Justia Energy, Oil & Gas Law Opinion Summaries

In 2009, the Energy Facilities Siting Board approved the petition of Brockton Power Company, LLC to build and operate a combined-cycle energy generating facility powered by natural gas and ultra-low sulfur distillate in the City of Brockton. The City, the Town of West Bridgewater, and a group of residents of the City and Town, all intervenors in the proceedings below, filed appeals of the decision. The Supreme Judicial Court affirmed the decision of the Board, holding (1) the Intervenors’ contention that the Board’s failure to apply unspecified “substantive equal protection” principles to its review of the proposed facility was without merit, as there was no requirement in the 2002 environmental justice policy to do so; (2) the Board did not abuse its discretion by relying on the National Ambient Air Quality Standards for fine particulate matter; (3) the Board did not erroneously accept Logan Airport weather data as representative of the proposed facility site; (4) the Board did not abuse its discretion in determining that Brockton Power’s evidence regarding the facility’s impact on the Town’s water supply was accurate and complete; and (5) the Board did not improperly designate delivery routes to and from the facility. View "City of Brockton v. Energy Facilities Siting Bd." on Justia Law

In 2009, the Energy Facilities Siting Board approved the petition of Brockton Power Company LLC to build and operate a combined-cycle energy generating facility powered by natural gas and ultra-low sulfur distillate in the City of Brockton. The Supreme Judicial Court affirmed the Board’s decision. In 2009, while the consolidated appeal was pending, Brockton Power submitted a project change filing (PCF) to the Board seeking approval of three changes to its project. The Board denied one of Brockton Power’s proposed changes but approved the two other project changes. Both Brockton Power and the City appealed. The Supreme Judicial Court affirmed the Board’s PCF decision in all respects, holding (1) the procedure the Board adopted to review potentially material changes to Brockton Power’s project did not constitute an abuse of its discretion; (2) the Board’s approval of Brockton Power’s proposed use of water from the City’s advanced wastewater reclamation facility for the facility’s cooling tower was not invalid; and (3) the Board did not err by concluding that the CO emissions from a gas-only plant satisfied statutory standards. View "Brockton Power Co. LLC v. Energy Facilities Siting Bd." on Justia Law

This dispute concerns oil and gas leases granting the Energy Companies specified rights to extract oil and gas underlying the Landowners' real property. The Energy Companies failed to produce oil and gas from the properties within the leases' primary terms and the Landowners subsequently filed suit seeking a declaration that the leases had expired. On appeal, the Energy Companies challenged the district court's grant of summary judgment to Landowners, and denial of summary judgment to the Energy Companies. The court concluded that this case turns on significant and novel issues of New York law concerning the interpretation of oil and gas leases and the court certified two questions of New York law to the New York Court of Appeals: (1) Under New York law, and in the context of an oil and gas lease, did the State's Moratorium amount to a force majeure event? and (2) If so, does the force majeure clause modify the habendum clause and extend the primary terms of the leases? View "Beardslee v. Inflection Energy, LLC" on Justia Law

At issue in this case was a joint operating agreement (JOA) for Wyoming oil and gas interests entered into in 2000 by the predecessors in interest to Windsor Energy Group, LLC and Windsor Beaver Creek, LLC (together, Windsor) and Noble Energy, Inc. (Noble). In 2004, Noble’s predecessor assigned its interest to another party. In 2010, Windsor filed suit against Noble’s predecessor, claiming it was obligated for costs under the JOA. The district court ruled (1) an assignor of an interest who was not formally released was still obligated under the JOA, but (2) Windsor’s claim against Noble for breach of the JOA was barred by laches. The Supreme Court affirmed the district court’s judgment without addressing the contract issue, holding that the district court (1) did not err in ruling that the equitable doctrine of laches was an available defense to Windsor’s claim for breach of the JOA even though the statute of limitations had not expired; and (2) did not abuse its discretion by finding the elements of laches were satisfied in this case. View "Windsor Energy Group, LLC v. Noble Energy, Inc." on Justia Law

Lessors appealed the district court's grant of summary judgment in favor of the lessee, Chesapeake, in this dispute over oil and gas lease royalty provisions. The court concluded that the value of the lessors' royalty is a percentage of the market value at the point of sale, which in this case is at the well; a "net-back" method of calculation does not "burden" or reduce the value of the royalty; Chesapeake has sold the gas at the wellhead and that is the point of sale at which market value must be calculated under the terms of the lessors' lease; and the Texas court's decision in Heritage Res., Inc. v. NationsBank, remains binding law. Therefore, the court affirmed the judgment of the district court. View "Potts, et al. v. Chesapeake Exploration, L.L.C." on Justia Law

