Justia Energy, Oil & Gas Law Opinion Summaries

Plaintiffs, holders of BP securities, filed suit against BP and two of its executives, alleging that BP made two distinct series of misrepresentations in violation of federal securities law: one series regarding its pre-Deepwater Horizon spill safety procedures, and one regarding the flow rate of the oil after the spill occurred. The district court only certified the post-spill class. Both sides appealed. The court concluded that the district court did not abuse its discretion in certifying the Post-Spill class where the district court determined that plaintiffs had established a model of damages consistent with their liability case and capable of measurement across the class, as required by the Supreme Court’s recent decision in Comcast Corp. v. Behrend. Accordingly, the court affirmed as to that issue. The court also affirmed the district court's decision not to certify the Pre-Spill class where plaintiffs’ materialization-of-the-risk theory cannot support class certification. View "Ludlow v. BP" on Justia Law

IDACORP submitted proposed settlements to FERC involving the FERC proceeding related to electricity sales in the Pacific Northwest in 2000 and 2001. At issue was whether FERC abused its discretion in considering these proposed settlements. The court concluded that the agency departed from its rules and precedent without explanation when it treated the first proposed settlement as uncontested. In this case, FERC abused its discretion by foregoing the Trailblazer Pipeline Co. analysis and merits analysis dictated by FERC’s regulations. The court granted both petitions for review and remanded for further proceedings because the settlements and petitions are inextricably intertwined. View "Idaho Power Co. v. FERC" on Justia Law

After inspectors found 130,000 barrels of oil floating atop uncovered equalization tanks, CITGO was convicted of multiple violations of the Clean Air Act (CAA), 42 U.S.C. 7413 and 40 C.F.R. 60.690 et seq. (Subpart QQQ), and the Migratory Bird Treaty Act of 1918 (MBTA), 16 U.S.C. 703. On appeal, CITGO challenged the district court's CAA convictions, arguing, inter alia, that the district court erroneously instructed the jury about the scope of a regulation concerning "oil-water separators." The court concluded that Subpart QQQ’s text, the overall regulatory scheme, and its promulgation history point to the inescapable conclusion that an equalization tank is not an “oil-water separator.” Because the district court misstated the scope of the regulation, its jury instruction was erroneous and this omission affected the outcome. Therefore, CITGO’s CAA convictions must be reversed. The court also concluded that CITGO's MBTA convictions must be reversed because the court agreed with the Eighth and Ninth circuits that a “taking” is limited to deliberate acts done directly and intentionally to migratory birds. The court's conclusion is based on the statute’s text, its common law origin, a comparison with other relevant statutes, and rejection of the argument that strict liability can change the nature of the necessary illegal act. View "United States v. CITGO Petroleum Corp." on Justia Law

A city pipeline buried beneath a road leaked odorless natural gas which infiltrated a nearby home, causing an explosion. Residents alleged that the natural gas lacked its distinctive rotten egg smell, and that the odorant that was designed to provide the warning odor was defective because it faded. After reviewing Plaintiffs’ products-liability and assorted negligence claims against the odorant manufacturer, odorant distributor, and transmission pipeline, the Mississippi Supreme Court concluded that these claims failed as a matter of law. The Court therefore affirmed the circuit court’s grant of summary judgment to the odorant manufacturer and transmission pipeline, and reversed the circuit court’s denial of the odorant distributor’s motion for summary judgment to render judgment in its favor. View "Elliott v. El Paso Corporation" on Justia Law

At the center of this an appeal was the superior court's de novo valuation of the Trans-Alaska Pipeline System (TAPS) for tax assessment years 2007, 2008, and 2009. In February 2014 the Alaska Supreme Court issued a decision affirming the superior court's de novo valuation of TAPS for the 2006 assessment year.1 The parties introduced considerably more evidence during trial for the 2007, 2008, and 2009 years, but the operative facts remained substantially the same and the superior court applied similar standards and methods for valuation. Many of the issues raised on appeal were similar or identical to issues raised in the 2006 appeal and thus are partially or wholly resolved by the Court's prior opinion. Because the superior court did not clearly err or abuse its discretion with regard to any of its findings or its methodology, and because it committed no legal error in its conclusions, the Supreme Court affirmed. View "Alaska Dept. of Revenue v. BP Pipelines (Alaska) Inc." on Justia Law

