Justia Energy, Oil & Gas Law Opinion Summaries

The Colorado Supreme Court concluded that the statutory scheme property taxation of oil and gas leaseholds authorized the retroactive tax assessment in this case. Petitioner Kinder Morgan CO2 Company, L.P., operated oil and gas leaseholds in Montezuma County, Colorado. In 2009, the assessor for Montezuma County issued a corrective tax assessment on these leaseholds for the previous tax year, retroactively assessing over $2 million in property taxes, after an auditor concluded that Kinder Morgan underreported the value of gas produced at the leaseholds. Kinder Morgan appealed, arguing the assessor lacked authority to retroactively assess these taxes because Colorado law did not authorize a retroactive assessment when an operator has correctly reported the volume of oil and gas sold but has underreported the selling price at the wellhead. In affirming the court of appeals in this matter, the Supreme Court further concluded that the Board of Assessment Appeals did not err in determining that Kinder Morgan underreported the selling price by claiming excess transportation deductions, given Kinder Morgan’s relationship to the owner of the pipeline through which the gas was transported. View "Kinder Morgan CO2 Co., L.P. v. Montezuma Cty. Bd. of Comm'rs" on Justia Law

The Oil Pollution Act (OPA), as confirmed by the Act's legislative history, grants to an OPA Responsible Party the right to receive contribution from other entities who were partially at fault for a discharge of oil. Specifically, a Responsible Party may recover from a jointly liable third party any damages it paid to claimants, including those arising out of purely economic losses. In a suit arising from a collision of two barges, the district court found both Settoon and Marquette Transportation were negligent. The Fifth Circuit held that Settoon could receive contribution from Marquette for its payment of purely economic damages, i.e., for the cleanup costs. The court also held that the district court's apportionment of fault was not clearly erroneous. Accordingly, the court affirmed the judgment. View "In re: Settoon Towing, LLC" on Justia Law

The Water District appealed from the district court's judgment in a consolidated multidistrict litigation granting summary judgment to BP and Shell on the ground that the Water District's suit was barred by res judicata arising from 2002 and 2005 settlements. Claims against BP and Shell for MTBE contamination had been brought by the Orange County District Attorney (OCDA) in 1999 and were settled in 2002 and 2005 respectively. The Second Circuit vacated and remanded the Water District's claims against BP and Shell, holding that the Water District and OCDA were not in privity. View "In re Methyl Tertiary Butyl Ether (MTBA) Products Liability Litigation" on Justia Law

Total Gas and two of its trading managers filed a declaratory judgment action against the Commission arguing that the Commission was precluded from adjudicating violations or imposing civil penalties because the Natural Gas Act (NGA) vests authority for those activities exclusively in federal district courts. The Fifth Circuit affirmed the Commission's motion to dismiss, holding that Total's suit was not ripe for review in light of controlling precedent, Energy Transfer Partners, L.P. v. FERC. In this case, instead of objecting to any actions FERC has already taken, Total seeks to preemptively challenge a FERC order that may never be issued. The court explained that all of Total's arguments were predicated on future events and were brought before FERC has even scheduled the matter for a hearing—let alone issued an order finding a NGA violation and imposing a civil penalty. View "TOTAL Gas & Power North America, Inc. v. FERC" on Justia Law

At issue in this case was the meaning of the term “motor fuel taxes” as used in the Georgia Constitution, Article III, Sec. IX, Par. IV(b). A trucking industry association and three individual motor carriers challenged local sales and use taxes on motor fuels, the revenues of which were not used solely for public roads and bridges. They argued that these taxes fell within the meaning of “motor fuel taxes” under the Motor Fuel Provision and, therefore, the revenues from these taxes (or an amount equal to that revenue) had to be allocated to the maintenance and construction of public roads and bridges. The Georgia Supreme Court affirmed the dismissal of the plaintiffs’ complaint because the history and context of the Motor Fuel Provision revealed that “motor fuel taxes” were limited to per-gallon taxes on distributors of motor fuel, and did not include sales and use taxes imposed on retail sales of motor fuels. View "Georgia Motor Trucking Assn. v. Georgia Dept. of Rev." on Justia Law

