Justia Energy, Oil & Gas Law Opinion Summaries

Healthy Gulf and other environmental groups challenged the Federal Energy Regulatory Commission's (FERC) decision to authorize the construction and operation of liquefied natural gas (LNG) facilities in southwestern Louisiana. They argued that FERC did not properly address certain requirements under the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA). Specifically, they contended that FERC inadequately explained its failure to determine the environmental significance of the project's greenhouse gas (GHG) emissions and failed to adequately assess the cumulative effects of the project's nitrogen dioxide (NO2) emissions. However, they acknowledged that FERC did consider alternatives to the project.The Commission had issued a final Environmental Impact Statement (FEIS) and authorized the project, finding it environmentally acceptable and consistent with the public interest. Petitioners requested a rehearing, which was deemed denied by operation of law when FERC did not respond timely. They then sought review from the United States Court of Appeals for the District of Columbia Circuit.The United States Court of Appeals for the District of Columbia Circuit found that FERC inadequately explained its failure to determine the significance of the project's GHG emissions and failed to properly assess the cumulative effects of the project's NO2 emissions. The court noted that FERC's reliance on the Significant Impact Levels (SILs) to assess cumulative effects was insufficient and that FERC did not adequately consider the significance of GHG emissions using available methodologies. However, the court upheld FERC's consideration of alternatives to the project, finding that FERC had provided sufficient reasoning for rejecting the proposed alternatives.The court granted the petitions in part, denied them in part, and remanded the case to FERC for further consideration without vacating the authorization order. The court instructed FERC to provide a more thorough explanation of its GHG emissions analysis and to properly assess the cumulative effects of NO2 emissions. View "Healthy Gulf v. FERC" on Justia Law

Golden Pass LNG Terminal, LLC was authorized to export up to 937 billion cubic feet per year of liquified natural gas (LNG) from a facility in Texas, with 129 billion cubic feet restricted to countries with a free-trade agreement (FTA) with the U.S. In 2022, the Department of Energy (DOE) removed this FTA-based restriction. The Sierra Club challenged this removal, arguing that it would increase actual exports, leading to more shipping traffic and harming the aesthetic and recreational interests of a member living near the facility.The Federal Energy Regulatory Commission (FERC) approved the facility's expansion in January 2021, and DOE approved increased exports to FTA countries in June 2021. DOE later approved exports to non-FTA countries in 2022, which Sierra Club opposed. After DOE denied Sierra Club's rehearing request, Sierra Club sought judicial review of the orders allowing greater exports to non-FTA countries.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and focused on the issue of constitutional standing. The court found that Sierra Club failed to provide evidence or argument in its opening brief to show that removing the FTA-based restriction would likely increase export volumes. The court noted that Sierra Club's arguments in its reply brief were insufficient to establish standing, as they were not patently obvious and irrefutable. Consequently, the court dismissed the petition for review due to lack of Article III standing. View "Sierra Club v. DOE" on Justia Law

Range Resources-Appalachia, LLC (Range) and Columbia Gulf Transmission, LLC (Columbia Gulf) filed administrative complaints against Texas Eastern Transmission, LP (Texas Eastern) with the Federal Energy Regulatory Commission (FERC). Range, a natural gas producer, has long-term agreements with Texas Eastern and Columbia Gulf to transport gas through the Adair Interconnect. During two periods in 2019 and 2021, Texas Eastern's pipeline pressure was too low to move gas into Columbia Gulf's system, causing significant financial losses for Range. Petitioners sought FERC's intervention to require Texas Eastern to maintain higher pipeline pressures.FERC dismissed the complaints, finding that Texas Eastern had no minimum delivery pressure obligation. FERC also denied rehearing requests, stating that the complaints did not sufficiently demonstrate a violation of any pressure obligations. Petitioners argued that Texas Eastern failed to comply with its tariff and the Adair Interconnection Agreement, but FERC found these arguments procedurally and substantively insufficient. Additionally, FERC concluded that Texas Eastern's force majeure declaration in 2021 was irrelevant to the issue of reservation charge credits, as Columbia Gulf's refusal to accept gas was outside Texas Eastern's control.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court upheld FERC's dismissal, agreeing that the complaints did not adequately plead violations of the Texas Eastern Tariff or the Adair Interconnection Agreement. The court also found that FERC did not need to hold an evidentiary hearing on the issues of equal service and the force majeure declaration, as the written record was sufficient. The court denied the petitions for review, affirming FERC's orders. View "Columbia Gulf Transmission, LLC v. Federal Energy Regulatory Commission" on Justia Law

