Justia Energy, Oil & Gas Law Opinion Summaries

UGI builds natural gas pipelines. It obtained authorization to construct and operate an underground pipeline along 34.4 miles of land in Pennsylvania under the Natural Gas Act, 15 U.S.C. 717, The Landowners rejected UGI’s offers of compensation for rights of way, so UGI sought orders of condemnation. UGI prevailed; only the amount of compensation remained. The Landowners’ expert set the before-taking value of the land by comparing properties in the area and estimating what each is worth relative to the market but, in estimating the post-taking property values, the expert relied on his own “damaged goods theory,” drawing on his experience working in his grandfather’s appliance shop. The expert cited the impact on real estate values from the Three Mile Island nuclear incident in 1979, the Exxon Valdez Alaskan oil spill in 1989, and assorted leaking underground storage tanks. The expert’s reports contain no data relating to those incidents. The district court agreed “that some form of ‘stigma’ attaches to the property as a whole” and adjusted the awards accordingly. The Third Circuit vacated. Rule 702 requires reliable expert testimony that fits the proceedings. The expert testimony presented by the Landowners bound only to speculation and conjecture, not good science or other “good grounds.” View "UGI Sunbury LLC v. Permanent Easement for 1.7575 Acres" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) affirming a tax assessment against Rockies Express Pipeline, LLC (Rockies), holding that Rockies' gross receipts for tax year 2015 from the transportation of natural gas within the state of Ohio were not excluded from taxation under Ohio Rev. Code 5727.33(B)(1) as "receipts derived wholly from interstate business" and that such taxation does not violate the Commerce Clause.Rockies is an interstate pipeline that transports natural gas for others. For tax year 2015, the Ohio Tax Commissioner assessed Rockies on transactions in which natural gas entered and exited Rockies' pipeline within Ohio. Rockies petitioned the tax commissioner for reassessment, arguing that its receipts derived wholly from interstate business and were thus eligible for exclusion under section 5727.33(B)(1). The tax commissioner upheld the assessment. The BTA affirmed. The Supreme Court affirmed, holding (1) Rockies did not meet its burden of showing that its receipts fall under the exclusion in section 5727.33(B)(1) as "receipts derived wholly from interstate business"; and (2) imposing the tax under these circumstances does not violate the Commerce Clause because Rockies has substantial nexus with Ohio based on its physical presence within the State. View "Rockies Express Pipeline, LLC v. McClain" on Justia Law

Pitchblack and Whitetail filed suit against Hess, alleging that their overriding royalty interests in a number of oil and gas leases should continue to burden various top leases that Hess acquired over the subject leases.The Eighth Circuit affirmed the district court's grant of summary judgment for Hess, holding that Hess did not owe Pitchblack or Whitetail any fiduciary duty that would have required Hess to treat the top leases as extensions or renewals. Based on North Dakota law and the lack of any fiduciary duties expressed in the parties' agreement, the court held that Hess did not owe Pitchblack and Whitetail any fiduciary duty to extend or renew the subject leases. Consequently, Pitchblack and Whitetail's argument that the top leases were extensions or renewals of the subject leases based on a fiduciary duty fails. The court also held that the district court correctly concluded that the top leases were not extensions or renewals of the subject leases. Therefore, because the top leases were new leases, the extension or renewal clause did not attach the overriding royalty interests to the top leases. The court held that the top leases were thus not burdened by the overriding royalty interests. View "Hess Bakken Investments II, LLC v. Whitetail Wave" on Justia Law

The Fifth Circuit affirmed the district court's decision declining discretionary review of the appeal panel's affirmance of a Settlement Program determination that Walmart's submission was a "start-up business" claim. The court also affirmed the nearly $1 million award. In this case, Walmart submitted an economic loss claim under the Deepwater Horizon Settlement Agreement for one of its stores located on the Mississippi Gulf Coast. The store had reopened six months before the oil spill, having been closed ever since it was destroyed by Hurricane Katrina years earlier. The court held that the underlying appeal panel decision did not actually contradict or misapply the Settlement Agreement on a pressing question of implementation, and there was no split among appeal panels on the issue presented. View "BP Exploration & Production, Inc. v. Claimant ID 100354107" on Justia Law

At issue here were three EPA orders granting extensions of the small refinery exemption to the Clean Air Act (“CAA”). Those orders were not made available to the public, and were challenged by a group of renewable fuels producers who claimed they found out about the extensions through news articles or public company filings (“the Biofuels Coalition”), and their petition to the Tenth Circuit Court of Appeals raised multiple questions. The EPA opposed the Biofuels Coalition’s appeal, as did the three recipients of the small refinery extensions, who were granted leave to intervene. The Tenth Circuit concluded: (1) the Biofuels Coalition had standing to sue; (2) the Tenth Circuit had jurisdiction over this dispute; (3) the amended Clean Air Act allowed the EPA to grant an “extension” of the small refinery exemption, but not a stand-alone “exemption” in response to a convincing petition; and (4) the EPA exceeded its statutory authority in granting those petitions because there was nothing for the agency to “extend” because none of the three small refineries here consistently received an exemption in the years preceding its petition. The Tenth Circuit rejected the Biofuels Coalition’s claim that the EPA read the word “disproportionate” out of the statute, and disagreed with almost all of the Biofuels Coalition’s assertions that the EPA acted arbitrarily and capriciously in granting the extension petitions. The Tenth Circuit held the agency abused its discretion, however, by failing to address the extent to which the three refineries were able to recoup their compliance costs by charging higher prices for the fuels they sell. “The EPA has studied and staked out a policy position on this issue. One of the refineries expressly raised the issue in its extension petition. It was not reasonable for the agency to ignore it.” View "Renewable Fuels Assn. v. EPA" on Justia Law

