Justia Energy, Oil & Gas Law Opinion Summaries

The San Francisco Public Utilities Commission owns a power supply system in the Hetch Hetchy Valley and transmission lines but does not own distribution lines and relies on PG&E’s distribution system. The Commission is both a customer and a competitor of PG&E. The Federal Energy Regulatory Commission (FERC) approved PG&E’s Tariff, which stated the generally applicable terms for “open-access” wholesale distribution service. In 2019, San Francisco filed a complaint under the Federal Power Act (FPA), 16 U.S.C. 824e, 825e, 825h, challenging PG&E’s refusal to offer secondary-voltage service in lieu of more burdensome primary-voltage service to certain San Francisco sites and provide service to delivery points that San Francisco maintains are eligible for service under the Tariff’s grandfathering provision. PG&E maintained that it had not given customers the right to dictate the level of service to be received and that any denials of secondary-voltage service were supported by “technical, safety, reliability, and operational reasons.”FERC denied San Francisco’s complaint, ruling that PG&E should retain discretion to determine what level of service is most appropriate for a customer because the provider “is ultimately responsible for the safety and reliability of its distribution system.” The D.C. Circuit vacated and remanded, citing FERC’s own precedent and noting a “troubling pattern of inattentiveness to potential anticompetitive effects of PG&E’s administration of its open-access Tariff.” View "City and County of San Francisco v. Federal Energy Regulatory Commission" on Justia Law

Duke generates electricity for Power, a “joint agency” of 32 North Carolina municipalities. Power pays Duke an Energy Charge that “reimburses Duke only for its fuel costs and variable operations and maintenance costs associated with producing the energy consumed by Power" and a Capacity Charge, designed to cover Duke’s fixed costs and provide a return on its infrastructure investments, calculated by determining its pro-rata share of the demand on Duke’s system during a one-hour “snapshot” of system usage taken during the peak hour on Duke’s system each month.Their agreement regulates activities Power may employ to modify its electricity use, including Demand-Side Management and Demand Response. Demand-Side Management involves end-users accepting an inducement to sign up for a program where Power can turn off and on their appliances around high-demand periods. Demand Response involves a supplier providing end-users information on the price of energy at a given time and those end users then modifying their consumption to avoid elevated prices.In 2019, Power petitioned the Federal Energy Regulatory Commission (FERC) arguing that the provisions that permit Demand-Side Management and Demand Response activities permit deploying battery storage technology to reduce metered demand during peak load periods and drawing from those batteries during the high-demand “snapshot” hour. Concerned that Power would reduce its Capacity Charge to zero, Duke opposed the petition. The D.C. Circuit affirmed FERC’s grant of Power’s petition, finding that the agreement permits Power to use battery storage technology as either Demand-Side Management or Demand Response. View "Duke Energy Progress, LLC v. Federal Energy Regulatory Commission" on Justia Law

The DC Circuit granted the City's petitions for review of FERC orders rejecting the City's complaint regarding periodic outflow coming from the operation of the Pensacola Project, a downstream dam licensed by FERC. The court found FERC's position unpersuasive and remanded for the Commission to determine the role of the Corps, the responsibility the Authority bears if it caused flooding in the City, analyze the evidence petitioner has produced, and finally interpret the Pensacola Act. View "The City of Miami, Oklahoma v. Federal Energy Regulatory Commission" on Justia Law

Phillip Armstrong appealed a judgment dismissing his amended complaint. The district court granted dismissal of the amended complaint after finding Armstrong had failed to exhaust his administrative remedies. In 1996, Armstrong filed a surety bond with the North Dakota Industrial Commission when he became the operator of several oil wells on private land. In 2001, Armstrong also began operating wells on federal lands. Armstrong was engaged with federal authorities in formulating a reclamation plan for the federal lands. The wells were not producing oil, and Armstrong requested a release of his surety bond filed with the Commission. The Commission conditioned the release of the bond on Armstrong performing a geoprobe assessment of the wells, which Armstrong refused. Armstrong thereafter filed a complaint in the district court seeking release of his bond. The court ultimately concluded Armstrong's claims were barred by his failure to exhaust his administrative remedies, rejected Armstrong’s argument state law did not apply because of federal preemption, and entered a judgment dismissing the action. The North Dakota Supreme Court concluded federal regulations did not preempt the application of N.D.C.C. ch. 38-08, Armstrong failed to exhaust his administrative remedies, and the court properly dismissed the action. View "Armstrong v. Helms" on Justia Law

