Justia Energy, Oil & Gas Law Opinion Summaries

MVP asked two Army Corps districts to verify that, pursuant to the Clean Water Act, MVP's proposed discharge of dredged and/or fill material into waters of the United States in furtherance of construction of a natural gas pipeline in those districts could be governed by the Army Corps' 2017 nationwide permit (NWP) referred to as NWP 12. The Huntington District issued a verification, determining that the Pipeline project met the criteria for operation under the NWP 12, excusing the project from the individual permitting process (the "Verification"). The Norfolk District did the same, issuing a reinstatement of its prior verification allowing MVP to use NWP 12 in that district (the "Reinstatement"). Petitioners filed petitions for agency review of the Verification and Reinstatement pursuant to the Natural Gas Act (NGA) and filed the instant motions to stay.The Fourth Circuit concluded that petitioners are likely to succeed on the merits of their petitions for review, and other equitable factors weigh in favor of granting the motions for stay. The court explained that the Verification was likely issued in contravention of applicable law because the Army Corps impermissibly incorporated into NWP 12 a modified permit condition from the West Virginia Department of Environmental Protection (WVDEP). Furthermore, because the Verification was likely issued in contravention of law, the Reinstatement (which necessarily depends on the validity of the Verification) is likely defective as well. Therefore, the court granted petitioners' motions for a stay of the Huntington District's Verification and the Norfolk District's Reinstatement until such time as the court may consider the petitions for review on their merits. However, the court concluded that petitioners are not likely to succeed on the merits of their challenges to the Army Corps' 2017 issuance of NWP 12 itself because the court likely lacks jurisdiction to entertain such challenges. View "Sierra Club v. U. S. Army Corps of Engineers" on Justia Law

The Fourth Circuit vacated the district court's grant of summary judgment in favor of plaintiffs in an action brought against Equinor and SWN, challenging the deduction of post-production costs from royalties paid to plaintiffs pursuant to an oil and gas lease between the parties. The district court held that the lease failed to properly provide for the method of calculating post-production costs.The court held, however, that the lease provisions regarding royalty payments satisfy Estate of Tawney v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (W. Va. 2006), and are otherwise consistent with West Virginia law. In this case, the lease suffices under Tawney to indicate the method for calculating the amount of post-production costs to be deducted when calculating plaintiffs' royalties; that method is simply to add up all of the identified, reasonable, and actually incurred post-production costs, and deduct them from SWN and Equinor's gross proceeds; and the amount is then adjusted for plaintiffs' fractional share of the total pooled acreage and their royalty rate. Especially in light of Leggett v. EQT Production Co., 800 S.E.2d 850 (W. Va. 2017), the court concluded that West Virginia law demands nothing more. The court found it unnecessary to certify any issue of law. View "Young v. Equinor USA Onshore Properties, Inc." on Justia Law

Plaintiff-appellee Revolution Resources, LLC, (Revolution), an oil and gas well operator, filed an action under the Oklahoma Surface Damages Act (SDA), to Appoint Appraisers. In February 2018, Revolution acquired and became the operator of a 30,000 acre unit that was created in 1947 pursuant to Order 20212 of the Oklahoma Corporation Commission (OCC). The unit wasknown as the West Edmond Hunton Lime Unit (WEHLU). Defendant-appellant Annecy, LLC, (Annecy) purchased the subject premises in August 2019, with the intent to build expensive luxury homes. Appellant unsuccessfully sought a temporary injunction against Appellee's operations. Appellant appealed the interlocutory order denying its motion for temporary injunction. The Oklahoma Supreme Court granted an injunction pending the appeal. Appellant was required to post a bond securing the cost and attorney fees of the Appellee if the Supreme Court determined later the temporary injunction should not have been granted. The Supreme Court concluded the injunction should not have been granted: Annecy purchased its surface estate subject to the outstanding mineral estate held by Revolution. Annecy's surface estate is servient to that of Revolution's mineral estate. Annecy did not meet its burden of proving by clear and convincing evidence that it would be irreparably harmed by Revolution's oil and gas operations. Having failed to establish one of the four factors required, i.e., irreparable harm, by clear and convincing evidence, Annecy did not meet its burden to prove all necessary factors to obtain extraordinary relief, therefore its motion for temporary injunction was correctly denied. The temporary injunction granted by the Supreme Court was dissolved, and the matter remanded for further proceedings to determine the costs and attorney fees owed the Appellee which were secured by bond. View "Revolution Resources, LLC v. Annecy, LLC" on Justia Law

