Justia Energy, Oil & Gas Law Opinion Summaries

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Chevron U.S.A. Inc. intends to decommission two oil platforms located off the coast of California. The activity of those platforms is generally subject to the Clean Air Act. Chevron asked the Environmental Protection Agency for guidance on whether, as the process of decommissioning the two oil platforms moves forward, the platforms will cease to qualify as regulated sources under the Clean Air Act. EPA responded in a letter to Chevron. Unsatisfied with the views set out in EPA’s letter, Chevron now seeks judicial review of EPA’s response.The DC Circuit dismissed Chevron’s petition for review. The court wrote that it does not reach the merits of Chevron’s petition for review. In the circumstances of this case, the Clean Air Act’s venue provision allows for judicial review in this court only if EPA’s challenged action is “nationally applicable,” as opposed to “locally or regionally applicable.” 42 U.S.C. Section 7607(b)(1). The court concluded that EPA’s response letter is locally or regionally applicable, and that venue over Chevron’s challenge lies exclusively in the United States Court of Appeals for the Ninth Circuit. View "Chevron U.S.A. Inc. v. EPA" on Justia Law

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Finite owns 90.9% of Orient #1, an abandoned Illinois coal mine; the other 9.1% belongs to Royal. In 2004, Keyrock's predecessor acquired an interest in Orient #1 to extract coal mine methane from its section of the property, drilled wells, and, in 2007, obtained a vacuum permit from the Illinois Department of Natural Resources. Finite discovered the pump’s use in 2018 after a test revealed that coal mine methane had been drained extensively from Orient #1. Finite unsuccessfully petitioned the Department for compulsory unitization of the parties’ properties, to require Keyrock to share its methane production with Finite.Finite sued, alleging conversion, trespass, accounting, and common law unitization, and sought to enjoin the use of a vacuum pump. The district court granted the defendants summary judgment, finding that, under the rule of capture (gas that migrates is subject to recovery and possession by the holder of the gas estate on the property to which the gas migrates), the methane could not be owned until extracted regardless of whether extraction occurred by means of a vacuum pump. Finite’s claims hinged on ownership, so the rule of capture foreclosed Finite’s claims.The Seventh Circuit affirmed. Absent illegality, the Department’s issuance of the permit suggests that the use of the vacuum pump to extract methane did not violate Finite’s correlative rights (imposing a duty on owners not to waste natural resources intentionally or negligently as to injure their neighbor).. View "Finite Resources, Ltd. v. DTE Methane Resources, LLC" on Justia Law

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The Supreme Court affirmed the decision of the Ohio Power Siting Board to approve the application of Icebreaker Windpower, Inc. for a certificate of environmental compatibility and public need to build a six-turbine wind-powered electric-generation facility in Lake Erie, holding that Appellants did not meet their burden of demonstrating that the Board's decision was against the manifest weight of the evidence.Specifically, the Supreme Court held (1) there was sufficient evidence in the record before the Board for it to determine the nature of the probable environmental impact of the project under Ohio Rev. Code 4906.10(A)(2) and whether the project represented the minimum adverse environmental impact under Ohio Rev. Code 4906.10(A)(3); and (2) the Board did not err in determining that it lacked jurisdiction to consider the residents' public-trust argument. View "In re Application of Icebreaker Windpower, Inc." on Justia Law

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The Oglala Sioux Tribe and its nonprofit association Aligning for Responsible Mining seek a review of the Nuclear Regulatory Commission’s decision to grant Powertech (USA), Inc., a source material license to extract uranium from ore beds in South Dakota. The Tribe maintains that the Commission failed to meet its obligations under the National Environmental Policy Act and the National Historic Preservation Act.   The DC Circuit denied the Tribe’s petition because the Commission adequately complied with the relevant statutory and regulatory requirements. The court explained that the Tribe failed to demonstrate any NEPA deficiencies that require setting aside the Commission’s decisions.   First, the Tribe argues the agency did not adequately consult with the Tribe. The Tribe’s refusal to participate in the 2013 Survey and its challenges to the opportunity the Tribe was, in fact, afforded. The Commission satisfied its consultation obligations under the NHPA. Second, the Tribe maintains the agency impermissibly failed to survey the Dewey-Burdock area for the Tribe’s historic properties. NHPA regulations permit an agency to conduct a survey as part of its efforts to identify historic properties, but agencies are free to use a survey or some other method to gather information. Finally, the Tribe suggests the agency impermissibly postponed identifying historic properties until after Powertech had begun operations. NHPA regulations, however, expressly contemplate this approach. View "Oglala Sioux Tribe v. NRC" on Justia Law