Enerplus Resources (USA) Corporation (“Enerplus”) appealed an amended judgment and adverse summary judgment orders which held it liable for suspending royalty payments to Meyer Family Mineral Trust, Joann Deryce Struthers Trust, and Steven J. Reed Living Trust (collectively, “Trust Defendants”). Victor Christensen owned land in Dunn County, North Dakota, including an area referred to as the “W1/2.” In 1952, he deeded a 5/128 royalty interest1 to Henry Roquette for all of the oil and gas produced from the W1/2 (“Roquette Deed”). Thereafter, Victor Christensen transferred his remaining interest in the W1/2 to his wife, Mildred Christensen. In 1957, Mildred Christensen deeded the W1/2 to Joe Reed and Deryce Reed, reserving a 4/5 mineral interest, and thereby conveying a 1/5 mineral interest to the Reeds. In 1968, Henry Roquette conveyed the 5/128 royalty interest to Mildred Christensen. The Vic Christensen Mineral Trust (“VCMT”) now owns the 4/5 mineral interest in the W1/2 that was formerly owned by Mildred Christensen. The Trust Defendants collectively owned the 1/5 mineral interest previously conveyed to the Reeds. Enerplus operated wells within the W1/2. A title examiner found a discrepancy with the land acreage in the Roquette Deed, which affected the size of the royalty interest. In October 2017, Enerplus informed VCMT and the Trust Defendants of these issues, required they enter into a stipulation clarifying their ownership interests, and suspended royalty payments to VCMT and the Trust Defendants. In 2019, VCMT sued the Trust Defendants to quiet title, alleging it owned the royalty interest on the Trust Defendants’ 1/5 mineral interest in the W1/2, and the royalty interest was larger than 5/128 based on the Roquette Deed. The Trust Defendants counterclaimed, alleging their 1/5 mineral interest had no royalty burden. VCMT and the Trust Defendants then stipulated to their interests with VCMT agreeing to forgo any rights to the royalty interest. Enerplus then paid VCMT and the Trust Defendants their suspended royalty payments. The Trust Defendants sought statutory interest from Enerplus for suspending their royalty payments. After cross-motions, the district court granted summary judgment in favor of the Trust Defendants and against Enerplus. Enerplus argued it was justified in suspending payments under N.D.C.C. 47-16-39.1, which allowed for suspending payments in the event of a dispute of title. To this, the North Dakota Supreme Court agreed and revered the district court's orders. View "Vic Christensen Mineral Trust v. Enerplus Resources Corp., et al." on Justia Law

At issue in this appeal was a contract dispute between Ute Indian Tribe of the Uintah and Ouray Reservation (the Tribe) and Lynn Becker, a non-Indian. The contract concerned Becker’s work marketing and developing the Tribe’s mineral resources on the Ute reservation. Becker sued the Tribe in Utah state court for allegedly breaching the contract by failing to pay him a percentage of certain revenue the Tribe received from its mineral holdings. Later, the Tribe filed this lawsuit, challenging the state court’s subject-matter jurisdiction under federal law. The district court denied the Tribe’s motion for a preliminary injunction against the state-court proceedings, and the Tribe appealed. After its review, the Tenth Circuit Court of Appeals reversed, finding the Tribe was entitled to injunctive relief. The appellate court found the trial court’s factual findings established that Becker’s state-court claims arose on the reservation because no substantial part of the conduct supporting them occurred elsewhere. And because the claims arose on the reservation, the state court lacks subject-matter jurisdiction absent congressional authorization. Accordingly, under the particular circumstances of this appeal, the Tenth Circuit "close[d] this chapter in Becker’s dispute with the Tribe by ordering the district court to permanently enjoin the state-court proceedings." View "Ute Indian Tribe of the Uintah, et al. v. Lawrence, et al." on Justia Law

