Justia Energy, Oil & Gas Law Opinion Summaries

At issue in this case was the meaning of the term “motor fuel taxes” as used in the Georgia Constitution, Article III, Sec. IX, Par. IV(b). A trucking industry association and three individual motor carriers challenged local sales and use taxes on motor fuels, the revenues of which were not used solely for public roads and bridges. They argued that these taxes fell within the meaning of “motor fuel taxes” under the Motor Fuel Provision and, therefore, the revenues from these taxes (or an amount equal to that revenue) had to be allocated to the maintenance and construction of public roads and bridges. The Georgia Supreme Court affirmed the dismissal of the plaintiffs’ complaint because the history and context of the Motor Fuel Provision revealed that “motor fuel taxes” were limited to per-gallon taxes on distributors of motor fuel, and did not include sales and use taxes imposed on retail sales of motor fuels. View "Georgia Motor Trucking Assn. v. Georgia Dept. of Rev." on Justia Law

Stephens Production Company sought to condemn underground natural gas storage easements and surface easements to complete an underground natural gas storage facility on and underneath approximately 900 acres of mostly rural property in Haskell County. Approximately 140 Defendants were named in the Petition. Stephens Production had previously offered such Defendants "just market value" for their respective interests, but the Defendants refused the offers. The trial court appointed three commissioners to value just compensation due for each Defendant listed in the Petition. All Defendants except one, appellant Royce Larsen, settled with Stephens Production. The Commissioners valued Larsen's property taken and the damage to the remainder at $12,400.00. Larsen objected to this amount, and his case proceeded to trial. Larsen's expert testified the just compensation value was approximately $419,000.00; Stephens Production's expert valued the just compensation at $9,000.00. The trial court determined that just compensation for the property was $9,000.00. Without any evidence from Larsen regarding the reasonable probability of combination or the market demand for underground gas storage in the area, the highest and best use of the property was the use to which it was subject at the time of the taking - natural resource, agricultural, and recreational use. The Supreme Court concluded the record supported the trial court's valuation of just compensation at $9,000.00. View "Stephens Production Co. v. Larsen" on Justia Law

In February 2012, the Pennsylvania General Assembly passed Act 13, a "sweeping" law regulating the oil and gas industry, which, inter alia, repealed parts of the existing Oil and Gas Act of 1984 codified in Title 58 of the Pennsylvania Consolidated Statutes, and created six new chapters therein. The specific provisions of two of which, Chapters 32 and 33, were at issue in this appeal. The questions raised in this appeal involved Sections 3218.1, 3222.1, and 3241 of Chapter 32, and Sections 3305 through 3309 of Chapter 33. This appeal was consolidated from the decision of the Commonwealth Court following the Supreme Court's remand to that court to resolve open issues pursuant to a mandate in "Robinson Township v. Commonwealth of Pennsylvania," (83 A.3d 901 (2013) (“Robinson II”)). In that case, the Supreme Court struck the entirety of Sections 3215(b), 3215(d), 3303, and 3304 of Act 13 of Feb. 14, 2012, P.L. 87 (“Act 13”), as violative of the Pennsylvania Constitution, and the Court enjoined the application and enforcement of Section 3215(c) and (e) and Sections 3305 through 3309, to the extent that they implemented or enforced the provisions of Act 13 which was invalidated. The Supreme Court affirmed the portion of the order the Commonwealth Court issued on remand, “Robinson III”, holding that Sections 3305 through 3309 were not severable from Sections 3303 and 3304, and the Court also upheld its conclusion that the passage of Act 13 did not violate Article III, Section 3 of the Pennsylvania Constitution (the “single subject rule”). However, because the Supreme Court concluded that Sections 3218.1, 3222.1(b)(10) and 3222.1(b)(11) contravened Article III, Section 32 of the Pennsylvania Constitution, due to the Court's determination that they constituted special legislation, the Court reversed the Commonwealth Court’s order upholding these sections, and enjoined their further application and enforcement. In that regard, the Supreme Court stayed its mandate with respect to Section 3218.1 for 180 days in order to give the General Assembly sufficient time to enact remedial legislation. Further, because the Court determined that Section 3241 was unconstitutional on its face, it reversed the Commonwealth Court’s order and directed this provision be stricken as well, and enjoined from further application and enforcement. View "Robinson Twp, et al v. Public Utility Commission" on Justia Law

