Justia Energy, Oil & Gas Law Opinion Summaries

Issues of constitutional import stemming from cross-appeals taken from the Commonwealth Court's ruling on expedited challenges to Act 13 of 2012 were before the Supreme Court in this case. Act 13 contained sweeping legislation affecting Pennsylvania’s environment particularly the exploitation and recovery of natural gas in Marcellus Shale. The litigation was accelerated in part because the legislation itself was designed to take effect quickly and imposed obligations which required the challengers to formulate their legal positions swiftly; and in part in recognition of the economic importance of the legislation to the Commonwealth and its citizens. Following careful deliberation, the Supreme Court's decision found several challenged provisions of Act 13 were unconstitutional. Madame Justice Todd, and Mr. Justice McCaffery, found that several core provisions of Act 13 violated the Commonwealth’s duties as trustee of Pennsylvania’s public natural resources under the Environmental Rights Amendment; other challenges lacked merit; and several issues required further Commonwealth Court proceedings. Mr. Justice Baer, concurred in the mandate, and joined the majority in all but Parts III and VI(C); Justice Baer would have found the "core constitutional infirmity" sounded in substantive due process. Accordingly, the Commonwealth Court was affirmed in part, reversed in part, and the case remanded for further proceedings. View "Robinson Township, et al v. Pa. Public Utility Commission and Attorney General -" on Justia Law

A mineral lessee operated two wells on two contiguous tracts of land. When one of the wells stopped producing, the lessee pooled parts of the two mineral leases. Landowners subsequently bought a tract of land that included the road the lessee used to access the producing well. The road was across the surface of the lease without production. After traffic on the road increased, the landowners filed suit against the lessee, claiming that the lessee had no legal right to use the surface of their tract of land to produce minerals from the operating well. The trial court determined that the lessee did not have the right to use the road to access the producing lease and granted declaratory and injunctive relief. The Supreme Court reversed, holding (1) once pooling occurred, the pooled parts of the two contiguous tracts no longer maintained separate identities insofar as where production from the pooled interests was located; and (2) therefore, the lessee had the right to use the road to access the pooled part of the tract of land containing the producing well. View "Key Operating & Equip., Inc. v. Hegar" on Justia Law

This case was an appeal of a final water court order which voided a rule promulgated by the Office of the State Engineer regarding nontributary ground water extracted in the course of coalbed methane (CBM) production and other oil and gas development. The final rules were challenged by owners of vested water rights and citizen groups whose members owned vested water rights. After extensive briefing by the parties, the water court upheld the Final Rules in their entirety except for the "Fruitland Rule," which it invalidated. The water court held that although H.B. 1303 granted authority to the State Engineer to promulgate the Fruitland Rule, the Tribal Rule essentially divested the State Engineer of that authority. The water court also found that the State Engineer had issued an improper "advisory" rule, and thus could not promulgate the Fruitland Rule unless he first obtained a judicial determination of his authority over nontributary ground water underlying the Reservation. The State Engineer, the Tribe, and several Intervenors appealed the water court's decision. Upon review, the Supreme Court reversed, concluding that the water court erred in invalidating the Fruitland Rule based on the Tribal Rule. The Court concluded the Tribal Rule did not divest the State Engineer of this authority: it stated on its face that the Final Rules themselves do not form the basis of or "establish" the State Engineer's authority to administer the nontributary ground water within Reservation boundaries. Because the Tribal Rule did not divest the State Engineer of his authority, the water court erred in invalidating the Fruitland Rule on that ground. Furthermore, the water court also erred in labeling the Fruitland Rule an "advisory" rule and in requiring the State Engineer to obtain a judicial determination that he had authority to administer nontributary ground water within the boundaries of the Reservation. Accordingly, the Supreme Court reversed the water court’s invalidation of the Fruitland Rule and remanded the case for further proceedings. View "Dick Wolfe v. Pawnee Well Users, Inc." on Justia Law

WRB owns the Wood River Petroleum Refinery in Madison County. Following major renovations, WRB applied to the Illinois Environmental Protection Agency under the Property Tax Code (35 ILCS 200/11-25) to have 28 of the refinery’s systems, methods, devices, and facilities certified as “pollution control facilities” for preferential tax assessment. IEPA recommended approval of two of the requests by the Pollution Control Board (PCB), which accepted the IEPA’s recommendations. The Board of Education sought to intervene in the proceedings where certification had been granted, arguing that it had a legally cognizable interest because the certifications would ultimately deprive it of tax revenue. PCB denied the petitions as moot. While requests to reconsider were pending, the IEPA recommended that the PCB approve WRB’s applications to certify the remaining 26 systems. Before PCB took action on those cases, the Board of Education sought to intervene. PCB denied the motion and granted certification in each case. The appellate court dismissed the Board of Education’s consolidated appeal for lack of jurisdiction under section 41 of the Illinois Environmental Protection Act, under which the Board of Education sought review The court noted the specific provision for appeals in proceedings involving PCB’s “issuance, refusal to issue, denial, revocation, modification or restriction of a pollution control certificate,” contained in the Property Tax Code,35 ILCS 200/11-60. That provision requires that proceedings originate in the circuit court, rather than by direct administrative review in the appellate court. The Illinois Supreme Court affirmed.View "Bd of Educ. of Roxana Cmty. Unit Sch. Dist/ No. 1 v. Pollution Control Bd." on Justia Law

