Justia Energy, Oil & Gas Law Opinion Summaries

In an amendment to the Clean Air Act (CAA), Congress directed the EPA to operate a Renewable Fuel Standards Program (the RFS Program) to increase oil refineries’ use of renewable fuels. But for small refineries that would suffer a “disproportionate economic hardship” in complying with the RFS Program, the statute required the EPA to grant exemptions on a case-by-case basis. Petitioner Sinclair Wyoming Refining Company owned and operated two refineries in Wyoming: one in Sinclair, and another in Casper. Both fell within the RFS Program’s definition of “small refinery” and were exempt from the RFS requirements until 2011. Those exemptions were extended until 2013 after the Department of Energy found Sinclair’s Wyoming refineries to be among the 13 of 59 small refineries that would continue to face “disproportionate economic hardship” if required to comply with the RFS Program. Sinclair then petitioned the EPA to extend their small-refinery exemptions. The EPA denied Sinclair’s petitions in two separate decisions, finding that both refineries appeared to be profitable enough to pay the cost of the RFS Program. Sinclair filed a timely petition for review with the Tenth Circuit court, which concluded the EPA exceeded its statutory authority under the CAA in interpreting the hardship exemption to require a threat to a refinery’s survival as an ongoing operation. Because the Court found the EPA exceeded its statutory authority, it vacated the EPA’s decisions and remanded to the EPA for further proceedings. View "Sinclair Wyoming Refining v. EPA" on Justia Law

Sierra Club challenged the Department's grant of an application to export liquified natural gas (LNG) using terminals and liquefaction facilities (Freeport Terminal) on Quintana Island. On the merits, the DC Circuit held that the Department did not fail to fulfill its obligations under the National Environmental Policy Act (NEPA) by declining to make specific projections about environmental impacts stemming from specific levels of export-induced gas production; the Department did not fail to fulfill its obligations with respect to the potential for the U.S. electric power sector to switch from gas to coal in response to higher gas prices; the court rejected Sierra Club's challenges to the Department's examination of the potential greenhouse-gas emissions resulting from the indirect effects of exports; and Sierra Club has given the court no reason to question the Department's judgment that the FLEX application was not inconsistent with the public interest. Accordingly, the court denied the petition for review. View "Sierra Club v. DOE" on Justia Law

ExxonMobil’s 859-mile long Pegasus Pipeline transports crude oil from Patoka, Illinois to Nederland, Texas. In March 2013, it ruptured, spilling several thousand barrels of oil near Mayflower, Arkansas. The Pipeline and Hazardous Materials Safety Administration, within the U.S. Department of Transportation, conducted an investigation and concluded that ExxonMobil violated several pipeline safety regulations under the Pipeline Safety Act, 49 U.S.C. 60101. Specifically, the agency found that the integrity management program (IMP) plan had not properly accounted for the risk of longitudinal seam failure and that this was a contributing factor in the Mayflower release. The agency assessed a $2.6 million civil penalty and ordered ExxonMobil to take certain actions to ensure compliance with those regulations. The Fifth Circuit vacated certain items in the order. Finding that it owed no deference to the agency’s interpretation of the regulation, the court concluded that ExxonMobil reasonably applied 49 CFR 195.452(e)(1)’s instruction to “consider” all relevant risk factors in making its pipeline susceptibility determination. The court remanded with an instruction to reevaluate the basis for the penalty associated with another violation. View "ExxonMobil Pipeline Co. v. United States Department of Transportation" on Justia Law

Petitioners filed suit challenging EPA's promulgation of a Final Rule setting several renewable fuel requirements for the years 2014 through 2017. The D.C. Circuit rejected all challenges except for one: the court agreed with Americans for Clean Energy that EPA erred in how it interpreted the "inadequate domestic supply" waiver provision. The court held that the "inadequate domestic supply" provision authorizes EPA to consider supply-side factors affecting the volume of renewable fuel that is available to refiners, blenders, and importers to meet the statutory volume requirements. It does not allow EPA to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers. Accordingly, the court granted Americans for Clean Energy's petition for review of the Final Rule, vacated EPA's decisions to reduce the total renewable fuel volume requirements for 2016 through use of its "inadequate domestic supply" waiver authority, and remanded for further consideration. View "Americans for Clean Energy v. EPA" on Justia Law