This case involves Duke Energy Progress, LLC, a grid operator, and two energy generation companies, American Beech Solar, LLC, and Edgecombe Solar LLC. The dispute centers around two orders by the Federal Energy Regulatory Commission (FERC). The first order rejected Duke Energy's agreement with American Beech Solar, which did not require Duke Energy to reimburse the cost of network upgrades. The second order accepted Duke Energy's agreement with Edgecombe Solar, which Duke Energy filed unsigned and under protest, and required Duke Energy to reimburse the cost of network upgrades.In the lower courts, FERC rejected the agreement with American Beech Solar, arguing that it was not just and reasonable because Duke Energy had threatened to delay construction of the upgrades, preventing American Beech from connecting to the grid, unless American Beech agreed to forego reimbursement. FERC also approved the agreement with Edgecombe Solar, despite Duke Energy's protest that it should not be required to pay reimbursements.In the United States Court of Appeals for the District of Columbia Circuit, the court denied Duke Energy's petitions for review. The court held that FERC's orders were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. The court found that FERC's interpretation of its own regulation, Order 2003, was reasonable and entitled to deference. The court also found that FERC reasonably rejected Duke Energy's request for a deviation from the reimbursement requirement. Finally, the court held that FERC's orders did not violate the principle of treating similarly situated utilities differently without a reasonable justification. View "Duke Energy Progress, LLC v. Federal Energy Regulatory Commission" on Justia Law

This case involves the sale of electricity under the Federal Power Act and the Federal Energy Regulatory Commission's (FERC) efforts to limit the rates at which certain wholesale electricity is traded. For over two decades, FERC has maintained a "soft" price cap for certain short-term electricity sales in parts of the western United States. In August 2020, a heat wave in the western United States led to increased prices in the market for short-term electricity supply. Some of the short-term sales occurred at prices above FERC's soft cap. Sellers who transacted at above-cap prices were required to justify those transactions to FERC or be required to refund sale prices that exceed the cap. After reviewing the sellers' justification filings, FERC determined that some sellers had failed to justify their above-cap sales and ordered partial refunds.The case was brought before the United States Court of Appeals for the District of Columbia Circuit. The court found that FERC should have conducted a Mobile-Sierra analysis, which presumes that contract rates formed through arms-length, bilateral negotiation are reasonable, before ordering refunds. The court agreed with the sellers that FERC erred by failing to conduct this analysis prior to ordering refunds. As a result, the court granted the sellers' petitions for review, vacated the orders they challenged, and remanded for further proceedings. The court dismissed the consumers' petitions for review as moot. View "Shell Energy North America (US), L.P. v. Federal Energy Regulatory Commission" on Justia Law

The case involves Transcontinental Gas Pipe Line Company, LLC (Transco), a natural gas company that sought to abandon and expand its pipeline facilities in Pennsylvania and New Jersey. To do so, Transco needed a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC), which it obtained. However, the certificate was subject to conditions, including that Transco receive three additional permits from the Pennsylvania Department of Environmental Protection (PADEP). After receiving these permits, Transco began its pipeline project. However, three environmental advocates filed an administrative appeal with the Environmental Hearing Board (EHB) challenging PADEP's issuance of the permits. In response, Transco initiated a lawsuit in the District Court seeking to enjoin the administrative appeal, arguing that the Natural Gas Act preempts the state law allowing the appeal.The District Court rejected Transco's preemption arguments and denied its motion for a preliminary injunction. Transco appealed this decision to the United States Court of Appeals for the Third Circuit. The Court of Appeals affirmed the District Court's decision, finding that none of the theories of preemption advanced by Transco or the state agency applied in this case. The Court held that the Natural Gas Act does not expressly preempt administrative appeals to the EHB, nor does it field preempt such appeals. The Court also found that the possibility of multiple challenges in different fora to PADEP permitting decisions under the Clean Water Act for interstate natural gas pipelines does not impose an obstacle to the purposes of the Natural Gas Act. Therefore, the Court concluded that Transco's motion for a preliminary injunction was correctly denied. View "Transcontinental Gas Pipe Line Co LLC v. Pennsylvania Environmental Hearing Board" on Justia Law

The case revolves around Equinor Energy LP's appeal against the North Dakota State Tax Commissioner's denial of sales tax refunds. Equinor, an oil and gas producer, had purchased and paid North Dakota sales tax on oilfield equipment, including separators, for several facilities. The company applied for a refund, arguing that the equipment was installed into a system used to compress, process, gather, collect, or refine gas, thus qualifying for a tax refund. The Tax Commissioner approved a portion of the claim but denied the remaining refund claim related to the purchase of separators.The Tax Commissioner issued an administrative complaint requesting denial of the remaining requested refund amount. The Commissioner argued that initial separators used during production do not qualify for the exemption, which applies only to equipment installed downstream of the wellsite transfer meter, i.e., off the wellsite. An administrative law judge (ALJ) upheld the denial of the refund claim, and the Commissioner adopted the ALJ’s findings of fact and conclusions of law. Equinor appealed to the district court, which reversed the Commissioner’s order. However, on remand, the ALJ again recommended the denial of Equinor’s refund. The district court affirmed the final order of the Commissioner, leading to this appeal.The Supreme Court of North Dakota affirmed the district court's judgment. The court concluded that the Commissioner's interpretation was in accordance with the language of the relevant statute. The court found that the separators merely isolated the three component parts of the well stream and did not gather or compress gas. Therefore, they did not qualify for the tax exemption. The court also noted that the legislature's intent in using the phrases “recovered from,” “a system to compress gas,” or “a system to gather gas” was clear, and it was unnecessary to apply “the rule of last resort” and construe the ambiguity in favor of the taxpayer. View "Equinor Energy v. State" on Justia Law

