Justia Energy, Oil & Gas Law Opinion Summaries

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The Supreme Court affirmed the order of the circuit court affirming amended integration orders entered by the Arkansas Oil & Gas Commission (AOGC), holding that the AOGC did not exceed its statutory authority in granting SWN Production, LLC's (SWN) request to reduce the royalty payable under Appellants' oil and gas leases when the lessees elected to go "non-consent." On appeal, Appellants argued that the AOGC's actions were both ultra vires and arbitrary and capricious. The Supreme Court affirmed, holding (1) while there is no statutory provision specifically stating that the AOGC may reduce the royalty rate contained in a lease, there is also no statutory language expressly stating that the consenting parties - such as SWN - are responsible for payment of royalties when an uncommitted leasehold working-interest owner elects to go non-consent; and (2) the AOGC's orders were neither ultra vires nor arbitrary and capricious. View "Hurd v. Arkansas Oil & Gas Commission" on Justia Law

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The plaintiffs each own a wind farm that was put into service in 2012. Each applied for a federal cash grant based on specified energy project costs, under section 1603 of the American Recovery and Reinvestment Tax Act of 2009. The Treasury Department awarded each company less than requested, rejecting as unjustified the full amounts of certain development fees included in the submitted cost bases. Each company sued. The government counterclaimed, alleging that it had actually overpaid the companies. The Claims Court and Federal Circuit ruled in favor of the government. Section 1603 provides for government reimbursement to qualified applicants of a portion of the “expense” of putting certain energy-generating property into service as measured by the “basis” of such property; “basis” is defined as “the cost of such property,” 26 U.S.C. 1012(a). To support its claim, each company was required to prove that the dollar amounts of the development fees claimed reliably measured the actual development costs for the windfarms. Findings that the amounts stated in the development agreements did not reliably indicate the development costs were sufficiently supported by the absence in the agreements of any meaningful description of the development services to be provided and the fact that all, or nearly all, of the development services had been completed by the time the agreements were executed. View "California Ridge Wind Energy, LLC v. United States" on Justia Law

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The Supreme Court accepted a question certified to it by the United States Court of Appeals for the Ninth Circuit and answered that, under Montana law, dinosaur fossils do not constitute "minerals" for the purpose of a mineral reservation. Mary Ann and Lige Murray owned the surface estate of sizable property in Garfield County. The mineral estate was held by BEJ Minerals, LLC and RTWF LLC (collectively, BEJ). The Murrays found and excavated several valuable dinosaur fossils on their property. When BEJ claimed an ownership interest in the fossils the Murrays sought a declaratory judgment affirming that the fossils were owned solely by the Murrays. BEJ filed a counterclaim requesting a declaratory judgment that, under Montana law, the fossils were "minerals" and thus part of the mineral estate. The federal district court granted summary judgment to the Murrays. On appeal, a Ninth Circuit panel reversed. The Murrays then filed a petition for rehearing and rehearing en banc. The Ninth Circuit certified the question to the Supreme Court for resolution under Montana law. The Supreme Court "decline[d] to stretch the term 'mineral' so far outside its ordinary meaning as to include dinosaur fossils," concluding that, under Montana law, dinosaur fossils do not constitute "minerals" for the purpose of a mineral reservation. View "Murray v. BEJ Minerals, LLC" on Justia Law

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Thomas Lockhart appealed an order finding him in contempt, imposing a sanction requiring the forfeiture of $300,000 to Douglas Arnold and Thomas Arnold, and divesting him of any management rights in Trident Resources, LLC. In 2013, Lockhart and the Arnolds entered into business capturing and compressing natural gas. The parties formed Trident Resources, with Lockhart owning a 70% interest and each of the Arnolds owning a 15% interest. Trident Resources owned two well processing units (WPUs), each purchased for $300,000. In 2015, the Arnolds initiated this action seeking reformation of the Trident Resources’ member control and operating agreement to clarify the parties’ respective ownership interests. Following a bench trial, the court ordered the entry of a judgment confirming Lockhart’s ownership of a 70% interest and each of the Arnold’s 15% ownership interest in Trident Resources. Before the entry of the judgment, Lockhart informed the Arnolds he had received an offer from Black Butte Resources to purchase one of the WPUs for $300,000. The Arnolds consented to the sale, provided the proceeds were deposited into their attorney’s trust account. When it appeared Lockhart had failed to deposit the funds into the trust account, the Arnolds filed a motion seeking to discover the location of the WPU and the sale proceeds. Before the hearing on the Arnolds’ motion, Lockhart deposited $100,000 into the account. The trial court ordered Lockhart to provide information regarding the WPU sold and the date the remaining $200,000 would be deposited. Lockhart eventually deposited $200,000 into the trust account and filed an affidavit stating Black Butte had purchased the WPU and the WPU had been transferred to Black Butte. Subsequent to Lockhart filing his affidavit, the Arnolds learned the WPU had not been sold to Black Butte for $300,000, but had instead been sold to another party for $500,000. The Arnolds filed a motion requesting the court to find Lockhart in contempt and for the imposition of appropriate sanctions. At the hearing on the motion, Lockhart conceded his affidavit was false and stipulated to the entry of a finding of contempt. On appeal, Lockhart argued the district court’s order improperly imposed a punitive sanction for his contempt. The North Dakota Supreme Court concluded the circumstances necessary for the imposition of a punitive sanction were not present prior to the imposition of the sanction in this case. The Court was left with an insufficient record to review the appropriateness of the imposition of a remedial sanction in the amount ordered by the trial court. reverse and remand this case to the district court for further findings in support of the sanction imposed for Lockhart’s contempt. The trial court judgment was reversed and the matter remanded for further findings. View "Arnold, et al. v. Trident Resources, et al." on Justia Law

