Justia Energy, Oil & Gas Law Opinion Summaries

The case involves a dispute over the construction of a substation by Park City Wind LLC (PCW) that will connect an offshore wind farm to the New England electric grid. Jacqueline Johnson, the petitioner, lives near the proposed substation site and raised concerns about the noise impact from the substation, which includes loud step-up transformers. PCW presented expert testimony and reports to the Energy Facilities Siting Board (the board) indicating that design features would mitigate the noise impact, keeping it within the allowable increase of ten A-weighted decibels (dBA) set by the Department of Environmental Protection (DEP).The board approved PCW's petition to construct the substation, subject to several conditions, including preconstruction and postconstruction reviews to ensure the noise levels at Johnson's home would not exceed an eight dBA increase. Johnson was allowed to participate fully in the administrative process, including discovery, briefing, and cross-examination of PCW's experts. The board required PCW to confirm that the predicted noise levels would not be exceeded once the equipment specifications were known and to implement additional noise mitigation measures if necessary.The Supreme Judicial Court of Massachusetts reviewed the case. Johnson argued that the board's decision was not supported by substantial evidence because it relied on aggressive sound level design specifications for yet-to-be-manufactured equipment. The court concluded that Johnson failed to meet the heavy burden required to overturn the board's decision, which was supported by substantial evidence, including expert testimony and industry-standard sound modeling. The court also found that the board's conditional approval, requiring preconstruction and postconstruction compliance filings, was lawful and within the board's statutory authority. The court affirmed the board's decision. View "Johnson v. Energy Facilities Siting Board" on Justia Law

Sentinel Energy Center, LLC owns a power plant in North Palm Springs and hired DGC Operations, LLC (OPS) to manage and operate the plant. In 2017, during annual maintenance, five OPS employees failed to follow the new depressurization protocol for the fuel filter skid, leading to an explosion that killed Daniel Collins. Collins's family sued Diamond Generating Corporation (DGC), which has a 50% indirect ownership in Sentinel and is the parent company of OPS, claiming DGC's negligence in safety oversight led to Collins's death.The Superior Court of Riverside County denied DGC's request to instruct the jury on the Privette doctrine, which generally shields a hirer from liability for injuries to an independent contractor's employees. The jury found DGC 97% at fault and awarded the plaintiffs over $150 million. DGC's motions for nonsuit and judgment notwithstanding the verdict, based on the Privette doctrine, were also denied.The Court of Appeal of the State of California, Fourth Appellate District, Division Three, reviewed the case. The court declined to grant judgment notwithstanding the verdict to DGC, citing unresolved factual questions about whether DGC retained control over the plant and negligently exercised that control. However, the court found that the trial court erred in not instructing the jury on the Privette doctrine and its exceptions, which could have led to a more favorable outcome for DGC. Consequently, the appellate court reversed the judgment and remanded the case for a new trial with instructions to include the Privette doctrine and its exceptions. View "Collins v. Diamond Generating Corp." on Justia Law

The State of Indiana approved a plan to retire a coal-fired facility and replace it with wind and solar energy sources, supplemented by two new natural gas turbines to ensure grid reliability. The Federal Energy Regulatory Commission (FERC) approved a natural gas pipeline to serve these turbines. The Citizens Action Coalition of Indiana challenged FERC’s approval, arguing that FERC’s environmental analysis was unreasonable and inconsistent with the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA). The core claim was that FERC should have analyzed non-gas alternatives before approving the pipeline.The Indiana Utility Regulatory Commission initially denied CenterPoint Energy’s proposal for an 850-megawatt natural gas unit due to inadequate consideration of alternatives. CenterPoint then modified its plan to include wind generation and applied to build two smaller gas-fired turbines, which the Indiana Commission approved. CenterPoint contracted with Texas Gas Transmission for a 24-mile pipeline to supply natural gas to the new units. Citizens Action intervened in the FERC proceeding, raising environmental concerns. FERC prepared an environmental impact statement and approved the pipeline. Citizens Action’s request for rehearing was denied by operation of law, leading to the current petition for review.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that FERC acted lawfully and reasonably in its environmental analysis and public convenience and necessity determination. FERC was not required to consider non-gas alternatives outside its jurisdiction and properly identified the project’s purpose as supporting CenterPoint’s new natural gas units. The court also found that FERC’s use of emissions percentages and the absence of a significance label were reasonable and consistent with NEPA. The petition for review was denied. View "Citizens Action Coalition of Indiana, Inc. v. FERC" on Justia Law