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PJM Interconnection, LLC (“PJM”)  authorized a series of upgrades to facilities owned by the Public Service Electric and Gas Company (“PSE&G”). PSE&G’s Bergen and Linden switching stations; a second involved repairs to and around PSE&G’s Sewaren substation. Together, these two projects cost around $1.3 billion. Initially, PJM assigned most of the projects’ costs to entities that reroute electricity from northern New Jersey into the New York market. Thereafter, the New York-based entities gave up their rights to withdraw electricity from New Jersey, and PJM reassigned their costs to PSE&G. The Federal Energy Regulatory Commission (“FERC” or “the Commission”) approved both rounds of cost allocations. The petitions for review in these two cases are about whether these cost allocations were “just and reasonable” under the Federal Power Act, and whether FERC’s orders were “arbitrary [and] capricious” in violation of the Administrative Procedure Act (“APA”).   The DC Circuit denied the petitions for review in New Jersey Board v. FERC, and granted in part and denied in part the petitions in ConEd v. FERC. In denying the New York entities’ applications for rehearing of both the First and Second Linden Complaint Orders, the court explained that FERC failed to adequately distinguish its decision in Artificial Island from its treatment of the Bergen and Sewaren projects. Further, FERC upheld the de minimis threshold in its orders denying rehearing of the First and Second Linden Complaint Orders and the ConEd Complaint Order. The court, therefore, vacated FERC’s denial of Linden’s two complaints. The court also vacated its denial of ConEd’s complaint and remanded for further proceedings solely on the de minimis issue. View "New Jersey Board of Public Utilities v. FERC" on Justia Law

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The Federal Energy Regulatory Commission is responsible for ensuring that interstate electricity rates are “just and reasonable.” Midcontinent Independent System Operator, Inc. (“MISO”) administers the electric grid on behalf of the companies that own transmission lines. Those transmission owners invested money to build their transmission lines, and MISO must charge customers electricity transmission rates that provide those companies an appropriate return on their investment. That return-on-equity component of the transmission rates, which we’ll just call the Return, is at issue in this case. In this case, a group of customers thought MISO provided transmission owners a too-generous Return. They asked FERC to reduce that aspect of MISO’s rates. FERC did. In the process, it completely overhauled its approach to setting an appropriate Return. Both the customers and transmission owners challenged several aspects of the FERC proceedings as unlawful or arbitrary and capricious.   The DC Circuit agreed with the customers that FERC’s development of the new Return methodology was arbitrary and capricious, thus the court vacated its rate-determination orders and remanded for further proceedings. Because the other challenged aspects of FERC’s orders flow from FERC’s rate determination, the court did not reach them. The court explained that FERC Failed to offer a reasoned explanation for its decision to reintroduce the risk-premium model after initially, and forcefully, rejecting it. Because FERC adopted that significant portion of its model in an arbitrary and capricious fashion, the new Return produced by that model cannot stand. View "MISO Transmission Owners v. FERC" on Justia Law

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The Pennsylvania Environmental Defense Foundation (“PEDF”) challenged for the third time, the use of proceeds from oil and gas leasing on the Commonwealth’s forest and park lands as violative of Article I, Section 27 of the Pennsylvania Constitution, also known as the Environmental Rights Amendment. (“Section 27” or “ERA”). In previous trips before the Pennsylvania Supreme Court, PEDF challenged several 2009-2025 budgetary provisions enacted challenging the use of proceeds from oil and gas leasing on the Commonwealth’s forest and park lands as violative of Article I, Section 27 of the Pennsylvania Constitution, also known as the Environmental Rights Amendment. (“Section 27” or “ERA”). In the first two cases, PEDF challenged several 2009-2015 budgetary provisions enacted in the wake of dramatic increases in oil and gas revenue resulting from Marcellus Shale exploration in Pennsylvania. Applying trust principles, the Pennsylvania Supreme Court held that the budgetary provisions violated Section 27 by utilizing the oil and gas revenue for non-trust purposes via transfers to the General Fund. PEDF v. Commonwealth, 161 A.3d 911 (Pa. 2017) (“PEDF II”); PEDF v. Commonwealth, 255 A.3d 289 (Pa. 2021) (“PEDF V”). The underlying case here was one for a declaratory judgment, and named the Commonwealth and Governor as parties. Here, PEDF raised numerous constitutional challenges to provisions of the General Appropriations Act of 2017 and 2018, as well as the 2017 Fiscal Code amendments, all of which were enacted after the Supreme Court’s decision in PEDF II. After review , the Supreme Court affirmed the Commonwealth Court, whilst rejecting that court;s analysis derived from PEDF III. View "PA Enviro Defense Fdn, Aplt. v. Commonwealth" on Justia Law

