Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court affirmed the summary judgment in favor of Landowners in this oil-and-gas dispute over how to calculate Landowners' royalty under the terms of a mineral lease with Producers, holding that there was no error in the proceedings below.At issue in a declaratory judgment action was whether, based on language in the subject leases, Landowners' royalty was payable not only on gross proceeds but also on an unaffiliated buyer's post-sale postproduction costs if the producers' sales contracts stated that the sales price had been derived by deducting such costs from published index prices downstream from the point of sale. The trial court granted summary judgment for Landowners as to these types of marketing arrangements. The Supreme Court affirmed, holding that the broad language of the lease unambiguously contemplated such a royalty base. View "Devon Energy Production Co., L.P. v. Sheppard" on Justia Law

The Supreme Court affirmed the judgment of the district court dismissing, for lack of jurisdiction, this matter opposing the grant of a conditional use permit (CUP) to construct a commercial wind turbine, holding that the district court never acquired jurisdiction over this CUP appeal.The Cherry County Board of Commissioners granted the CUP to BSH Kilgore, LLC for it to construct and operate commercial grade wind turbines near Kilgore, Nebraska. Plaintiffs, parties who opposed the project, appealed the decision to the district court and later were allowed to amend their complaint to challenge the CUP pursuant to a petition in error. The district court dismissed the amended complaint for lack of jurisdiction. The Supreme Court affirmed, holding that the jurisdictional requirements were not met in this case. View "Preserve the Sandhills v. Cherry County" on Justia Law

Angus Kennedy owned real property and mineral interests in McKenzie County, North Dakota. In 1960, Angus and his wife, Lois, executed two deeds conveying the surface and “excepting and reserving unto the parties of the first part, their heirs, successors or assigns, all right, title and interest in and to any and all . . . minerals in or under the foregoing described lands.” Lois did not own an interest in the property when Angus and Lois Kennedy executed the deeds. Angus died in 1965, and Lois died in 1980. Angus and Lois did not have children together. Angus had six children from a previous marriage. Angus' heirs executed numerous mineral leases for the property. Lois had one child, Julia Nevin, who died in 1989. In 2016 and 2017, Julia Nevin’s surviving husband, Stanley Nevin, executed mineral leases with Northern Oil and Gas, Inc. In 2018, Stanley sued the successors in interest to Angus, alleging Lois owned half of the minerals reserved in the 1960 deeds. In response, the Angus heirs claimed Angus did not intend to reserve any minerals to Lois because she did not own an interest in the property conveyed in the 1960 deeds. The district court granted Northern Oil’s motion to intervene. Northern Oil appeals the quiet title judgment deciding Northern Oil did not own mineral interests in the McKenzie County property, arguing the district court erred in concluding the deeds at issue were ambiguous as to whether Angus intended to reserve minerals to his wife, Lois. Finding no reversible error in the trial court judgment, the North Dakota Supreme Court affirmed. View "Nevin, et al. v. Kennedy, et al." on Justia Law

The Supreme Court dismissed the Episcopal Diocese or Rhode Island's challenge to an order of the Rhode Island Public Utilities Commission (PUC) that permitted the Narragansett Electric Company to charge the diocese for electricity transmission costs associated with a proposed solar development project on diocese property in Glocester, holding that the matter was moot.On appeal, the diocese argued that the PUC's order was unlawful and unreasonable for several reasons, including the assertion that the PUC subjected the diocese to a biased proceeding in violation of state law. After the Supreme Court remanded the matter to the PUC for consideration of newly discovered evidence Narragansett determined that the diocese was not subject to the challenged interconnection costs. The Supreme Court declined to address the merits of the diocese's appeal, holding that the matter was moot. View "In re Petition of the Episcopal Diocese of R.I. for Declaratory Judgment" on Justia Law

