Justia Energy, Oil & Gas Law Opinion Summaries

by
The Supreme Court held that the Public Utilities Commission (PUC) did not abuse its discretion in deciding not to reopen a December 2014 order (Order No. 32600) upon allegations raised in 2019 that changed circumstances warranted relief from the order.The order at issue approved a purchase power agreement (PPA) in which Hawaiian Electric Company agreed to purchase wind energy generated by Na Pua Makani on a wind farm to be constructed on the island of O'ahu. Life of the Land (LOL) sought to reopen the order with reference to Hawai'i Rules of Civil Procedure Rule 60(b). The PUC denied LOL's motion for relief, concluding that it was without jurisdiction to consider the motion because LOL had not timely appealed the order under Haw. Rev. Stat. 269-15.5 and, alternatively, that the motion for relief was an untimely motion for rehearing or reconsideration. The Supreme Court affirmed, holding that the PUC did not abuse its discretion in declining to turn to HRCP Rule 60(b) to reopen Order No. 32600. View "In re Application of Hawaiian Electric Co." on Justia Law

by
Gasoline is subject to an excise tax. The combined fuel excise taxes account for more than 80% of the annual revenue collected for the Highway Trust Fund. The 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act. introduced new credits that fuel producers could use to offset their fuel excise taxes, including one for using “alternative fuels” to create “alternative fuel mixtures” (AFM credit), 26 U.S.C. 6426(e).U.S. Venture buys fuel from various suppliers and combines it with different additives before selling the finished product to retailers. Since 2012 U.S. Venture has commonly added butane to the gasoline it produces and sells. Butane is a type of gas, made from both natural gas and petroleum. It has long been considered a fuel additive, with suppliers adding it to gasoline since at least the 1960s.In 2017. U.S. Venture first sought an AFM tax credit for producing and selling fuel that contained a mixture of gasoline and butane. The IRS rejected its position. The district court and Seventh Circuit affirmed. There is nothing alternative about gasoline containing a butane additive, as indicated by a combination of statutory provisions defining the scope of the alternative fuel mixture tax credit. View "U.S. Venture, Inc. v. United States" on Justia Law

by
Under the Natural Gas Act, to build an interstate pipeline, a natural gas company must obtain from the Federal Energy Regulatory Commission (FERC) a certificate of "public convenience and necessity,” 15 U.S.C. 717f(e). A 1947 amendment, section 717f(h), authorized certificate holders to exercise the federal eminent domain power. FERC granted PennEast a certificate of public convenience and necessity for a 116-mile pipeline from Pennsylvania to New Jersey. Challenges to that authorization remain pending. PennEast sought to exercise the federal eminent domain power to obtain rights-of-way along the pipeline route, including land in which New Jersey asserts a property interest. New Jersey asserted sovereign immunity. The Third Circuit concluded that PennEast was not authorized to condemn New Jersey’s property.The Supreme Court reversed, first holding that New Jersey’s appeal is not a collateral attack on the FERC order. Section 717f(h) authorizes FERC certificate holders to condemn all necessary rights-of-way, whether owned by private parties or states, and is consistent with established federal government practice for the construction of infrastructure, whether by government or through a private company.States may be sued only in limited circumstances: where the state expressly consents; where Congress clearly abrogates the state’s immunity under the Fourteenth Amendment; or if it has implicitly agreed to suit in “the structure of the original Constitution.” The states implicitly consented to private condemnation suits when they ratified the Constitution, including the eminent domain power, which is inextricably intertwined with condemnation authority. Separating the two would diminish the federal eminent domain power, which the states may not do. View "PennEast Pipeline Co. v. New Jersey" on Justia Law

