Justia Energy, Oil & Gas Law Opinion Summaries

Petitioners challenged FERC's refund order in a cost-allocation case where the agency found that the rate-distribution methodology was unjust and unreasonable. FERC ordered refunds to customers who paid too much, funded by surcharges on customers who paid too little. The DC Circuit denied the petitions for review and held that the reallocation at issue did not constitute an impermissible retroactive rate increase where FERC reasonably determined that the prior rate methodology was unjust and unreasonable, and its reliance on certain evidence in reaching this conclusion was appropriate. FERC had authority to order refunds and corresponding surcharges under Section 206 of the Federal Power Act and its broad remedial authority under Section 309, because it had established that the existing rate was unjust and unreasonable, and that a different methodology would comply with cost-causation principles. View "Verso Corp. v. FERC" on Justia Law

The American Recovery and Reinvestment Act of 2009 provides a cash grant to entities that “place[] in service” certain renewable energy facilities. The amount is determined using the basis of the tangible personal property of the facility. Alta placed windfarm facilities into service and sought $703 million in grants. The government awarded $495 million. Alta filed suit, seeking an additional $206 million. The government counterclaimed, asserting that it had overpaid $59 million. The difference was attributable to the calculation of basis. The portion of the purchase prices attributable to grant-ineligible tangible property (real estate, transmission equipment, and buildings) must be deducted: Alta argued that the entire remainder can be allocated to grant-eligible tangible personal property, with none allocated to intangibles. The Claims Court found in favor of Alta, rejecting the government’s argument that basis must be calculated using the residual method of 26 U.S.C. 1060, which applies to the acquisition of a business. The court reasoned that no intangible goodwill or going concern value could have attached to the windfarms at the time of the transaction.The Federal Circuit vacated. The Alta purchase prices were well in excess of their development and construction costs (book value), and the transactions involved numerous related agreements, such as the leasebacks and grant-related indemnities. Goodwill and going concern value could have attached, so those assets constitute a “trade or business” within the meaning of section 1060; the transactions count as “applicable asset acquisitions.” View "Alta Wind v. United States" on Justia Law

The Fourth Circuit affirmed the district court's dismissal of plaintiffs' action against Mountain Valley Pipeline, FERC, and the Acting Chairman of FERC, challenging the constitutionality of various provisions of the Natural Gas Act. The court held that it need not reach the merits of the challenges because the claims must be dismissed for lack of subject matter jurisdiction. The court explained that, under the two-step analysis in Bennett v. SEC, 844 F.3d 174 (4th Cir. 2016), Congress intended to divest district courts of jurisdiction to hear the claims pursued by plaintiffs and instead intended those claims to be brought under the statutory review scheme established by the Natural Gas Act. View "Berkley v. Mountain Valley Pipeline, LLC" on Justia Law

Petitioners challenged FERC's failure to account for the effect on electricity prices of the permanent retirement of the Brayton Point Power Station, a coal-fired electric plant in Somerset, Massachusetts. Petitioners alleged that the closure was an attempt to manipulate the results of forward capacity auction (FCA 8). The DC Circuit held that it lacked jurisdiction to consider the petition in the absence of final agency action. In two later proceedings, petitioners asked FERC to correct for what they assert were effects of Brayton Point’s illegal closure on the next two annual forward capacity auctions (FCA 9 and FCA 10). FERC denied the petitions and approved FCA 9 and FCA 10 results.The court held that petitioners lacked standing to challenge FERC's acceptance of the FCA 9 and FCA 10 results because no record evidence established a causal link between the claimed manipulative closure of Brayton Point and the clearing prices of FCA 9 and FCA 10 that FERC approved. View "Utility Workers Union of America Local 464 v. FERC" on Justia Law

Once the NRC determines there is a significant deficiency in its National Environmental Policy Act (NEPA) compliance, it may not permit a project to continue in a manner that puts at risk the values NEPA protects simply because no intervenor can show irreparable harm.The DC Circuit granted a petition for review in part of the Commission's grant of a license to Powertech to construct a uranium mining project in the Black Hills of South Dakota. The court held that the Commission's decision violated NEPA where the Commission conditioned enforcement of NEPA on a showing of irreparable harm by the Tribe, but lacked an adequate environmental analysis when it first issued the license and the significant NEPA deficiencies identified by the Board remained unaddressed at the time of the Commission's decision. The court further held that it did not have jurisdiction to review the bulk of the rulings challenged by the Tribe because the Commission's order did not end the agency proceedings as to all issues. View "Oglala Sioux Tribe v. NRC" on Justia Law

