Justia Energy, Oil & Gas Law Opinion Summaries

The case centers on reforms to the process by which new energy generators, particularly renewable energy sources, connect to the nation’s power grid. At the end of 2023, a significant backlog existed, with about 2,600 gigawatts of proposed generation and storage capacity awaiting interconnection studies, mainly from solar, wind, and energy storage projects. The Federal Energy Regulatory Commission (FERC) determined that delays and inefficiencies in the existing interconnection process were creating unjust and unreasonable conditions in wholesale energy markets, hindering timely development and competition.FERC responded by issuing Order 2023, acting under its remedial authority in Section 206 of the Federal Power Act. Order 2023 mandated nationwide reforms for transmission providers, replacing the prior serial study model with a clustered study approach, requiring more substantial deposits, imposing withdrawal fines, establishing firm study deadlines, and implementing automatic late fees for missed deadlines. FERC also standardized affected-system study procedures and adopted energy-service modeling as the default. Following thirty-two rehearing and clarification requests, FERC issued Order 2023-A, reaffirming its findings and adjustments.Petitioners challenged three major aspects: the withdrawal fines, study deadlines backed by late fees, and the energy-service modeling requirement. The United States Court of Appeals for the District of Columbia Circuit found that FERC acted within its statutory authority, reasonably explained its reforms, and provided adequate process and safeguards. The court denied all petitions, holding that FERC’s nationwide interconnection regime and rulemaking under Order 2023 were lawful, not arbitrary or capricious, and did not unduly discriminate or violate constitutional protections. The court also affirmed that FERC reasonably balanced competing interests and that its reforms were supported by substantial evidence. View "Advanced Energy United v. FERC" on Justia Law

A company operates a pipeline transporting oil and natural gas liquids between the United States and Canada. A portion of this pipeline crosses twelve miles of land within a Native American reservation in northern Wisconsin. In 2013, the company’s rights-of-way over certain parcels of reservation land expired. During the intervening years, the tribal band acquired ownership interests in a number of these parcels. The company continued to operate the pipeline without securing the tribal band’s renewed consent for the necessary easements. Following a breakdown in negotiations, the tribal band filed suit, alleging trespass and public nuisance. The band also pointed to the risk of a pipeline rupture near a river bend where erosion threatened pipeline safety.The United States District Court for the Western District of Wisconsin granted summary judgment for the tribal band on its trespass and unjust enrichment claims, and against the company on its breach-of-contract counterclaim. After a bench trial, the district court awarded the band restitution for past trespass, ordered future disgorgement of profits, and issued an injunction requiring the company to cease operations across the affected parcels within three years and to implement a monitoring and shutdown protocol to abate the alleged nuisance. Both parties appealed; the district court stayed the shutdown portion of the injunction while the appeal was pending.The United States Court of Appeals for the Seventh Circuit affirmed the finding that the company was trespassing on the parcels at issue and that restitution and injunctive relief are appropriate remedies. However, the court vacated the district court’s restitution calculation and the three-year shutdown deadline, remanding for a new determination of remedies that accounts for the public interest and ongoing pipeline reroute efforts. The court also held that federal statutory law displaced the band’s federal common law nuisance claim and vacated the related injunction. View "Bad River Band of the Lake Superior Tribe of Chippewa v Enbridge Energy Company, Inc." on Justia Law