At issue was a lessor’s right to terminate an oil and gas lease when a lessee fails to make minimum annual rental or royalty payments. The trial court granted summary judgment in favor of the lessors in this case and ordered forfeiture of the lease at issue, declaring that the lease had terminated under its own terms because the lessees had failed to a minimum annual rental of $5,500 under the lease and that the lease was void as against public policy. The court of appeals reversed. The Supreme Court affirmed, holding (1) the provision in the lease requiring the lessee to pay $5,500 annually did not invoke the termination provision in the unrelated delay-rental clause; and (2) the lease did not qualify as a no-term, perpetual lease, and therefore, the lease was not void as against public policy. View "Bohlen v. Anadarko E&P Onshore, LLC" on Justia Law

The Supreme Judicial Court affirmed the order of the Maine Public Utilities Commission approving a stipulation regarding Efficiency Maine Trust’s Third Triennial Plan for energy efficiency, holding that the Commission did not err in interpreting and applying the relevant statutes.The Conservation Law Foundation appealed from the Commission’s order approving the stipulation, arguing that the order and the terms of the stipulation disregarded statutory mandates set forth in the Efficiency Maine Trust Act. See Me. Rev. Stat. Ann. tit. 35-A, 10101-10123. The Supreme Judicial Court held that the Commission’s order and the stipulation did not violate statutory mandates for electric energy efficiency or the statutory mandate to assess each natural gas utility an amount to capture all maximum achievable cost-effective energy efficiency savings. View "Conservation Law Foundation v. Public Utilities Commission" on Justia Law

The circuit court affirmed the Trempealeau County Environment & Land Use Committee’s denial of a conditional use permit application for non-metallic mineral mining submitted by AllEnergy Corporation and allEnergy Silica, Arcadia, LLC (collectively, AllEnergy). The court of appeals affirmed the circuit court’s order. The Supreme Court affirmed, holding (1) the Committee applied the factors and considerations set forth in the applicable ordinance and thus kept within its jurisdiction in denying AllEnergy’s application for a conditional use permit; (2) there is substantial evidence to support the Committee’s decision to deny AllEnergy a conditional use permit; and (3) this court does not adopt the new legal doctrine urged by AllEnergy that a conditional use permit applicant is entitled to the permit under certain conditions. View "AllEnergy Corp. v. Trempealeau County Environment & Land Use Committee" on Justia Law

Where a lessee designates tracts of land for pooling regarding horizontal drilling and production of oil and gas from the Marcellus Shale Formation, which includes nonparticipating royalty interests (NPRI), consent or ratification by the holders of the nonparticipating royalty interests is not required where the holders of the NPRIs have conveyed the oil and gas in place and the executive leasing rights thereto to the lessor.At issue was a voluntary pooling and unionization lease provision regarding horizontal drilling and production of oil and gas from the Marcellus Shale Formation. PPG Industries, Inc., the lessor, and Gastar Exploration USA, Inc., the lessee, signed a lease under which 700 acres were designated by Gastar as the Wayne/Lily Unit for purposes of pooling the oil and gas interests held by various individuals and entities. PPG and Gastar challenged the circuit court’s entry of partial summary judgment in favor of Plaintiffs, who collectively held a nonparticipating royalty interest in the oil and gas underlying a parcel included within the Wayne/Lily Unit. The Supreme Court reversed, holding that the circuit court erred in ruling that the validity of the pooling provision in the PPG-Gastar lease and the designated Wayne/Lily Unit were void until such time as pooling was consented to and ratified by Plaintiffs. View "Gastar Exploration Inc. v. Contraguerro" on Justia Law

Both the legislative intent and language utilized in W. Va. Code 22-6-8 permits allocation or deduction of reasonable post-production expenses actually incurred by the lessee of an oil and/or gas lease and, more specifically, permits use of the “net-back” or “work-back” method of royalty calculation.Here the Supreme Court answered certified questions presented by the United States District Court for the Northern District of West Virginia regarding whether the Supreme Court’s decision in Tawney v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (2006), has any effect upon whether a lessee subject to section 22-6-8 may deduct post-production expenses from the lessor’s royalty. Upon rehearing, the court concluded that royalty payments pursuant to an oil or gas lease governed by the statute may be subject to pro-rata deduction or allocation of all reasonable post-production expenses incurred by the lessee, and therefore, an oil or gas lessee may utilize the “net-back” or “work-back” method to calculate royalties owed to a lessor pursuant to a lease governed by section 22-6-8(e). View "Leggett v. EQT Production Co." on Justia Law