NorthWestern Corporation and the Montana Department of Environmental Quality (DEQ) appealed a District Court order vacating an air quality permit granted to NorthWestern for a natural-gas-fueled power plant near Laurel, Montana. The District Court found DEQ's analysis under the Montana Environmental Policy Act (MEPA) inadequate regarding the project's lighting impacts and greenhouse gas emissions.The Thirteenth Judicial District Court vacated the permit, ruling that DEQ's noise analysis was not arbitrary or capricious but failed to take a "hard look" at the facility's lighting impacts and greenhouse gas emissions. The court also found that DEQ did not comply with MEPA requirements in its environmental assessment (EA) and remanded the EA to DEQ for further analysis.The Supreme Court of the State of Montana reviewed the case. It affirmed the District Court's ruling that DEQ's noise analysis was adequate but agreed that DEQ failed to properly analyze the lighting impacts. The Supreme Court also held that DEQ must analyze greenhouse gas emissions within Montana as part of its MEPA review, despite the absence of specific regulatory standards for greenhouse gases under the Clean Air Act of Montana.However, the Supreme Court reversed the District Court's vacatur of the permit, citing the need for specific findings under § 75-1-201(6)(c)(ii), MCA, before granting such equitable relief. The case was remanded to DEQ for further MEPA analysis in accordance with the Supreme Court's opinion, with the permit reinstated pending this additional review. View "MEIC v. DEQ" on Justia Law

Phelps Oil and Gas, LLC, leased land to Noble Energy, Inc., which produces natural gas and pays royalties to Phelps. Phelps filed a class action lawsuit against Noble, alleging underpayment of royalties. The dispute centers on the interpretation of a prior settlement agreement, the Holman Settlement, which outlines the royalty calculation method. Phelps claims Noble failed to pay royalties on $34 million from a DCP Midstream, LP audit and $17.5 million that DCP promised to invest in infrastructure.The United States District Court for the District of Colorado granted summary judgment in favor of Noble. The court found that Noble was not obligated to pay royalties on the $34 million because DCP never returned those proceeds to Noble. Regarding the $17.5 million, the court held that Phelps failed to show that the promise had value to Noble beyond increased production and resulting revenues.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court affirmed the district court's decision, agreeing that Phelps did not present evidence that DCP returned any proceeds to Noble related to the $34 million. The court also upheld the summary judgment on the $17.5 million claim, finding that Phelps could not demonstrate that the promise provided any additional benefit to Noble aside from increased production and revenues, which Noble had already accounted for in its royalty payments.The Tenth Circuit concluded that Phelps failed to create a genuine issue of material fact regarding Noble's obligation to pay additional royalties under the Holman Settlement. The court affirmed the district court's judgment in favor of Noble Energy, Inc. View "Phelps Oil and Gas v. Noble Energy" on Justia Law

Kenneth Hahn, who owns a non-participating royalty interest (NPRI) in a mineral estate leased by ConocoPhillips, disputed the amount of royalty owed to him. Hahn's NPRI was initially set at a fixed 1/8 share of production. The case centered on whether this share was reduced when Hahn ratified a subsequent lease by the mineral estate owner, which included its own royalty term, or when he signed a stipulation and cross-conveyance agreeing to accept a different royalty.The trial court denied Hahn's motion for partial summary judgment and granted the Gipses' motion, declaring that Hahn's NPRI was a floating fraction of the landowner's royalty. Hahn appealed, and the Court of Appeals reversed, holding that Hahn's NPRI was a fixed 1/8 share and that the stipulation could not alter this interest. The case was remanded for further proceedings. On remand, the trial court again ruled in favor of ConocoPhillips, declaring that Hahn's ratification of the lease subjected his NPRI to the lease's royalty provision. Hahn appealed again.The Supreme Court of Texas reviewed the case and agreed with the Court of Appeals that Hahn's ratification of the lease did not reduce his NPRI from a fixed to a floating fraction. However, the Supreme Court disagreed with the Court of Appeals regarding the stipulation and cross-conveyance. The Court held that the stipulation did effectively reduce Hahn's NPRI by conveying part of it to the mineral fee owner. Consequently, the Supreme Court reversed the Court of Appeals' judgment in part and rendered judgment that ConocoPhillips correctly calculated Hahn's share of proceeds from the production on the pooled unit. View "CONOCOPHILLIPS COMPANY v. HAHN" on Justia Law

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