A non-profit river conservation and recreation organization, whose members include kayakers and canoers in Missouri, sought to intervene out of time in a Federal Energy Regulatory Commission (FERC) license surrender proceeding for the Niangua Hydroelectric Project in Missouri. The project, completed in 1930, impounded the Niangua River and created Lake Niangua. After decades of operation and relicensing, the licensee decided not to pursue relicensing, proposing to decommission the project but leave the dam in place. The organization argued its members would be directly affected and that its participation would represent public interest, but it missed the intervention deadline due to lack of awareness of the proceeding.FERC denied the organization’s unopposed motion to intervene out of time, finding it failed to demonstrate good cause for late filing under its procedural rules. FERC also denied rehearing, reiterating that lack of awareness of a publicly noticed proceeding did not constitute good cause and that, per its precedent, failure to show good cause was sufficient to deny intervention without considering other factors. The Commission subsequently approved the license surrender with the dam left in place, rejecting the organization’s comments.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. It held that FERC did not err in interpreting its rule to require a late intervenor to show good cause for the late filing, but concluded that FERC acted arbitrarily and capriciously by inconsistently applying its precedent on late intervention without providing a reasoned explanation. The court vacated FERC’s orders and remanded the case for reconsideration and a reasoned explanation consistent with FERC’s precedent. View "American Whitewater v. FERC" on Justia Law

Sunpin Energy Services, LLC and Ralph P. Lapinkas, Jr. sought to construct a large-scale ground-mounted solar energy system on a parcel of undeveloped, mostly forested land in Petersham, Massachusetts. Because the proposed site was outside the town’s designated solar electric overlay district, Sunpin applied for a special permit from the Zoning Board of Appeals. The project would require clearing trees from approximately 14.3 acres, and Sunpin secured an order of conditions from the town conservation commission under the Wetlands Protection Act. The permit application was denied after one of three board members voted against it, citing concerns about deforestation and referencing the town’s bylaw goals of maintaining the town’s beauty and proper land use.The plaintiffs challenged the board’s denial in the Land Court Department. The Land Court judge granted summary judgment in favor of the board, concluding that the board member properly applied the zoning bylaw criteria, including the protection of public health, safety, and welfare, and concerns about tree removal. The plaintiffs appealed, and the Massachusetts Appeals Court vacated the judgment, holding that the board’s decision was arbitrary and capricious, improperly favoring forest preservation over solar energy siting and relying on speculation about future development.The Supreme Judicial Court of Massachusetts reviewed the case and held that, under the Dover Amendment’s solar provision (G. L. c. 40A, § 3, ninth paragraph), municipalities must provide reasonable opportunities for solar energy systems and may not deny a special permit unless it is necessary to protect public health, safety, or welfare. The Court found that the denial, based on general concerns about tree cutting, amounted to a blanket prohibition in a town that is ninety-seven percent forested, which was improper. The Court vacated the Land Court’s judgment and remanded for further proceedings consistent with its opinion. View "Sunpin Energy Services, LLC v. Zoning Board of Appeals of Petersham" on Justia Law

The case concerns disputes between two groups of North Dakota surface landowners and an oil and gas company with rights to drill on their land. After the company gave statutory notice and commenced drilling, the landowners and the company were unable to reach an agreement on compensation for damages to the land, as required by North Dakota’s Oil and Gas Production Damage Compensation Act. Both sets of landowners, represented by the same law firm, filed separate lawsuits in federal court seeking compensation for damages. The cases involved substantial litigation over discovery, scheduling, expert witnesses, and attorneys’ fees, with mediation attempts failing. Eventually, the parties reached stipulated judgments settling the claims for monetary amounts.After settlement, the landowners sought attorneys’ fees under North Dakota law, submitting discounted requests and supporting invoices. The company objected, arguing that the requests were excessive given the simplicity of the dispute and raising concerns such as alleged excessive billing, duplicative work, and poor documentation. The company also requested an in-person hearing on the fee motions, which was denied.The United States District Court for the District of North Dakota applied the lodestar method to determine reasonable attorneys’ fees, starting with the actual fees incurred, then reducing the amounts based on factors such as poor documentation and litigation conduct. The court awarded the landowners more than they requested, after finding the hourly rates and the time expended reasonable, but applying a 10% reduction for documentation issues and delays. The court also denied the company’s motion for oral argument.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed. The court held that the district court did not abuse its discretion in its fee award calculations, its consideration of relevant factors, or in denying an oral argument. The court found that the district court’s approach and reductions were consistent with precedent and North Dakota law. View "Murphy v. Continental Resources, Inc." on Justia Law