Hansard Mining, Inc. and Donald Hansard (the Hansards) sought resolution of a dispute with Barry McLean and the Estate of Glen Harold McLean (the McLeans) concerning overlapping property rights. The parties’ competing claims derived from conflicting patents issued by the United States. The district court granted judgment in favor of the Hansards, concluding that the Hansards’ mining patents had priority over the McLeans’ homestead patent. The Supreme Court affirmed, holding that the district court did not err in granting the Hansards’ motion for summary judgment and in denying the McLeans’ cross-motion for summary judgment, as the Hansards owned the surface and the subsurface rights of their mining claims, and the conflicting portions of the McLeans’ patent were void. View "Hansard v. McLean" on Justia Law

ComEd closed its Zion nuclear power plant in 1998. A decommissioned nuclear must be “decommissioned” and not be dangerously radioactive. Decommissioning is supervised by the Nuclear Regulatory Commission, which requires the operator to finance the decommissioning. The details of the trust fund are left to the state agency, in this case the Illinois Commerce Commission, which (220 ILCS 5/9‐201.5(a)), authorized ComEd to create a trust to be funded by $700 million in charges levied by ComEd on its customers. The Act entitles ComEd customers to the return of money not spent when the decommissioning is completed. In 2001, with the permission of the ICC, ComEd transferred ownership of the Zion plant and the trust assets, to ComEd’s parent, Exelon. Neither Exelon nor its subsidiary is a public utility. Ordinarily the utility (ComEd) would have owned the plant after shutting it down, but transaction costs would be reduced by uniting financing and decommissioning in the same company. After several transfers, plaintiffs brought suit, claiming that the trust funds are being misused in violation of the Illinois Public Utilities Act and common law of trusts. The district court, without deciding whether to certify a class, dismissed. The Seventh Circuit affirmed, noting that that none of the plaintiffs are beneficiaries of the trust.View "Pennington v. ZionSolutions LLC" on Justia Law

Plaintiff filed suit against Denbury, alleging that Denbury breached its duty to act as a reasonable and prudent operator of the well that was drilled under oil, gas, and mineral leases. At issue on appeal was whether the district court erred in remanding the case on the basis that the local single event exclusion under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(11)(B)(ii), (ii)(I), applies to this case. The court concluded that the plain text of the exclusion supports plaintiffs' view that the terms "event" and "occurrence" are not generally understood to apply only to incidents that occur at a discrete moment in time. Moreover, this understanding is supported by legislative history and other case law interpreting the local single event exclusion. Therefore, the court held that, although the exclusion applied in cases in which the single event or occurrence happens at a discrete moment in time, the single event or occurrence may also be constituted by a pattern of conduct in which the pattern is consistent in leading to a single focused event that culminates in the basis of the asserted liability. Accordingly, the court held that the failure of the Well constituted the "event or occurrence" from which the claims of plaintiffs arose. The court affirmed the judgment of the district court. View "Rainbow Gun Club, Inc., et al. v. Denbury Onshore, L.L.C., et al." on Justia Law

In approximately twenty years PCS Nitrogen, Inc. contributed to environmental contamination by manufacturing fertilizer and disturbing contaminated soil during various demolition activities. In 2003, Ashley II of Charleston, Inc. purchased 27.62 acres of the PCS's property. Since that time, Ashley II has incurred substantial costs in remediating the environmental contamination. In July 2008, Ashley II filed a complaint against PCS seeking a declaration of joint and several liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) due to costs of the environmental cleanup at the Site. Additionally, PCS asserted a third-party indemnification claim against the site's previous owner based on the indemnity provision in a 1966 purchase agreement, seeking indemnification for attorney's fees, costs, and litigation expenses incurred in establishing that the predecessor contributed to the contamination. The South Carolina Supreme Court anwered the following certified question from the United States District Court for the District of South Carolina: "Does the rule that a contract of indemnity will not be construed to indemnify the indemnitee against losses resulting from its own negligent acts, unless such intention is expressed in clear and unequivocal terms, apply when the indemnitee seeks contractual indemnification for costs and expenses resulting in part from its own strict liability acts? " In the context of the underlying claim in federal court, the South Carolina Court answered the question, "no." View "Ashley II v. PCS Nitrogen" on Justia Law

In 2012, the Environmental Protection Agency (EPA) promulgated a final Federal Implementation Plan (FIP) to reduce regional haze by regulating emissions of nitrogen oxides (NOx) and particulate matter (PM) at the five units of the Four Corners Power Plant on the Navajo Reservation. WildEarth Guardians filed a petition under 42 U.S.C. 7607(b)(1) for review of the FIP. It argued that promulgation of the FIP did not comply with the Endangered Species Act (ESA) because the EPA failed to consult with the Fish and Wildlife Service about the effect of the FIP even though the EPA had discretion to act to protect endangered fish near the Plant from mercury and selenium emissions. WildEarth argued that the EPA had four grounds for the exercise of discretion that could have benefitted the fish. But the principal ground was mooted by the closure of three units of the Plant, and two other grounds were not raised in WildEarth’s opening brief. "As for the fourth alleged ground, it could not create a duty to consult under the ESA because it would have required the EPA to exceed the clearly delineated boundaries of the FIP." The Tenth Circuit denied the petition. View "WildEarth Guardians v. EPA, et al" on Justia Law