Justia Energy, Oil & Gas Law Opinion Summaries

The First Circuit denied Petitioners' petition objecting to a permit issued by the Environmental Protection Agency (EPA) and affirmed by the Environmental Appeals Board requiring General Electric Company (GE) to clean up polychlorinated biphenyls from certain portions of the Housatonic River, holding that the EPA's challenged actions were not arbitrary or capricious.On appeal, Petitioners brought three substantive challenges and also brought procedural challenges to the permit's issuance. The First Circuit denied the petition after noting that should GE's cleanup of the river not achieve the goals set out in the permit, the permit requires further measures, holding that Petitioners were not entitled to relief on their procedural and substantive legal challenges. View "Housatonic River Initiative v. U.S. Environmental Protection Agency" on Justia Law

The Natural Gas Act authorizes private entities who have received a certificate of public convenience and necessity to acquire property “by the exercise of the right of eminent domain.” Sabal Trail Transmission, LLC, invoked this power of eminent domain to acquire easements to build a pipeline on land owned by Sunderman Groves, Inc. In the condemnation proceeding, the district court determined that the Act incorporates state eminent domain law, and it consequently applied Florida law to grant attorneys’ fees, costs, and prejudgment interest to Sunderman Groves. Sabal Trail appealed these awards, arguing that the district court should have applied federal law instead. A different panel decided on a nearly identical case that arose out of Sabal Trail’s use of eminent domain power to build this same pipeline.   The Fourth Circuit affirmed. The court explained that it is firmly established” that “each succeeding panel is bound by the holding of the first panel to address an issue of law, unless and until that holding is overruled en banc, or by the Supreme Court.” United States v. Hogan, 986 F.2d 1364, 1369 (11th Cir. 1993). The court explained that the court’s prior construction of the Natural Gas Act is now the law in the Circuit, and it conclusively resolves this appeal. View "Sabal Trail Transmission, LLC v. Sunderman Groves, Inc" on Justia Law

the Federal Energy Regulatory Commission granted Algonquin a certificate of public convenience and necessity that allowed it and the owner of the neighboring Maritimes & Northeast pipeline to undertake a series of upgrades. Those upgrades are known collectively as the Atlantic Bridge Project (“Project”). As part of the Project, Algonquin planned to build a new compressor station in Weymouth, Massachusetts. The compressor station would pressurize gas traveling north towards Maine. The Town of Weymouth, as well as several residents and environmental groups, petitioned this court to overturn the Commission’s certification decision for the Project. This court found no relevant error in the Commission’s decision and denied the petition. The entities sought review of two orders that followed the Commission’s issuance of the certificate of public convenience and necessity.   The DC Circuit dismissed the petitions. The court explained that to construe the Commission’s denial of rehearing as a reviewable new “order,” that would not change anything. That is because the statute strictly requires that every single “order” we review be accompanied by an “application to the Commission for rehearing.” The court further wrote that the denial of rehearing is not a reviewable order, so the Fore River Residents may not obtain judicial review under 15 U.S.C. Section 717r(b). And even if it were a reviewable order, their petition would be jurisdictionally deficient because they failed to request rehearing of it. View "Fore River Residents Against the Compressor Station v. FERC" on Justia Law

