Justia Energy, Oil & Gas Law Opinion Summaries

Columbia Gas of Ohio, Inc. applied to the Ohio Power Siting Board for approval to construct a 3.7-mile natural-gas-distribution pipeline in Maumee, Ohio. The application was submitted under an accelerated review process for pipelines less than five miles long. Yorktown Management, L.L.C., which owns property adjacent to the proposed pipeline route, raised concerns about the safety and environmental impact of the pipeline, particularly its proximity to their commercial office building.The Ohio Power Siting Board approved Columbia's application under the accelerated review process, finding that the project met the necessary criteria. Yorktown filed a motion to intervene and later a motion to suspend the review, arguing that the board had not adequately addressed their safety concerns. The board denied Yorktown's motion to suspend and subsequently denied their application for rehearing, leading Yorktown to appeal the decision.The Supreme Court of Ohio reviewed the case and affirmed the board's decision. The court found that Columbia's application did not require a 50-foot-wide permanent easement along the entire pipeline route, as Yorktown claimed. The court also determined that Yorktown had waived its right to challenge the board's rejection of testimony from a different pipeline project. Additionally, the court held that the board did not err in refusing to suspend its review of the accelerated application, as Yorktown failed to demonstrate good cause for suspension. The court concluded that the board did not improperly defer to Columbia and had appropriately conditioned the approval on compliance with relevant safety regulations. View "In re Letter of Notification Application of Columbia Gas of Ohio, Inc. for the Ford Street Pipeline Project" on Justia Law

This case involves a dispute over a lease agreement between Tera, L.L.C., and Rice Drilling D, L.L.C., and Gulfport Energy Corporation. The lease granted Rice Drilling and Gulfport Energy certain mineral rights in the geological formations known as the Marcellus Shale and the Utica Shale beneath Tera’s land. The dispute arose when Tera claimed that the defendants had intentionally drilled six wells into the Point Pleasant formation, which Tera argued was not included in the lease agreement.The trial court awarded summary judgment to Tera, concluding that the lease agreement clearly limited the rights granted to the defendants to the Marcellus and Utica formations and reserved rights to all other formations. The court also found that the defendants had trespassed in bad faith, and a jury awarded Tera over $40 million in damages.The Court of Appeals for Belmont County affirmed the trial court's decision. The court concluded that the lease language was unambiguous and that the phrase "Utica Shale" had a technical stratigraphic meaning that did not include the Point Pleasant formation.The Supreme Court of Ohio reversed the lower courts' decisions. The court found that the lease agreement was ambiguous because it did not clearly establish whether the Point Pleasant was or was not to be considered part of the Utica Shale. The court concluded that resolving the meaning of ambiguous terms in a contract is a matter of factual determination for the fact-finder. Therefore, the court remanded the case to the trial court for further proceedings. View "Tera, L.L.C. v. Rice Drilling D, L.L.C." on Justia Law

The Supreme Court affirmed the orders of the Ohio Power Siting Board approving two large solar farms that were proposed to be built in Preble County, holding that the Board's order was neither unlawful nor unreasonable.The General Assembly authorized commercial solar farms in Ohio but made their construction conditional on the Board's approval. The Board approved the solar farms after its staff agreed to stipulations imposing a number of conditions on the construction and operation of the facilities. Certain citizens appealed. The Supreme Court affirmed, holding that there was nothing unlawful about the Board's adherence to its own regulations and that the Board did not act unreasonably in making the determinations required by Ohio Rev. Code 4906.10(A). View "In re Application of Alamo Solar I, LLC" on Justia Law

In this discretionary appeal brought by Discovery Oil and Gas, LLC to determine whether an express indemnification provision in its contract with Wildcat Drilling, LLC evinced a clear intent by the parties to abrogate the common-law notice requirements for indemnification set forth in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), the Supreme Court held that the requirements announced in Globe Indemnity did not apply.Specifically, the Supreme Court held (1) when the parties have entered into a contract containing an express indemnification provision, the common-law notice requirements set forth in Globe Indemnity do not apply, and the parties are bound by the terms of their contract because the provision evinces a clear intent by the parties to abrogate the common law; and (2) the language of the contract in this case evicted the parties' clear intent to abrogate the common-law notice requirements for indemnification. View "Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC" on Justia Law

