Justia Energy, Oil & Gas Law Opinion Summaries

The Natural Gas Act (NGA), 15 U.S.C. 717, allows private gas companies to exercise the federal government’s power to take property by eminent domain, if the company has a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC); was unable to acquire the property by contract or reach agreement about the amount to be paid; and the value of the property exceeds $3,000. PennEast, scheduled to build a pipeline through Pennsylvania and New Jersey, obtained federal approval for the project and filed suit under the NGA to condemn and gain immediate access to properties along the pipeline route, including 42 properties owned, at least in part, by New Jersey or arms of the state. New Jersey sought dismissal, citing the Eleventh Amendment. The district court ruled in favor of PennEast. The Third Circuit vacated. The Eleventh Amendment recognizes that states enjoy sovereign immunity from suits by private parties in federal court. New Jersey has not consented to PennEast’s condemnation suits and its sovereign immunity has not been abrogated by the NGA. The federal government’s power of eminent domain and its power to hale sovereign states into federal court are separate and distinct. In the NGA, Congress has delegated only the power of eminent domain. View "In re: PennEast Pipeline Co. LLC" on Justia Law

Neighbors of a proposed solar electric-generation facility challenged the Public Utility Commission's (PUC) issuance of a certificate of public good for the project. At the heart of their appeal was a challenge to the PUC’s conclusions that the Apple Hill project would not unduly interfere with the orderly development of the region and would not have an undue adverse effect on aesthetics. Both of these conclusions rested in substantial part on the PUC’s conclusions that the selectboard of the Town of Bennington took the position that the Apple Hill project complied with the applicable Town Plan, and that the 2010 Town Plan did not establish a clear, written standard. After review, the Vermont Supreme Court determined the evidence and the PUC’s findings did not support these conclusions, so it reversed and remanded for further proceedings. View "In re Petition of Apple Hill Solar LLC" on Justia Law

The Supreme Court reversed the judgment of the district court granting summary judgment against Northern Natural Gas Company, holding that certification from the Federal Energy Regulatory Commission (FERC) permitting Northern to expand the authorized boundaries of its underground storage field to encompass nearby wells changed the right-to-produce analysis for gas taken before June 2, 2010. Some of the storage gas owned by Northern migrated beneath the earth to nearby wells in areas that Northern did not control through eminent domain or contract. The wells' operators extracted that gas and sold it. In a previous appeal, the Supreme Court applied the common-law rule of capture to rule that the operators lawfully produced and sold Northern's storage gas taken before June 2, 2010, the date when Northern received its certificate from FERC. At issue in this appeal was whether the producers could take Northern's migrated storage gas from wells located within the newly certified boundaries for the storage field after June 2, 2010. The district court ruled on summary judgment that the producers had that right under the common-law rule of capture. The Supreme Court disagreed, holding that once the new boundaries were certified Northern's identifiable storage gas within that designated area was no longer subject to the rule of capture. View "Northern Natural Gas Co. v. ONEOK Field Services Co., LLC" on Justia Law

Petitioners challenged the Commission's order authorizing Nexus Gas to construct and operate an interstate natural gas pipeline and exercise the right of eminent domain to acquire any necessary rights-of-way. Although the DC Circuit rejected many of petitioners' arguments, the court agreed with petitioners that the Commission failed to adequately justify its determination that it was lawful to credit Nexus Gas's contracts with foreign shippers serving foreign customers as evidence of market demand for the interstate pipeline. Accordingly, the court remanded without vacatur to the Commission for further explanation of this determination. View "City of Oberlin v. FERC" on Justia Law

The DC Circuit denied Alon Petitioners' petition for review of EPA's decision not to revise its 2010 point of obligation regulation requiring refineries and importers, but not blenders, to bear the direct compliance obligation of ensuring that transportation fuels sold or introduced into the U.S. market include the requisite percentages of renewables. The court also denied Coffeyville Petitioners' petition challenging EPA's refusal to reassess the appropriateness of the point of obligation in the context of its 2017 annual volumetric rule, which set the 2017 applicable percentages for all four categories of renewable fuel and the 2018 applicable volume for one subset of such fuel, biomass-based diesel. Furthermore, the court rejected Coffeyville Petitioners' claim that EPA arbitrarily set the 2017 percentage standards too high. Finally, the court rejected NBB's separate claim that EPA set the 2018 applicable volume for biomass-based diesel too low. View "Alon Refining Krotz Springs, Inc. v. EPA" on Justia Law

The alleged misconduct tied to the trading of crude oil extracted from Europe's North Sea constitutes an impermissibly extraterritorial application of the Commodity Exchange Act. Plaintiffs, individuals and entities who traded futures and derivatives contracts involving North Sea oil, appealed the district court's dismissal of their claims alleging that defendants, entities involved in various aspects of the production of Brent crude, conspired to manipulate, and did in fact manipulate, the market for physical Brent crude and Brent Futures by executing fraudulent bids, offers, and transactions in the underlying physical Brent crude market over the course of the Class Period. The Second Circuit affirmed the district court's dismissal of plaintiffs' claims under the Act, holding that the presumption of extraterritoriality has not been displaced in this case, and plaintiffs have not pleaded a domestic application of the Act by merely alleging a winding chain of foreign, intervening events connected to the purchase of Brent Futures. The court also affirmed the district court's dismissal of all other defendants and all other claims in a separately filed summary order. View "Prime International Trading Ltd. v. BP PLC" on Justia Law