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The Supreme Judicial Court affirmed the decision of the Business and Consumer Docket affirming a decision of the Secretary of State that validated a direct initiative petition regarding the New England Clean Energy Connect Transmission Project (NECEC), holding that the Secretary of State properly validated the petition. On appeal, Delbert Reed claimed that the Secretary of State erred by (1) validating the petitions notarized by three notaries based on the Secretary of State's misinterpretation and misapplication of Me. Rev. Stat. 21-A, 9030E and Me. Rev. Stat. 954-A, and (2) failing to conduct a more thorough fraud investigation of the initiative campaign's signature-gathering process. The Supreme Court affirmed, holding (1) the Secretary of State did not err by declining, pursuant to sections 903-E and 954-A, to invalidate the petitions that were notarized by the notaries at issue; and (2) the Secretary of State reasonably determined that the broad assertions of fraud were insufficient grounds to launch an additional investigation of the entire campaign. View "Reed v. Secretary of State" on Justia Law

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Plaintiff-appellee Natural Gas Pipeline Company of America LLC (NGPL) operated two interstate natural gas pipelines that crossed property owned by Defendant-appellant Foster OK Resources LP (Foster). NGPL brought a condemnation action seeking four separate easements to have consistent access to operate and maintain the pipelines and to clear title issues involving the pipelines. Foster challenged NGPL's exercise of eminent domain and whether NGPL's taking met the legal standard of necessity. After review, the Oklahoma Supreme Court held NGPL could not contract away its right of eminent domain and was not prevented from seeking the easements at issue to operate and maintain the pipelines. NGPL's condemnation of Foster's property was for public use and met the legal standard of necessity. Furthermore, the Court held the issue of the necessity of a survey in computing just compensation owed to Foster was premature and could not be determined at this time. View "Natural Gas Pipeline Co. v. Foster OK Resources, LP" on Justia Law

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SPP, a Regional Transmission Organization (RTO), is authorized by the Commission to provide electric transmission services across a multi-state region. Pursuant to SPP's license-plate rate design, SPP is divided into different zones, and customers in each zone pay rates based on the cost of transmission facilities in that zone. The Eighth Circuit denied a petition for review brought by NPPD of FERC's approval of SPP's placement of Tri-State into Zone 17. The court held that substantial evidence supported the Commission's finding that Tri-State's placement into Zone 17 was just and reasonable. In this case, because the Commission stated plausible and articulable reasons for why the costs and benefits were comparable in this case, the court could not say that its cost-causation analysis was arbitrary and capricious. Furthermore, the Commission did not act arbitrarily and capriciously in deciding that Tri-State's placement into Zone 17 was just and reasonable. View "Nebraska Public Power District v. Federal Energy Regulatory Commission" on Justia Law

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The Supreme Court dismissed Appellant's appeals from orders of the Nebraska Public Service Commission (PSC) that granted applications requesting changes to existing boundaries so that the applicants could receive advanced telecommunications services from another service provider in lieu of service from Appellant, holding that Appellant's notices of intention to appeal were not timely filed with the PSC. The PSC entered orders in both cases on July 10, 2018. Appellant subsequently submitted motions for rehearing requesting that the PSC reconsider its orders. Each motion was file stamped as having been received by the PSC on July 23. On August 21, the PSC entered orders denying the motions for rehearing. On September 13, in each case, Appellant filed a notice of intention to appeal with the PSC. The Supreme Court dismissed the appeals for lack of jurisdiction, holding (1) based on the file stamps, the motions for rehearing were not filed within ten days of the effective date of the respective orders; (2) under Neb. Rev. Stat. 75-134.02, the motions did not suspend the time for filing a notice of intention to appeal; and (3) therefore, Appellant's notices of intention to appeal were filed beyond the thirty-day time limit allowed under section 75-136(2) to perfect appeals from the July 10 orders. View "In re Application No. C-4973 of Skrdlant" on Justia Law

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The Supreme Court held that the Minnesota Public Utilities Commission (MPUC) lacks the authority to require Otter Tail Power Company to amend an existing transmission cost-recovery rider (TCRR) approved under Minn. Stat. 216B.16, subd. 7b(b) to include the costs and revenues associated with two high-voltage interstate transmission lines, known as the Big Stone Access Transmission Lines (Big Stone Lines). In 2013, the MPUC approved Otter Tail's request for a TCRR for three transmission projects. In 2016, Otter Tail filed this general rate case with the MPUC seeking an annual-rate increase on its retail electricity sales to help offset company-wide investment costs and asserted that the costs and revenues associated with the Big Stone Lines should not be considered when setting the retail rates. The MPUC directed Otter Tail to amend the TCRR approved in 2013 to include the costs and revenues of the Big Stone Lines. The court of appeals reversed. The Supreme Court affirmed, holding that the MPUC does not have statutory authority to compel Otter Tail to include the Big Stone Lines in the TCRR. View "In re Application of Otter Tail Power Company for Authority to Increase Rates for Electric Service in Minnesota" on Justia Law

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The DC Circuit held that FERC's rejection of Gulf South's application for incremental-plus rates was arbitrary and capricious. The court held that FERC failed to justify the disparity between how materially identical shippers will pay dramatically different rates for the use of the same facilities. Furthermore, FERC's decision violated fundamental ratemaking principles—namely, that rates should generally reflect the burdens imposed and benefits drawn by a given shipper. Accordingly, the court vacated the order denying incremental-plus rates and remanded for further proceedings. The court denied Gulf South's petition for review in all other respects. View "Gulf South Pipeline Co. v. Federal Energy Regulatory Commission" on Justia Law