Environmental groups challenged the constitutionality of Public Resources Code section 25531, which limits judicial review of decisions by the Energy Resources Conservation and Development Commission on the siting of thermal power plants. Section 25531(a) provides that an Energy Commission siting decision is “subject to judicial review by the Supreme Court of California.” The plaintiffs contend this provision abridges the original jurisdiction of the superior courts and courts of appeal over mandate petitions, as conferred by California Constitution Article VI, section 10. Section 25531(b) provides that findings of fact in support of a Commission siting determination “are final,” allegedly violating the separation of powers doctrine by depriving courts of their essential power to review administrative agency findings (Cal. Const., Art. III, section 3; Art. VI, section 1).The court of appeal affirmed summary judgment in favor of the plaintiffs. The Article VI grant of original jurisdiction includes the superior courts and courts of appeal and may not be circumscribed by statute, absent some other constitutional provision. Legislative amendments to section 25531 have broken the once-tight link between the regulatory authority of the Public Utilities Commission (PUC) and Energy Commission power plant siting decisions, such that the plenary power Article XII grants the Legislature over PUC activities no longer authorizes section 25531(a). Section 25531(b) violates the judicial powers clause by preventing courts from reviewing whether substantial evidence supports the Commission’s factual findings. View "Communities for a Better Environment v. Energy Resources Conservation & Development Commission" on Justia Law

The California State Lands Commission and Aspen American Insurance Company filed suit against Plains Pipeline and its affiliate, alleging that when Plains's negligent maintenance of a pipeline resulted in disrupting the flow of oil, it also disrupted the payment of royalty income to the Commission, and caused damage to improvements on the Commission's land.The Court of Appeal reversed the trial court's judgment in favor of Plains, holding that Plains is not exempt from liability for the interruption in service. The court explained that no statute grants immunity to public utilities and whether immunity applies is a question of judicial policy. In this case, Plains does not deliver essential municipal services to members of the general public and, although it is called a public utility, it is a private business, entitled to no more immunity from liability than any ordinary private business. The court also held that the complaint alleges sufficient facts to show a special relationship between the parties that allows the Commission to recover purely economic damages. As for the reverse condemnation claim raised for the first time on appeal, the court noted that the proper procedure is to make any motion to amend in the trial court in the first instance. View "State Lands Commission v. Plains Pipeline, L.P." on Justia Law

The Supreme Court affirmed the order of the circuit court denying the motion filed by Plaintiff, an oil and gas drilling company, for summary judgment and denying Plaintiff a favorable declaratory judgment, holding that the circuit court did not err in refusing to imply into an existing oil and gas lease a covenant to pool and unitize the lease with nearby mineral estates.Plaintiff brought this action seeking a declaration that the oil and gas lease at issue contained an implied covenant to pool or unitize the lease with other mineral interests. The circuit court rejected Plaintiff's request for a declaratory judgment, holding that the circuit court correctly concluded that there can be no implied covenant to pool or unitize in the absence of language in the lease showing the parties contemplated that a lessor has a right to pool and unitize the lease with other estates. View "Ascent Resources - Marcellus, LLC v. Huffman" on Justia Law

