Justia Energy, Oil & Gas Law Opinion Summaries

Stingray Pipeline Company LLC operates a pipeline system under the jurisdiction of the Federal Energy Regulatory Commission (FERC). Due to declining throughput and financial losses, Stingray sought FERC's permission to abandon part of its pipeline network by selling it to a non-jurisdictional entity. However, a hurricane damaged a segment of the pipeline, Segment 3394, which has remained out of service since 2020. FERC granted the abandonment request but imposed a condition that Stingray must either restore Segment 3394 to service or reach an agreement with the affected shipper, ERT.The Federal Energy Regulatory Commission largely granted Stingray's application to abandon the pipeline but imposed the condition regarding Segment 3394. Stingray challenged this condition as unreasonable and unsupported by the record. FERC reaffirmed its order, leading Stingray to petition the United States Court of Appeals for the District of Columbia Circuit for review.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and denied the Petition for Review. The court held that FERC's decision to impose the condition was not arbitrary and capricious. The court found that Stingray had not met its burden to show that unconditional abandonment was consistent with the public convenience and necessity. The court emphasized that Stingray had repeatedly assured FERC that it would restore Segment 3394 to service but failed to provide sufficient evidence to justify abandoning the segment without restoring service or reaching an agreement with ERT. The court also rejected Stingray's arguments that the condition exceeded FERC's regulatory authority. View "Stingray Pipeline Company, L.L.C. v. FERC" on Justia Law

Patterson-UTI Energy, Inc. and its affiliates (collectively, Patterson) provide oil-and-gas equipment and services and purchase insurance to cover potential costs from incidents during drilling operations. For the 2017-2018 policy year, Patterson obtained an umbrella policy from Liberty Mutual Insurance Europe, Ltd. and an excess policy from Ohio Casualty Insurance Company. After a drilling-rig incident led to multiple lawsuits, Patterson settled the claims and incurred significant legal-defense expenses. Ohio Casualty funded portions of the settlements but refused to cover the defense expenses, leading Patterson to sue Ohio Casualty and its broker, Marsh USA, Inc.The trial court granted summary judgment in favor of Patterson, ruling that the Ohio Casualty policy covered defense expenses because it did not clearly exclude them. The parties then moved for an agreed final judgment, which the trial court signed. Ohio Casualty appealed, and the Court of Appeals for the Fourteenth District of Texas affirmed the trial court's decision, reasoning that the excess policy, being a "follow-form" policy, did not unambiguously exclude defense expenses and thus covered them.The Supreme Court of Texas reviewed the case and reversed the Court of Appeals' judgment. The Supreme Court held that the excess policy's coverage is determined by its own terms, not the underlying policy. The excess policy defined "loss" as sums paid in settlement or satisfaction of a claim as damages, which does not include defense expenses. Therefore, the excess policy did not cover Patterson's legal-defense expenses. The Supreme Court rendered judgment in favor of Ohio Casualty and remanded the dispute between Patterson and Marsh to the trial court for further proceedings. View "THE OHIO CASUALTY INSURANCE COMPANY v. PATTERSON-UTI ENERGY, INC." on Justia Law

The case involves the approval process for a large-scale commercial offshore wind energy facility located on the Outer Continental Shelf, fourteen miles south of Martha's Vineyard and Nantucket. The plaintiffs, consisting of commercial fishing entities and a nonprofit organization, challenged the federal government's approval of the project, citing violations of the Administrative Procedure Act (APA), the National Environmental Policy Act (NEPA), the Endangered Species Act (ESA), the Marine Mammal Protection Act (MMPA), the Clean Water Act (CWA), and the Outer Continental Shelf Lands Act (OCSLA).The United States District Court for the District of Massachusetts granted summary judgment in favor of the defendants, which included various federal departments and agencies, as well as the business entity responsible for the wind project. The court found that the plaintiffs' ESA claims were non-justiciable due to lack of standing and mootness, as the initial biological opinion had been superseded by a new one. The court also ruled that the plaintiffs were outside the zone of interests protected by the NEPA and the MMPA, and that the Alliance had failed to show that the Corps' issuance of the CWA Section 404 permit was arbitrary or capricious.The United States Court of Appeals for the First Circuit reviewed the district court's rulings de novo. The appellate court affirmed the district court's judgments, agreeing that the plaintiffs lacked standing for their ESA claims and that the claims were moot. The court also upheld the district court's zone-of-interests rulings regarding the NEPA and MMPA claims. Additionally, the court found that the Corps' decision to issue the CWA permit was not arbitrary or capricious and that the BOEM's approval of the project under the OCSLA was lawful. The appellate court concluded that the plaintiffs' arguments did not demonstrate that the BOEM had acted arbitrarily or capriciously in approving the project. View "Seafreeze Shoreside, Inc. v. Department of the Interior" on Justia Law

