Justia Energy, Oil & Gas Law Opinion Summaries

In an appeal by allowance, the Pennsylvania Supreme Court considered whether the Commonwealth, by the Office of Attorney General (OAG), could bring claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) on behalf of private landowners against a natural gas exploration and production company for its alleged deceptive, misleading, and unfair practices in obtaining natural gas leases from the landowners. The Supreme Court concluded the OAG could not bring claims under the UTPCPL on behalf of private landowners against Anadarko Petroleum Corporation and Anadarko E&P Onshore, L.L.C. (Anadarko) for its alleged unfair and deceptive practices in acquiring natural gas leases from the landowners. Furthermore, the Court found its resolution of the first issue rendered the second issue moot. The Court affirmed the portion of the Commonwealth Court’s decision that reversed the trial court order overruling Anadarko’s preliminary objections to Count III of the OAG’s second amended complaint, and otherwise reversed the order of the Commonwealth Court. View "Com. v. Chesapeake Energy, et al (Anadarko, Aplt.)" on Justia Law

Taylor Energy leased and operated Gulf of Mexico oil and gas properties, on the Outer Continental Shelf, offshore Louisiana. In 2004, Hurricane Ivan destroyed those operations, causing oil leaks. The Outer Continental Shelf Lands Act, the Clean Water Act, and the Oil Pollution Act required Taylor to decommission the site and stop the leaks. Taylor and the Department of the Interior developed a plan. Interior approved Taylor’s assignments of its leases to third parties with conditions requiring financial assurances. Three agreements addressed how Taylor would fund a trust account and how Interior would disburse payments. Taylor began decommissioning work. In 2009, Taylor proposed that Taylor “make the full final deposit into the trust account,” without any offsets, and retain all insurance proceeds. Interior rejected Taylor’s proposal. Taylor continued the work. In 2011, Taylor requested reimbursement from the trust account for rig downtime costs. Interior denied the request. In 2018, the Interior Board of Land Appeals (IBLA) affirmed Interior’s 2009 and 2011 Decisions.Taylor filed suit in the Claims Court, asserting contract claims. The Federal Circuit affirmed the dismissal of the suit, rejecting “Taylor’s attempt to disguise its regulatory obligations as contractual ones,” and stating an IBLA decision must be appealed to a district court.In 2018, Taylor filed suit in a Louisiana district court, seeking review of the IBLA’s 2018 decision and filed a second complaint in the Claims Court, alleging breach of contract. On Taylor's motion, the district court transferred the case, citing the Tucker Act. The Federal Circuit reversed. The Claims Court does not have subject matter jurisdiction over this case. Taylor is challenging the IBLA Decision and must do so in district court under the APA. View "Taylor Energy Co., L.L.C. v. Department of the Interior" on Justia Law

In 2016, the Federal Energy Regulatory Commission approved, as just and reasonable, cost allocations filed by PJM, the Mid–Atlantic’s regional transmission organization, for a project to improve the reliability of three New Jersey nuclear power plants. The Commission denied a complaint lodged by Delaware and Maryland alleging a large imbalance between the costs imposed on the Delmarva transmission zone and the benefits that zone would accrue from the project. On rehearing in 2018, the Commission reversed course, concluding that application of PJM’s cost–allocation method to the project violated cost–causation principles and was therefore unjust and unreasonable under the Federal Power Act, 16 U.S.C. 824e. The Commission’s replacement cost–allocation method shifted primary cost responsibility for the project from the Delmarva zone to utilities in New Jersey.The New Jersey Agencies argued that the Commission departed from precedent without adequate explanation, made findings that are unsupported by substantial evidence, and failed to respond meaningfully to objections raised during the proceedings. The D.C. Circuit denied their petitions for review. The Commission reasonably decided to adopt a different cost–allocation method for the type of project at issue here and adequately explained its departure from the cost allocations it had approved in 2016. View "Public Service Electric and Gas Co. v. Federal Energy Regulatory Commission" on Justia Law

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