Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court reversed the order of the circuit court denying Petitioners' motion for summary judgment, holding that Petitioners were immune from Respondent's lawsuit pursuant to the litigation privilege and the Noerr-Pennington doctrine.Petitioners executed an oil and gas lease to a company that assigned 2,300 acres of Petitioners' tract to Respondent for a storage project. Respondent then applied to FERC for a certificate of public convenience and necessity to construct and operate a storage field. Petitioners intervened in the FERC proceeding. FERC eventually granted Respondent's request. When Respondent did not complete construction of the storage facility within the required amount of time it sought a three-year extension. Petitioners opposed the extension, and FERC denied Respondent's request to extend the timeframe. Thereafter, Petitioners filed suit against Respondent alleging breach of contract and seeking declaratory judgment. Respondent filed a counterclaim alleging, inter alia, breach of contract. Petitioners filed a motion for summary judgment, asserting that they were immune from suit pursuant to the litigation privilege and the Noerr-Pennington doctrine. The circuit court denied the motion. The Supreme Court reversed, holding that the litigation privilege and Noerr-Pennington doctrine provided Petitioners with immunity from all of Respondent's counterclaims. View "Smith v. Chestnut Ridge Storage, LLC" on Justia Law

The DC Circuit denied a petition for review brought by three electrical transmission companies (Transcos), subsidiaries of the same parent company, challenging FERC's decision to reduce the enhanced return on equity FERC had previously authorized them to collect from ratepayers due to their status as standalone transmission companies.The court rejected ITC's contention that FERC arbitrarily and capriciously departed from precedent establishing a particular methodology to assess Transco independence. The court explained that FERC, consistent with its stated intent in Order No. 679, never established any definitive methodology, let alone the one ITC claims it did. In this case, FERC has consistently applied a case-by-case approach to determining Transco independence, considering ownership and business structure as part of that inquiry since it first granted a Transco adder in 2003. When the adder was codified in 2006, Order No. 679 built on prior practice by identifying certain criteria that ITC now mistakenly claims constitute "a new corporate-structure test." The court also rejected ITC's contention that FERC exceeded its statutory authority by reducing ITC's Transco adders without first finding the adders to be unjust and unreasonable. Rather, the court concluded that there was substantial evidence to support FERC’s finding that the merger had reduced ITC's independence, thereby rendering the existing adders unjust and unreasonable. View "International Transmission Co. v. Federal Energy Regulatory Commission" on Justia Law

The DC Circuit held that the Corps violated the National Environmental Policy Act (EPA) by issuing an easement allowing the Dakota Access Pipeline to transport crude oil through federally owned land at the Lake Oahe crossing site without preparing an environmental impact statement despite substantial criticisms from the Tribes.The court rejected the Corps' and Dakota Access' contention that the district court applied the wrong standard by relying on National Parks Conservation Association v. Semonite, 916 F.3d at 1083, which emphasized the important role played by entities other than the federal government. The court explained that the Tribes' unique role and their government-to-government relationship with the United States demand that their criticisms be treated with appropriate solicitude. The court concluded that several serious scientific disputes in this case means that the effects of the Corps' easement decision are likely to be "highly controversial." The court also noted that, although the risk of a pipeline leak may be low, that risk is sufficient that a person of ordinary prudence would take it into account in reaching a decision to approve the pipeline's placement, and its potential consequences are therefore properly considered. The court affirmed the district court's order vacating the easement while the Corps prepares an environmental impact statement. However, the court reversed the district court's order to the extent it directed that the pipeline be shut down and emptied of oil. View "Standing Rock Sioux Tribe v. United States Army Corps of Engineers" on Justia Law