Gulf LNG Energy, LLC owned and operated a liquefied natural gas (“LNG”) terminal in Mississippi (the “Pascagoula Facility”). Gulf LNG Pipeline, LLC (collectively with Gulf LNG Energy, LLC, “Gulf”), owned and operated a five-mile long pipeline that distributed LNG from the Pascagoula Facility to downstream inland pipelines. Eni USA Gas Marketing LLC (“Eni”), marketed natural gas products and offered related services to customers in the U.S. In 2007, Gulf and Eni entered into a Terminal Use Agreement (the “TUA”), whereby Gulf would construct the Pascagoula Facility, and Eni would use the Facility to receive, store, regasify, and deliver imported LNG to downstream businesses. Under the TUA, Eni agreed to pay Gulf fees for using the Facility, including monthly Reservation Fees and Operating Fees. In 2016, Eni filed for arbitration, alleging the U.S. natural gas market had undergone a “radical change” due to “unforeseen, vast new production and supply of shale gas in the United States [that] made import of LNG into the United States economically irrational and unsustainable.” Eni alleged the essential purpose of the TUA had been frustrated and thus terminated because of “fundamental and unforeseeable change in the United States natural gas/LNG market,” and sought a declaration that Eni could terminate the TUA at any time because Gulf breached warranties and covenants. After the first arbitration, the panel order Eni to pay Gulf "just compensation ...for the value their partial performance of the TUA conferred upon Eni." Gulf subsequently sued Eni to collect the arbitration award; judgment was entered in Gulf's favor. Eni initiated a second arbitration, again asserting breaches of the TUA. Gulf moved to dismiss the second arbitration. The Court of Chancery ruled the issues raised in the second arbitration were already decided in the first (and subsequent court case). The Delaware Supreme Court, after its review of these proceedings, determined: (1) the Court of Chancery had jurisidction to enjoin a collateral attack on the first arbitration award; and (2) the Court of Chancery should have enjoined all claims in the second arbitration between the parties, because the admitted goal of the second arbitration was to "raise irregularities and revisit the financial award in the first arbitration." The Court, therefore, affirmed part of the Court of Chancery's judgment affirming dismissal of the second arbitration, and reversed any part of the lower court's judgment allowing certain issues in the second arbitration to be considered. View "Gulf LNG Energy v. ENI USA Gas Marketing" on Justia Law

The Fourth Circuit granted Ergon's petition for review of the EPA's decision denying Ergon's petition to be exempt from the EPA's administration of a renewable fuel standard program. The court previously vacated and remanded the EPA's denial as arbitrary and capricious. On remand, the EPA denied Ergon's petition again. In this appeal, Ergon argues that the EPA repeated the errors the court previously identified in Ergon I by again relying on the DOE's facially deficient scoring metrics to deny the petition.The court reviewed the record and concluded that, although the EPA's post-remand decision largely cured the problems the court previously identified, Ergon has provided sufficient evidence undermining one aspect of the EPA's decision. In this case, part of the EPA's basis for accepting the DOE's reasoning as to Section 1(b) of the DOE's Scoring Matrix has been reliably called into question, and thus the EPA's decision was arbitrary and capricious. Because of the threshold problem with the rationale provided for the Section 1(b) scoring, the court did not reach the secondary issue regarding the apparently contradictory definitions of "refinery" used in Section 1(b) and 2(a). Accordingly, the court vacated and remanded for further proceedings. View "Ergon-West Virginia, Inc. v. Environmental Protection Agency" on Justia Law

The Supreme Court affirmed the circuit court's order granting Antero Resources Corporation partial summary judgment on its claim for declaratory judgment, holding that the court did not err in concluding that the Antero top lease took priority over the EQT Production Company base lease covering the same property.Larry and Linda Lemasters, who owned the oil and gas underlying a tract of land, entered into an oil and gas lease (the base lease) with an LLC that later assigned the lease to EQT. The Lemasters subsequently entered into an oil and gas lease with Antero (the top lease). The lease was made effective immediately upon expiration of the primary term of the base lease. The Lemasters and EQT (together, Defendants) subsequently entered into a base lease amendment agreeing to extend the primary term of the base lease. Antero filed a complaint against Defendants asserting claims for, inter alia, breach of contract and declaratory judgment. The circuit court awarded summary judgment for Antero on its declaratory judgment claim, determining that the base lease and its amendment were subject to the Antero top lease. The Supreme Court affirmed, holding that the court did not err in declaring that the top lease was the valid and existing oil and gas lease covering the subject property. View "EQT Production Co. v. Antero Resources Corp." on Justia Law

The Supreme Court reversed the order of the circuit court granting summary judgment for Antero Resources Corp. and declaring that Bison Interests, LLC was entitled to no overriding royalty interest in the Marcellus shale formation underlying certain gas wells, holding that the declaratory judgment sought by Antero was barred by the doctrines of res judicata and judicial estoppel.The circuit court found Antero's action was barred neither by res judicata nor collateral estoppel because the issue of Bison's entitlement to an overriding royalty in the Marcellus shale production had not been finally adjudicated in prior litigation. The court further found that Antero was not judicially estopped from bringing its claim. The Supreme Court reversed, holding (1) Antero's action for declaratory relief was barred by the doctrine of res judicata; and (2) Antero's action was similarly, and independently, barred by the doctrine of judicial estoppel. View "Bison Interests, LLC, v. Antero Resources Corp." on Justia Law