Justia Energy, Oil & Gas Law Opinion Summaries

David W. Cromwell and Anadarko E&P Onshore, LLC are co-tenants in an oil-and-gas lease on land in Loving County, Texas. Cromwell obtained his interests in 2009 through two leases, one with Carmen Ferrer and one with the Tantalo Trust. Both leases contained habendum clauses that extended the lease terms as long as minerals were produced from the land. Anadarko, which already had a working interest and had drilled wells on the land, continued to produce minerals. Cromwell repeatedly sought to participate in production and enter a joint operating agreement with Anadarko, but Anadarko did not respond. Despite this, Anadarko sent Cromwell joint interest invoices and treated him as a working interest owner.The trial court granted summary judgment in favor of Anadarko, ruling that Cromwell's leases terminated at the end of their primary terms because he did not personally cause production. The Court of Appeals for the Eighth District of Texas affirmed, holding that Cromwell was required to take action to cause production to keep his leases alive, based on the court's previous decision in Cimarex Energy Co. v. Anadarko Petroleum Corp.The Supreme Court of Texas reviewed the case and held that the plain language of the habendum clauses did not require Cromwell to personally produce minerals to maintain his interests. The court emphasized that the leases did not specify who must produce the minerals and that production in commercial paying quantities had continuously occurred on the land. Therefore, Cromwell's leases did not terminate. The court disapproved of previous decisions that required lessees to personally produce minerals when the lease language did not explicitly state such a requirement. The judgment of the court of appeals was reversed, and the case was remanded to the trial court to address the parties' remaining arguments. View "CROMWELL v. ANADARKO E&P ONSHORE, LLC" on Justia Law

This case involves a dispute between American Midstream (Alabama Intrastate), LLC (AMID) and Rainbow Energy Marketing Corporation (Rainbow) over a contract (MAG-0005) for the transportation and balancing of natural gas. Rainbow had contracts to transport gas through two interconnected pipelines, the Transco and the Magnolia, and used the MAG-0005 to leverage AMID’s balancing flexibility. The contract allowed Rainbow to run imbalances, withdrawing gas without simultaneously supplying an equal amount, provided they resupplied by the end of each month. Disputes arose when Transco began limiting imbalances more strictly, leading to AMID curtailing Rainbow’s nominations on several occasions.The trial court found in favor of Rainbow on all its claims, including breach of contract, repudiation, fraud, fraudulent inducement, and negligent misrepresentation, awarding over $6 million in lost profits. The court interpreted Section 9.1 of the MAG-0005 as excusing AMID’s performance only under specific conditions involving scheduled and physical imbalances. The Court of Appeals for the First District of Texas affirmed the trial court’s decision, agreeing with its interpretation of the contract and the award of damages.The Supreme Court of Texas reviewed the case and held that the trial court had erroneously inserted language into Section 9.1 of the MAG-0005. The correct interpretation of Section 9.1 excused AMID from providing balancing services on any day that Transco required AMID or Rainbow to limit imbalances attributable to Rainbow, without distinguishing between types of imbalances. The Supreme Court reversed the lower courts' decisions, rendered judgment for AMID on Rainbow’s contract-repudiation and tort claims, and remanded for a new trial on the breach-of-contract claims to determine if Transco mandates excused AMID’s performance on the days in question. View "AMERICAN MIDSTREAM (ALABAMA INTRASTATE), LLC v. RAINBOW ENERGY MARKETING CORPORATION" on Justia Law

Chenault-Vaughan Family Partnership ("Chenault"), a royalty interest holder in a Texas mineral estate, sued Centennial Resources Operating, LLC ("Centennial"), the site operator, for wrongly withholding royalties. The Bankruptcy Court awarded summary judgment to Centennial. Chenault appealed to the District Court, where the parties consented to proceed before a Magistrate Judge. The Magistrate Judge affirmed the Bankruptcy Court’s judgment, and Chenault appealed to the United States Court of Appeals for the Third Circuit.The Third Circuit first addressed whether the Magistrate Judge had jurisdiction to enter final judgment in the bankruptcy appeal. The court concluded that, with the consent of the parties and a referral by the district court, a magistrate judge may enter final judgment in a bankruptcy appeal. This conclusion was supported by the broad consent authority granted to magistrate judges under 28 U.S.C. § 636(c), the repeal of the statutory provision that previously prohibited such referrals, and the supervisory authority retained by Article III judges.On the merits, the Third Circuit reviewed the Bankruptcy Court’s summary judgment on two claims: trespass to try title and royalties under the Texas Natural Resources Code ("TNRC"). The court affirmed the summary judgment for Centennial on the trespass-to-try-title claim, finding that Centennial did not unlawfully enter the land and dispossess Chenault, as Luxe, a cotenant, had the right to extract minerals and permit Centennial to operate.However, the court vacated the summary judgment on the TNRC claim. The court found that there were genuine disputes of material fact regarding whether Centennial was obligated to pay Unit B royalties to Chenault, particularly concerning the Division Order and Centennial’s knowledge of MDC’s non-signature on the Unit B JOA. The case was remanded to the Magistrate Judge with instructions to remand to the Bankruptcy Court for further proceedings on the TNRC claim. View "In re: MTE Holdings LLC" on Justia Law

