Justia Energy, Oil & Gas Law Opinion Summaries

A company constructed and operated a large interstate natural gas pipeline running through Ohio, which was completed in late 2018. The project’s actual construction costs significantly exceeded initial estimates due to unusually heavy rainfall causing delays and an environmental incident that led to regulatory actions and further delays. During construction, an investment firm acquired a substantial indirect ownership interest in the pipeline’s parent company, paying a price that implied a high valuation for the pipeline.For the 2019 tax year, the Ohio Tax Commissioner assessed the taxable value of the Ohio portion of the pipeline using a statutory cost-based method, resulting in a valuation that the company believed was excessive. The company challenged the assessment, arguing that the pipeline’s true value was much lower, citing alternative appraisal methods and the impact of construction delays and overruns. The Tax Commissioner rejected these arguments, maintaining that the statutory method produced the correct value.The company appealed to the Ohio Board of Tax Appeals, where both parties presented expert appraisals. The company’s appraiser used a unit appraisal approach and arrived at a lower value, while the Tax Commissioner’s appraiser, using both cost and income approaches, opined a higher value. The Board found the Tax Commissioner’s appraisal more credible, especially in light of the investment firm’s transaction and the actual construction costs, and ordered the pipeline to be valued according to that appraisal.On further appeal, the Supreme Court of Ohio reviewed whether the Board’s decision was reasonable and lawful. The court held that the Board has broad discretion in weighing competing appraisals and evidence, and that its adoption of the Tax Commissioner’s appraisal was supported by the record. The court affirmed the Board’s decision, upholding the higher valuation for tax purposes. View "Rover Pipeline, L.L.C. v. Harris" on Justia Law

Several companies incorporated in Cyprus and the Isle of Man, who were shareholders of OAO Yukos Oil Company, alleged that the Russian Federation unlawfully expropriated Yukos’s assets between 2003 and 2004. The shareholders initiated arbitration proceedings under the Energy Charter Treaty, which Russia had signed but not ratified, claiming that Russia’s actions violated the Treaty’s protections against expropriation. The arbitral tribunal in The Hague found in favor of the shareholders, awarding them over $50 billion in damages. Russia contested the tribunal’s jurisdiction, arguing that it was not bound to arbitrate under the Treaty because provisional application of the arbitration clause was inconsistent with Russian law, and that the shareholders were not proper investors under the Treaty.After the tribunal’s decision, Russia sought to set aside the awards in Dutch courts. The Dutch Supreme Court ultimately upheld the tribunal’s jurisdiction and the awards, finding that Russia was provisionally bound by the Treaty’s arbitration clause and that the shareholders qualified as investors. Meanwhile, the shareholders sought to enforce the arbitral awards in the United States District Court for the District of Columbia. Russia moved to dismiss, asserting sovereign immunity under the Foreign Sovereign Immunities Act (FSIA) and arguing that the arbitration exception did not apply because there was no valid arbitration agreement. The district court denied Russia’s motion, holding that it had jurisdiction under the FSIA’s arbitration exception, and deferred to the arbitral tribunal’s determination that an arbitration agreement existed.On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the existence of an arbitration agreement is a jurisdictional fact under the FSIA that must be independently determined by the district court, rather than deferred to the arbitral tribunal. The court vacated the district court’s judgment and remanded for independent consideration of whether the FSIA’s arbitration exception applies, including whether the Dutch courts’ judgments should have preclusive effect. View "Hulley Enterprises Ltd. v. Russian Federation" on Justia Law

The Federal Energy Regulatory Commission (FERC) approved a 1,000-foot natural-gas pipeline crossing the U.S.-Mexico border. The Sierra Club and Public Citizen challenged this approval, arguing that FERC should have exercised jurisdiction over a longer 157-mile pipeline extending into Texas, considered the environmental impact of the entire pipeline, and evaluated alternatives to the border-crossing segment. They also claimed that FERC's approval of the border-crossing pipeline was arbitrary and capricious.The lower court, FERC, concluded that it did not have jurisdiction over the 157-mile Connector Pipeline because it did not cross state lines or carry interstate gas upon entering service. FERC conducted an Environmental Assessment for the 1,000-foot Border Facility, found minimal environmental impact, and deemed it in the public interest. After FERC reaffirmed its conclusions on rehearing, the petitioners sought judicial review.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that FERC reasonably declined to exercise jurisdiction over the Connector Pipeline under Section 3 of the Natural Gas Act, respecting state regulatory authority. The court also found substantial evidence supporting FERC's conclusion that the Connector Pipeline would not transport interstate gas initially, thus not subjecting it to Section 7 jurisdiction. The court rejected the petitioners' claims that FERC's approval of the Border Facility was arbitrary and capricious, noting the presumption favoring authorization under the Natural Gas Act.Regarding the National Environmental Policy Act (NEPA), the court found that FERC reasonably defined the project's purpose and need, appropriately limited its environmental review to the Border Facility, and did not need to consider the upstream Connector Pipeline's impacts. The court denied the petition, affirming FERC's decisions. View "Sierra Club v. FERC" on Justia Law

