Justia Energy, Oil & Gas Law Opinion Summaries

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

At an oil and gas wellsite in Texas, a contractor, TCP Specialists, LLC, provided wireline services alongside other companies that managed the well’s pressure and equipment. During a maintenance operation, a pressurized pipe ruptured while the well was being depressurized, causing fatal injuries to two workers and serious injury to a TCP employee. Although TCP did not control the depressurization or supply the faulty pipe, its employees were standing near the wellhead at the time of the accident. The Department of Labor alleged that TCP exposed its employees to known hazards by not establishing a buffer zone around the well during depressurization.An administrative law judge (ALJ) of the Occupational Safety and Health Review Commission held a hearing and found that TCP had violated the General Duty Clause of the Occupational Safety and Health Act. The ALJ determined that TCP had control over its employees’ proximity to the hazard and that a buffer zone would have been a feasible and effective abatement measure. The ALJ concluded that TCP failed to implement adequate safety policies and upheld the citation, imposing a penalty. The full Commission declined to review the ALJ’s decision, making it a final order.The United States Court of Appeals for the District of Columbia Circuit reviewed TCP’s petition and denied it. The court held that the hazard was properly defined by reference to the physical agents (the frac stack and pressurized piping) and that TCP had control over its employees’ exposure to that hazard. The court found substantial evidence supported the ALJ’s conclusions regarding the feasibility and effectiveness of a buffer zone, and rejected TCP’s constitutional and procedural arguments. The order upholding the citation and penalty was affirmed. View "TCP Specialists, LLC v. Secretary of Labor" on Justia Law

SWN Production Company, LLC sought to drill multiple horizontal natural gas wells on a 301-acre tract within the City of Weirton, West Virginia. The City required a conditional use permit for oil and gas extraction under its zoning ordinance. SWN applied for such a permit, and the City’s Board of Zoning Appeals (BZA) held hearings where community members raised concerns about traffic, noise, and the effect on local development. The BZA denied SWN’s application, citing incompatibility with the City’s comprehensive development plan and other adverse impacts. Afterward, SWN obtained a drilling permit from the West Virginia Department of Environmental Protection (DEP).SWN filed two actions in the Circuit Court of Brooke County: a petition for a writ of certiorari challenging the BZA’s decision and a complaint seeking a declaration that the City’s zoning ordinance was preempted by state law, especially the Natural Gas Horizontal Well Control Act. The circuit court rejected SWN’s preemption argument and affirmed the BZA’s denial of the permit. SWN appealed both rulings to the Intermediate Court of Appeals of West Virginia (ICA). The ICA reversed the circuit court on the preemption issue, finding the City’s ordinance conflicted with state law, but dismissed SWN’s appeal of the certiorari ruling for lack of jurisdiction.The Supreme Court of Appeals of West Virginia reviewed both appeals. It held that there was no irreconcilable conflict between the City’s zoning ordinance and the state’s environmental statutes; rather, any overlap was incidental and not preempted. The Court reversed the ICA’s decision on preemption and reinstated the circuit court’s order dismissing SWN’s facial preemption challenge. Regarding the certiorari appeal, the Court affirmed the ICA’s dismissal, holding that the ICA lacked subject-matter jurisdiction to review extraordinary remedies such as certiorari. View "City of Weirton v. SWN Production Company, LLC" on Justia Law

The dispute centers on land in Calcasieu Parish, Louisiana, owned by a public entity, where oil and gas exploration occurred for decades under a mineral lease originally granted in 1943. The plaintiff acquired several tracts of this land between 1968 and 1987, with prior owners reserving mineral rights. The mineral lease was assigned multiple times before terminating in 2020. The plaintiff alleged that the defendants, or their predecessors, caused environmental damage to the property through oil and gas operations predating the plaintiff’s ownership, and sought damages under both tort and contract theories.Defendants filed exceptions of no right of action, arguing that under the “subsequent purchaser rule” articulated in Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., a property owner cannot recover for damage inflicted before their purchase unless assigned the prior owner’s rights. The trial court denied these exceptions. On appeal, the Louisiana Court of Appeal, Third Circuit, reversed in part. It dismissed all claims against one defendant (Honeywell) for preacquisition damage, and limited claims against the other (Texas Pacific) to an 87-day period when both the plaintiff and Texas Pacific’s predecessor simultaneously held interests in one tract.The Supreme Court of Louisiana granted review. It extended the subsequent purchaser rule from Eagle Pipe to cases involving mineral leases, holding that a purchaser of property, absent an assignment or subrogation, has no right of action for preacquisition property damage caused by mineral lessees. However, the court recognized an exception for damages occurring during the period when the plaintiff owned the property and the defendant held lease rights. Additionally, the court held that a current surface owner may enforce the prudent operator standard under Mineral Code article 122 for end-of-lease obligations that become due upon termination, but not for historic operational damage. The judgment was affirmed in part, reversed in part, and remanded. View "VINTON HARBOR & TERMINAL DISTRICT VS. REUNION ENERGY COMPANY" on Justia Law