Carbon County Resource Council and Northern Plains Resources Council (collectively, Resource Councils) challenged the Montana Board of Oil and Gas Conservation’s (the Board) approval of well stimulation activities at an exploratory gas well in Carbon County. Specifically, Resource Councils claimed that the Board’s permitting process violated their constitutional right to meaningfully participate in government decisions. The district court concluded that Resource Councils’ constitutional challenge was not ripe for judgment and granted summary judgment in favor of the Board. The Supreme Court reversed, holding (1) Resource Councils’ claims are ripe for judicial review; but (2) the Board did not violate Resource Councils’ right to participate in its consideration of the permit at issue in this case. View "Carbon County Res. Council v. Bd. of Oil & Gas Conservation" on Justia Law

Defendants, the Donziger Firm and others, appealed the district court's grant of certain relief against them in favor of Chevron, in connection with an $8.646 billion judgment obtained against Chevron in Ecuador by the Lago Agrio Plaintiffs represented by the Donziger Firm. The judgment award was for environmental damage in connection with the Texaco oil exploration activities in Ecuador from the 1960s-1990s. On appeal, defendants challenge the district court's judgment, arguing principally that the action should have been dismissed on the ground that Chevron lacks Article III standing, and/or that the judgment should be reversed on the grounds, inter alia, that it violates principles of international comity and judicial estoppel, exceeds any legal authorization for equitable relief, and was entered without personal jurisdiction over defendants other than Donziger and his Firm. The court found no basis for dismissal or reversal in the absence of challenges to the district court's factual findings; considering the express disclaimers by the Ecuadorian appellate courts of their own jurisdiction to "hear and resolve" the above charges of corruption, "preserving the parties' rights" to pursue those charges in actions in the United States; and considering the district court's confinement of its injunction to a grant of in personam relief against the three defendants-appellants without disturbing the Ecuadorian judgment. Accordingly, the court affirmed the judgment. View "Chevron Corp. v. Donziger" on Justia Law

Plaintiffs filed suit against the state claiming, inter alia, that the prohibitions in the Minnesota Next Generation Energy Act, Minn. Stat. 216H.03, subd. 3(2) and (3), violate the Commerce Clause. The statute is intended to reduce statewide power sector carbon dioxide emissions by prohibiting utilities from meeting Minnesota demand with electricity generated by a new large energy facility in a transaction that will contribute to or increase statewide power sector carbon dioxide emissions. The district court granted plaintiffs summary judgment and a permanent injunction. The court concluded that plaintiffs meet the Article III standing requirement where Plaintiff Basin can demonstrate a probable economic injury resulting from governmental action; plaintiffs' claims are ripe for judicial review because the issues are predominately legal, and the challenged prohibitions are currently causing hardship by interfering with the ability of plaintiffs such as Basin to plan, invest in, and conduct their business operations; the district court did not err in declining to abstain under Railroad Commission of Texas v. Pullman Co.; the district court correctly concluded that the challenged prohibitions have the practical effect of controlling conduct beyond the boundaries of Minnesota; the statute has extraterritorial reach and will impose Minnesota’s policy of increasing the cost of electricity by restricting use of the currently most cost-efficient sources of generating capacity from prohibited sources anywhere in the grid, absent Minnesota regulatory approval or the dismantling of the federally encouraged and approved MISO transmission system; Minnesota may not do this without the approval of Congress; and the district court did not err by enjoining the defendant state officials from enforcing the prohibitions. The court dismissed plaintiffs' cross-appeal as moot. View "North Dakota v. Heydinger" on Justia Law

The citizens of home-rule City of Longmont voted in favor of a moratorium on hydraulic fracturing and the storage of its waste products within city limits. Thereafter, the Colorado Oil and Gas Association (the Association), an industry organization, sued Longmont seeking a declaratory judgment invalidating, and a permanent injunction enjoining Longmont from enforcing, Article XVI. "In a lengthy and thorough written order," the district court granted these motions, ruling that the Oil and Gas Conservation Act preempted Longmont’s bans on fracking and the storage and disposal of fracking waste. Longmont and the citizen intervenors argued on appeal to the Supreme Court that: (1) the district court erred in its preemption analysis; and (2) the inalienable rights provision of the Colorado Constitution trumped any preemption analysis and required the Supreme Court to conclude that ArticleXVI superseded state law. Finding no reversible error, the Supreme Court affirmed the district court's judgment. View "City of Longmont v. Colo. Oil and Gas Ass'n" on Justia Law