Columbia Gas Transmission operates a natural gas pipeline that crosses a parcel of land owned by RDFS, LLC. Columbia holds an easement to operate and maintain the pipeline on this parcel. When a coal company planned to mine beneath the parcel, Columbia sought access to mitigate potential harm to its pipeline. RDFS denied access, leading Columbia to file a lawsuit. The district court granted a preliminary injunction allowing Columbia to proceed with its mitigation efforts.The United States District Court for the Northern District of West Virginia first considered Columbia's motion for a preliminary injunction. The court applied the four factors from Winter v. Natural Resources Defense Council, Inc., concluding that Columbia was likely to succeed on the merits, would suffer irreparable harm without access, and that the balance of equities and public interest favored Columbia. The court also granted Columbia's motion for partial summary judgment to condemn a temporary easement under the Natural Gas Act, finding that Columbia met all necessary requirements.The United States Court of Appeals for the Fourth Circuit reviewed the district court's grant of the preliminary injunction for abuse of discretion. The appellate court found that Columbia's easement provided broad authority to access the entire parcel for maintenance, including mitigation work. The court rejected RDFS's argument that the easement was vague and limited by Columbia's prior use. The court affirmed the district court's ruling, concluding that Columbia's right to access the parcel for mitigation was consistent with maintaining the pipeline and did not unreasonably burden RDFS's property. The ruling of the district court was affirmed. View "Columbia Gas Transmission, LLC v. RDFS, LLC" on Justia Law

In 2013, Royalty Interests Partnership, LP (Royalty) leased oil and gas drilling rights to MBI Oil & Gas, LLC (MBI) for a primary term of three years, with the lease continuing as long as oil and gas production occurred on the leased premises or pooled acreage. By 2016, MBI had not drilled any wells or paid royalties, although one pre-existing well was producing oil and gas. In 2020, Royalty leased the same premises to Ovintiv USA Inc. (Ovintiv), which drilled several wells. In 2022, Royalty requested MBI to release its lease, but MBI refused and initiated litigation, claiming its lease was still valid.The United States District Court for the District of North Dakota granted summary judgment in favor of Royalty and Grayson Mill Bakken, LLC (Grayson Mill), Ovintiv’s successor. The court found that MBI had failed to extend the lease term by not producing oil and gas on the leased premises. MBI appealed this decision.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the reservation clause in the lease unambiguously reserved all rights to the production from the pre-existing well to Royalty, excluding it from perpetuating the lease. The court also found that North Dakota’s pooling statute was inapplicable because it applies to separately owned tracts, not separately owned interests in the same tract. Consequently, the court affirmed the district court’s decision, concluding that MBI’s lease had expired due to its failure to produce oil and gas or contribute to drilling on the leased premises or pooled acreage. View "MBI Oil and Gas, LLC v. Royalty Interests Partnership, LP" on Justia Law

Avanzalia Panamá and its parent company, Avanzalia Solar, built a solar plant in Panama and sought to connect it to the El Coco substation, owned by Goldwind USA's affiliate, UEPI. Avanzalia alleged that Goldwind tortiously blocked their access to the substation, preventing them from selling electricity. Avanzalia filed a complaint with Panama's Autoridad de Servicios Públicos (ASEP), which required them to submit updated electrical studies and obtain an access agreement with UEPI. Despite obtaining the agreement, Avanzalia faced further delays and was unable to connect to the substation until May 2020.The United States District Court for the Northern District of Illinois granted summary judgment to Goldwind. The court found that Avanzalia could not satisfy the Illinois state law requirement for tortious interference, which necessitates that the defendant's actions be directed at a third party. The court also applied collateral estoppel, concluding that ASEP's findings were binding and precluded Avanzalia's claims related to pre-access agreement delays.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision to afford comity to ASEP's order and apply collateral estoppel, barring Avanzalia's claims related to pre-access agreement delays. However, the appellate court found that the district court erred in not considering the impossibility theory of tortious interference under Restatement (Second) of Torts § 766A. The court vacated the summary judgment on this issue and remanded for further proceedings to determine whether Goldwind wrongfully prevented Avanzalia from performing its contractual obligations. The judgment was affirmed in all other respects. View "Avanzalia Solar, S.L. v. Goldwind USA, Inc." on Justia Law

Florida Power & Light Company (FPL) entered into a multi-party settlement agreement to establish base rates, which was approved by the Florida Public Service Commission (Commission). The settlement allowed FPL to increase rates annually for four years, generating significant additional revenue and permitting incremental rate increases for solar projects. It also included provisions for an equity-to-debt ratio, return on equity, and a minimum base bill for customers. The settlement aimed to support investments in power generation, transmission, distribution systems, and renewable energy programs.The Commission's initial approval of the settlement was challenged, leading to a remand by the Supreme Court of Florida in Floridians Against Increased Rates, Inc. v. Clark (FAIR). The Court required the Commission to provide a more detailed explanation of its reasoning and to consider FPL's performance under the Florida Energy Efficiency and Conservation Act (FEECA). On remand, the Commission denied a motion to reopen the evidentiary record and issued a Supplemental Final Order, reaffirming that the settlement was in the public interest.The Supreme Court of Florida reviewed the case again. The Court upheld the Commission's approval of the settlement, finding that the Commission's factual findings were supported by competent, substantial evidence and that its policy decisions were within its discretion. The Court concluded that the Commission had adequately considered the mandatory and discretionary factors, including FPL's FEECA performance, and provided a reasoned explanation for its decision. The Court affirmed the Commission's Final and Supplemental Final Orders, determining that the settlement established fair, just, and reasonable rates. View "Florida Rising, Inc. v. Florida Public Service Commission" on Justia Law