The Supreme Court affirmed the orders of the Public Utilities Commission of Ohio approving a stipulation that authorized Dominion Energy Ohio to implement its capital expenditure program rider (CEP Rider), holding that the Commission's orders were not unlawful or unreasonable.Dominion filed an application to recover the costs of its capital expenditure program by establishing the CEP Rider at issue. Dominion and the Commission jointly filed a stipulation asking the Commission to approve the application subject to the staff's recommendations. The Commission modified and approved the stipulation. The Supreme Court affirmed, holding (1) the Commission did not violate an important regulatory principle in adopting the 9.91 percent rate of return; (2) the Commission did not inconsistently apply its precedent; (3) the Commission did not violate Ohio Rev. Code 4903.09; and (4) Appellants' manifest-weight-of-the-evidence argument failed. View "In re Application of East Ohio Gas Co." on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the Ohio Board of Tax Appeals (BTA) that some of Taxpayer's equipment used in fracking was subject to Ohio's sales and use tax, holding most of the equipment at issue was exempt from taxation.While Ohio law generally exempts from taxation equipment used direction in oil and gas production not everything in the production of oil and gas qualifies for the exemption. After Taxpayer purchased equipment for use in its fracking operations the tax commissioner issued use-tax assessments, one for each piece of equipment. The commissioner then canceled about half the assessments. The BTA affirmed. The Supreme Court reversed in part, holding that equipment consisting of blenders, hydration units, chemical-additive units, t-belts, and sand kings are tax exempt. View "Stingray Pressure Washing, L.L.C. v. Harris" on Justia Law

The Supreme Court affirmed the order of the Ohio Power Siting Board authorizing Firelands Wind, LLC to construct, operate, and maintain a wind farm in Huron and Erie Counties, holding that the nineteen nearby residents and the Black Swamp Bird Observatory that brought this appeal (collectively, Appellants) have not established that the Board's order was unlawful or unreasonable.On appeal, Appellants challenged the Board's determination that the wind farm satisfies the statutory requirements for constructing a major utility facility, asserting, among other things, that the project could kill birds and create excessive noise for residents near the wind farm and that the Board improperly failed to follow its administrative rules. The Supreme Court affirmed, holding that the Board's order was neither unlawful nor unreasonable. View "In re Application of Firelands Wind, L.L.C." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals concluding that use and development and alienation restrictions in a deed applied to both the surface and subsurface of the properties at issue in this case and that the village of Barnesville violated the restrictions when it transferred oil and gas rights to another entity without obtaining written permission from Ohio Public Works Commission (OPWC), holding that there was no error.The village received two grants to finance the purchase of two properties for conservation projects. The OPWC brought this action claiming that the village violated transfer and use restrictions in the deeds for the properties at issue by transferring oil and gas rights to another entity, which leased those rights to Gulfport Energy Corporation, without obtaining the OPWC's permission. The court of appeals granted judgment in favor of OPWC. The Supreme Court affirmed, holding that the court of appeals correctly determined that the village violated the use and development restrictions when it transferred oil and gas rights without OPWC's written consent. View "Ohio Public Works Commission v. Village of Barnesville" on Justia Law

The Supreme Court affirmed the decision of the Ohio Power Siting Board to approve the application of Icebreaker Windpower, Inc. for a certificate of environmental compatibility and public need to build a six-turbine wind-powered electric-generation facility in Lake Erie, holding that Appellants did not meet their burden of demonstrating that the Board's decision was against the manifest weight of the evidence.Specifically, the Supreme Court held (1) there was sufficient evidence in the record before the Board for it to determine the nature of the probable environmental impact of the project under Ohio Rev. Code 4906.10(A)(2) and whether the project represented the minimum adverse environmental impact under Ohio Rev. Code 4906.10(A)(3); and (2) the Board did not err in determining that it lacked jurisdiction to consider the residents' public-trust argument. View "In re Application of Icebreaker Windpower, Inc." on Justia Law

In this appeal from a judgment of the Seventh District Court of Appeals, the Supreme Court held that Ohio's Marketable Title Act (MTA), Ohio Rev. Code 5301.47 et seq., applied to an oil and gas interest that had been severed from its surface property.Senterra, Ltd., the owner of the surface property at issue in this case, sought to quiet title to the disputed one-quarter oil and gas interest in its favor, urging the Court to apply the deed-interpretation rule of equity set forth in Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878 (Tex. 1940) (the Duhig rule). The heirs to the oil and gas interest argued, in response, that the Duhig rule was inapplicable and that the MTA applied and gave them marketable record title to the interest. The trial court granted summary judgment to Senterra. The Seventh District reversed, ruling that the Duhig rule was inapplicable and that the MTA applied. The Supreme Court affirmed, holding (1) the oil and gas interest retained by the heirs was not subject to the Duhig rule; and (2) the heirs' interest was preserved under the MTA. View "Senterra, Ltd. v. Winland" on Justia Law