ConocoPhillips Alaska, Inc., an oil and gas producer, conducted drilling operations in the National Petroleum Reserve-Alaska, a federal property located within the territorial bounds of Alaska. As required by federal lease terms and the Naval Petroleum Reserves Production Act, ConocoPhillips submitted well data to the U.S. Department of the Interior. To comply with Alaska law, it also submitted a subset of that data to the Alaska Oil and Gas Conservation Commission. Alaska law requires such well data to be kept confidential for 24 months, after which it must be disclosed to the public unless certain additional confidentiality conditions are met. ConocoPhillips sought to prevent the Commission from releasing this data, citing concerns about the loss of trade secrets.After the Alaska Department of Natural Resources denied ConocoPhillips’s request to extend the confidentiality period, ConocoPhillips filed suit in the United States District Court for the District of Alaska, seeking declaratory and injunctive relief. The district court denied the Commission’s motion to dismiss, granted partial summary judgment to ConocoPhillips, and entered final judgment in its favor. The district court concluded that while the federal Production Act did not expressly preempt Alaska law, it did impliedly preempt the state’s disclosure provision because releasing the data would conflict with the purposes of the federal statute.The United States Court of Appeals for the Ninth Circuit reviewed the case de novo and reversed the district court’s decision. The Ninth Circuit held that the Production Act does not expressly preempt Alaska’s disclosure statute, nor do Department of the Interior regulations do so. The court also found there was no implied preemption, as the Production Act does not demonstrate a congressional intent that would be obstructed by Alaska’s law. Thus, Alaska’s disclosure requirements were not preempted by federal law. View "CONOCOPHILLIPS ALASKA, INC. V. ALASKA OIL AND GAS CONSERVATION COMMISSION" on Justia Law

Oak Run Solar Project, L.L.C. sought approval from the Ohio Power Siting Board to construct a solar-powered electric generation facility in Madison County, Ohio. The proposed facility would occupy approximately 4,400 acres and include an 800 MW solar array, a 300 MW battery energy storage system, and two transmission lines. Oak Run entered agreements with landowners for the project site and committed to an agrivoltaics program, maintaining agricultural productivity alongside solar generation. Local governments and other parties intervened, raising concerns about environmental, visual, water, plant, wildlife, and safety impacts. The board’s staff issued a report, and a hearing was held, resulting in project approval subject to conditions for landscape screening and safety.Prior to reaching the Supreme Court of Ohio, the Ohio Power Siting Board considered Oak Run’s application and allowed intervenors, including several township boards and the county board of commissioners, to participate. After a hearing and review, the board granted Oak Run’s certificate for construction, finding the statutory requirements satisfied and imposing conditions related to visual screening and emergency response. The local governments filed an application for rehearing, which was denied. They then appealed to the Supreme Court of Ohio, arguing the board failed to obtain necessary information, especially regarding visual impacts and environmental effects.The Supreme Court of Ohio reviewed the case, applying a standard of review for “unlawful or unreasonable” board orders. The court held that Oak Run failed to provide required photographic simulations or sketches of substations, as mandated by administrative rules, thereby depriving the board of necessary information to assess visual impacts. The court affirmed the board’s orders in part, reversed in part regarding the visual-impact information, and remanded the matter to the board for further consideration of the project’s visual effects. View "In re Application of Oak Run Solar Project, L.L.C." on Justia Law

Maryland enacted legislation regulating how retail electricity suppliers may market “green power” to consumers, seeking to address concerns that consumers were misled by claims about renewable energy. The statute prohibits suppliers from using terms such as “clean,” “green,” or “100% renewable” unless at least 51% of the energy is backed by renewable energy credits (RECs) from within a specific regional grid (the PJM region). Additionally, suppliers are required to include disclosures explaining the nature of RECs and their relationship to renewable electricity, with the exact disclosure language later specified by the Maryland Public Service Commission (PSC).Retail Energy Advancement League and Green Mountain Energy Company brought a facial First Amendment challenge against these provisions and sought a preliminary injunction in the United States District Court for the District of Maryland. The district court denied the injunction, applying intermediate scrutiny to the speech restriction and concluding that the plaintiffs were unlikely to prevail on the merits. The court also found that the statute’s disclosure requirements likely survived constitutional review.On appeal, the United States Court of Appeals for the Fourth Circuit found that the plaintiffs demonstrated a likelihood of success in showing the speech restriction was unconstitutional even under intermediate scrutiny, because the restriction did not materially advance Maryland’s asserted interest in preventing consumer deception and was not adequately tailored. The Fourth Circuit reversed the district court’s denial of a preliminary injunction as to the speech restriction and ordered an injunction against enforcement of that provision. However, regarding the compelled disclosure requirement, the Fourth Circuit remanded the case for the district court to review the constitutionality of the new PSC-promulgated disclosure language in the first instance. View "Retail Energy Advancement League v. Brown" on Justia Law