The DC Circuit denied a petition for review challenging FERC's determination that fuel transported by pipeline to Orlando's airport—after being delivered to the Port of Tampa—moves intrastate. The court upheld the ALJ's finding, under the three Northville factors, that the stop in Tampa broke the continuity of interstate transportation, and so the jet fuel moved intrastate through the Central Florida Pipeline. Therefore, FERC lacked jurisdiction to regulate the pipeline rates. The court rejected petitioners' claims that FERC misapplied the Northville factors; the Northville factors are inadequate to make the determination; the Commission misinterpreted the teachings of old Supreme Court cases: Texas & New Orleans R.R. Co. v. Sabine Tram Co., 227 U.S. 111 (1913); Carson Petrol. Co. v. Vial, 279 U.S. 95 (1929); United States v. Erie R.R. Co., 280 U.S. 98 (1929); and the Airlines' overarching intent to transport the fuel from ships through Tampa to Orlando means the pipeline movement is interstate in nature. View "Aircraft Service International, Inc. v. Federal Energy Regulatory Commission" on Justia Law

The Pennsylvania Supreme Court granted the Pennsylvania Department of Transportation (“PennDOT”)’s petition seeking review of a Commonwealth Court holding that a de facto taking of an unmined coal estate, owned by Penn Pocahontas and leased to PBS Coals, Inc. (collectively “the Coal Companies”), occurred under the Eminent Domain Code, 26 Pa.C.S. sections 101-1106 (“Code”), when PennDOT’s construction of Highway 219 on an adjoining parcel destroyed options for constructing rights-of-ways to the coal estate’s surface. In reaching that conclusion, the Commonwealth Court held that the feasibility of mining the coal, as measured by the probability of obtaining a legally required permit from the Department of Environmental Protection (“DEP”), was relevant only to damages. The Supreme Court reversed the Commonwealth Court’s decision, agreeing with PennDOT that the legality of extracting the coal went directly to the trial court’s duty to determine whether a taking occurred. Furthermore, the Court held the Commonwealth Court erred by failing to remand the case for consideration of whether consequential damages are available to the Coal Companies. The matter was remanded to the Commonwealth Court with instructions to remand to the trial court with respect to the Coal Companies’ consequential damages claim. View "PBS Coals, et al v. PennDOT" on Justia Law

Therese and Timothy Holmes appealed a Vermont Public Utility Commission (PUC) decision granting Acorn Energy Solar 2 a certificate of public good (CPG) to build and operate a solar net-metering system. The Holmeses argued the PUC erred in concluding that: (1) Acorn’s application was complete under the PUC Rules; (2) several proposed changes constituted minor amendments; (3) the project would be located on a preferred site; (4) the project would comply with setback requirements; and (5) the project would not have an undue adverse effect on aesthetics, orderly development, wetlands, air pollution, greenhouse gases, and traffic. Finding no reversible error, the Vermont Supreme Court affirmed the PUC's decision. View "In re Petition of Acorn Energy Solar 2, LLC (Therese & Timothy Holmes, Appellants)" on Justia Law

MVP asked two Army Corps districts to verify that, pursuant to the Clean Water Act, MVP's proposed discharge of dredged and/or fill material into waters of the United States in furtherance of construction of a natural gas pipeline in those districts could be governed by the Army Corps' 2017 nationwide permit (NWP) referred to as NWP 12. The Huntington District issued a verification, determining that the Pipeline project met the criteria for operation under the NWP 12, excusing the project from the individual permitting process (the "Verification"). The Norfolk District did the same, issuing a reinstatement of its prior verification allowing MVP to use NWP 12 in that district (the "Reinstatement"). Petitioners filed petitions for agency review of the Verification and Reinstatement pursuant to the Natural Gas Act (NGA) and filed the instant motions to stay.The Fourth Circuit concluded that petitioners are likely to succeed on the merits of their petitions for review, and other equitable factors weigh in favor of granting the motions for stay. The court explained that the Verification was likely issued in contravention of applicable law because the Army Corps impermissibly incorporated into NWP 12 a modified permit condition from the West Virginia Department of Environmental Protection (WVDEP). Furthermore, because the Verification was likely issued in contravention of law, the Reinstatement (which necessarily depends on the validity of the Verification) is likely defective as well. Therefore, the court granted petitioners' motions for a stay of the Huntington District's Verification and the Norfolk District's Reinstatement until such time as the court may consider the petitions for review on their merits. However, the court concluded that petitioners are not likely to succeed on the merits of their challenges to the Army Corps' 2017 issuance of NWP 12 itself because the court likely lacks jurisdiction to entertain such challenges. View "Sierra Club v. U. S. Army Corps of Engineers" on Justia Law