A group of Kansas residential natural gas consumers, who purchase gas from local distributors, sued several interstate wholesalers. They alleged that during Winter Storm Uri, the wholesalers manipulated the market and sold natural gas to local distributors at exorbitant prices, leading to unprecedented increases in retail gas prices. The plaintiffs claimed these actions violated the Kansas Consumer Protection Act (KCPA) by forcing local distributors into the high-priced spot market and passing the excessive costs on to consumers. The plaintiffs contended that even though the alleged misconduct occurred in the wholesale market, it had a direct and significant impact on retail customers.The United States District Court for the District of Kansas consolidated five class actions and reviewed the claims. The district court granted the defendants’ joint motion to dismiss, finding that the Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over interstate wholesale natural gas rates under the Natural Gas Act (NGA), and that the plaintiffs’ state-law claims were preempted. The court concluded that the challenged conduct concerned wholesale transactions, which are subject to comprehensive federal regulation.The United States Court of Appeals for the Tenth Circuit reviewed the case. It affirmed the district court’s decision, holding that the NGA field-preempts the plaintiffs’ KCPA claims because the claims are aimed directly at, and challenge, transactions and practices in the interstate wholesale natural gas market, an area reserved for federal oversight. The Tenth Circuit distinguished this case from Supreme Court precedent where state-law claims were not preempted, emphasizing that these plaintiffs’ claims targeted wholesale sales rather than background marketplace conditions. The court concluded that the exclusive jurisdiction of FERC over wholesale sales foreclosed state-law consumer protection claims based on those transactions. View "Mehl v. BP Energy Company" on Justia Law

A company with a lease in the Brentwood Oil Field, Contra Costa County, proposed to convert an inactive oil and gas extraction well into a water injection well for disposing of treated wastewater, a byproduct of oil and gas drilling. The well in question had been built in 1963, used for extraction until 1984, and then plugged. The company currently disposed of wastewater by trucking it offsite but sought to inject it underground instead. Regulatory agencies, including CalGEM, the State Water Board, and the Regional Water Board, expressed concerns about potential contamination of local clean water sources due to possible migration of wastewater. After additional technical analysis and the imposition of specific project conditions, these concerns were resolved, and CalGEM approved the project, issuing a notice of exemption (NOE) under the California Environmental Quality Act (CEQA), relying on the “class 1” categorical exemption for minor alterations of existing facilities with negligible expansion of use.The Contra Costa County Superior Court found substantial evidence did not support CalGEM’s determination that the project fell within the class 1 exemption, concluding that converting an oil and gas well into a water injection well did not constitute negligible or no expansion of former use. CalGEM agreed to comply with the writ. On appeal, the First Appellate District, Division Five, reversed, holding that the exemption applied because the environmental risks of the new use were negligible.The Supreme Court of California reviewed the case and reversed the Court of Appeal’s judgment. The Supreme Court held that the phrase “negligible or no expansion of existing or former use” in the class 1 exemption refers to the nature or degree of a structure or facility’s use, not to the risk of environmental harm caused by such a change. The court remanded the case for reconsideration under this proper framework and did not reach the additional question regarding project conditions as mitigation. View "Sunflower Alliance v. Dept. of Conservation" on Justia Law