Larry Householder, former Speaker of the Ohio House of Representatives, and lobbyist Matthew Borges were convicted of conspiring to solicit and receive nearly $60 million in exchange for passing a billion-dollar bailout for a failing nuclear energy company, FirstEnergy Corp. Householder used the funds to support his bid for the speakership and to recruit candidates who would vote for him. Borges played a role in the conspiracy by attempting to disrupt a referendum campaign against the bailout legislation.The United States District Court for the Southern District of Ohio at Cincinnati found both Householder and Borges guilty after a 26-day trial. Householder was convicted of multiple counts, including public-official bribery, private-citizen bribery, and money laundering. Borges was also found guilty of participating in the conspiracy.The United States Court of Appeals for the Sixth Circuit reviewed the case and found no reversible error, affirming the convictions. The court held that the evidence was sufficient to support the jury's findings that Householder and Borges engaged in a quid pro quo arrangement with FirstEnergy. The court also upheld the jury instructions, finding them consistent with applicable law, and rejected Householder's claims of insufficient evidence, right to counsel violations, and judicial bias. Additionally, the court found that the district court did not abuse its discretion in its evidentiary rulings or in admitting the guilty pleas of co-conspirators.Householder's sentence of twenty years, the statutory maximum under RICO, was deemed procedurally and substantively reasonable. The court emphasized the magnitude and severity of Householder's offense, referring to it as the "biggest corruption case in Ohio's history." Borges's arguments regarding the sufficiency of the evidence and the district court's evidentiary rulings were also rejected, and his conviction was affirmed. View "United States v. Householder" on Justia Law

Continental Resources, Inc., an oil and gas production company, leases minerals from both the North Dakota Board of University and School Lands (Land Board) and the United States. The dispute centers on the entitlement to royalties from minerals extracted from the bed of Lake Sakakawea in North Dakota, which depends on the location of the Ordinary High Water Mark (OHWM). If North Dakota law and the state survey govern the OHWM, the Land Board is entitled to a larger percentage of the royalties; if the federal survey controls, the United States is entitled to a larger percentage.The United States removed the interpleader action to federal court and moved to dismiss based on sovereign immunity. The United States District Court for the District of North Dakota denied the motion, holding that under 28 U.S.C. § 2410(a)(5), the United States waived sovereign immunity because North Dakota law created a lien in favor of the United States upon Continental severing the minerals. The district court granted summary judgment in favor of the United States for lands retained since North Dakota's admission to the Union, applying federal law and the Corps Survey. It granted summary judgment in favor of the Land Board for lands reacquired by the United States, applying North Dakota law and the Wenck survey.The United States Court of Appeals for the Eighth Circuit reviewed the case. It affirmed the district court's denial of the motion to dismiss, agreeing that the United States had a lien on the disputed minerals under North Dakota law. The court also affirmed the summary judgment in favor of the Land Board, holding that North Dakota law governs the current location of the OHWM for lands reacquired by the United States. The court denied the United States' motion for judicial notice of additional documents. View "Continental Resources, Inc. v. United States" on Justia Law

A solar energy company, Harvey Solar I, L.L.C., applied to the Ohio Power Siting Board for a certificate to construct a solar-powered electric-generation facility in Licking County, Ohio. The project faced opposition from a local citizens group, Save Hartford Twp., L.L.C., and 11 nearby residents, who raised concerns about the environmental and economic impacts of the project, including visual impacts, flooding, wildlife disruption, noise, water quality, and glare.The Ohio Power Siting Board reviewed the application and conducted an evidentiary hearing. The board staff investigated the potential impacts and recommended approval with conditions. The board ultimately granted the certificate, subject to 39 conditions, including requirements for visual screening, floodplain coordination, wildlife impact mitigation, noise control, and stormwater management.The residents appealed the board's decision to the Supreme Court of Ohio, arguing that the board failed to properly evaluate the project's adverse impacts and that Harvey Solar did not provide sufficient information as required by the board's rules. They contended that the board's decision was unlawful and unreasonable.The Supreme Court of Ohio reviewed the case and found that the board had acted within its statutory authority and had not violated any applicable laws or regulations. The court determined that the board had sufficient evidence to make the required determinations under R.C. 4906.10(A) and that the conditions imposed on the certificate were reasonable and appropriate. The court affirmed the board's order granting the certificate for the construction, operation, and maintenance of the solar facility. View "In re Application of Harvey Solar I, L.L.C." on Justia Law

