Justia Energy, Oil & Gas Law Opinion Summaries

Seven affiliated debtors are entities that conducted deep and strip coal mining and operated coal prep plants and loading facilities in three states. The bankruptcy court authorized joint procedural administration, but not substantive consolidation. The administrative expense claims at issue arise from environmental damage. The land and the coal were subject to leases that terminated before commencement of bankruptcy proceedings. The West Virginia Department of Environmental Protection (WVDEP) issued mining permits and National Pollutant Discharge Elimination System permits to the debtors and affiliated entities for the operations. The bankruptcy court denied WVDEP’s application for administrative expenses against two debtors. The Sixth Circuit Bankruptcy Appellate Panel held that the court failed to properly analyze the debtors’ potential liability for reclamation obligations associated with permits owned by their affiliate. WVDEP’s administrative expense claims were properly denied to the extent they were based on derivative liability for the debts of the affiliate, either based on veil piercing or substantive consolidation. The court abused its discretion in denying the claims that were based on direct liability for reclamation obligations associated with the permits owned by the affiliate and in denying claims that were independent of the threshold question of joint and several liability for reclamation obligations associated with the permits owned by an affiliate. View "In re: Appalachian Fuels, LLC" on Justia Law

These cases arose out of the energy crisis of 2000-2002. Plaintiffs, retail buyers of natural gas, alleged that defendants, natural gas traders, manipulated the price of natural gas by reporting false information to price indices published by trade publications and engaging in wash sales. The court held that the Natural Gas Act (NGA), 15 U.S.C. 717 et seq., did not preempt plaintiffs' state antitrust claims, and reversed the district court's order granting summary judgment to defendants. The 2003 enactment of FERC's Code of Conduct did not affect the court's conclusion that the NGA did not grant FERC jurisdiction over claims arising out of false price reporting and other anticompetitive behavior associated with nonjurisdictional sales. The court found that the district court did not abuse its discretion in denying the Heartland Plaintiffs' motion for leave to amend to add a treble damages state law claim and therefore affirmed the district court's order denying that motion. The court reversed the district court's order dismissing the AEP Defendants from the Wisconsin Arandell case for lack of personal jurisdiction. Because the court agreed with the district court's conclusion that the plain text of Wisconsin Statutes 133.14 allowed recovery only by plaintiffs who were direct purchasers under the voided contract, the court affirmed the district court's order granting partial summary judgment to DETM. View "In re: Western States Antitrust Litig." on Justia Law

In 1983, the Nuclear Waste Policy Act established a plan for spent nuclear fuel (SNF) generated by nuclear power plants, 42 U.S.C. 10101–10270. The Act made utilities responsible for SNF storage until the U.S. Department of Energy (DOE) accepts the material. The Secretary of Energy entered into contracts with nuclear utilities to accept SNF in return for payment of fees. The Act provided that the Nuclear Regulatory Commission “shall not issue or renew a license” to any nuclear utility unless the utility has entered into a contract with DOE or DOE certifies ongoing negotiations. Nuclear utilities, including the owner of the Entergy nuclear power stations, entered into contracts and began making payments, which have continued. By 1994, DOE knew it would be unable to accept SNF by the Act’s January 31, 1998 deadline. In 1995, DOE issued a “Final Interpretation” that took the position that it did not have an unconditional obligation to begin performance on that date. Entergy sued, asserting that DOE’s partial breach caused it to incur additional costs for SNF storage. The claims court struck an unavoidable delay defense, based on a prior decision rejecting DOE’s argument that its failure was “unavoidable” under the contract. The Federal Circuit affirmed. View "Entergy Nuclear Fitzpatrick, LLC v. United States" on Justia Law

The Clean Air Act New Source Review program forbids construction of new pollution sources without a permit, 42 U.S.C. 7475. Operators of major pollutant-emitting sources who plan construction must make a preconstruction projection of the increase in emissions following construction, to determine whether the project constitutes a “major modification,” requiring a permit. DTE planned on replacing 2,000 square feet of tubing, the economizer, and large sections of reheater piping; installing a new nine-ton device that provides voltage that creates the electromagnetic field needed for the rotor to produce electricity; and refurbishing boiler feedwater pumps at its power plant. The project required 83 days and $65 million. DTE performed required calculations and projected an emissions increase of 3,701 tons per year of sulfur dioxide and 4,096 tons per year of nitrogen oxides. Under the regulations, an increase of 40 tons per year of either substance is significant. DTE determined that the increase fell under the demand growth exclusion. The Michigan Department of Environmental Quality took no action and construction began. The U.S. EPA filed notice of violation. The district court granted DTE summary judgment. The Sixth Circuit reversed. While the regulations allow operators to undertake projects without having EPA second-guess their projections, EPA is not categorically prevented from challenging blatant violations until after modifications are made. View "United States v. DTE Energy Co." on Justia Law

