Justia Energy, Oil & Gas Law Opinion Summaries

Two companies applied for permits to expand their oil terminals on Grays Harbor. The issue here this case presented was whether the Ocean Resources Management Act (ORMA), applied to these expansion projects. The Shoreline Hearings Board (Board) and the Court of Appeals held that ORMA did not apply to these projects based on limited definitions in the Department of Ecology's (DOE) ORMA implementation regulations. The parties also contested whether these projects qualify as "ocean uses" or "transportation" under DOE's regulations. The Washington Supreme Court held that the Court of Appeals’ interpretation improperly restricted ORMA, which was enacted to broadly protect against the environmental dangers of oil and other fossil fuels. The Supreme Court also held that these projects qualified as both ocean uses and transportation. And though not discussed by the parties or the Court of Appeals, the Supreme Court found these projects qualified as "coastal uses" under DOE's regulations. Accordingly, it reversed the Court of Appeals and remanded for further review under ORMA's provisions. View "Quinault Indian Nation v. City of Hoquiam" on Justia Law

Plaintiffs sued EQT Production Company and five related entities alleging that Plaintiffs were underpaid royalties with respect to their ownership of oil and gas interests that EQT was contracted to exploit. A federal district court granted summary judgment to the related entities and partial summary judgment EQT. The court reserved its ruling on the remaining aspects of Plaintiff’s claims against EQT pending the disposition of questions certified to the Supreme Court relevant to the claims’ resolution. The Supreme Court declined to answer the second certified question and answered the first certified question as follows: When the lessee-owner of a working interest in an oil or gas well must tender to the lessor-owner of the oil or gas a royalty not less than one-eighth of the total amount paid to or received by or allowed to the lessee, W. Va. Code 22-6-8(e) requires in addition that the lessee not deduct from that amount any expenses that have been incurred in gathering, transporting, or treating the oil or gas after it has been initially extracted any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production. View "Leggett v. EQT Production Co." on Justia Law

Bryan and Doris McCurdy filed an action against Mountain Valley Pipeline, LLC (MVP) seeking a declaration that MVP had no right to enter their property to survey the area as a potential location for a natural gas transmission pipeline MVP planned to construct. The McCurdys further sought both a preliminary and a permanent injunction prohibiting MVP from entering their property. The circuit court granted declaratory judgment to the McCurdys and also granted the McCurdys a preliminary and a permanent injunction prohibiting MVP from entering their property. The circuit court based its decision on its finding that MVP’s pipeline is not being constructed for a public use in West Virginia. The Supreme Court affirmed, holding that the circuit court did not err in concluding (1) MVP could enter the MCurdys’ land to survey the land only if the MVP pipeline was for a public use, and (2) the MVP pipeline was not being constructed for a public use in West Virginia. View "Mountain Valley Pipeline v. McCurdy" on Justia Law

Plaintiffs appealed the district court’s denial of their request for a preliminary injunction to prevent the drilling of certain oil and gas wells in the Mancos Shale formation of the San Juan Basin in New Mexico. The district court concluded that Plaintiffs had failed to satisfy three of the four elements required to obtain a preliminary injunction: (1) Plaintiffs had not demonstrated a substantial likelihood of success on the merits of their claims; (2) the balance of harms weighed against Plaintiffs; and (3) Plaintiffs failed to show that the public interest favored an injunction. Finding no reversible error in the district court's denial, the Tenth Circuit affirmed. View "Dine Citizens v. Jewell" on Justia Law

At dispute in this case was ownership of coalbed methane (CBM) under a 1938 deed. Respondent filed a complaint against Petitioners seeking a declaration of ownership of all CBM on the property conveyed in the deed and an accounting of royalties from Petitioners. Petitioners filed counterclaims and cross claims also seeking a declaration of ownership and an accounting of royalties. The dispositive issue for determination at trial was whether CBM was considered “gas” for purposes of Petitioners’ “oil and gas” reservation in the deed. The circuit court granted judgment in favor of Respondent, concluding that, based on the totality of the circumstances, the predecessors of Petitioners did not intend the reservation in the 1938 deed to include an interest in the CBM. The Supreme Court affirmed, holding that the reservation in the 1938 deed did not include CBM due to the general opinion at the time that CBM was a hazard and a nuisance. View "Poulos v. LBR Holdings, LLC" on Justia Law

Plaintiff filed a declaratory-judgment action against Defendant, seeking to quiet title to a mineral interest. At issue between the parties was whether the 1989 version of the Dormant Mineral Act or the 2006 version of the Act applied in this case. The trial court granted summary judgment in favor of Plaintiff. The court of appeals affirmed, concluding that the 1989 version of the Act applied, and therefore, Defendant, the owner of the severed mineral estate, did not preserve his rights. The Supreme Court reversed, holding (1) pursuant to Corban v. Chesapeake Exploration, LLC, the 2006 version of the Act applied in this case; and (2) based on Dodd v. Croskey, Defendant preserved his mineral rights. View "Walker v. Shondrick-Nau" on Justia Law