The Supreme Court affirmed the judgment of the court of appeal concluding that a municipality does not violate Ohio Const. art. XVIII, 6 by selling a surplus of electricity to customers outside the municipality's boundaries, holding that the court of appeals did not err.The City of Cleveland sold outside its boundaries approximately four percent of the electricity it sold inside its boundaries. Cleveland Electric Illuminating Company (CEI) brought this complaint arguing that the electricity the City sold extraterritorially as surplus violated this Court's decision in Toledo Edison Co. v. Bryan, 737 N.E.2d 529 (2000) and the Ohio Constitution. The trial court granted summary judgment for the City. The court of appeals reversed, determining (1) Article XVIII, Section 6 does not require a municipality to buy the precise amount of electricity required by its inhabitants at any given time, and (2) questions of material fact existed as to whether the City obtained surplus electricity for the sole purpose of selling it to a neighboring city. The Supreme Court affirmed, holding that while a municipality may not acquire excess capacity for the sole purpose of reselling it outside the municipality's territorial boundaries, the municipality is not required to purchase the exact amount of electricity necessary to satisfy the current needs of its territorial customers. View "Cleveland Electric Illuminating Co. v. Cleveland" on Justia Law

The First Circuit affirmed the decision of the Massachusetts Department of Environmental Protection (DEP) reaffirming the issuance of an air permit to Algonquin Gas Transmission, LLC for a natural gas compressor station in Weymouth, Massachusetts, holding that the agency's actions were not arbitrary or capricious.DEP had previously approved Algonquin's plans to power the Weymouth station using a natural gas-fired turbine, which emitted nitrogen oxides. In a prior appeal, the City of Quincy, the Towns of Braintree and Hingham, and a group of citizens (collectively, the City) and other petitioners established that the DEP did not follow its own procedures when it eliminated an electric motor as a possible alternative to the gas-fired turbine, and the First Circuit remanded the case. On remand, DEP again concluded that an electric motor was not what Massachusetts regulations call the "best available control technology" (BACT) for the new compressor station and reaffirmed the air permit at issue. The First Circuit affirmed the DEP's decision after remand, holding that substantial evidence supported the decision and that the agency's determination was not arbitrary and capricious. View "City of Quincy v. Massachusetts Department of Environmental Protection" on Justia Law

Texas and Wyoming both regulate the use of indemnity agreements in their oilfields. Wyoming, concerned that indemnification disincentivizes safety, forbids oilfield indemnity agreements. Wyo. Stat. 30-1-131. Texas, concerned that large oil companies will use their leverage to demand indemnity from independent operators, also disfavors the agreements but does not ban them; it allows indemnification in limited situations including when the indemnity is mutual and backed by insurance. Tex. Civ. Prac. & Rem. 127.003, 127.005.Cannon, a Wyoming oil-and-gas exploration company, and Texas-based KLX entered into a “Master Equipment Rental Agreement,” providing that Texas law governs the agreement and that the parties must “protect, defend, [and] indemnify” each other against losses involving injuries sustained by the other’s employees, regardless of who is at fault “to the maximum extent permitted by applicable law.” Most of the work performed under the contract occurred in Wyoming with none in Texas. Indemnity was sought for a Wyoming lawsuit filed by a Wyoming resident injured in a Wyoming oilfield operated by a Wyoming business.The Fifth Circuit held that Wyoming law prevails and that the indemnity provision in the Agreement is unenforceable. Wyoming has a more significant relationship to the parties and a materially greater interest in applying its policy; its anti-indemnity policy is “fundamental.” View "Cannon Oil & Gas Well Services, Inc. v. KLX Energy Services, L.L.C." on Justia Law

Allco Renewable Energy Limited appealed a Public Utility Commission (PUC) order which found that Allco had begun “site preparation for . . . an electric generation facility” without first obtaining a certificate of public good (CPG) in violation of 30 V.S.A. 248(a)(2)(A). The PUC enjoined Allco from any further site preparation unless certain criteria were satisfied and explained that, following another hearing, it would determine a civil penalty for Allco’s violation under 30 V.S.A. 30(a). On appeal, Allco challenged the PUC’s injunction order. Because there was not yet a final appealable order, the Vermont Supreme Court dismissed this appeal for lack of jurisdiction. View "In re Allco Renewable Energy Limited et al." on Justia Law