Justia Energy, Oil & Gas Law Opinion Summaries

A collection of Dutch and Luxembourgish energy companies invested in solar power projects in Spain, relying on promised economic subsidies. Following the 2008 financial crisis, Spain withdrew these subsidies, prompting the companies to challenge Spain's actions through arbitration under the Energy Charter Treaty (ECT). The companies won multi-million-euro awards in arbitration. However, the European Union argued that the ECT's arbitration provision does not apply to disputes between EU Member States, rendering the awards invalid under EU law. The companies sought to enforce the awards in the United States, invoking the ICSID Convention and the New York Convention.The United States District Court for the District of Columbia reviewed the cases. In NextEra Energy Global Holdings B.V. v. Kingdom of Spain and 9REN Holding S.A.R.L. v. Kingdom of Spain, the court held it had jurisdiction under the Foreign Sovereign Immunities Act (FSIA) arbitration exception and denied Spain's motion to dismiss. The court also granted anti-anti-suit injunctions to prevent Spain from seeking anti-suit relief in foreign courts. Conversely, in Blasket Renewable Investments LLC v. Kingdom of Spain, the district court found Spain immune under the FSIA and dismissed the case, denying the requested injunction as moot.The United States Court of Appeals for the District of Columbia Circuit reviewed the cases. The court held that the district courts have jurisdiction under the FSIA’s arbitration exception to confirm the arbitration awards against Spain. However, it found that the district court in NextEra and 9REN abused its discretion by enjoining Spain from pursuing anti-suit relief in Dutch and Luxembourgish courts. The appellate court affirmed in part and reversed in part in NextEra, reversed in 9REN and Blasket, and remanded for further proceedings. View "NextEra Energy Global Holdings B.V. v. Kingdom of Spain" on Justia Law

The Pipeline and Hazardous Materials Safety Administration (PHMSA) issued new and revised safety standards for pipelines in 2022. The Interstate Natural Gas Association of America (INGAA), representing pipeline companies, challenged five of these standards, arguing that PHMSA failed to justify the benefits outweighing the costs as required by law.The U.S. Court of Appeals for the District of Columbia Circuit reviewed the case. The court found that four of the five challenged standards were inadequately justified. Specifically, PHMSA failed to properly analyze the costs associated with the high-frequency electric resistance welding (ERW) standard, the crack maximum allowable operating pressure (MAOP) standard, the dent-safety-factor standard, and the corrosive-constituent standard. The court noted that PHMSA either did not recognize new costs imposed by these standards or provided inconsistent explanations regarding the costs.The court vacated the high-frequency-ERW standard as applied to seams formed by high-frequency ERW, the crack-MAOP standard, the dent-safety-factor standard and related provisions, and the corrosive-constituent standard. The court also vacated the high-frequency-ERW standard but only as applied to seams formed by high-frequency ERW.However, the court upheld the pipeline-segment standard. INGAA had argued that a change in terminology from "SCC segment" to "covered pipeline segment" would significantly increase the number of required excavations. PHMSA clarified that there was no substantive difference between the proposed and final versions of the rule. The court accepted PHMSA's explanation and found no basis to challenge the cost-benefit analysis for this standard.In summary, the court granted INGAA's petition in part, vacating several standards due to inadequate cost-benefit analyses, but denied the petition regarding the pipeline-segment standard. View "Interstate Natural Gas Association of America v. PHMSA" on Justia Law

In 2021, petitioners challenged the Federal Energy Regulatory Commission’s (FERC) authorization of two liquefied natural gas (LNG) export terminals in Cameron County, Texas, and a related pipeline. The court partially granted the petitions and remanded the case to FERC without vacating the orders. On remand, FERC reauthorized the projects, prompting petitioners to challenge the reauthorization, arguing non-compliance with the National Environmental Policy Act (NEPA) and the Natural Gas Act (NGA).Previously, the U.S. Court of Appeals for the District of Columbia Circuit found FERC’s environmental justice analysis inadequate and required FERC to either justify its chosen analysis radius or use a different one. FERC was also directed to reconsider its public interest determinations under the NGA. On remand, FERC expanded its environmental justice analysis but did not issue a supplemental Environmental Impact Statement (EIS), which petitioners argued was necessary. FERC also did not consider a new carbon capture and sequestration (CCS) proposal as part of its environmental review.The U.S. Court of Appeals for the District of Columbia Circuit found FERC’s failure to issue a supplemental EIS for its updated environmental justice analysis arbitrary and capricious, as the new analysis provided a significantly different environmental picture. The court also held that FERC should have considered the CCS proposal as a connected action or a reasonable alternative. Additionally, the court found FERC’s rejection of air quality data from a nearby monitor arbitrary and capricious. The court vacated FERC’s reauthorization orders and remanded the case for further proceedings, requiring FERC to issue a supplemental EIS and consider the CCS proposal. View "City of Port Isabel v. FERC" on Justia Law