This case stemmed from Washington Gas' request to expand a natural gas substation (County Zoning Plans). On appeal, Washington Gas challenged the district court's order dismissing Washington Gas' mandatory referral claim and the district court's subsequent order granting summary judgment on Washington Gas' federal preemption claims. The court concluded that the district court did not abuse its discretion in dismissing the mandatory referral claim pursuant to Burford v. Sun Oil; the Natural Gas Pipeline Safety Act (PSA), 49 U.S.C. 60102, 60104, did not preempt the County Zoning Plans because the PSA only preempted safety regulations and the County Zoning Plans were not safety regulations; and the Natural Gas Act (NGA), 15 U.S.C. 717, did not preempt the County Zoning Plans because Washington Gas was a local distributor of natural gas and, therefore, was not subject to the NGA. Accordingly, the court affirmed the district court's judgment. View "Washington Gas Light Co. v. Prince George's County Council" on Justia Law

FERC fined petitioner $30 million for manipulating natural gas futures contracts. Petitioner, an employee of the hedge fund Amaranth, claimed that FERC lacked authority to fine him because the Commodity Futures Trading Commission (CFTC) had exclusive jurisdiction over all transactions involving commodity futures contracts. The court granted the petition for review because manipulation of natural gas futures contracts fell within the CFTC's exclusive jurisdiction and because nothing in the Energy Policy Act, 15 U.S.C. 717c-1, clearly and manifestly repealed the CFTC's exclusive jurisdiction. View "Hunter v. FERC" on Justia Law

This case involved a contractual interpretation dispute over whether overriding royalties were payable out of the initial oil and gas production from a tract of land on the outer continental shelf (OCS) adjacent to Louisiana. The court concluded, under applicable Louisiana law, that the "calculate and pay" clauses in the overriding royalty interests assignment contracts did not clearly and explicitly express the intent that overriding royalty payments shall be suspended whenever the U.S. landowner royalties were suspended under the OCS Deepwater Royalty Relief Act, 43 U.S.C. 1337(a); and that the "calculate and pay" clauses must be interpreted further in search of the common intent of the parties to the assignment contracts. Accordingly, the court reversed the district court's summary judgment and remanded for further proceedings. View "Total E&P USA, Inc. v. Kerr-McGee Oil and Gas Corp, et al" on Justia Law

This case stemmed from Greenpeace's public campaign to stop Shell from driling in the Arctic. Greenpeace appealed the district court's grant of Shell's motion for a preliminary injunction, which prohibited Greenpeace from coming within a specified distance of vessels involved in Shell's Arctic Outer Continental Shelf (OCS) exploration and from committing various unlawful and tortious acts against those vessels. The court affirmed the judgment, concluding that the action presented a justiciable case or controversy, that the district court had jurisdiction to issue its order, and that it did not abuse its discretion in doing so. View "Shell Offshore, Inc., et al v. Greenpeace, Inc." on Justia Law

The issue before the Tenth Circuit in this case centered on whether the Mineral Leasing Act (MLA), as amended by the Reform Act of 1987, required the Secretary of the Interior to issue leases for parcels of land to the highest bidding energy company within sixty days of payment to the Bureau of Land Management (BLM). Appellants (collectively, "Energy Companies") sued to compel the Secretary to issue pending leases on which they were the high bidders and more than sixty days had passed since they had paid the BLM in full. The district court construed the MLA to impose a mandate on the Secretary to decide whether to issue the leases, and ordered BLM to make such decisions regarding the still pending leases of Energy Companies within thirty days. Energy Companies appealed the district court's order and asserted that the MLA required the Secretary to issue the pending leases within sixty days rather than merely make a decision on whether the leases will be issued. Upon review of the matter, the Tenth Circuit held that the district court’s order was not a "final decision," and as such, the Court lacked jurisdiction to hear the Energy Companies' appeal. View "Western Energy Alliance v. Salazar" on Justia Law

Plaintiff-Appellant Eric Rajala, Trustee of the bankruptcy estate of Generation Resources Holding Company, LLC (GRHC), appealed a district court order which granted motions by Defendants-Appellees FreeStream Capital, LLC (FreeStream) and Lookout Windpower Holding Co., LLC (LWHC) to distribute approximately $9 million held in escrow. The amount represented part of the purchase price of a wind power project allegedly developed by GRHC. The Trustee claimed that GRHC had been left with $5 million in debt while the individual Defendants-Appellees and their affiliated entities received some $13 million in proceeds from the sale of several wind power projects, unburdened by the debt. The issue on appeal before the Tenth Circuit was what constituted property of the bankruptcy estate and whether allegedly fraudulently transferred property was subject to the Bankruptcy Code's automatic stay before a trustee recovers the property through an avoidance action. The district court held that allegedly fraudulently transferred property was not part of the bankruptcy estate until recovered and therefore was beyond the reach of the automatic stay. Upon review, the Tenth Circuit affirmed: "[i]n the end, we need not pass upon the constitutionality of such a broad reading. . . . This interpretation gives Congress's chosen language its ordinary meaning, and abides by the rule against surplusage. Further, our reading does not undermine the Bankruptcy Code's goal of equitable distribution, as there exist[s] alternative means of protecting estate assets." View "Rajala v. Garnder" on Justia Law