CO2 Committee, Inc. (“CO2”) was a nonprofit corporation whose membership was comprised of nonoperating owners of fractional interests in the McElmo Dome unit, a consolidation of working interests in a large deposit of pure carbon dioxide in Montezuma County and Dolores County, near the Four Corners area of Colorado. Kinder Morgan CO2 Company, L.P. (“Kinder Morgan”) was the operator of the unit. Following an audit for the 2008 tax year, Montezuma County determined that Kinder Morgan had underreported the value of gas produced at the unit’s leaseholds by improperly deducting certain costs that it, as the unit operator, was not entitled to deduct. The county ultimately increased its valuation of the entire unit by approximately $57 million. The Montezuma County assessor then imposed a retroactive tax assessment on the unit totaling more than $2 million based on that increased value. That prompted Kinder Morgan to challenge—ultimately unsuccessfully—the county’s authority to impose the retroactive tax. The issue this case presented for the Colorado Supreme Court's review centered on whether CO2 had standing to independently challenge the county's retroactive property tax increase. Finding that it did not, the Court dismissed its appeal. View "Colorado Property Tax Administrator v. CO2 Committee, Inc." on Justia Law

In this "double-fraction" dilemma arising from antique mineral conveyances in which the parties used two fractions, the Supreme Court held that the meaning of a 1924 deed's mineral reservation of "one-half of one-eighth" equalled one-half of the mineral estate.The parties in this case were the parties who derived from the grantees (White parties) and the parties whose interests derived from the grantors (Mulkey parties). The ownership of certain royalties turned on which side correctly interpreted the 1924 deed's mineral reservation of "one-half of one-eighth." The trial court entered an order granting the White parties' motion for partial summary judgment on the construction of the deed, and the court of appeals affirmed. The Supreme Court reversed, holding that the lower courts erred in holding that the Mulkey parties did not have a one-half interest in the minerals because (1) the presumption that "1/8" was used as a term of art to refer to the "mineral estate" was not rebutted in this case; and (2) alternatively, the presumed-grant doctrine would confirm that the Mulkey parties had title to one-half of the mineral estate. View "Van Dyke v. Navigator Group" on Justia Law

Plaintiff-respondent Tres C, LLC was an Oklahoma limited liability company whose members were Viola "Tincy" Cowan, her son David Cowan, her daughter Karlea Cowan Ewald, her grandson Scot Meier, and her granddaughter Marsha Bukowski. Tres C was a successor-in-interest to certain mineral interests a the 320-acre lot in Blaine County, Oklahoma, that were formerly owned by the parents of Tincy's late husband, George and Coral Cowan. In February 1955, George and Carol Cowan executed an oil and gas lease in favor of J.J. Wright (hereinafter "the Lessee") concerning those mineral interests. Under its habendum clause, the Cowan Lease would remain valid for a primary term lasting 10 years and then--so long as a producing well was drilled--for a secondary term lasting "as long thereafter as oil, gas, casinghead gas, casinghead gasoline, or any of the products covered by this lease is or can be produced." Defendants-petitioners were the Lessee's current successors-in-interest under the Cowan Lease. This appeal concerned the trial court's judgment that granted Plaintiff's petition to cancel defendant's oil and gas lease and to quiet title in its favor so that a third party could exercise the option of executing a new lease. The Court of Civil Appeals conditionally affirmed the trial court's judgment, but remanded the matter with instructions to address the noncontractual defense of obstructions, set forth in Jones v. Moore, 338 P.2d 872. The Oklahoma Supreme Court granted certiorari to address whether the trial court erred in applying a rule of law that analyzed only a 3-month window of time for assessing whether a dip in the existing well's production was a cessation of production in paying quantities such that defendants' lease expired by its own terms. On de novo review, the Court found the trial court did err insofar as it relied upon the lease's cessation-of-production clause to define the time period for assessing profitability. The Court vacated the Court of Civil Appeals' opinion, reversed the trial court's judgment, quieted title in favor of Defendants, and remanded the case for further proceedings. View "Tres C, LLC v. Raker Resources" on Justia Law

