Justia Energy, Oil & Gas Law Opinion Summaries

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Midship Pipeline Company, L.L.C. challenged part of a Federal Energy Regulatory Commission (FERC) order directing an administrative law judge to determine the “reasonable cost” for Midship to complete remediation activities at Sandy Creek Farms in Oklahoma.The Fifth Circuit disagreed with the FERC, finding that the matter was ripe for appeal. Further, the Fifth Circuit determined that the FERC order directing an administrative law judge to determine the “reasonable cost” of remediation activities was ultra vires because the FERC lacked authority under the Natural Gas Act (NGA) to do so. Thus, the court held that the FERC's action was ultra vires and vacated that portion of the Commission's order. The court remanded the remaining portion of the order to the FERC for further proceedings. View "Midship Pipeline v. FERC" on Justia Law

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The Supreme Court affirmed in part and reversed in part rulings made by the State Corporation Commission during its triennial review of Appalachian Power Company's rates, terms, and conditions pursuant to Va. Code 56.585.1, holding that remand was required for further proceedings.Specifically, the Supreme Court held that the Commission (1) erred in finding that it was not reasonable for Appalachian to record its costs associated with the early retirement of its coal-fired power plants as asset impairments; (2) did not err when it implemented depreciation rates from the revised 2017 Depreciation Study for the years 2018 and 2019 in the triennial review; (3) did not err by refusing to apply Va. Code 56-585.1(E) retroactively; and (4) did not err in finding Appalachian's affiliate costs under an Inter-Company Power Agreement with Ohio Valley Electric Cooperation to be reasonable. View "Appalachian Power Co. v. State Corp. Commission" on Justia Law

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On January 20, 2021, Acting Secretary of the Interior Scott de la Vega suspended delegated authority “[t]o issue any onshore or offshore fossil fuel authorization . . . .” On January 27, 2021, President Biden issued Executive Order 14,008.   The district court issued a nationwide preliminary injunction enjoining President Biden and various Department of Interior officials (the “Government”) from pausing oil and gas lease sales. The Fifth Circuit vacated and remanded, holding that the district court’s order and accompanying memorandum lack specificity. The court explained that to comply with Rule 65(d) a district court’s order should state its terms specifically and describe in reasonable detail the conduct restrained or required. The court wrote that the present injunction fails to meet Rule 65(d) requirements. View "State of Louisiana v. Biden" on Justia Law

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Delaware and Hoboken, New Jersey each sued the oil companies in state court for state-law torts. By “produc[ing], marketing, and s[e]l[ling] fossil fuels,” they claimed, the oil companies worsened climate change. They sought damages for the environmental harm they had suffered and injunctions to stop future harm. The oil companies removed the cases to federal district courts. The suits’ broad focus on “global climate change,” the companies reasoned, “demand[ed] resolution by a federal court under federal law.”. They argued the tort claims arose under federal law, either because they were inherently federal, not state claims, or they raised substantive federal issues; the suits related to producing oil on the Outer Continental Shelf; and the oil companies were acting under federal officers.The Third Circuit affirmed the remands of the cases to state courts, noting that four other circuits have refused to allow the oil companies to remove similar state tort suits to federal court. These lawsuits neither are inherently federal nor raise substantial federal issues that belong in federal court. Oil production on the Outer Continental Shelf is too many steps removed from the burning of fuels that causes climate change. Delaware and Hoboken are not suing over actions that the companies were directed to take by federal officers. View "City of Hoboken v. Chevron Corp" on Justia Law

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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