Environmental groups challenged the constitutionality of Public Resources Code section 25531, which limits judicial review of decisions by the Energy Resources Conservation and Development Commission on the siting of thermal power plants. Section 25531(a) provides that an Energy Commission siting decision is “subject to judicial review by the Supreme Court of California.” The plaintiffs contend this provision abridges the original jurisdiction of the superior courts and courts of appeal over mandate petitions, as conferred by California Constitution Article VI, section 10. Section 25531(b) provides that findings of fact in support of a Commission siting determination “are final,” allegedly violating the separation of powers doctrine by depriving courts of their essential power to review administrative agency findings (Cal. Const., Art. III, section 3; Art. VI, section 1).The court of appeal affirmed summary judgment in favor of the plaintiffs. The Article VI grant of original jurisdiction includes the superior courts and courts of appeal and may not be circumscribed by statute, absent some other constitutional provision. Legislative amendments to section 25531 have broken the once-tight link between the regulatory authority of the Public Utilities Commission (PUC) and Energy Commission power plant siting decisions, such that the plenary power Article XII grants the Legislature over PUC activities no longer authorizes section 25531(a). Section 25531(b) violates the judicial powers clause by preventing courts from reviewing whether substantial evidence supports the Commission’s factual findings. View "Communities for a Better Environment v. Energy Resources Conservation & Development Commission" on Justia Law

This dispute involved ad valorem taxes for the tax years 2013 through 2016. In October 2012, D90 Energy, LLC, purchased two gas wells and one saltwater disposal well. The wells were subject to ad valorem property taxation in Jefferson Davis Parish, Louisiana. Relying on a Commission regulation applicable to oil and gas wells, D90 argued that a purchase price in a valid sale is fair market value; therefore, the wells should be valued at $100,000.00 for each of these tax years. For each tax year, the Assessor rejected D90’s documentation of the sale, explaining, in part, that his office never uses the sales price as fair market value for oil and gas wells. Rather, the Assessor used valuation tables provided by the Commission, which take into account age, depth, type, and production of the wells. D90 appealed each assessment to the Commission, presenting documentary evidence and live testimony to establish the $100,000.00 purchase price for the wells and the arms-length nature of the sale. It presented additional evidence to establish that the condition and value of the wells were virtually identical for each tax year. The district court affirmed the Commission’s valuations for all four tax years. Reviewing only what was presented to the Assessor, the court of appeal reversed the district court and reinstated the Assessor’s valuation. The Louisiana Supreme Court granted D90’s writ application to determine the correctness of the assessments, the proper scope and standard of review, and the legal effect of D90’s failure to pay taxes under protest. After review, the Court determined the district court was correct in affirming the Commission, thus reversing the appellate court's judgment. View "D90 Energy, LLC v. Jefferson Davis Parish Board of Review" on Justia Law

The Supreme Court affirmed the judgment of the district court concluding that the Montana Public Service Commission (PSC) arbitrarily and unlawfully reduced solar qualifying facility (QF) standard-offer rates by excluding carbon dioxide emissions costs and NorthWestern Energy's avoided costs of operating its internal combustion engine resource units from the avoided-cost rate, holding that the district court did not err.Specifically, the Supreme Court held that the district court did not err in determining that the PSC did not comply with the Public Utility Regulatory Policies Act (PURPA) and Montana's mini-PURPA when it set the standard-offer contract rates and maximum contract lengths for qualifying small (QF-1) solar power producers. The PSC's decision to reduce the standard-offer QF-1 rates was arbitrary and unreasonable because the PSC failed to consider future carbon costs and failed to provide a reasoned decision in departing from its recent precedent. Further, the PSC unreasonably failed to consider NorthWestern's cost of operating its new internal combustion engine resources when setting the avoided-cost rate. View "Vote Solar v. Montana Department of Public Service Regulation" on Justia Law