Nile and Katheryn Batman claimed to hold an interest in minerals underlying the properties owned by Wayne Lipperman and the estate of James Albanese (“Albanese”). Albanese and Lipperman filed separate actions seeking to quiet title to their respective properties, claiming that the severed mineral interests held by the Batmans had been abandoned. Albanese and Lipperman also sought to cancel any oil and gas leases executed in relation to the Batmans’ interests in their properties. The trial court granted summary judgment against Albanese and Lipperman. The court of appeals affirmed in both cases. The Supreme Court affirmed, holding (1) the Ohio Dormant Mineral Act (ODMA) applies in these cases; and (2) because neither Albanese nor Lipperman complied with the notice and affidavit requirements in the ODMA, the mineral interests are preserved in favor of their holder, the Batmans. View "Albanese v. Batman" on Justia Law

Williams Alaska Petroleum owned the North Pole refinery until 2004. Williams knew that the then-unregulated chemical sulfolane was present in refinery property groundwater, but it did not know that the sulfolane had migrated off the refinery property via underground water flow. Flint Hills Resources Alaska bought the North Pole refinery from Williams in 2004 pursuant to a contract that contained detailed terms regarding environmental liabilities, indemnification, and damages caps. Almost immediately the Alaska Department of Environmental Conservation informed Flint Hills that sulfolane was to be a regulated chemical and that Flint Hills needed to find the source of the sulfolane in the groundwater. The Department contacted Flint Hills again in 2006. Flint Hills’s environmental contractor repeatedly warned Flint Hills that sulfolane could be leaving the refinery property and that more work was necessary to ascertain the extent of the problem. In 2008, Flint Hills drilled perimeter wells and discovered the sulfolane was migrating beyond its property and had contaminated drinking water in North Pole. A North Pole resident sued Flint Hills and Williams, and Flint Hills cross-claimed against Williams for indemnification. After extensive motion practice the superior court dismissed all of Flint Hills’s claims against Williams as time-barred. Flint Hills appealed. After review, the Supreme Court held that the superior court correctly applied the contract’s damages cap provision, but concluded that the court erred in finding Flint Hills’s contractual indemnification claims and part of its statutory claims were time-barred. The Court also affirmed the court’s dismissal of Flint Hills’s equitable claims. View "Flint Hills Resources Alaska, LLC v. Williams Alaska Petroleum, Inc." on Justia Law

Sandra Horob, Steven Poeckes, Steve Shae, Mike Shae and Paul Shae, the successors to the interests of John and Bernice Shae ("Horob plaintiffs"), appealed the grant of summary judgment deciding ownership of an oil and gas lease in favor of the successors to the interest of the William Herbert Hunt Trust Estate (collectively "defendants") and declaring the lease did not terminate and remained in effect. The Horob plaintiffs argued the Shae lease expired under the cessation of production clause because production from the well on the interest at-issue ceased, and additional drilling or reworking operations were not commenced within 60 days of the cessation. The district court concluded the lease did not expire because the cessation of production clause was not triggered. The court alternatively concluded the lease did not expire because: (1) it remained in effect under the terms of a communitization agreement with the United States; and (2) the Horob plaintiffs ratified the lease by accepting royalty payments after the lapses in production. After review, the North Dakota Supreme Court concluded the Shae lease's cessation of production clause was triggered, however, the lease remained in effect under the terms of the communitization agreement. View "Horob v. Zavanna, LLC" on Justia Law

In 2001, EQT sold or leased to Journey several oil- and natural-gas-producing properties in Kentucky. Both parties continued to conduct oil and natural-gas operations in the state, but Journey later concluded that EQT was operating on some of the lands that had been conveyed to Journey. Journey sought a declaration that it owned or controlled those properties and that EQT was liable for the oil and natural gas that EQT had removed from those properties. The district court concluded on summary judgment that the parties’ 2001 contract had unambiguously conveyed the disputed properties to Journey. A jury found that EQT’s trespasses on Journey’s lands were not in good faith. The court subsequently required EQT to pay $14,288,432 in damages and transfer certain oil and natural-gas wells to Journey. The Sixth Circuit affirmed, rejecting arguments that the district court erred in construing the parties’ contract, in excluding portions of EQT’s proffered evidence, and in crafting the remedy for EQT’s trespasses. EQT carried out its drilling despite obvious indicators that its ownership of the underlying property was doubtful, establishing an ample basis to conclude that EQT’s trespasses were not in good faith. View "Journey Acquisition-II, L.P. v. EQT Prod.Co." on Justia Law