by
In 2017, the City of Farmington (Defendant) adopted an ordinance that imposed additional charges on customers who generate their own electricity. Defendant argued that change reflected the true cost imposed by these customers on the electric grid; Plaintiffs argued the charges amounted to price discrimination in violation of FERC rules. Defendant moved to dismiss Vote Solar and several other plaintiffs for lack of standing. Sua sponte, the district court requested supplemental briefing concerning its statutory subject-matter jurisdiction. The parties, operating under the assumption that the "as-implemented" versus "as-applied" framework governed subject-matter jurisdiction: Plaintiffs argued they were lodging an as-implemented claim and Defendant characterized the claim as as-applied. Due to its interpretation of PURPA’s jurisdictional provisions, the district court dismissed the case for failure to state a claim under Rule 12(b)(6), finding that because Plaintiffs did not argue Defendant had made no effort to implement FERC’s price discrimination rules, its claim did not fall within the district court’s jurisdiction. It also deemed Defendant’s motion regarding standing moot. Plaintiffs appealed. The Tenth Circuit Court of Appeals reversed, finding that this case was one of an “as-implemented” claim. "In this case, the district court rejected that established distinction, introducing a particularized and novel interpretation of PURPA’s jurisdictional scheme under which federal courts have jurisdiction only if a utility fails to make any reasonable effort to implement a Federal Energy Regulatory Commission (FERC) rule." The Tenth Circuit declined to adopt the district court's decision in this case. View "Vote Solar v. City of Farmington" on Justia Law

by
The Supreme Judicial Court affirmed the decision of the Energy Facilities Siting Board that approved a proposal by Eversource Energy under Mass. Gen. Laws ch. 264, 69J to construct a new electrical transmission line between substations in Sudbury and Hudson, holding that there was no error in the Board's assessment and approval of the project.Eversource sought to construct the new transmission line after it was discovered that the particular area needed additional energy supply to withstand certain contingencies. The Supreme Judicial Court concluded that there was no error in the Board's assessment and approval of the project, holding (1) the Board has wide to discretion to balance the reliability, cost and environmental impact of each proposal before it to achieve its statutory mandate; and (2) there was no legal basis for disturbing the Board's careful and reasoned decision in this case. View "Sudbury v. Energy Facilities Siting Board" on Justia Law

by
The renewable fuel program (RFP) requires most domestic refineries to blend renewable fuels into the transportation fuels they produce, 42 U.S.C. 7545(o)(1)(J), (o)(1)(L), (o)(2)(A)(i), To lessen the impact of those mandates on small refineries, Congress created a blanket exemption from RFP obligations for small refineries until 2011 and directed the Environmental Protection Agency (EPA) to “extend the exemption under clause (i)” for at least two years if the RFP obligations would impose “a disproportionate economic hardship” on a given small refinery. Congress offered the possibility of further relief, providing that “[a] small refinery may at any time petition . . . for an extension of the exemption under subparagraph (A) for the reason of disproportionate economic hardship,” subparagraph (B)(i). Three small refineries received subparagraph (B)(i) exemptions. Renewable fuel producers objected. The Tenth Circuit vacated EPA’s decisions.The Supreme Court reversed. A small refinery that previously received a hardship exemption may obtain an “extension” under subparagraph (B)(i) even if it saw a lapse in exemption coverage in a previous year. Subparagraph (B)(i)’s temporal use of “extension,” does not require unbroken continuity. The court noted federal rules and statutes that permit "extensions" of time or of benefits, even after a lapse. The absence of any “consecutive” or “successive” language suggests exemptions need not follow one another without interruption. By authorizing small refineries to seek a hardship exemption “at any time,” subparagraph (B)(i) invites small refineries to seek hardship exemptions in different years as market conditions change. The context suggests subparagraph (B) is not part of some sunset scheme. View "HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association" on Justia Law