Kenny Savoie, a former employee of Pritchard Energy Advisors, LLC (PGA), filed a breach-of-contract lawsuit against Thomas Pritchard, his former boss, in the United States District Court for the Western District of Louisiana. Savoie, a Louisiana resident, claimed that Pritchard, a Virginia resident, owed him compensation under a 2017 offer letter for work done on behalf of Empire Petroleum Corporation. Savoie alleged that Pritchard fraudulently informed him that PGA had not received any payments for his projects, thus denying him due compensation.The district court dismissed the case against Pritchard for lack of personal jurisdiction, concluding that Pritchard's contacts with Louisiana were made in his corporate capacity and were protected by the fiduciary shield doctrine. The court found that Savoie failed to establish any exceptions to this doctrine that would allow Pritchard's corporate contacts to be attributed to him personally.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the fiduciary shield doctrine, which prevents the exercise of personal jurisdiction based solely on a defendant's corporate acts, applied in this case. The court noted that Louisiana law recognizes the fiduciary shield doctrine and that Savoie did not establish any exceptions, such as piercing the corporate veil or alleging a tort for which Pritchard could be personally liable. Consequently, the court concluded that Pritchard's corporate contacts could not be used to establish personal jurisdiction over him in Louisiana. View "Savoie v. Pritchard" on Justia Law

A landowner in Hardin County, Iowa, refused to allow a surveyor for a pipeline developer to enter his private property. The developer, Summit Carbon Solutions, LLC, sought access under Iowa Code section 479B.15, which governs hazardous liquid pipelines. The district court ordered the landowner to allow the surveyor temporary access, rejecting the landowner’s claims that the statute was unconstitutional under the “takings” clauses of the U.S. and Iowa Constitutions and that carbon dioxide in a supercritical state is not a “hazardous liquid.”The Iowa District Court for Hardin County ruled that the statute was facially constitutional and that Summit was a “pipeline company” with access rights under section 479B.15. The court found that Summit had provided proper statutory notice to the landowner and that the landowner’s claim of having a tenant who did not receive notice was not credible. The court granted Summit’s request for injunctive relief to compel access for surveying.The Iowa Supreme Court reviewed the case and affirmed the district court’s judgment. The court held that section 479B.15 is a lawful pre-existing limitation on the landowner’s title, consistent with longstanding background restrictions on property rights, and does not constitute a taking under the Federal or Iowa Constitutions. The court also held that supercritical carbon dioxide is a “hazardous liquid” within the meaning of section 479B.2, making Summit a pipeline company with access rights under the statute. The court found that Summit had complied with the statutory notice requirements and that no additional showing of irreparable harm was required for the injunction. The judgment and injunctive relief granted by the district court were affirmed. View "Summit Carbon Solutions, LLC v. Kasischke" on Justia Law

Appellee filed a complaint against Appellant alleging breach of written agreements for the lease of oil storage tanks. During the bench trial, the district court amended the complaint to include an oral guarantee to pay for the leases, which Appellant was not allowed to rebut. The court found Appellant breached the oral guarantee and awarded damages to Appellee.The District Court of Campbell County initially found in favor of Appellee, determining that Appellant breached the oral guarantee and awarded $114,537.56 in damages. Appellant raised multiple issues on appeal, including the admission of evidence, the application of the statute of frauds, and the effect of a settlement with a co-defendant.The Supreme Court of Wyoming reviewed the case and found that the district court did not abuse its discretion in admitting various exhibits into evidence. The court also held that the statute of frauds defense was waived as it was not raised at trial. Additionally, the court found that the settlement with the co-defendant did not preclude Appellee from pursuing claims against Appellant.However, the Supreme Court of Wyoming determined that the district court abused its discretion by not allowing Appellant to testify regarding the oral guarantee. The court affirmed the district court's rulings on the other issues but reversed and remanded the case for the limited purpose of allowing Appellant to testify about the oral guarantee. The remand is specifically for reconsideration of the personal guarantee and to provide both parties an opportunity to introduce evidence on that issue. View "Sorum v. Sikorski" on Justia Law

Jon Willis, an employee of Shamrock Management, L.L.C., was injured while working on an offshore oil platform operated by Fieldwood Energy, L.L.C. The injury occurred when a tag line slipped off a grocery box being delivered by a vessel operated by Barry Graham Oil Service, L.L.C. Willis sued Barry Graham for negligence. Barry Graham then sought indemnification, defense, and insurance coverage from Shamrock and its insurer, Aspen, based on a series of contracts linking the parties.The United States District Court for the Western District of Louisiana denied Barry Graham's motion for summary judgment and granted Shamrock and Aspen's motion, ruling that Barry Graham was not covered under the defense, indemnification, and insurance provisions of the Shamrock-Fieldwood Master Services Contract (MSC). Willis's case was settled, and Barry Graham appealed the district court's decision on its third-party complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court concluded that the MSC required Shamrock to defend, indemnify, and insure Barry Graham because Barry Graham was part of a "Third Party Contractor Group" under the MSC. The court also determined that the cross-indemnification provisions in the contracts were satisfied, and that the Louisiana Oilfield Anti-Indemnity Act (LOAIA) did not void Shamrock's obligations because Fieldwood had paid the insurance premium to cover Shamrock's indemnities, thus meeting the Marcel exception.The Fifth Circuit reversed the district court's judgment and remanded the case for further proceedings consistent with its opinion. View "Barry Graham Oil v. Shamrock Mgmt" on Justia Law

