may continue to operate, but are asked to limit staff on site to the minimal number needed for essential operations. Businesses are encouraged to give each employee a letter indicating that the employee works in an industry permitted to continue operations. The New Jersey order does not otherwise affect most energy industry personnel. The New Jersey order can be found here.

Pennsylvania

On March 19, 2020, the Governor of Pennsylvania issued a stay-at-home order that forbids a person or entity from operating a place of business that is not a life sustaining business. Life sustaining businesses may remain open but must follow the social distancing practices and other mitigation measures defined by the Centers for Disease Control. A list of businesses, designating each as permitted or not permitted to remain open, is attached and incorporated into the order. The list of businesses that may continue physical operations includes oil and gas extraction; mining (not originally included, but recently added); petroleum and coal products manufacturing; most chemical manufacturing (but not paint, coating, and adhesive manufacturing); petroleum and petroleum products merchant wholesalers; pipeline transportation; and utilities (electric power generation, transmission and distribution as well as natural gsa distribution).  The list expressly excludes mining. The Pennsylvania order can be found here. The list of businesses that may and may not continue physical operations can be found here.

Connecticut

On March 20, 2020, the Governor of Connecticut issued Executive Order No. 7H, requiring non-essential businesses to reduce their work forces by 100%. The essential businesses listed in the order include the 16 CISA critical infrastructure sectors. The Connecticut order can be found here.

New Mexico

On March 19, 2020, the Governor of New Mexico issued an order requiring that “[t]ypical business environments that are not engaged in the provision of an essential service should limit operations to the greatest extent possible and minimize employee contact.”  “Essential service” is defined to include “the provision of goods and services necessary to sustain and promote public health and welfare including airports, transportation facilities, shelters, grocery stores and pharmacies, local food vendors, courthouses, correctional and detention facilities, banks, schools and educational institutions, hospitals, clinics, nursing homes, intermediate care facilities for individuals with intellectual disabilities, other health care and congregate care facilities, and places of worship operating during ‘normal business hours.’” The order does not specifically enumerate the energy industry as exempt. The New Mexico Order can be found here.

CONCLUSION

There is considerable variation among the states that have issued guidance thus far. In most cases, there is at least some basis for asserting that most energy industry activities are exempt. However, it is important to recognize that this is not solely a legal question. The question should also be assessed from a political and ethical standpoint. Companies should weigh the risk that, if they continue operations and there is a COVID-19 outbreak linked to those operations, politicians and media who were once pleased to support the jobs and the economic contribution created by the project may quickly shift to finger pointing and blame. Companies also need to balance the economic harm of ceasing operations against the potential public health harm, the potential risk to their employees and personnel of continuing operations, and the potential for future litigation should an outbreak occur linked to those operations.

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