This case concerns how PJM, the manager of a large, multi-state electrical grid, prices the flow of electricity to utilities in times of congestion. Such congestion arises when energy is scarce in a particular location on the grid due to, for example, extreme weather conditions or a fire at a transmission station. That scarcity causes the dispatch of more expensive generation and can trigger the Transmission Constraint Penalty Factor (“Penalty Factor”) when such alternative generation is unavailable. The Penalty Factor imposes an upper bound on the costs PJM will incur to control a transmission constraint, and it is designed to send transparent price signals to the market and incentivize investment that will resolve the congestion and prevent it from recurring. Petitioner Citadel FNGE Ltd. is an energy trading firm. It challenged the Commission’s suspension of the Penalty Factor as arbitrary and capricious.   The DC Circuit denied the petitions. The court explained that substantial evidence supported the Commission’s decision that the Penalty Factor, as applied to the unique Northern Neck circumstances, could not work as designed because it increased costs without incentivizing supply or demand responses. Because application of the Penalty Factor increased costs for consumers without a commensurate benefit, the Commission reasonably found that its application in this context was unjust and unreasonable. View "Citadel FNGE Ltd. v. FERC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this case concerning whether Apache Corporation breached its purchase-and-sale agreements (PSAs) with Sellers, holding the court of appeals erred by failing to apply the default common-law rule of contractual construction to the parties' dispute and incorrectly construed other contractual provisions at issue.In the PSAs at issue, Sellers sold seventy-five percent of their working interests in 109 oil-and-gas leases to Apache. The trial court rendered final judgment for Apache on the grounds that Sellers had no evidence of damages and could not prevail on their claims. The court of appeals reversed in part. At issue was whether the default rule for treating contracts that use the words "from" or "after" a specified date to measure a length of time should be applied in this case. The Supreme Court reversed the judgment of the court of appeals as to the issues that the parties presented for review, holding that the parties' agreement in this case implicated the default rule without displacing it. View "Apache Corp. v. Apollo Exploration, LLC" on Justia Law

Utility companies responsible for a planned electric transmission line asked the Fish and Wildlife Service (FWS) to allow construction across the Upper Mississippi River National Wildlife and Fish Refuge alongside an existing road and railroad. Rural Utilities Service completed an environmental impact statement under the National Environmental Policy Act (NEPA), 42 U.S.C. 4332(2)(C). FWS adopted the statement and issued a right-of-way permit.While litigation was pending, the utility companies sought to slightly alter the route and asked FWS to consider a land exchange. FWS discovered that it had relied on incorrect easement documents in issuing its original determination. It revoked the determination and permit but promised to consider the proposed land exchange. The district court ruled in favor of the environmental groups but declined to enjoin ongoing construction of the project on private land outside the Refuge.The Seventh Circuit vacated in part, first rejecting a mootness argument. FWS has revoked the compatibility determination but has not promised never to issue a new permit. However, FWS’s current position does not meet the criteria of finality. Whatever hardship the plaintiffs face comes not from FWS’s promise to consider a land exchange but from the Utilities’ decision to build on their own land, so the district court erred in reviewing the merits of the proposed land exchange. Plaintiffs’ request for relief against the Utilities under NEPA likewise is premature. Adopting the environmental impact statement did not “consummate” the decisionmaking process. View "Driftless Area Land Conservancy v. Rural Utilities Service" on Justia Law

Marvin and Mildred Bay (“the Bays”) challenged a court order dismissing their trespass claim against Anadarko E&P Onshore LLC and Anadarko Land Corporation (collectively, “Anadarko”). Anadarko, an oil and gas company, owned the mineral rights under the Bays’ farm. The Bays brought a putative class action along with other surface landowners against Anadarko, alleging that Anadarko’s mineral lessees had exceeded the scope of their mineral rights by drilling multiple vertical wells on the surface owners’ land when it was possible to drill fewer wells of the “directional” type. At the conclusion of the Bays’ presentation of evidence, the district court found that the Bays’ evidence failed as a matter of law to demonstrate that Anadarko’s activities amounted to a trespass and dismissed the case. Finding that the district court applied the wrong legal standard, the Tenth Circuit reversed the dismissal in "Bay I," finding that Colorado’s common law of trespass required the Bays to show that Anadarko’s lessees had “materially interfered” with the Bays’ farming operations. The appellate court questioned whether the record demonstrated that the Bays met this standard in their trial, but because Anadarko had not raised this specific issue, the case was remanded to the district court for further proceedings. On remand, the district court again granted judgment as a matter of law to Anadarko on the material interference issue. Specifically, the court first held that it was bound by the Tenth Circuit's interpretation in Bay I of the material interference standard, then found that the Bays showed only that Anadarko’s conduct inconvenienced them—which was insufficient to satisfy the material interference standard. The Bays again appealed, arguing that the Tenth Circuit's discussion of the material interference standard in Bay I was dictum; thus, the district court incorrectly determined that it was bound to apply that standard. They further argued the material interference standard applied by the district court was inconsistent with the Colorado standard for trespass outlined in Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913 (Colo. 1997), and that the evidence they presented in their trial established a prima facie case of material interference under Gerrity. The Tenth Circuit determined the district court did not err in its second dismissal and affirmed judgment. View "Bay, et al. v. Anadarko E&P Onshore, et al." on Justia Law

