Justia Energy, Oil & Gas Law Opinion Summaries

by
The Supreme Court overruled the decision of the Public Service Commission (PSC) rejecting a proposed development of an eighty-megawatt solar energy facility near Billings, Montana, holding that the PSC violated the requirements of the federal Public Utility Regulatory Policies Act (PURPA) and state law precluding discrimination against solar energy projects.The district court reversed and remanded the PSC's order setting terms and conditions of MTSUN, LLC's proposed eighty megawatt solar project based on findings of violations of due process, PURPA, and Montana's mini-PURPA. The Supreme Court affirmed, holding that the district court (1) did not err in concluding that the PSC's determinations were arbitrary and unlawful; and (2) relied on record evidence in determining the existence of a legally-enforceable agreement and the avoided-cost rates. View "MTSUN, LLC v. Montana Department of Public Service Regulation" on Justia Law

by
The Supreme Court reversed the order of the Public Utilities Commission of Ohio (PUCO) determining that Direct Energy Business, LLC had established that Duke Energy Ohio, Inc.'s failure to provide accurate readings of the generation usage of one of Direct's customers constituted inadequate service, holding that Duke Energy was not acting as a public utility when serving as Direct's meter-data-management agent.Direct purchased electric generation services from the operator of a wholesale power market and resold them to end-use customers through Duke Energy's distribution system. Duke Energy acted as Direct's meter-data-management agent, providing electric usage data about Direct's customers to the wholesale market operator, which then used the data to invoice Direct for its purchases. When Duke Energy failed to calculate usage data for one of Direct's large customers, Direct filed a complaint against Duke Energy with the PUCO. The PUCO ruled in favor of Direct. The Supreme Court reversed and remanded to the PUCO with instructions for it to dismiss Direct's complaint, holding (1) the PUCO lacked jurisdiction over this matter because PUCO's jurisdiction is confined to the supervision of "public utilities"; and (2) Duke Energy did not act as a public utility under the facts of this case. View "In re Complaint of Direct Energy Business, LLC v. Duke Energy Ohio, Inc." on Justia Law

by
Environmental Law and Policy Center and Dakota Resource Council (“Appellants”) appealed from a district court judgment affirming the Public Service Commission’s order dismissing Appellants’ formal complaint on the basis of a lack of subject matter jurisdiction. This appeal arose from Meridian Energy Group, Inc.’s construction of a new oil refinery (“Davis Refinery”) in Billings County, North Dakota. In June 2018, Appellants filed a formal complaint with the Commission, alleging: Meridian was required to obtain a certificate of site compatibility from the Commission under N.D.C.C. ch. 49-22.1; and Meridian’s planned facility would have a capacity of refining 50,000 or more barrels per day (bpd). Appellants filed their complaint after the North Dakota Department of Health, now Department of Environmental Quality, granted Meridian a construction permit for a “55,000 bpd” oil refinery. The complaint sought a declaration that Meridian’s refinery was subject to N.D.C.C. ch. 49-22.1 and to the statutory siting process. The Commission determined the complaint stated a “prima facie case” under its pleading rule, and the Commission formally served the complaint on Meridian. Meridian asserted it was constructing a refinery with a capacity of 49,500 bpd, falling outside the Commission’s statutory jurisdictional threshold of 50,000 bpd. Meridian argued, as a result, the Commission did not have jurisdiction over this matter and the complaint must be dismissed. After review, the North Dakota Supreme Court concluded the Commission did not err when it dismissed Appellants’ complaint. The Court affirmed the district court’s judgment and the Commission’s order of dismissal. View "Environmental Law & Policy Center, et al. v. N.D. Public Svc. Commission, et al." on Justia Law

by
In 2015, the owners of a 13,000-acre tract of land known as 70 Ranch successfully petitioned to include their tract in a special district. After 70 Ranch was incorporated into the district, the district began taxing the leaseholders of subsurface mineral rights, Bill Barrett Corporation, Bonanza Creek Energy, Inc., and Noble Energy, Inc. for the oil and gas they produced at wellheads located on 70 Ranch. The Lessees, however, objected to being taxed, arguing the mineral interests they leased could not be included in the special district because neither they nor the owners of the mineral estates consented to inclusion, which they asserted was required by section 32-1-401(1)(a), C.R.S. (2019), of the Special District Act. The Colorado Supreme Court determined that section 401(1)(a) permitted the inclusion of real property covered by the statute into a special taxing district when (1) the inclusion occurred without notice to or consent by the property’s owners and (2) that property was not capable of being served by the district. The Court answered "no," however, 32-1-401(1)(a) required the assent of all of the surface property owners to an inclusion under that provision, and inclusion was only appropriate if the surface property could be served by the district. "Section 32-1-401(1)(a) does not require assent from owners of subsurface mineral estates because those mineral estates, while they are real property, are not territory. Thus, Lessees’ consent was not required for the inclusion of 70 Ranch in the special district." The Court therefore affirmed the court of appeals on alternate grounds. View "Barrett Corp. v. Lembke" on Justia Law