Trinity Energy Services, L.L.C. ("Trinity Energy") and Southeast Directional Drilling, L.L.C. ("Southeast Drilling") were involved in a subcontract for constructing natural gas pipelines. Disputes arose over liability for "stand-by costs" incurred during construction delays. The parties agreed to arbitration, where a panel awarded Southeast Drilling $1,662,000 in stand-by costs from Trinity Energy. Trinity Energy petitioned to vacate the arbitration award, but the district court denied the petition and confirmed the award. Trinity Energy then appealed.The United States District Court for the Northern District of Texas initially denied Trinity Energy's petition to vacate the arbitration award and granted Southeast Drilling's motion to confirm it. Trinity Energy appealed this decision, but the appeal was dismissed as interlocutory by the United States Court of Appeals for the Fifth Circuit. Subsequently, the district court granted Southeast Drilling's cross-motion to confirm the arbitration award, leading to Trinity Energy's timely appeal.The United States Court of Appeals for the Fifth Circuit reviewed the district court's order de novo and emphasized the narrow and deferential standard of review for arbitration awards. The court found that the arbitration panel had construed the subcontract and based its decision on its terms, thus not exceeding its authority under 9 U.S.C. § 10(a)(4). The court also rejected Trinity Energy's argument that the panel manifestly disregarded Texas law, noting that "manifest disregard of the law" is not a valid ground for vacatur under the Federal Arbitration Act. Consequently, the Fifth Circuit affirmed the district court's judgment confirming the arbitration award. Southeast Drilling's request for sanctions against Trinity Energy was denied due to procedural deficiencies. View "Trinity Energy Services v. SE Directional Drilling" on Justia Law

Enbridge Energy owns and operates a pipeline that runs from Wisconsin, through Michigan, and into Canada, crossing the Straits of Mackinac under a 1953 easement with the State of Michigan. In 2020, Michigan Governor Gretchen Whitmer informed Enbridge that the State was revoking the easement, alleging that Enbridge had violated it by creating an unreasonable risk of an oil spill. Enbridge responded by filing a federal lawsuit against Governor Whitmer and the Director of the Michigan Department of Natural Resources, seeking declaratory and injunctive relief to prevent the State from interfering with the pipeline's operation.The United States District Court for the Western District of Michigan rejected the defendants' argument that Enbridge’s claims were barred by Eleventh Amendment sovereign immunity. The court held that Enbridge’s lawsuit fell within the Ex parte Young exception to sovereign immunity, which allows federal courts to hear cases seeking prospective relief against state officials for ongoing violations of federal law.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decision. The Sixth Circuit held that Enbridge’s lawsuit was not barred by sovereign immunity because it sought prospective injunctive relief against state officials for alleged violations of federal law, fitting within the Ex parte Young doctrine. The court rejected the defendants' arguments that the suit was equivalent to a quiet title action or a request for specific performance of a state contract, finding that the relief sought would not divest the State of ownership or regulatory control over the land. Thus, the court concluded that Enbridge’s claims could proceed in federal court. View "Enbridge Energy, LP v. Whitmer" on Justia Law

The Alaska LNG Project sought authorization from the Department of Energy to export up to twenty million metric tons of liquefied natural gas (LNG) per year for thirty years. The Department initially authorized the Project to export LNG to free-trade countries in 2014 and later to non-free trade countries in 2015, subject to environmental review. In 2023, the Department issued a final order approving the Project’s export application, concluding that the approval was consistent with the public interest despite uncertainties regarding environmental impacts.The Federal Energy Regulatory Commission (FERC) had previously authorized the construction and operation of the Project’s facilities, including an 800-mile pipeline and associated infrastructure, after preparing an extensive environmental impact statement. The U.S. Court of Appeals for the District of Columbia Circuit upheld FERC’s compliance with the National Environmental Policy Act (NEPA) in Center for Biological Diversity v. FERC. The Department of Energy adopted FERC’s impact statement and issued its own supplemental environmental impact statement in response to Executive Order 13990.The United States Court of Appeals for the District of Columbia Circuit reviewed the Department of Energy’s final order. The court found that the Department had properly adopted FERC’s environmental impact statement and complied with NEPA. The court also upheld the Department’s finding of substantial uncertainty regarding the magnitude of environmental impacts, particularly greenhouse gas emissions and climate impacts, associated with the Project’s exports. The court concluded that the impacts of downstream emissions in foreign countries were not reasonably foreseeable and that the Department’s analysis was supported by substantial evidence.The court denied the petitions for review, affirming the Department of Energy’s authorization for the Alaska LNG Project to export LNG. View "Sierra Club v. DOE" on Justia Law

Entergy companies petitioned for review of three orders by the Federal Energy Regulatory Commission (FERC). FERC had rejected tariff changes proposed by Midcontinent Independent System Operator (MISO), arguing that the new tariff would grant Entergy excessive market power. Entergy contended that FERC’s decisions were arbitrary and capricious.The case was reviewed by the United States Court of Appeals for the District of Columbia Circuit. Entergy’s opening brief did not address the issue of standing, which is a jurisdictional prerequisite. This omission violated Circuit Rule 28(a)(7), which requires petitioners to set forth the basis for their claim of standing in their opening brief. As a result, Entergy forfeited any arguments in support of standing.The D.C. Circuit Court dismissed the petitions for review, stating that Entergy lacked standing. The court emphasized that Entergy’s failure to discuss standing in its opening brief constituted a forfeiture of the argument. Even if the court were to consider the standing arguments Entergy later advanced, the company did not demonstrate the necessary concrete, imminent, and redressable injury. The court concluded that dismissal was the appropriate consequence for Entergy’s failure to establish standing. View "Entergy Arkansas, LLC v. FERC" on Justia Law