The case involves a class action lawsuit brought by Jacklin Romeo, Susan S. Rine, and Debra Snyder Miller against Antero Resources Corporation. The plaintiffs, who own oil and gas interests in Harrison County, West Virginia, allege that Antero breached the terms of their leases by failing to pay the full one-eighth royalty specified in the leases. They argue that Antero improperly deducted postproduction costs from the gross sale proceeds of the gas, contrary to West Virginia Supreme Court precedents in Wellman v. Energy Resources, Inc. and Estate of Tawney v. Columbia Natural Resources, L.L.C.The United States District Court for the Northern District of West Virginia, which is handling the case, certified two questions to the Supreme Court of Appeals of West Virginia. The first question asked whether the requirements of Wellman and Estate of Tawney extend only to the "first available market" as opposed to the "point of sale" when the duty to market is implicated. The second question asked whether the marketable product rule extends beyond gas to require a lessee to pay royalties on natural gas liquids (NGLs) and, if so, whether the lessors share in the cost of processing, manufacturing, and transporting the NGLs to sale.The Supreme Court of Appeals of West Virginia answered the first question in the negative, holding that the requirements of Wellman and Estate of Tawney extend to the point of sale, not just to the first available market. The court reaffirmed that the lessee must bear all costs incurred in exploring for, producing, marketing, and transporting the product to the point of sale unless the lease provides otherwise.For the second question, the court held that the marketable product rule extends beyond gas to require a lessee to pay royalties on NGLs. However, the court also held that absent express language in the lease to the contrary, the lessors do not share in the cost of processing, manufacturing, and transporting residue gas and NGLs to the point of sale. View "Jacklin Romeo, Susan S. Rine, and Debra Snyder Miller v. Antero Resources Corporation" on Justia Law

The case involves Francis Kaess, who owns mineral interests in land in Pleasants County, West Virginia, subject to an oil and gas lease with BB Land, LLC. The lease, dated January 6, 1979, provides for in-kind royalties, meaning Kaess is entitled to a portion of the physical oil and gas produced. BB Land began production in 2018, but Kaess did not take his share in-kind. Instead, BB Land sold Kaess' share and paid him royalties after deducting postproduction costs.Kaess filed a lawsuit in the United States District Court for the Northern District of West Virginia, alleging improper deductions of postproduction costs from his royalties, among other claims. The district court denied BB Land's motion for summary judgment on the improper deductions claim, finding that the requirements for deducting postproduction costs set forth in Wellman v. Energy Resources, Inc. and Estate of Tawney v. Columbia Natural Resources, LLC apply to in-kind leases. BB Land then moved to certify a question to the Supreme Court of Appeals of West Virginia.The Supreme Court of Appeals of West Virginia reviewed the case and answered two certified questions. First, the court held that there is an implied duty to market the minerals in oil and gas leases containing an in-kind royalty provision. If the lessor does not take physical possession of their share, the lessee must either deliver the lessor's share to a third-party purchaser near the wellhead, buy the lessor's share, or market and sell the lessor's share along with their own.Second, the court held that the requirements for deducting postproduction costs from royalties, as established in Wellman and Estate of Tawney, apply to leases with in-kind royalty provisions. Therefore, if the lessee markets and sells the lessor's share, the lessee must tender the lessor's percentage share of the gross proceeds, free from any deductions for postproduction expenses, received at the first point of sale to an unaffiliated third-party purchaser in an arm's length transaction. View "Francis Kaess v. BB Land, LLC" on Justia Law

The plaintiff, a company that constructs and operates fuel cells, sought municipal property tax exemptions for its fuel cell modules and related equipment installed on the Pfizer campus. The property primarily provided electricity and converted waste heat into thermal energy. The plaintiff applied for tax exemptions under Connecticut General Statutes § 12-81 (57), which exempts class I renewable energy sources from taxation. The defendant, the town of Groton, denied the applications, classifying the property as a cogeneration system under § 12-81 (63), which allows but does not require municipalities to exempt such systems from taxation.The Superior Court granted partial summary judgment to the plaintiff, ruling that the property was exempt from taxation for the years 2017 through 2019 under § 12-81 (57). The court found that the property, which included fuel cells with a heat recovery steam generator (HRSG), fell within the definition of a class I renewable energy source. For the 2016 tax year, the court held a trial and determined that the property was not completely manufactured by October 1, 2016, and thus was exempt under § 12-81 (50) as "goods in the process of manufacture." The court also ruled that the plaintiff was not required to file a personal property declaration for the exempt property, and the penalties imposed by the defendant for failing to file such a declaration were improper.The Connecticut Supreme Court upheld the trial court's rulings. It agreed that the property was exempt from taxation under § 12-81 (57) for the years 2017 through 2019, as the statute specifically exempts class I renewable energy sources, including fuel cells. The court also affirmed that the property was exempt for the 2016 tax year under § 12-81 (50) as it was still in the process of manufacture. Finally, the court held that the plaintiff was not required to file a personal property declaration for the exempt property, and the penalties for failing to do so were not permitted. View "FuelCell Energy, Inc. v. Groton" on Justia Law