The plaintiffs, property owners in West Virginia, filed a lawsuit against the current and former owners of abandoned oil and gas wells on their properties. They sought damages for the defendants' failure to plug the wells, alleging common law nuisance, trespass, and negligence. The defendants argued that the West Virginia Department of Environmental Protection (WVDEP) was responsible for well plugging and that WVDEP had approved transactions between the defendants, which purportedly relaxed their statutory duty to plug the wells. They claimed WVDEP was an indispensable party under Federal Rule of Civil Procedure 19 and, because it could not be joined due to sovereign immunity, sought judgment in their favor under Rule 12(c).The United States District Court for the Northern District of West Virginia denied the defendants' motion, ruling that WVDEP was not a necessary and indispensable party under Rule 19. The court concluded that it could grant the plaintiffs damages on their common law claims without implicating the State’s interests. The defendants then filed an interlocutory appeal, arguing that the district court's order was reviewable under the collateral order doctrine, as it effectively denied WVDEP sovereign immunity.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the district court's order did not rule on any immunity issue but only on whether WVDEP was a necessary and indispensable party under Rule 19. The appellate court found that the order did not satisfy the requirements of the collateral order doctrine and was not a final decision. Consequently, the court granted the plaintiffs' motion to dismiss the appeal for lack of jurisdiction. View "McEvoy v. Diversified Energy Company PLC" on Justia Law

During Winter Storm Uri, Southwest Power Pool, Inc. (Southwest) contacted Associated Electric Cooperative, Inc. (the Cooperative) to purchase emergency energy. The Cooperative provided the energy, and Southwest compensated the Cooperative according to their existing written contract, known as the Tariff, filed with the Federal Energy Regulatory Commission (FERC). The Cooperative claimed the payment was insufficient and not in line with a separate oral agreement made during the storm. Southwest refused to pay more than the Tariff rate, leading the Cooperative to file a lawsuit in federal district court for breach of contract and equitable claims.Southwest petitioned FERC for a declaratory order asserting primary jurisdiction over the dispute and confirming that the payment was appropriate under the Tariff. FERC agreed, and the Cooperative's petition for rehearing was denied. The Cooperative then sought review from the United States Court of Appeals for the Eighth Circuit, which denied the petitions, affirming FERC's primary jurisdiction and the applicability of the Tariff rate.The United States District Court for the Western District of Missouri granted Southwest’s motion to dismiss the Cooperative’s complaint, agreeing with FERC’s jurisdiction and the Tariff’s control over the payment terms. The district court also denied Southwest’s motion for attorneys’ fees and costs. The Cooperative appealed the dismissal, and Southwest appealed the denial of attorneys’ fees.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s dismissal de novo and affirmed the decision, agreeing that FERC had primary jurisdiction and the Tariff controlled the payment terms. The court also affirmed the district court’s denial of attorneys’ fees, finding that the relevant contract provision did not apply to this dispute and that the district court did not abuse its discretion. View "Associated Electric Cooperative, Inc. v. Southwest Power Pool, Inc." on Justia Law

During Winter Storm Uri, Southwest Power Pool, Inc. (Southwest) contacted Associated Electric Cooperative, Inc. (the Cooperative) to purchase emergency energy. The Cooperative provided the energy and was subsequently paid by Southwest according to their existing written contract and the rates filed with the Federal Energy Regulatory Commission (FERC). The Cooperative claimed that the payment was insufficient and not in accordance with a separate oral agreement made during the storm. Southwest refused to pay more than the rate in the written contract, leading the Cooperative to file a lawsuit in federal district court for breach of contract and equitable claims.Before the district court made any determinations, Southwest petitioned FERC for a declaratory order asserting that FERC had primary jurisdiction over the dispute and that Southwest had properly compensated the Cooperative. FERC agreed, stating it had primary jurisdiction and that Southwest had appropriately compensated the Cooperative according to the filed rate. The Cooperative then petitioned for review of FERC’s order and the denial of rehearing.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the emergency energy transaction was governed by the existing written contract and the rates filed with FERC, not by any separate oral agreement. The court found that FERC had properly exercised primary jurisdiction over the dispute and correctly applied the filed rate doctrine, which mandates that no seller of energy may collect a rate other than the one filed with and approved by FERC. Consequently, the court denied the Cooperative’s petitions for review, affirming that Southwest had not breached its contractual obligations. View "Associated Electric Cooperative, Inc. v. FERC" on Justia Law

ND Energy Services, LLC, entered into a temporary layflat easement agreement with Kathleen Stroh, granting it the exclusive right to transfer freshwater via aboveground layflat hoses on Stroh's property. Lime Rock Resources III-A, L.P., and Herman Energy Services, LLC, subsequently placed layflat hoses on the same property to transport water for fracking operations. ND Energy sued Lime Rock for tortious interference with contract and willful trespass, seeking a permanent injunction.The District Court of Dunn County granted summary judgment in favor of Lime Rock, dismissing ND Energy's claims. The court found that the oil and gas leases, which Lime Rock had acquired, provided Lime Rock the right to use the property for oil and gas production, including the installation of layflat hoses. The court also concluded that ND Energy had notice of Lime Rock's rights due to a recorded memorandum of a surface use agreement and that Lime Rock's actions were justified.The Supreme Court of North Dakota affirmed the district court's decision. The court held that the leases granted Lime Rock the right to use layflat hoses on the property, as this use was necessary for oil and gas production. The court also determined that ND Energy was not a good-faith purchaser of the layflat easement because it had constructive notice of the surface use agreement through the recorded memorandum. Consequently, ND Energy's claims for tortious interference and a permanent injunction were dismissed, as Lime Rock's actions were justified under the leases. View "ND Energy Services, LLC v. Lime Rock Resources III-A" on Justia Law