This case involved two mineral deeds issued by Alice Rozan to Gustave Goldstein and William Murray in 1964. At the time, Rozan owned the following interests in McKenzie Country North Dakota land relevant to this case. Herma Altshule and others ("Altshule defendants") appealed a judgment quieting title in favor of Gerrity Bakken, LLC. Through numerous conveyances over the years, the Altshule defendants, Devereaux Foundation, and Pacific Oaks College and Children's School succeeded to part of the interests of Goldstein and Murray. In 2011 Pacific Oaks College and Children's School and Devereux Foundation granted oil and gas leases to Robert Gerrity, who assigned his interests to various companies culminating in Gerrity Bakken holding the leases. All conveyances and assignments were duly recorded. After production began on the property, Pacific Oaks College and Children's School, Devereux Foundation, and others brought a quiet title action in 2013 naming as defendants the Altshule defendants and others. Gerrity Bakken was not named as a party, nor was Gerrity or any intermediate holder of the leases. The amended complaint also did not include as defendants "'[a]ll other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint.'" Shortly after judgment was entered in the 2013 quiet title action, Gerrity Bakken commenced this second quiet title action against the Altshule defendants, other persons of record, and "all other persons unknown claiming" an interest in the property, seeking an interpretation of the Goldstein and Murray deeds. The district court granted summary judgment in favor of Gerrity Bakken, and arrived at a conclusion different from that reached by the court in the 2013 action. The North Dakota Supreme Court held deeds must be construed as a whole to give effect to each provision, if reasonably possible. The law presumes that differently spelled names refer to the same person when they sound alike or when common usage has by corruption or abbreviation made their pronunciation identical. A quiet title judgment is not binding on any persons having interests in leases and wells who were not made parties to the action. A non-party may maintain a suit to set aside an allegedly damaging judgment if he has an interest which is jeopardized by enforcement of the judgment and the circumstances support a present grant of relief. Because the district court did not err in its construction of the deeds and in quieting title, the Supreme Court affirmed the judgment. View "Gerrity Bakken, LLC v. Oasis Petroleum North America LLC" on Justia Law

Greggory Tank appealed an amended judgment quieting title to royalty interests in property located in McKenzie County, North Dakota in favor of several of the defendants. In June 2014, Tank sued numerous defendants seeking to quiet title to royalty interests in proceeds from the production from an oil and gas well. Most of the defendants did not appear or settled with Tank. The remaining defendants who were the appellees in this appeal contested the quiet title action. The royalty interests at issue were subject to several possible conveyances. Tank claims ownership of a 16 percent royalty interest based on an unbroken chain of title utilizing filed county records dating back to the federal fee patent. Included within that chain of title was a 1931 purchase of the property by McKenzie County under a tax foreclosure sale. The County subsequently sold and transferred the property in 1945. The defendants claimed various percentages of royalty interests under a recorded 1938 assignment of an 11 percent royalty to oil and gas produced on the property. The North Dakota Supreme Court reversed the district court's amended judgment quieting title to the royalty interests in favor of the defendants and directed the entry of judgment quieting title in favor of Tank. A county's tax deed gives it title or color of title to the whole estate in the land including the royalty interests. A tax deed, valid upon its face, creates a presumptive title to the entire estate in the land which continues until it has been overcome by the affirmative action in court, by suit or counterclaim on the part of a person who has a sufficient interest to challenge the title. Royalty interests cannot be "possessed" for purposes of the statute of limitations or adverse possession. The Court remanded this case to the district court for determination of whether Tank was barred from the recovery of royalty payments previously made to the defendants and, if not barred, the amount of the recovery. View "Siana Oil & Gas Co., LLC v. Dublin Co." on Justia Law

Plaintiffs filed a putative class action claiming that two provisions of the Florida Renewable Technologies and Energy Efficiency Act, which authorized the Nuclear Cost Recovery System (NCRS), were invalid under the Dormant Commerce Clause (DCC). Plaintiffs also claimed that the two provisions of the Act were preempted by the Atomic Energy Act of 1954, and the Energy Policy Act of 2005. The Eleventh Circuit affirmed the dismissal of the DCC claim under Federal Rule of Civil Procedure 12(b)(6), because plaintiffs' interests as Florida electric utility customers were well beyond the zone the DCC was meant to protect. The court held that the Atomic Energy Act did not preempt the NCRS, and the district court did not abuse its discretion in denying plaintiffs leave to amend. View "Newton v. Duke Energy Florida, LLC" on Justia Law

Canyon Fuel Company operated the Sufco Mine, a coal mine located in Sevier County, Utah. Under federal law, the mine had to have two escapeways in the event of an emergency: a primary and an alternate. An inspector for the Mine Safety and Health Administration (“MSHA”) cited Canyon Fuel for a violation of this mine safety requirement. Canyon Fuel unsuccessfully contested the citation before the federal agency and appealed to the Tenth Circuit Court of Appeals. After review, the Tenth Circuit affirmed the Secretary of Labor’s interpretation of the regulation as requiring consideration of both above- and below-ground factors, but vacated the citation because it was not supported by substantial evidence. View "Canyon Fuel Company v. Secretary of Labor" on Justia Law

A majority of the Supreme Court held (1) Va. Code 56-49.01(A) allows a natural gas company to gain access to private property for the purpose of conducting surveys and other activities that are only necessary for the selection of the most advantageous route; and (2) the trial court did not misapply section 56-49.01 in this case.Atlantic Coast Pipeline, LLC (ACP), which was engaged in the regulatory approval process to build a natural gas pipeline, sought permission to enter Landowners’ properties to conduct preliminary surveys and other activities. Landowners withheld their consent. ACP filed the instant second amended petition for declaratory judgment seeking an order affirming ACP’s authority to enter Landowners’ properties for the purposes defined in section 56-49.01. The trial court granted ACP permission to enter the properties to conduct the necessary activities. The Supreme Court affirmed, holding (1) the trial court did not err in its construction of section 56-49.01(A); and (2) the trial court’s application of section 56-49.01 was not improper. View "Barr v. Atlantic Coast Pipeline, LLC" on Justia Law