Justia Energy, Oil & Gas Law Opinion Summaries

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

Louisville Gas and Electric Company (LG&E) sought a permit authorizing it to discharge certain pollutants into the Ohio River in conjunction with the operation of its recently expended generating facility. The Commonwealth of Kentucky, Energy and Environment Cabinet’s Division of Water issued the permit. The circuit court vacated the permit. The Court of Appeals affirmed. The Supreme Court reversed and reinstated LG&E’s permit, holding (1) in vacating the permit, the circuit court and Court of Appeals misapplied controlling federal law; and (2) the Cabinet’s determination that the LG&E permit should proceed under 40 C.F.R. 125.3(c)(1) was a reasonable interpretation of the regulation. View "Louisville Gas & Electric Co. v. Kentucky Waterways Alliance" on Justia Law

Nearly 20 years after defendants built, sold, and leased back a Rockport Indiana coal-burning power plant, they committed, in a consent decree resolving lawsuits involving alleged Clean Air Act violations at their other power plants, to either make over a billion dollars of emission control improvements to the plant, or shut it down. The sale and leaseback arrangement was a means of financing construction. Defendants then obtained a modification to the consent decree providing that these improvements need not be made until after their lease expired, pushing their commitments to improve the air quality of the plant’s emissions to the plaintiff, the investors who had financed construction and who would own the plant after the 33-year lease term. The district court held this encumbrance did not violate the parties’ contracts governing the sale and leaseback, and that plaintiff’s breach of contract claims precluded it from maintaining an alternative cause of action for breach of the covenant of good faith and fair dealing. The Sixth Circuit reversed, holding that a Permitted Lien exception in the lease unambiguously supports the plaintiff’s position and that the defendants’ actions “materially adversely affected’ plaintiff’s interests. View "Wilmington Trust Co. v. AEP Generating Co." on Justia Law

In 2010, The Kansas Department of Health and Environment (KDHE) issued a prevention of significant deterioration (PSD) construction permit to Sunflower Electric Power Corporation that authorized Sunflower to build a coal-fired electric generating unit at a site where Sunflower already operates a coal-fired station. In Sierra Club I, the Supreme Court held that KDHE had failed to comply with the federal Clean Air Act and remanded the permit to KDHE. On remand, KDHE issued an addendum to the 2010 permit. Sierra Club sought judicial review of that action, arguing, inter alia, that KDHE was required to conduct an entirely new permitting process rather than simply crafting an addendum to the 2010 permit. The Supreme Court affirmed, holding (1) KDHE did not err in adding an addendum to the 2010 permit; and (2) Sierra Club failed to establish any other basis for invalidating Sunflower’s PSD permit. View "Sierra Club v. Mosier" on Justia Law

Dunn County appealed a judgment declaring the Industrial Commission had exclusive jurisdiction to determine the location of oil and gas waste treating plants. The Supreme Court affirmed, concluding the County lacked the power to veto the Commission's approval of the location for an oil and gas waste treating plant. View "Environmental Driven Solutions v. Dunn County" on Justia Law