Under the federal environmental laws, the owner of property contaminated with hazardous substances or a person who arranges for the disposal of hazardous substances may be strictly liable for subsequent clean-up costs. The United States owned national forest lands in New Mexico that were mined over several generations by Chevron Mining Inc. The question presented for the Tenth Circuit’s review was whether the United States is a “potentially responsible party” (PRP) for the environmental contamination located on that land. The Tenth Circuit concluded that under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), the United States is an “owner,” and, therefore, a PRP, because it was strictly liable for its equitable portion of the costs necessary to remediate the contamination arising from mining activity on federal land. The Court also concluded the United States cannot be held liable as an “arranger” of hazardous substance disposal because it did not own or possess the substances in question. The Court reversed the district court in part and affirmed in part, remanding for further proceedings to determine the United States’ equitable share, if any, of the clean-up costs. View "Chevron Mining v. United States" on Justia Law

The Water District appealed from the district court's judgment in a consolidated multidistrict litigation granting summary judgment to BP and Shell on the ground that the Water District's suit was barred by res judicata arising from 2002 and 2005 settlements. Claims against BP and Shell for MTBE contamination had been brought by the Orange County District Attorney (OCDA) in 1999 and were settled in 2002 and 2005 respectively. The Second Circuit vacated and remanded the Water District's claims against BP and Shell, holding that the Water District and OCDA were not in privity. View "In re Methyl Tertiary Butyl Ether (MTBA) Products Liability Litigation" on Justia Law

The circuit court affirmed the Trempealeau County Environment & Land Use Committee’s denial of a conditional use permit application for non-metallic mineral mining submitted by AllEnergy Corporation and allEnergy Silica, Arcadia, LLC (collectively, AllEnergy). The court of appeals affirmed the circuit court’s order. The Supreme Court affirmed, holding (1) the Committee applied the factors and considerations set forth in the applicable ordinance and thus kept within its jurisdiction in denying AllEnergy’s application for a conditional use permit; (2) there is substantial evidence to support the Committee’s decision to deny AllEnergy a conditional use permit; and (3) this court does not adopt the new legal doctrine urged by AllEnergy that a conditional use permit applicant is entitled to the permit under certain conditions. View "AllEnergy Corp. v. Trempealeau County Environment & Land Use Committee" on Justia Law

Riverkeeper petitioned for review of FERC's Certificate of Public Convenience and Necessity conditionally approving the Leidy Project. The DC Circuit denied the petition and held that it had jurisdiction to consider Riverkeeper's challenge to the Certificate Order on the ground that FERC violated the sequencing requirement of the Clean Water Act (CWA) by issuing its Certificate Order before Pennsylvania issued its section 401 certification; the sequencing requirement of section 401 was not triggered because the Commission's conditional approval of the Leidy Project construction did not authorize any activity which might result in a discharge in navigable waters; the court need not decide whether the letter orders impermissibly approved activity that might have resulted in a discharge before Pennsylvania issued its section 401 certification; FERC did not violate the National Environmental Policy Act (NEPA) by misclassifying wetlands; even if FERC technically erred in some of its classifications, Riverkeeper has not shown any prejudice; and FERC's NEPA review of the Leidy Project's proposed gas flow velocities appeared to be fully informed and well-considered. View "Delaware Riverkeeper Network v. FERC" on Justia Law

Substantively, in three somewhat interconnected claims, Joe and Yvette Hardesty (collectively, Hardesty) attacked State Mining and Geology Board (Board) findings, contending the trial court misunderstood the legal force of his 19th century federal mining patents. He asserted he had a vested right to surface mine after the passage of SMARA without the need to prove he was surface mining on SMARA’s operative date of January 1, 1976. He argued the Board and trial court misapplied the law of nonconforming uses in finding Hardesty had no vested right, and separately misapplied the law in finding that his predecessors abandoned any right to mine. These contentions turned on legal disputes about the SMARA grandfather clause and the force of federal mining patents. Procedurally, Hardesty alleged the Board’s findings did not “bridge the gap” between the raw evidence and the administrative findings. Hardesty also challenged the fairness of the administrative process itself, alleging that purported ex parte communications by the Board’s executive director, Stephen Testa, tainted the proceedings. The Court of Appeal reviewed the facts, and found they undermined Hardesty’s claims: the fact that mines were worked on the property years ago does not necessarily mean any surface or other mining existed when SMARA took effect, such that any right to surface mine was grandfathered. However, the Court agreed with the trial court’s conclusions that, on this record, neither of these procedural claims proved persuasive. Accordingly, the Court affirmed the judgment denying the mandamus petition. View "Hardesty v. State Mining & Geology Board" on Justia Law

Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law