Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court affirmed the decision of the Public Service Commission allocating partial replacement power costs to Duke Energy Florida, LLC (DEF), holding that the Office of Public Counsel (OPC) waived the arguments it presented on appeal.In its appeal to the Supreme Court for judicial review OPC raised a series of legal challenges to the Commission's authority to assign partial costs and consider mitigating factors when making a determination that DEF's actions were "reasonable and prudent" and argued that the Commission erred in interpreting and applying the burden of proof. DEF argued in response that the issues were not preserved for appellate review. The Supreme Court agreed and affirmed, holding that the issues raised by OPC were not properly preserved and were thus waived. View "Citizens of State of Fla. v. Clark" on Justia Law

The Supreme Court affirmed the decision of the Board of Equalization affirming the Wyoming Departments of Audit and Revenue's mineral tax audit assessments of Chesapeake Operating, LLC's oil and gas production, holding that the State Board of Equalization did not misinterpret Wyo. Stat. Ann. 39-14-203(b)(iv) when it found that Chesapeake's field facilities did not qualify as processing facilities.On appeal, Chesapeake argued that the Board erred in concluding that Chesapeake's facilities qualified as processing facilities under the mineral tax statutes and that the proper point of valuation for its gas production was at the custody transfer meters. The district court certified the case directly to the Supreme Court, which affirmed, holding that the Board correctly interpreted and applied Wyo. Stat. Ann. 39-14-201(a)(xviii) when it found that the seven facilities at issue were not processing facilities. View "Chesapeake Operating, LLC v. State, Dep't of Revenue" on Justia Law

The Supreme Judicial Court vacated the judgment of the superior court reversing the decision of the Town of Eliot's board of appeals vacating the planning board's approval of a large solar array project, holding that the project did not fit the definition of "public utility facility" within the meaning of the Town zoning ordinance.Odiorne Lane Solar, LLC applied to the Planning Board for a approval to build a large solar array project on land located in the Town's rural district. The Planning Board approved the application. The board of appeals, however, vacated the approval. The superior court vacated the board of appeals' decision. The Supreme Judicial Court vacated the superior court's judgment, holding that, at the relevant times for this application, the ordinance did not permit the location of the project within the rural district. View "Odiorne Lane Solar, LLC v. Town of Eliot" on Justia Law

The Supreme Court affirmed the orders of the circuit court denying Defendants' motions to dismiss for lack of jurisdiction and for failure to state a claim in this action brought by the City and County of Honolulu and the Honolulu Board of Water Supply (collectively, Plaintiffs) against a number of oil and gas producers (collectively, Defendants), holding that there was no error.Plaintiffs sued Defendants alleging public nuisance, private nuisance, strict liability failure to warn, negligent failure to warn, and trespass. Specifically, Plaintiffs alleged that Defendants engaged in a deceptive promotion campaign and misled the public about the dangers and environmental impact of using their fossil fuel products. Defendants filed a motion to dismiss, arguing, among other things, that Plaintiffs' claims were preempted by the Clean Air Act (CAA). The Supreme Court denied the motions, holding (1) Defendants were subject to specific jurisdiction in Hawai'i; (2) the CAA displaced federal common law governing interstate pollution damages suit, and following displacement, federal common law did and does not preempt state law; and (3) the CAA did not preempt Plaintiffs' claims. View "City & County of Honolulu v. Sunoco LP" on Justia Law

The Supreme Court affirmed the orders of the Ohio Power Siting Board approving two large solar farms that were proposed to be built in Preble County, holding that the Board's order was neither unlawful nor unreasonable.The General Assembly authorized commercial solar farms in Ohio but made their construction conditional on the Board's approval. The Board approved the solar farms after its staff agreed to stipulations imposing a number of conditions on the construction and operation of the facilities. Certain citizens appealed. The Supreme Court affirmed, holding that there was nothing unlawful about the Board's adherence to its own regulations and that the Board did not act unreasonably in making the determinations required by Ohio Rev. Code 4906.10(A). View "In re Application of Alamo Solar I, LLC" on Justia Law

The Bonneville Power Administration (BPA) is a federal agency tasked with selling the power generated at various hydroelectric facilities in the Pacific Northwest. In the decision on review, BPA set its rates for the 2022–2023 fiscal period. Environmental groups now petition for a review of that decision, arguing that BPA failed to comply with a pair of statutory duties in the Northwest Power Act relating to fish and wildlife.   The Ninth Circuit denied the petition. The panel held that petitioners had Article III standing. First, petitioners have alleged injury, in fact where they are interested in the fish populations in the Columbia River Basin, and ongoing harm to these fish populations inflicts an injury on petitioners’ members. Second, any harm to the fish populations is traceable to BPA’s BP-22 ratemaking. Third, Petitioners have adequately alleged redressability where it is a reasonable inference from the historical record that Petitioners’ injuries would be at least partially redressed by a favorable decision on the merits. Turning to the merits, the panel held that the text and structure of the NWPA as a whole convincingly provide that NWEPA Section 4(h)(11)(A) does not apply to rate making where that provision does not mention ratemaking, and other features of the statutory scheme buttress this conclusion. View "IDAHO CONSERVATION LEAGUE, ET AL V. BPA" on Justia Law