An energy company, seeking to address disposal challenges associated with wastewater from its hydraulic fracturing operations, engaged a water technology firm to design and construct a specialized treatment facility. The two sides entered into a series of agreements, culminating in a comprehensive contract for the facility’s construction. Before this final contract was executed, the water technology firm discovered that its design would not meet the energy consumption requirements critical to the energy company, but did not disclose this information. The firm also failed to reveal risks associated with a proposed design change that could affect the quality of the facility’s waste byproduct. Relying on the firm’s representations, the energy company signed the contract and later approved the design change. When the facility failed to meet contractual specifications—producing unusable waste and exceeding power limits—the energy company terminated the contract and sued for breach and fraud.The case was tried in the Denver District Court, which found that the water technology firm had fraudulently induced the energy company into signing the contract by concealing and failing to disclose material facts. The trial court held that the economic loss rule did not bar the fraud claim because the misconduct occurred prior to contract formation. The court awarded the energy company substantial damages and attorney fees. On appeal, the Colorado Court of Appeals affirmed, though it reasoned that the contracts were interrelated but found an independent tort duty still existed.The Supreme Court of Colorado reviewed whether the economic loss rule barred the fraud claim. The Court held that the interrelated contracts doctrine does not apply when each contract is a stand-alone transaction and that the fraudulent conduct occurred before the governing contract was executed, inducing its formation. Therefore, the economic loss rule does not bar the fraud claim. The judgment was affirmed, and the case was remanded for a determination of reasonable attorney fees. View "Veolia Water Techs. v. Antero Treatment LLC" on Justia Law

A resident of Treasure County, Montana, submitted a petition for a citizen initiative proposing a county ordinance to establish a permitting process and regulatory standards for wind energy conversion systems (WECS) exceeding certain size thresholds. The ordinance sought to regulate various aspects of WECS, including setbacks, noise, wildlife impacts, and penalties for non-compliance, and would have required the county commissioners to administer and enforce the permitting regime. After the petition’s form was approved, the petitioner made minor revisions and resubmitted it.Following these events, the Board of County Commissioners of Treasure County filed a complaint in the Montana Sixteenth Judicial District Court, seeking a declaratory judgment that the proposed ordinance was invalid and unconstitutional. The County argued that specific Montana statutes—namely, Title 76, chapter 2—set forth exclusive processes and requirements for county land-use and zoning regulation, with which the proposed ordinance did not comply. The petitioner responded, generally denying the allegations and seeking a declaration that the ordinance was valid, or that invalid provisions could be severed.The District Court construed the parties’ motions for summary judgment as addressing the validity and constitutionality of the ordinance. It concluded that the ordinance was invalid under § 7-5-135, MCA, because it purported to regulate land use under the county’s general powers when specific statutes governed such regulations, and its provisions exceeded the county’s legislative authority. The court did not reach the constitutional question.On appeal, the Supreme Court of the State of Montana affirmed, holding that this particular proposed ordinance was invalid because it created a permitting and enforcement regime outside the authority delegated to the county by the Legislature. The court clarified that its holding was narrow and did not foreclose all citizen initiatives affecting land use, but only invalidated this ordinance as drafted. View "Treasure County v. Edlund" on Justia Law

A Barbados-based company acquired an 18 percent share in a Venezuelan oil company, alongside two state-owned shareholders. When dividends were distributed in 2008 and 2009, the state-owned entities received their share, but the Barbados-based company did not. In 2013, the company initiated arbitration proceedings against Venezuela in The Hague, seeking damages for not receiving its dividends. The arbitral tribunal, after a jurisdictional and merits phase, eventually awarded the company $59 million plus costs, fees, and interest. During the proceedings, a dispute arose about which government and legal counsel represented Venezuela, given the contested presidency between Nicolás Maduro and Juan Guaidó.The company sought to enforce the arbitration award in the United States District Court for the District of Columbia. Venezuela argued that enforcement would violate U.S. public policy by contradicting the U.S. President’s official recognition of the Guaidó government, as the tribunal had allowed the Maduro regime to change legal counsel during the arbitration. The district court rejected Venezuela’s argument, concluding that the President’s recognition power was not a cognizable public policy under the New York Convention, and even if it were, enforcement would not violate it. The court granted the company’s petition to enforce the award.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s judgment. The appellate court held that none of the exceptions in the New York Convention, including the public policy exception, applied to prevent recognition and enforcement of the arbitral award. The court found that enforcing the award did not undermine the President’s exclusive recognition power or express any view on the legitimacy of either Venezuelan government, and thus did not violate fundamental U.S. public policy. View "Venezuela US SRL v. Bolivarian Republic of Venezuela" on Justia Law