This case involves a dispute between Dorchester Minerals, L.P. (Dorchester) and Hess Bakken Investments II, LLC (Hess) over unpaid royalties and statutory interest. Dorchester, an unleased mineral interest owner, claimed that Hess failed to pay royalties from oil and gas production from the Hueske well between May 2008 and February 2011 due to a title issue. Dorchester sought statutory interest under N.D.C.C. § 47-16-39.1 for the unpaid royalties. Hess argued that Dorchester's claim was time-barred.The District Court initially dismissed Dorchester's claim regarding the Johnson well but denied the motion to dismiss the claim regarding the Hueske well. Both parties moved for summary judgment on the Hueske well claim, and the court granted Dorchester's motion. Dorchester then moved for statutory attorney’s fees, which the court denied, concluding no single “prevailing party” existed within the meaning of N.D.C.C. § 47-16-39.1. The court awarded Dorchester $75,166.07 in statutory interest on its Hueske well claim and dismissed both parties’ claims for attorney’s fees.The Supreme Court of North Dakota reversed the lower court's decision. The court held that Dorchester's claim for statutory interest under N.D.C.C. § 47-16-39.1 was time-barred. The court concluded that the six-year limitation period provided in N.D.C.C. § 28-01-16(2) applied to Dorchester’s claims. The court found that Dorchester had actual knowledge of the material facts necessary for it to understand it had a claim under N.D.C.C. § 47-16-39.1 regarding the Hueske well by 2013 at the latest. Therefore, Dorchester’s claim for statutory interest under N.D.C.C. § 47-16-39.1 regarding the Hueske well was barred by the six-year statute of limitations provided in N.D.C.C. § 28-01-16(2). The court remanded the case for the district court to award attorney’s fees and costs to Hess as the “prevailing party.” View "Dorchester Minerals v. Hess Bakken Investments II" on Justia Law

The case involves a dispute over the award of black lung benefits to the surviving wife of the late Bruce E. Goode, who worked for American Energy as a coal miner and suffered from a severe chronic obstructive pulmonary disability. American Energy disputed the cause of his impairment, arguing that it was due to his long-term cigarette smoking, not his coal mine employment. An administrative law judge (ALJ) found that Mr. Goode’s disability arose from his coal mine employment and awarded black lung benefits. The Benefits Review Board affirmed the award.American Energy appealed, arguing that the ALJ applied an incorrect legal standard. The company contended that the Black Lung Benefits Act and its implementing regulations require a miner to prove that coal dust caused the lung disease or made it worse. American Energy argued that the ALJ reversed the burden of proof by finding that the company had not proven why Mr. Goode’s lung disease was not at least partially due to coal dust exposure.The United States Court of Appeals for the Fourth Circuit agreed that the ALJ applied the wrong legal standard in determining that Mr. Goode had legal pneumoconiosis. However, the court noted that the ALJ also concluded that Mr. Goode’s clinical pneumoconiosis entitled him to benefits. The court granted American Energy’s petition and vacated and remanded the Board’s order for further proceedings. View "American Energy, LLC v. Director, Office of Workers' Compensation Programs" on Justia Law

The case involves James and Wilma Self, who filed a lawsuit as representatives of a class of plaintiffs who own unleased mineral interests in Louisiana within compulsory drilling units operated by BPX Operating Company. The plaintiffs alleged that BPX's practice of withholding post-production costs from their pro rata share of production was improper. BPX sought dismissal of the claim, arguing that the Louisiana doctrine of negotiorum gestio provides a mechanism for unit operators to be reimbursed for post-production costs not otherwise covered by specific statutes. The federal district court granted BPX's motion to dismiss.On appeal, the United States Fifth Circuit found the law unsettled on this issue and certified a question of law to the Supreme Court of Louisiana. The question was whether the doctrine of negotiorum gestio applies to unit operators selling product in accordance with La. R.S. 30:10(A)(3).The Supreme Court of Louisiana found that the doctrine of negotiorum gestio does not apply and cannot be a basis for liability as a unit operator is always acting "with authority." The court reasoned that the oil and gas conservation law provides a unique quasi-contractual relationship between unleased mineral owners and unit operators, which cannot be applied consistently with the doctrine of negotiorum gestio. The court further explained that a party is only a gestor if his action is taken "without authority," but a unit operator is statutorily authorized by La. R.S. 30:10(A)(3) to sell an unleased owner's share of production when the unleased owner has not arranged to dispose of his share. Therefore, a unit operator who sells an owner's production under the statutory authority of La. R.S. 30:10(A)(3) cannot be a gestor under La. C.C. art. 2292. The court answered the certified question and sent its judgment to the United States Court of Appeals for the Fifth Circuit and to the parties. View "SELF VS. BPX OPERATING COMPANY" on Justia Law