In 2018, Mwande Serge Kpiele-Poda ("Employee") was injured at a wellsite while repairing a conveyor that activated and crushed his legs. While Employee's Workers' Compensation claim was still pending, he filed a petition asserting negligence and products liability against his employers, two wellsite operators, and the manufacturers and distributors of the conveyor. Ovintiv Mid-Continent, Inc. was named in the body of the petition but omitted from the caption. After the statute of limitations period expired, Employee amended his petition to add Ovintiv Mid-Continent, Inc. as a defendant in the petition's caption. A second amended petition added other parties. Ovintiv Mid-Continent, Inc. moved to dismiss arguing the claim was time-barred because the amended petition did not relate back to the first petition. Employee's employers also moved to dismiss arguing the Administrative Workers' Compensation Act and Oklahoma precedent precluded employees from simultaneously maintaining an action before the Workers' Compensation Commission and in the district court. The district court granted each dismissal motion and certified each order as appealable. The Oklahoma Supreme Court retained and consolidated Employee's separate appeals, holding: (1) the district court erred when it dismissed Employee's action against Ovintiv Mid-Continent, Inc. as time-barred; and (2) the district court properly dismissed Employee's intentional tort action for lack of subject matter jurisdiction. View "Kpiele-Poda v. Patterson-UTI Energy, et al." on Justia Law

The Edison Electric Institute and NorthWestern Corporation, d/b/a NorthWestern Energy (collectively, “Utilities”) petition for review of an order by the Federal Energy Regulatory Commission (“Commission”) in which the Commission granted Broadview Solar’s application to become a qualifying facility under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The Solar Energy Industries Association (“SEIA”) petitions for review of the Commission’s denial of its motion to intervene in the adjudication of Broadview’s application.   The DC Circuit concluded that the Commission’s interpretation of the statute is entitled to deference and that the Commission did not act arbitrarily or capriciously and accordingly denied the Utilities’ petitions. The court explained that the Utilities challenge the Commission’s decision to look at Broadview’s instantaneous net power output and not its power output over time. The statute measures “power production capacity” in “megawatts.” But power production over time is measured in “megawatt-hours.” Rather than being arbitrary and capricious, the Commission’s focus on instantaneous power production adhered to the statutory language.   Further, the court dismissed SEIA’s petitions because it lacks Article III standing. The court explained that SEIA’s failure to timely intervene is the result of its own mistaken judgment. The effect of that mistake—SEIA’s inability to participate in the Commission’s proceedings—does not give rise to an Article III injury. View "Solar Energy Industries Association v. FERC" on Justia Law

These original proceedings involve efforts by the Public Utilities Commission (PUC or the Commission) to discover whether the political activities of Southern California Gas Company (SCG) are funded by SCG’s shareholders, which is permissible, or ratepayers, which is not. The Commission propounded several discovery requests (called “Data Requests”) on SCG, and when SCG failed fully to comply, moved to compel further responses that ultimately resulted in an order to comply or face substantial penalties. SCG seeks a writ of mandate directing the Commission to rescind its order on the ground that the discovery requests infringe on SCG’s First Amendment rights.   The Second Appellate District granted the petition and held that SCG has shown that disclosure of the requested information will impact its First Amendment rights, and the Commission failed to show that its interest in determining whether SCG’s political efforts are impermissibly funded outweighs that impact. The court reasoned that because SCG demonstrated that a threat to its constitutional rights exists, the burden shifted to the Commission to demonstrate that the data requests serve and are narrowly tailored to a compelling governmental interest. However, the PAO’s discovery inquiries into all sources of funding for SCG’s lobbying activities go beyond ratepayer expenditures. Insofar as the requests seek information about shareholder expenditures, they exceed the PAO’s mandate to obtain the lowest possible costs for ratepayers and its authority to compel disclosure of information necessary for that task. The requests, therefore, are not carefully tailored to avoid unnecessary interference with SCG’s protected activities. View "So. Cal. Gas Co. v. P.U.C." on Justia Law