In 2011, Plaintiffs Rhonda Pennington, Steven Nelson, Donald Nelson, and Charlene Bjornson executed oil and gas leases for property in McKenzie County, North Dakota. Each lease term was three years with a lessee option to extend for an additional year. The leases were assigned to Continental Resources in September 2014, and it exercised an extension option. The leases included a provision that the leases would not terminate if drilling operations were delayed by an inability to obtain permits. In May 2012, Continental applied for a drilling permit on a 2,560-acre spacing unit that included the lands covered by the leases. The 2,560 acres included lands inhabited by the Dakota Skipper butterfly, which was listed as threatened under the Endangered Species Act. Continental could not begin drilling operations until receiving federal approval. In August 2015, the U.S. Fish and Wildlife Service issued a biological opinion relating to the impact of Continental’s proposed drilling on the Dakota Skipper. On October 1, 2015, Continental proposed measures to minimize the impact of its operations on the Dakota Skipper. On October 21, 2015, Continental recorded an affidavit of regulation and delay, stating it had not yet obtained federal regulatory approval to drill, and the primary term of the leases was extended under the “regulation and delay” paragraph of the leases. The following day, Continental applied to terminate the 2,560-acre spacing unit and create a 1,920-acre spacing unit to remove the Dakota Skipper habitat. In November 2015, the Industrial Commission approved the 1,920-acre spacing unit. In January 2016, the commission pooled all of the oil and gas interests in the 1,920-acre spacing unit for the development and operation of the spacing unit. Following the January 2016 order, Continental began drilling operations. In August 2017, the Plaintiffs sued Continental, alleging the leases expired on October 25, 2015, and Continental’s delay in obtaining regulatory approval to drill did not extend the leases. Plaintiffs appealed a district court ruling the “regulation and delay” provision in their oil and gas leases with Continental Resources extended the term of the leases. The North Dakota Supreme Court determined the district court concluded the delay in obtaining drilling permits for the 2,560-acre spacing unit was beyond Continental’s control and was not because of Continental’s fault or negligence. However, the court did not address whether Continental acted diligently and in good faith in pursuing a permit to drill the 2,560-acre spacing unit for more than three years. Viewing the evidence and inferences to be drawn from the evidence in a light favorable to the Plaintiffs, a genuine issue of material fact existed as to whether Continental acted diligently and in good faith. The Supreme Court therefore reversed the district court’s judgment and remanded for further proceedings on that issue. View "Pennington, et al. v. Continental Resources, Inc." on Justia Law

The Supreme Court affirmed the Public Service Commission's (PSC) grant of an application filed by TransCanada Keystone Pipeline, LP for approval of a major oil pipeline route and eminent domain authority and finding that the "Mainline Alternative Route" (MAR) was in the public interest, holding that TransCanada carried its burden of proving that the MAR was in the public interest and that the errors assigned by intervenors in the proceedings were without merit. The MAR approved by the PSC was a thirty-six-inch major oil pipeline and related facilities to be constructed through Nebraska. Landowners, two Indian tribes, and the Sierra Club all intervened in the proceedings. The Supreme Court affirmed on appeal, holding (1) the PSC had jurisdiction to consider TransCanada's application; (2) TransCanada met its burden of proof; (3) the PSC properly considered the MAR; and (4) the intervenors were afforded due process. View "TransCanada Keystone Pipeline, LP v. Dunavan" on Justia Law

In this quiet title action involving the mineral interests in two tracts of real estate, the Supreme Court affirmed the judgment of the district court finding that the grantees' successors in interest obtained ownership of minerals when twenty years expired without production on the property, holding that the common-law rule against perpetuities (the rule) should not be applicable to the circumstances of this case. The tracts at issue were conveyed by deeds in which the grantor excepted the mineral interests for a "period of 20 years or as long thereafter" as minerals may be produced. The grantor's successors in interest claimed full ownership of the mineral interest in both tracts, arguing that the future ownership of the minerals when the grantor's excepted term interest ended violated the rule, thereby voiding those conveyances ab initial and preventing them from devolving to the grantees' successors in interest. The district court concluded that the grantees' heirs obtained ownership of the minerals when twenty years expired without production on the property. The Supreme Court affirmed on different grounds, holding that the rule did not apply under these circumstances. View "Jason Oil Co. v. Littler" on Justia Law

A group of menhaden fishermen challenged the denial of their claims pursuant to a punitive damages settlement agreement between a class of claimants, who alleged that they were harmed by the Deepwater Horizon oil spill, and defendants. As a preliminary matter, the Fifth Circuit granted the Fishermen's motion to take judicial notice of the docket and complaint in Bruhmuller v. BP Exploration & Production Inc. The court held that the magistrate judge did not err by affirming the denial of Fishermen's claims, because the Fishermen did not attempt to comply with Pretrial Order 60 at any point throughout these proceedings. The court also held that the district court did not err in declining to review the magistrate judge's decision, and the district court did not err in denying the Fishermen's Rule 60(b) motion. Accordingly, the court affirmed the judgment. View "Lake Eugenie Land & Development, Inc. v. Halliburton Energy Services, Inc." on Justia Law