by
The First Circuit affirmed the decision of the district court dismissing this lawsuit challenging Defendants' alleged manipulation of natural gas pipeline capacity for failure to state a claim, holding that any differences between two cases filed with regard to this issue did not warrant a different outcome.In 2017, a group of economists published a report alleging that Defendants were able to increase electricity prices in New England by buying up and refusing to release excess transmission capacity in the Algonquin pipeline. In response, a group of electricity end consumers filed suit alleging violations of federal and state antitrust and unfair competition law. Thereafter, PNE Energy Supply LLC, a wholesale energy purchaser, filed this lawsuit also challenging Defendants' conduct in neither using nor releasing reserved pipeline capacity. The district court dismissed the electricity consumers' suit. The First Circuit affirmed, holding that the antitrust claims failed on their merits because Defendants' conduct occurred pursuant to a tariff approved by the Federal Energy Regulatory Commission. At issue was whether the logic from the electricity consumers' suit also applied to this lawsuit brought by PNE. The First Circuit held that the holding in the first lawsuit controlled and affirmed the district court's dismissal of PNE's lawsuit. View "PNE Energy Supply LLC v. Eversource Energy" on Justia Law

by
Taylor's leases for the Outer Continental Shelf (OCS), set to expire in 2007, incorporated Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1301, regulations. They required Taylor to leave the leased area “in a manner satisfactory to the [Regional] Director.” Taylor drilled 28 wells, each connected to an oil platform. In 2004, Hurricane Ivan toppled Taylor’s platform, rendering the wells inoperable. Taylor discovered leaking oil but took no action. In 2007, Taylor was ordered to decommission the wells within one year. Taylor sought extensions. The government required Taylor to set aside funds for its decommissioning obligations. For Taylor to receive reimbursement, the government must confirm the work was conducted “in material compliance with all applicable federal laws and . . . regulations" and with the Leases. The resulting Trust Agreement states that it “shall be governed by and construed in accordance with the laws of" Louisiana. Taylor attempted to fulfill its obligations. The government approved a departure from certain standards but ultimately refused to relieve Taylor of its responsibilities.Taylor filed claims involving Louisiana state law: breach of the Trust Agreement; request for dissolution of the trust account based on impossibility of performance; request for reformation for mutual error; and breach of the duty of good faith and fair dealing. The Federal Circuit affirmed the dismissal of the complaint. OCSLA makes federal law exclusive in its regulation of the OCS. To the extent federal law applies to a particular issue, state law is inapplicable. OCSLA regulations address the arguments underlying Taylor’s contract claims, so Louisiana state law cannot be adopted as surrogate law. View "Taylor Energy Co. LLC v. United States" on Justia Law

by
The First Circuit granted the petition filed by Algonquin Gas Transmission, LLC for rehearing as to remedy in this case where the First Circuit vacated the grant of an air permit by the Massachusetts Department of Environmental Protection (DEP) for a proposed natural gas compression station and remanded the case to that agency, holding that the remedy granted is remand without vacatur.On June 3, 2020, the First Circuit issued an opinion vacating the air permit for the proposed compressor station to be built as part of Algonquin's Atlantic Bridge Project, holding that the DEP did not follow its own established procedures for assessing whether an electric motor was the Best Available Control Technology (BACT). The Court's remedy was to vacate the air permit and remand to the DEP to redo the BACT. Given new developments that will materially the "balance of equities and public interest considerations," the First Circuit altered its remedy and revised its opinion to reflect that the remedy granted is remand without vacatur. View "Town of Weymouth v. Massachusetts Department of Environmental Protection" on Justia Law

by
Defendants appealed the district court's judgment favoring Five Star in a quiet title action over oil-and-gas interests. Five Star, asserting itself as the grantee’s successor-in-interest, sought a declaration that it owns a "floating" royalty entitling it to a three-eighths share of any leased royalty. The district court declared that Five Star owns an undivided three-eighths mineral interest pursuant to a 1927 deed. The Fifth Circuit affirmed the judgment, but clarified that Five Star's three-eighths mineral interest includes solely a right to receive a proportionate share of royalties and does not include an executive right or right to develop the land. View "Five Star Royalty Partners, Ltd. v. Mauldin" on Justia Law

by
The Second Circuit granted a petition for review of the NHTSA's final rule, which reversed the agency's 2016 increase to the base rate of the Corporate Average Fuel Economy (CAFE) penalty. The court held that the CAFE penalty is a civil monetary penalty under the Federal Civil Penalties Inflation Adjustment Act Improvements Act. Consequently, NHTSA did not act in accordance with law when it reached the contrary conclusion in its 2019 Final Rule and reversed its initial catch-up inflation adjustment.The court also held that the NHTSA's reconsideration of the economic effects of its initial rule was untimely and therefore unauthorized. In this case, the Improvements Act provided a limited window of time for NHTSA to reduce the initial catch-up inflation adjustment to the CAFE penalty based on a conclusion that the increase would have a negative economic impact. However, by 2019, that window had closed and the agency acted in excess of its authority when it reconsidered and reversed its prior increase of the CAFE penalty based on an assessment of economic consequences. Accordingly, the court vacated the rule. View "New York v. National Highway Traffic Safety Administration" on Justia Law

by
The Board of University and School Lands of the State of North Dakota, the State Engineer, and Statoil Oil & Gas LP appeal from a judgment determining William Wilkinson and the other plaintiffs owned mineral interests in certain North Dakota land. Although the judgment was not appealable because it did not dispose of all claims against all parties, the North Dakota Supreme Court exercised its supervisory jurisdiction to review the summary judgment. The Court concluded the district court did not err in concluding N.D.C.C. ch. 61-33.1 applied and the disputed mineral interests were above the ordinary high water mark of the historical Missouri riverbed channel, but the court erred in quieting title and failing to comply with the statutory process. Therefore, the Court affirmed in part, reversed in part, and remanded for further proceedings. View "Wilkinson, et al. v. Board of University and School Lands of the State of N.D." on Justia Law