The citizens of home-rule city Fort Collins voted in favor of a moratorium on hydraulic fracturing and the storage of its waste products within city limits. The Colorado Oil and Gas Association (the Association), an industry organization, sued Fort Collins and requested: (1) a declaratory judgment declaring that the Oil and Gas Conservation Act, and the rules and regulations promulgated pursuant thereto, preempted Fort Collins’s fracking moratorium; and (2) a permanent injunction enjoining the enforcement of the moratorium. The Association subsequently moved for summary judgment on its declaratory judgment claim, and Fort Collins filed a cross-motion for summary judgment, asking the district court to find that the moratorium was not preempted by state law. The Supreme Court concluded that "fracking is a matter of mixed state and local concern," Fort Collins’s fracking moratorium was subject to preemption by state law. Furthermore, the Court concluded that Fort Collins’s five-year moratorium on fracking and the storage of fracking waste operationally conflicted with the effectuation of state law. Accordingly, the Court held that the moratorium was preempted by state law and was, therefore, invalid and unenforceable. The district court’s order was affirmed, and the matter remanded for further proceedings. View "City of Fort Collins v. Colo. Oil and Gas Ass'n" on Justia Law

The Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over interstate wholesale electricity sales. States regulate retail sales. In states that have deregulated their energy markets, “load serving entities” (LSEs) purchase wholesale electricity from generators for delivery to retail consumers. PJM, which manages segments of the electricity grid, operates an auction to identify need for new generation and to accommodate long-term contracts. PJM predicts demand for three years and assigns a share of that demand to each participating LSE. Producers enter bids. PJM accepts bids until it purchases enough capacity to satisfy anticipated demand. All accepted sellers receive the highest accepted rate (clearing price). LSEs then must purchase, from PJM, electricity to satisfy their assigned share. FERC regulates the auction to ensure a reasonable clearing price. Concerned that the auction was not encouraging development of sufficient new in-state generation, Maryland enacted a program, selected CPV to construct a new power plant and required LSEs to enter into 20-year contracts with CPV. Under the contract, CPV sells its capacity to PJM through the auction, but—through mandated payments from LSEs—receives the state price rather than the clearing price. The district court issued a declaratory judgment holding that Maryland’s program improperly sets CPV's rate for interstate wholesale capacity sales to PJM. The Fourth Circuit and Supreme Court affirmed. Maryland’s program is preempted because it disregards the rate FERC requires under its exclusive authority over interstate wholesale sales, 16 U.S.C. 824(b)(1). FERC has approved PJM’s capacity auction as the sole rate-setting mechanism for those sales. Maryland attempts to guarantee CPV a rate distinct from the clearing price, contrary to the Federal Power Act’s division of authority; states may not seek to achieve ends, however legitimate, through regulatory means that intrude on FERC’s authority. View "Hughes v. Talen Energy Mktg., LLC" on Justia Law

Trona is a sodium carbonate compound that is processed into soda ash or baking soda. Because oil and gas development posed a risk to the extraction of trona and trona worker safety, the Bureau of Land Management (BLM), which manages the leasing of federal public land for mineral development, indefinitely suspended all oil and gas leases in the mechanically mineable trona area (MMTA) of Wyoming. The area includes 26 pre-existing oil and gas leases owned by Barlow. Barlow filed suit, alleging that the BLM’s suspension of oil and gas leases constituted a taking of Barlow’s interests without just compensation and constituted a breach of both the express provisions of the leases and their implied covenants of good faith and fair dealing. The Federal Circuit affirmed the Claims Court’s dismissal of the contract claims on the merits and of the takings claim as unripe. BLM has not repudiated the contracts and Barlow did not establish that seeking a permit to drill would be futile. View "Barlow & Haun, Inc. v. United States" on Justia Law