The 1976 Railroad Revitalization and Regulatory Reform Act prohibits states from imposing taxes that “discriminat[e] against a rail carrier,” 49 U.S.C. 11501(b)(4)A, including: Assessing rail transportation property at a value with a higher ratio to the true market value of the property than the ratio applied to other commercial and industrial property; levying or collecting an ad valorem property tax on rail transportation property at a tax rate that exceeds the rate applicable to commercial and industrial property in the same jurisdiction; or imposing “another tax that discriminates against a rail carrier providing transportation.” Railroads sued, claiming that Tennessee sales and use tax assessments were discriminatory. The district court agreed, holding that imposition of those taxes on railroad purchases and use of diesel fuel was discriminatory. In response, in 2014, Tennessee enacted a Transportation Fuel Equity Act that repeals the sales and use tax on railroad diesel fuel, but subjects railroads to the same per-gallon tax imposed on motor carriers under the Highway User Fuel Tax. Previously railroads, like other carriers using diesel fuel for off-highway purposes, were exempt from a “diesel tax.” The Railroads contend the Act is discriminatory because it now subjects only railroads to taxation of diesel fuel used off-highway. The Sixth Circuit affirmed denial of the Railroads’ motion for a preliminary injunction on its targeted or singling-out approach and the functional approach, but remanded for consideration of the Railroads’ argument under the competitive approach. View "CSX Transp., Inc. v. Tenn. Dep't of Revenue" on Justia Law

Two sets of landowners brought suit seeking damages and a declaration of their rights under oil and gas leases executed with with predecessor to an oil and gas producer. Additionally, the landowners sought a declaration that the lessee production companies had miscalculated and underpaid royalties due under the leases. Specifically, the landowners claimed that the lease provision basing their royalty on “one-eighth the market price at the well” should be understand to contemplate the sale of gas made “marketable” and then “sold at the well.” The trial court rejected these claims and dismissed the landowners’ complaint. The court of appeals affirmed, concluding that the trial court did not err in ruling that given royalty provisions such as those in the leases at issue here, Kentucky law does not embrace the “marketable product” approach to royalty calculation. The Supreme Court affirmed, holding that, for the purposes of gas lease royalty valuation under standard “market price (value) at the well” royalty clauses, the lessee is solely responsible for the costs of production, but post-production costs may be deducted from gross receipts before the calculation of the royalty share. View "Baker v. Magnum Hunter Prod., Inc." on Justia Law

At issue in this case was the apportionment of natural gas severance taxes for purposes of calculating royalties when a producer-lessee severs natural gas from the earth. The Sixth Circuit Court of Appeals certified a question to the Kentucky Supreme Court asking whether Kentucky’s at-the-well rule allows a natural gas processor to deduct all severance taxes paid at market prior to calculating a contractual royalty payment to a royalty owner-lessor based on the market price of gas at the well or whether the resource’s at-the-well price includes a proportionate share of the severance taxes owed such that a processor may deduct only that portion of the severance taxes attributable to accumulating, compressing, processing, and transporting the gas prior to calculating the appropriate royalty payment. The Supreme Court rejected the two options presented and concluded that, in the absence of a specific lease provision apportioning severance taxes, lessees may not deduct severance taxes or any portion thereof prior to calculating a royalty value. View "Appalachian Land Co. v. EQT Prod. Co." on Justia Law

MISO, an organization of independent transmission-owning utilities, has linked the transmission lines of its members into a single interconnected grid across 11 states. The Generators, which operate 150-megawatt wind-powered electric generation facilities in Illinois, wish to connect to the system run by MISO. The Federal Energy Regulatory Commission (FERC), acting under 16 U.S.C. 824(a), has standardized the process: the Generators submitted requests to MISO, which then produced studies (paid for by the Generators) to assess potential impact on the grid and calculate the cost of necessary upgrades. After the studies were complete and agreements signed, MISO notified the Generators of a “significant error” that failed to include certain upgrades and that the Generators would either have to agree to fewer megawatts or pay for additional upgrades estimated to cost $11.5 million. MISO presented superseding Agreements to both Generators. The companies refused to sign. FERC found that the Generators should pay for the additional network upgrades. The Seventh Circuit denied a petition for review. The record failed to show that the Generators relied on the original, mistaken studies or that reducing the output would have made their farms economically unsustainable. They also had an exit option. The court noted that the Generators apparently built their wind farms despite the dispute. View "Pioneer Trail Wind Farm, LLC v. Fed. Energy Regulatory Comm'n" on Justia Law

Petitioners, wholesale electricity customers, challenged FERC's orders requiring the Bonneville Power Administration to provide transmission services on terms "not unduly discriminatory or preferential." Petitioners are wholesale electricity customers of Bonneville. The court concluded that petitioners have Article III standing by demonstrating that they have an injury in fact, causation, and redressability. The court concluded, however, that petitioners failed to demonstrate statutory standing, which requires them to be "aggrieved" within the meaning of the Federal Power Act section 313(b) (FPA), 16 U.S.C. 8251(b), and the Administrative Procedure Act section 10, 5 U.S.C. 702. In this case, the zone-of-interests test was not satisfied where petitioners' interests are not arguably protected by section 211A of the FPA. Accordingly, the court denied the petitions for review. View "NRU V. FERC" on Justia Law