Exxon Mobil Corporation owned subsidiaries in Cuba that had various oil and gas assets. In 1960, the Cuban government expropriated these assets without compensating Exxon. In 1996, Congress enacted the Cuban Liberty and Democratic Solidarity Act, which allows U.S. nationals to sue those who traffic in property confiscated by the Cuban government. Exxon sued three state-owned defendants, alleging they trafficked in the confiscated property by participating in the oil industry and operating service stations.The United States District Court for the District of Columbia denied one defendant's motion to dismiss based on foreign sovereign immunity. The court held that the Cuban Liberty and Democratic Solidarity Act does not override the Foreign Sovereign Immunities Act (FSIA), and jurisdiction depends on an FSIA exception. The court found that the FSIA’s expropriation exception did not apply but that the commercial-activity exception did. The court allowed limited jurisdictional discovery for the other two defendants and later denied their motion for reconsideration.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court agreed with the district court that the Cuban Liberty and Democratic Solidarity Act does not confer jurisdiction and that the FSIA’s expropriation exception is inapplicable. However, the court concluded that the district court needed to undertake additional analysis before determining that jurisdiction exists under the FSIA’s commercial-activity exception. The court vacated the district court’s decision and remanded the case for further analysis on the applicability of the FSIA’s commercial-activity exception. View "Exxon Mobil Corporation v. Corporacion CIMEX, S.A. (Cuba)" on Justia Law

The Federal Energy Regulatory Commission (FERC) issued a certificate to Transcontinental Gas Pipe Line Company, LLC (Transco) to construct and operate a pipeline through several states, including New Jersey. The New Jersey Conservation Foundation and other petitioners argued that FERC overlooked significant environmental consequences and failed to consider evidence of a lack of market need for the pipeline. They also contended that FERC ignored New Jersey state laws mandating reductions in natural gas consumption.The lower court, FERC, approved the pipeline project, finding that the public benefits outweighed the adverse impacts. FERC based its decision on precedent agreements with local gas distribution companies (LDCs) and concluded that the project satisfied the Natural Gas Act (NGA). Petitioners requested a rehearing, arguing that FERC's decision was arbitrary and capricious. FERC denied the rehearing request, maintaining its position on market need and environmental impact assessments.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court found that FERC acted arbitrarily by not adequately explaining its decision regarding the significance of greenhouse gas emissions and failing to discuss possible mitigation measures. The court also held that FERC did not properly consider evidence showing that current capacity was sufficient to meet New Jersey's natural gas demands and that the precedent agreements with LDCs did not necessarily indicate market need. Additionally, the court found that FERC misinterpreted New Jersey's mandatory energy efficiency laws as unenforceable.The court vacated FERC's orders and remanded the case for further action, requiring FERC to reassess the market need and environmental impacts of the pipeline project. View "New Jersey Conservation Foundation v. FERC" on Justia Law

The Federal Energy Regulatory Commission (FERC) is responsible for ensuring that rates charged by interstate oil pipelines are just and reasonable. Every five years, FERC reviews the methodology, known as the Index, used to set maximum annual rate increases. In 2020, FERC conducted its five-year review and set a new Index level, which was later modified on rehearing without adhering to notice-and-comment procedures.Initially, FERC invited comments on the proposed Index, receiving input from both pipeline operators (Carriers) and customers (Shippers). FERC issued an Initial Order in December 2020, establishing an Index level higher than proposed, effective July 1, 2021. Both Carriers and Shippers sought rehearing, with Carriers requesting minor changes and Shippers challenging the Index level. FERC issued a Rehearing Order in January 2022, adopting Shippers' suggestions and setting a new, lower Index effective March 1, 2022. Shippers sought clarification on the retroactive application of the Rehearing Order, which FERC denied.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. Carriers argued that FERC failed to comply with the Administrative Procedure Act (APA) by modifying the Index without notice-and-comment procedures. The court agreed, noting that once the Initial Order's Index became effective on July 1, 2021, any substantive changes required adherence to APA procedures. The court found that FERC's modification of the Index in the Rehearing Order without such procedures was improper.The court granted Carriers' petitions for review, vacated the Rehearing Order, and ordered FERC to reinstate the Initial Order. Shippers' petitions for review were dismissed as moot due to the vacatur of the Rehearing Order. View "Liquid Energy Pipeline Association v. FERC" on Justia Law