The Supreme Court reversed the judgment of the court of appeals, holding that a devise of "all...right, title and interest in and to Ranch 'Las Piedras'" referred only to a surface estate by that name, as understood by the testatrix and beneficiaries at the time the will was made, and did not include the mineral estate.Respondents asserted that their father's life estate under their grandmother's will included her interest in not only the surface of Las Piedras Ranch but also the minerals beneath it. The trial court awarded judgment in favor of Respondents. The court of appeals affirmed. The Supreme Court reversed, holding that Respondents' claims were premised on an erroneous interpretation of their grandmother's will. Therefore, Petitioners were entitled to judgment as a matter of law. View "ConocoPhillips Co. v. Ramirez" on Justia Law

Sabal Trail brought a condemnation action to acquire permanent and temporary easements that would allow it to build and operate a portion of the pipeline on property owned by Sunderman Groves. The jury awarded Sunderman Groves $309,500 as compensation for the easements, and the district court entered a final judgment providing that as part of the compensation award, Sunderman Groves was entitled to recover its attorney's fees and costs in an amount to be set by the court.The Eleventh Circuit held that the district court did not abuse its discretion in allowing Sunderman Groves to testify about the value of the property and the court lacked jurisdiction to review whether Sunderman Groves was entitled to attorney's fees and costs. Accordingly, the court affirmed in part and dismissed in part. View "Sabal Trail Transmission, LLC v. 3.921 Acres of Land in Lake County Florida" on Justia Law

At issue was whether the rule of capture immunized an energy developer from liability in trespass, where the developer used hydraulic fracturing on the property it owned or leased, and such activities allowed it to obtain oil or gas that migrated from beneath the surface of another person’s land. Plaintiffs’ property was adjacent to a tract of land leased by Appellant Southwestern Energy Production Company for natural gas extraction. Plaintiffs alleged that Southwestern “has and continues to extract natural gas from under the land of the Plaintiffs,” and that such extraction was “willful[], unlawful[], outrageous[] and in complete conscious disregard of the rights and title of the Plaintiffs in said land and the natural gas thereunder.” Southwestern alleged that Plaintiffs’ claims were barred by, inter alia, the rule of capture, and sought declaratory relief confirming its immunity from liability. The court of common pleas court granted Southwestern’s motion for summary judgment, denied Plaintiffs’ motion for partial summary judgment, and denied the motion to compel as moot. The court agreed with Southwestern’s position that the rule of capture applied in the circumstances and, as such, Plaintiffs could not recover under theories of trespass or conversion even if some of the gas harvested by Southwestern had drained from under Plaintiffs’ property. The Superior Court reversed, holding that hydraulic fracturing could give rise to liability in trespass, particularly if subsurface fractures ... crossed boundary lines. The Pennsylvania Supreme Court rejected the concept that the rule of capture was inapplicable to drilling and hydraulic fracturing that occurred entirely within the developer’s property solely because drainage was the direct or indirect result of hydraulic fracturing. Nevertheless, the Supreme Court found the Superior Court panel’s opinion "to suffer from multiple infirmities," reversed and remanded with directions. View "Briggs, et al v. Southwestern Energy" on Justia Law

The Supreme Court affirmed the order of the Public Utilities Commission of Ohio (PUCO) approving and modifying a previously approved electric-security plan of Ohio Power Company, holding that the Office of the Ohio Consumers' Counsel (OCC) did not satisfy its burden to demonstrate reversible error on the record.The OCC challenged three riders authorized by the PUCO's order, including the power purchase agreement rider, the smart city rider, and the renewable generation rider. The Supreme Court affirmed the PUCO's order, holding (1) this Court lacked jurisdiction to review the OCC's challenge to the power purchase agreement rider because the OCC did not include the challenge in an application for rehearing; (2) the OCC failed to show that the PUCO lacked statutory authority to approve the smart city rider; and (3) the OCC did not establish that approving the renewable general rider on a placeholder basis will harm or prejudice ratepayers. View "In re Application of Ohio Power Co." on Justia Law

In this taxation dispute between the County of Maui and Appellees, which leased land on the island of Maui to operate their wind farms, the Supreme Court upheld the Tax Appeals Court's (TAC) final judgment in favor of Appellees, holding that the TAC properly held that the County exceeded its constitutional authority by amending Maui County Code 3.48.005 to expand its definition of "real property" to include "personal property."The County included the value of Appellees' wind turbine in their real property tax assessments and redefined the term "real property" within section 3.48.005 of the MCC to include wind turbines for that purpose. The TAC concluded that the County exceeded its authority under Haw. Const. art. VIII, 3 because the delegates to the 1978 Constitutional Convention did not intend to grant counties the power to redefine "real property." The Supreme Court affirmed, holding that the County exceeded its constitutional power when it amended MCC 6.48.005 to redefine "real property." View "In re Tax Appeal of Kaheawa Wind Power, LLC v. County of Maui" on Justia Law