John and Stacy Bang own several parcels of real property in Dunn County, including the subject property in this dispute. They own both the surface and mineral estates. In May 2004, John Bang executed an oil and gas lease agreement with Diamond Resources, Inc., whose successor, Continental Resources, Inc., is the operator and holds the mineral lease. Continental notified the Bangs of its intent to install oil and gas facilities on the property, which the Bangs objected to. Continental subsequently constructed various facilities on the property.The Bangs filed a lawsuit against Continental in 2022, alleging trespass, seeking an injunction, and claiming damages under North Dakota law. The district court denied the Bangs' motions for a temporary restraining order and preliminary injunction. Continental filed a separate action seeking a declaratory judgment and an injunction against John Bang, which was consolidated with the Bangs' case. In January 2024, the district court granted Continental partial summary judgment, declaring Continental had the right to install a pipeline corridor and denied the Bangs' claims for trespass and permanent injunction. The court also denied Continental summary judgment on damages. A jury trial in February 2024 awarded the Bangs $97,621.90 for their compensation claims. The Bangs' motions for a new trial and other relief were denied.The North Dakota Supreme Court reviewed the case and affirmed the district court's amended judgment and order denying a new trial. The court held that the lease was unambiguous and provided Continental the authority to install pipeline facilities on the subject property. The court also upheld the district court's evidentiary rulings, including the exclusion of certain expert testimony and evidence of settlement agreements, and the exclusion of speculative evidence of future agricultural damages. The court found no error in the jury instructions and concluded that the district court did not abuse its discretion in denying the Bangs' motions under N.D.R.Civ.P. 59 and 60. View "Bang v. Continental Resources" on Justia Law

The Bureau of Land Management (BLM) approved over 4,000 permits for oil and gas wells on public land in New Mexico and Wyoming from January 2021 to August 2022. Environmental organizations challenged these permits, alleging that BLM failed to adequately consider the climate and environmental justice impacts of the wells. The district court dismissed the claims, holding that the plaintiffs lacked standing.The plaintiffs appealed, asserting standing based on affidavits from their members who live, work, and recreate near the drilling sites, claiming injuries to their health, safety, and recreational and aesthetic interests. They also claimed standing based on the wells' overall contribution to global climate change and an organizational injury from the government's failure to publicize information about climate change.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that the plaintiffs failed to sufficiently link their alleged harms to the specific agency actions they sought to reverse. The court emphasized that plaintiffs must demonstrate standing for each challenged permit by showing a concrete and particularized injury that is fairly traceable to the challenged action and likely to be redressed by a favorable ruling. The court found that the plaintiffs' generalized claims about the harms of oil and gas development were insufficient to establish standing for the specific permits at issue.The court also rejected the plaintiffs' claims of organizational standing, finding that the alleged injuries were limited to issue advocacy and did not demonstrate a concrete and demonstrable injury to the organization's activities. Consequently, the court affirmed the district court's judgment of dismissal. View "Center for Biological Diversity v. Department of the Interior" on Justia Law

Summit Carbon Solutions, LLC plans to build an interstate pipeline through Iowa, passing through Shelby and Story Counties. Both counties enacted ordinances regulating pipelines, including setback, emergency response plan, and local permit requirements. Summit challenged these ordinances, claiming they were preempted by the federal Pipeline Safety Act (PSA) and Iowa law. The district court granted summary judgment in favor of Summit, permanently enjoining the ordinances.The United States District Court for the Southern District of Iowa reviewed the case and ruled in favor of Summit, finding that the PSA preempted the counties' ordinances. The court held that the ordinances imposed safety standards, which are under the exclusive regulatory authority of the federal government. The court also found that the ordinances were inconsistent with Iowa state law, which grants the Iowa Utilities Commission (IUC) the authority to regulate pipeline routes and safety standards.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court's decision. The court held that the PSA preempts the Shelby and Story ordinances' setback, emergency response, and abandonment provisions. The court found that the ordinances' primary motivation was safety, which falls under the exclusive regulatory authority of the federal government. The court also held that the ordinances were inconsistent with Iowa state law, as they imposed additional requirements that could prohibit pipeline construction even if the IUC had granted a permit.The Eighth Circuit affirmed the district court's judgment in both cases, but vacated and remanded the judgment in the Story County case to the extent it addressed a repealed ordinance. View "McNair v. Johnson" on Justia Law