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The Federal Energy Regulatory Commission approved the merger of two electrical grid operators, Louisville Gas & Electric Company and Kentucky Utilities Company. To protect customers from the merger’s potential anticompetitive effects, the Commission required the combined company (collectively, “Louisville Utilities”) to join a then-new regional electrical grid organization, the Midwest Independent Transmission System Operator, Inc. (“MISO”).   Louisville Utilities asked the Commission to end its depancaking responsibilities under Schedule 402. Most of the customers protected by Schedule 402 objected. The Commission largely approved the request on the ground that sufficient competition in electricity sales existed to provide Louisville Utilities customers alternative competitive sources for electricity even without depancaking. At the same time, the Commission took steps to protect customers that had reasonably relied on depancaking under Schedule 402 in their contracting and investing decisions. A group of customers previously protected by Schedule 402 (collectively, “Municipal Customers”) and Louisville Utilities both petitioned for a review of the Commission’s orders.   The DC Circuit vacated the Commission’s decision to end depancaking under Schedule 402. While the Commission adequately supported its conclusion that customers would continue to enjoy a competitive market without depancaking, it was arbitrary for the agency to completely ignore the significant effect that duplicative charges would have on customer rates. The court also concluded that the Commission’s decisions protecting reliance interests were reasonable, with two exceptions. As a result, the court granted the petitions for review in part and vacated and remanded the challenged orders in part. View "Kentucky Municipal Energy Agency v. FERC" on Justia Law

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In three FERC orders, FERC found that the State Board had engaged in coordinated schemes with the Nevada Irrigation District, the Yuba County Water Agency, and the Merced Irrigation District (“Project Applicants”) to delay certification and to avoid making a decision on their certification requests. According to FERC, the State Board had coordinated with the Project Applicants to ensure that they withdrew and resubmitted their certification requests before the State’s deadline for action under Section 401 in order to reset the State’s one-year period to review the certification requests. FERC held that, because of that coordination, the State Board had “fail[ed] or refuse[d] to act” on requests and therefore had waived its certification authority under Section 401 of the Clean Water Act. See 33 U.S.C. Section 1341(a)(1).The Ninth Circuit granted petitions for review, and vacated orders issued by FERC. The court held that FERC’s findings of coordination were unsupported by substantial evidence. Instead, the evidence showed only that the State Board acquiesced in the Project Applicants’ own unilateral decisions to withdraw and resubmit their applications rather than have them denied. The court held that even assuming that FERC’s “coordination” standard was consistent with the statute, the State Board’s mere acquiescence in the Project Applicants’ withdrawals and resubmissions could not demonstrate that the State Board was engaged in a coordinated scheme to delay certification. Accordingly, FERC’s orders could not stand. The court remanded for further proceedings. View "CALIFORNIA STATE WATER RESOURC V. FERC" on Justia Law

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The Supreme Court affirmed the decision of the South Dakota Public Utilities Commission (PUC) approving the application of Crowned Ridge Wind, LLC for a permit to construct a wind energy farm in northeast South Dakota, holding that the PUC acted within its discretion in this case.After a contested hearing, the PUC issued a written decision approving the permit. Two individuals who lived in rural areas near the project and had intervened to oppose Crowned Ridge's application sought review. The circuit court affirmed. The Supreme Court affirmed, holding (1) neither of the Intervenors' evidentiary claims were sustainable; and (2) even if the Intervenors' claims were preserved for appeal, the PUC acted within its discretion when it denied the Intervenors' challenges to certain testimony. View "Christenson v. Crowned Ridge Wind, LLC" on Justia Law