In June 1949, Axel Anderson conveyed to L.S. Youngblood a ½ mineral interest in several tracts of land in Mountrail County, North Dakota (“the Disputed Lands”)In 2011, with the Andersons and Henry Johnson now deceased, grantee Johnson’s successors filed a quiet title action in state court against Nancy Finkle and grantor Andersons’ other successors to resolve the over conveyance, seeking title to a ½ mineral interest in the Disputed Lands (“the Finkle Litigation”).inkle appealed the quiet title order and judgment, arguing that an exception to the Duhig rule that is not at issue in this appeal applied and therefore the trial court should have awarded each side a 1/4 mineral interest in the Disputed Lands. In January 2008, Finkle, a successor to grantor Andersons’ mineral interests, conveyed by oil and gas lease her mineral interest leasehold and operating rights in the Disputed Lands to Montana Oil Properties, Inc. Northern Oil did not participate while Finkle defended the Johnson successors’ quiet title claim and asserted her own deed reformation counterclaim in state court.   The Eighth Circuit affirmed, holding that the district court correctly granted summary judgment to the defendant on the ground that due to an over-conveyance of rights, Plaintiff had not obtained any mineral rights in the subject property when it acquired its interest in a leasehold. Further, the court held that the district court granted summary judgment dismissing Northern Oil’s reformation claim as time-barred by the ten-year statute of limitations in N.D.C.C. Section 28-01-15(2), applying a Supreme Court of North Dakota decision issued after the Finkle Litigation, Western Energy Corp. v. Stauffer, 921 N.W.2d 431, 434-35 (N.D. 2019). View "Northern Oil and Gas, Inc. v. EOG Resources, Inc." on Justia Law

The Supreme Court quashed the order of the district court granting the motion to dismiss filed by the State of Rhode Island, acting by and through the Division of Taxation (Division), in this appeal stemming from a series of transactions for the purchase and sale of gasoline, holding that the district court erred in granting the Division's motion to dismiss based on Plaintiff's failure to exhaust its administrative remedies.The tax at issue was levied on a transaction between Plaintiff and another party and was the subject of several transactions between various entities. Plaintiff reimbursed a third-party for the tax assessed on the sale of 300,000 barrels of gasoline and then initiated this action alleging constitutional violations and violations of the Motor Fuel Tax. The trial judge dismissed the case for Plaintiff's failure to exhaust administrative remedies. The Supreme Court reversed, holding that the trial judge erroneously dismissed the action based on Plaintiff's failure to exhaust its administrative remedies. View "Gunvor USA, LLC v. State, ex rel. Division of Taxation" on Justia Law

The Supreme Court quashed the order of the district court dismissing two actions challenging the State Division of Taxation's denial of Plaintiff's claim for a refund of $4,280,039 paid for Motor Fuel Tax assessed on the purchase and sale of 300,000 barrels of gasoline, holding that the the district court erred.Plaintiff purchased 300,000 barrels of gasoline from Defendant. The Division imposed a motor fuel taxes on the gasoline that was charged to Defendant, as the seller of the gas. Defendant sought reimbursement from Plaintiff, which sought a refund from the Division under R.I. Gen. Stat. 31-36-13. The Division denied Plaintiff's claim for a refund on the grounds that Plaintiff did not have a right to pursue a refund. Plaintiff then filed a complaint alleging constitutional violations and violations of the Motor Fuel Tax, among other claims. Plaintiff then appealed the Division's denial of its request for a refund. The hearing officer concluded that Plaintiff's claim was barred by both res judicata and administrative finality. Ultimately, both cases were dismissed. The Supreme Court quashed the decisions below, holding (1) Plaintiff had standing; (2) the trial judge erred in concluding that res judicata barred Plaintiff's appeal; and (3) the doctrine of administrative finality did not apply to bar Plaintiff's claims. View "Apex Oil Co. v. State, ex rel. Division of Taxation" on Justia Law