WRB owns the Wood River Petroleum Refinery in Madison County. Following major renovations, WRB applied to the Illinois Environmental Protection Agency under the Property Tax Code (35 ILCS 200/11-25) to have 28 of the refinery’s systems, methods, devices, and facilities certified as “pollution control facilities” for preferential tax assessment. IEPA recommended approval of two of the requests by the Pollution Control Board (PCB), which accepted the IEPA’s recommendations. The Board of Education sought to intervene in the proceedings where certification had been granted, arguing that it had a legally cognizable interest because the certifications would ultimately deprive it of tax revenue. PCB denied the petitions as moot. While requests to reconsider were pending, the IEPA recommended that the PCB approve WRB’s applications to certify the remaining 26 systems. Before PCB took action on those cases, the Board of Education sought to intervene. PCB denied the motion and granted certification in each case. The appellate court dismissed the Board of Education’s consolidated appeal for lack of jurisdiction under section 41 of the Illinois Environmental Protection Act, under which the Board of Education sought review The court noted the specific provision for appeals in proceedings involving PCB’s “issuance, refusal to issue, denial, revocation, modification or restriction of a pollution control certificate,” contained in the Property Tax Code,35 ILCS 200/11-60. That provision requires that proceedings originate in the circuit court, rather than by direct administrative review in the appellate court. The Illinois Supreme Court affirmed.View "Bd. of Educ. of Roxana Cmty. Unit Sch. Dist. No. 1 v. Pollution Control Bd." on Justia Law

BP and Andarko appealed the district court's grant of summary judgment in favor of the the government on the question of their liability for civil penalties under 33 U.S.C. 1321(b)(7)(A). Section 1321(b)(7)(A) imposes mandatory penalties upon the owners of facilities "from which oil or a hazardous substance is discharged." The court found no genuine dispute as to defendants' liability for civil penalties where the well's cement failed, resulting in the loss of controlled confinement of oil such that the oil ultimately entered navigable waters. Therefore, the well is a facility "from which oil or a hazardous substance was discharged""into or upon the navigable waters of the United States." Andarko and BP "shall be subject to a civil penalty" calculated in accordance with statutory and regulatory guidelines and this liability is unaffected by the path traversed by the discharged oil. Nor is liability precluded by any culpability on the part of the vessel's owner or operator. Accordingly, the court affirmed the judgment of the district court. View "In Re: Deepwater Horizon" on Justia Law

The Energy Policy Act of 2005 directs the Department of Energy (DOE) to fund alternative energy projects called “biorefinery demonstration projects,” 42 U.S.C. 16232(d), to develop ways to convert trees, crops and agricultural waste into energy. Frontier sought a grant to construct a plant in Michigan’s Upper Peninsula that would use about 770 tons of wood chips per day to produce 20 million gallons of ethanol per year. As required by the National Environmental Policy Act (NEPA), DOE prepared a draft environmental assessment. After receiving input, DOE issued a final environmental assessment that proposed changes, including use of a biomass boiler instead of natural gas boilers to generate power for the plant. DOE issued a finding of “no significant impact” and awarded $100 million toward construction of the plant, about 34% of its total cost. Opponents sued, alleging violation of the NEPA. The district court held that the plaintiffs lacked standing and that the claims also failed on the merits. The Sixth Circuit reversed with respect to standing, holding that the opponents did show injury subject to redress, but affirmed on the merits, stating that DOE completed a thorough environmental assessment and reasonably described the environmental impacts identified as not significant. View "Klein v. U.S. Dep't of Energy" on Justia Law

Following the 1941 attack on Pearl Harbor, each of the Oil Companies entered into contracts with the government to provide high-octane aviation gas (avgas) to fuel military aircraft. The production of avgas resulted in waste products such as spent alkylation acid and “acid sludge.” The Oil Companies contracted to have McColl, a former Shell engineer, dump the waste at property in Fullerton, California. More than 50 years later, California and the federal government obtained compensation from the Oil Companies under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601, for the cost of cleaning up the McColl site. The Oil Companies sued, arguing the avgas contracts require the government to indemnify them for the CERCLA costs. The Court of Federal Claims granted summary judgment in favor of the government. The Federal Circuit reversed with respect to breach of contract liability and remanded. As a concession to the Oil Companies, the avgas contracts required the government to reimburse the Oil Companies for their “charges.” The court particularly noted the immense regulatory power the government had over natural resources during the war and the low profit margin on the avgas contracts. View "Shell Oil Co. v. United States" on Justia Law

This appeal was taken from a district court order in a quiet title action. While the appeal was pending, the Bureau of Land Management (BLM) declared twenty-seven unpatented mining claims asserted by Appellant forfeit and void by operation of law because Appellant failed to comply with the statutory mining claim maintenance requirement. Consequently, Respondent filed a motion to dismiss the appeal, arguing that the appeal was rendered moot when the BLM declared Appellant's asserted claims forfeit and void. The Supreme Court granted the motion to dismiss, holding that the appeal was moot because the controversy that existed at the beginning of this litigation concerning superior title was no longer at issue, and Appellant's claims did not exist as a matter of law.View "Majuba Mining, Ltd. v. Pumpkin Copper, Inc." on Justia Law

The Wyoming Oil and Gas Conservation Commission approved Cimarex Energy Company's plan to reinject waste carbon dioxide and hydrogen sulfide into a producing natural gas formation in southwest Wyoming over the objection of Exxon Mobil Corporation. Exxon appealed. The district court affirmed the Commission's decision. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) the Commission properly denied Exxon's petition for a rehearing; but (2) the Commission failed to provide sufficient findings of fact as to whether Cimarex's plan to reinject carbon dioxide and hydrogen sulfide would result in waste of natural gas and improperly interfere with Exxon's correlative rights. Remanded to the Commission to make appropriate findings of both basic and ultimate facts.View "Exxon Mobil Corp. v. Wyo. Oil & Gas Conservation Comm'n" on Justia Law