Defendant Compass Minerals Louisiana, Inc. (“Compass”) is part of a mineral company that owns and operates multiple salt mines. Among Compass’s locations is its Cote Blanche salt mine. Compass contracted with Louisiana-based companies Fire & Safety Specialists, Inc. (“FSS”) and MC Electric, LLC (“MCE”). An electrician employed by MCE died in an accident at the Cote Blanche salt mine. Both FSS and MCE held a commercial general liability policy with QBE. QBE filed a declaratory action in federal court, asserting that the indemnification and additional-insured provisions in the FSS and MCE purchase orders are “null, void, and unenforceable” under the Louisiana Oilfield Anti-Indemnity Act (“LOAIA”). The court rejected QBE’s argument that Compass “drills for” salt by using the drill-and-blast method for breaking a salt wall. It concluded, relatedly, that the term “drilling for minerals” in the LOAIA “should be construed as referring to the drilling of a well.” QBE appealed.   Finding no clear and controlling precedent on this issue of Louisiana law, the Fifth Circuit certified two questions to the Louisiana Supreme Court: 1.     Does the Louisiana Oilfield Anti-Indemnity Act, La. Stat. Ann. Section 9:2780, apply to provisions in agreements that pertain to “drilling for minerals,” even where the agreement does not “pertain to a well”? 2.     If the Act applies to agreements that pertain to “drilling for minerals,” irrespective of the agreement’s nexus to a well, does the Act apply to invalidate these indemnification and additional-insured provisions contained in contracts for fire suppression and electrical work in a salt mine, by virtue of the salt mine’s use of a “drill-and-blast” method for mining salt? View "QBE Syndicate 1036 v. Compass Minerals" on Justia Law

In this review of a decision of the Public Service Commission relating to rates charged by Florida Power & Light Company (FPL) for the provision of electric service, the Supreme Court held that the Commission had not supplied a basis for meaningful judicial review of its conclusion that the settlement agreement provided a reasonable resolution of the issues, established reasonable rates, and was in the public interest.The settlement agreement at issue was between FPL and seven parties that intervened in the matter and permitted FPL to increase its base rates and service charges. After hearing arguments in favor of and against the settlement agreement the Commission concluded that the agreement "provides a reasonable resolution of all issues raised, establishes rates that are fair, just, and reasonable, and is in the public interest." The Supreme Court reversed, holding that remand was required because the Commission failed to perform its duty to explain its reasoning. View "Floridians Against Increased Rates, Inc. v. Clark" on Justia Law

In this discretionary appeal brought by Discovery Oil and Gas, LLC to determine whether an express indemnification provision in its contract with Wildcat Drilling, LLC evinced a clear intent by the parties to abrogate the common-law notice requirements for indemnification set forth in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), the Supreme Court held that the requirements announced in Globe Indemnity did not apply.Specifically, the Supreme Court held (1) when the parties have entered into a contract containing an express indemnification provision, the common-law notice requirements set forth in Globe Indemnity do not apply, and the parties are bound by the terms of their contract because the provision evinces a clear intent by the parties to abrogate the common law; and (2) the language of the contract in this case evicted the parties' clear intent to abrogate the common-law notice requirements for indemnification. View "Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC" on Justia Law

Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into two Note Agreements and a Credit Agreement with the predecessor-in-interest to now-Plaintiff-Appellee Red Tree Investments, LLC (“Red Tree”). PDVSA became delinquent on its obligations under the contracts. Red Tree’s predecessor-in-interest accelerated the outstanding debt. Then Red Tree initiated these actions in Supreme Court, New York County, which Defendants removed to district court. PDVSA claimed that any further payment under the Agreements was impossible and should therefore be excused. The district court granted summary judgment against PDVSA on the grounds that PDVSA had failed to provide sufficient evidence that payment was impossible or in the alternative, that any impediment to payment was not reasonably foreseeable. It therefore entered judgment in favor of Red Tree and imposed post-judgment interest. On appeal, PDVSA contends that the district court erred in concluding that no reasonable trier of fact could find that payment was impossible or that U.S. sanctions were unforeseeable. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible. Further, the court concluded that the district court did not err in its calculation of post-judgment interest. The court explained that under the plain language of the Note and Credit Agreements, the outstanding principal and interest that accrued prejudgment—including both default and ordinary interest—are subject to default interest post-judgment. View "Red Tree Investments, LLC v. PDVSA, Petróleo" on Justia Law