by
Spire planned to build a St. Louis-area pipeline and unsuccessfully solicited natural gas “shippers” to enter into preconstruction “precedent agreements.” Spire later entered into a precedent agreement with its affiliate, Spire Missouri, for 87.5 percent of the pipeline’s projected capacity. Spire applied to the Federal Energy Regulatory Commission (FERC) for a certificate of public convenience and necessity (Natural Gas Act, 15 U.S.C. 717f(c)(1)(A)), conceding that the proposed pipeline was not needed to serve new load but claiming other benefits. As evidence of need, Spire relied on its precedent agreement with Spire Missouri. FERC released an Environmental Assessment, finding no significant environmental impact. EDF challenged Spire’s application, arguing that the precedent agreement should have limited probative value because the companies were corporate affiliates. The Order approving the new pipeline principally focused on the precedent agreement.The D.C. Circuit vacated the approval. FERC may issue a Certificate only if it finds that construction of a new pipeline “is or will be required by the present or future public convenience and necessity.” Under FERC’s “Certificate Policy Statement,” if there is a need for the pipeline, FERC determines whether there will be adverse impacts on existing customers, existing pipelines, or landowners and communities. If adverse stakeholder impacts will result, FERC balances the public benefits against the adverse effects. FERC’s refusal to address nonfrivolous arguments challenging the probative weight of the affiliated precedent agreement did not evince reasoned and principled decision-making. FERC ignored evidence of self-dealing and failed to thoroughly conduct the interest-balancing inquiry. View "Environmental Defense Fund v. Federal Energy Regulatory Commission" on Justia Law

by
A mining company appealed the borough assessor’s valuation of its mine to the borough board of equalization. At a hearing the company presented a detailed report arguing the borough had improperly included the value of “capitalized waste stripping”when calculating the tax-assessed value of the mine. The assessor maintained its position that waste stripping was taxable, but reduced its valuation of the mine to better reflect the remaining life of the mine. The board approved the assessor’s reduced valuation of the mine and the superior court affirmed the board’s decision. The mine owners argued that waste stripping fell within a statutory exemption from taxation. The Alaska Supreme Court construed municipal taxing power broadly, and read exceptions to that power narrowly. The Court found waste stripping was not a “natural resource,” but an improvement that made it easier for miners to access natural resources. The Court concluded that the value of this improvement, like that of other improvements at the mine site, was subject to tax by the borough. The Court therefore affirmed the superior court’s decision affirming the board’s valuation. View "Fairbanks Gold Mining, Inc. vs. Fairbanks North Star Borough Assessor" on Justia Law

by
An oil producer challenged an Alaska Department of Revenue advisory bulletin interpreting the oil tax code, arguing that the bulletin violated the Alaska Administrative Procedure Act (APA) and seeking a declaratory judgment that the interpretation was contrary to law. The Alaska Supreme Court determined the advisory bulletin could not be challenged under the APA because it was not a regulation, and that a declaratory judgment was not available because the tax dispute between the parties was not ripe. View "Exxon Mobil Corporation v. Alaska, Department of Revenue" on Justia Law

by
The Supreme Court held that the Texas Propane Gas Association (TPGA) demonstrated standing to bring its suit against the City of Houston for a declaratory judgment that the City's ordinances regulating the liquefied petroleum gas (LPG) industry to include imposing criminal fines for violations were preempted by state law.The City brought two jurisdictional challenges to TPGA's suit: (1) the City argued that civil courts lacked subject matter jurisdiction to adjudicate TPGA's preemption claim because the local regulations it challenged carried criminal penalties; and (2) the City argued that TPGA could only challenge the City's LPG regulations that have injured at least one of its members. The trial court refused to dismiss the suit for lack of jurisdiction. The court of appeals remanded the case to the trial court for TPGA to amend its pleadings, agreeing that TPGA could not challenge the City's regulations en masse. The Supreme Court reversed, holding (1) TPGA's claim was not a criminal law matter that must be raised in defense to prosecution; and (2) the City's argument, while framed as a challenge to TPGA's standing, was in fact a merits challenge, and TPGA demonstrated standing to bring the preemption claim it pleaded. View "Texas Propane Gas Ass'n v. City of Houston" on Justia Law