Justia Energy, Oil & Gas Law Opinion Summaries

Substantively, in three somewhat interconnected claims, Joe and Yvette Hardesty (collectively, Hardesty) attacked State Mining and Geology Board (Board) findings, contending the trial court misunderstood the legal force of his 19th century federal mining patents. He asserted he had a vested right to surface mine after the passage of SMARA without the need to prove he was surface mining on SMARA’s operative date of January 1, 1976. He argued the Board and trial court misapplied the law of nonconforming uses in finding Hardesty had no vested right, and separately misapplied the law in finding that his predecessors abandoned any right to mine. These contentions turned on legal disputes about the SMARA grandfather clause and the force of federal mining patents. Procedurally, Hardesty alleged the Board’s findings did not “bridge the gap” between the raw evidence and the administrative findings. Hardesty also challenged the fairness of the administrative process itself, alleging that purported ex parte communications by the Board’s executive director, Stephen Testa, tainted the proceedings. The Court of Appeal reviewed the facts, and found they undermined Hardesty’s claims: the fact that mines were worked on the property years ago does not necessarily mean any surface or other mining existed when SMARA took effect, such that any right to surface mine was grandfathered. However, the Court agreed with the trial court’s conclusions that, on this record, neither of these procedural claims proved persuasive. Accordingly, the Court affirmed the judgment denying the mandamus petition. View "Hardesty v. State Mining & Geology Board" on Justia Law

The most natural reading of La. R.S. 30:103.1 and 103.2 is that operators forfeit their right to contribution when they fail to send timely reports to lessees with oil and gas interests in lands upon which the operator has no lease, and that interpretation is most consistent with the statute's context and purpose. TDX filed suit seeking its share of revenues from a unit well without deduction of drilling costs because Chesapeake did not provide the requested reports. The Fifth Circuit rejected Chesapeake's contention that even if sections 103.1 and 103.2 provide a remedy for lessees, applying them in that way would violate Article III of the Louisiana constitution. The court explained that, given the liberal construction courts must give titles, a title which gave notice that an act dealt with operators' reporting requirements cannot fail because it did not specify every party to whom they must report. Finally, the court rejected Chesapeake's counterclaim asserting that TDX was required to pay a risk fee under La. R.S. 30:10(A) because TDX did not make an election regarding the risk fee under that provision. The court reversed in part, affirmed in part, and remanded. View "TDX Energy v. Chesapeake Operating" on Justia Law

The trial court properly considered evidence showing the development of a gas storage market that relied exclusively on surface acres as the valuation metric.This appeal arose out of a condemnation action in which Fred Southam and Southam & Son (collectively, Southam) sought to introduce evidence of the value of their land for an underground natural gas storage project based on reservoir volume. The trial court’s in limine ruling excluded Southam’s valuation approach based on evidence all independently operated gas storage projects in California compensate landowners based on surface acres contributed to the project. The Court of Appeal concluded the trial court properly considered evidence showing the development of an independently operated gas storage market that relied exclusively on surface acres as the valuation metric. Further, the trial court did not abuse its discretion in excluding a volume-based valuation approach based on Southam’s failure to present any evidence this vaulation approach had ever been used in the market for natural gas storage leases. Southam did not establish his entitlement to cross examine an expert before that expert may give a declaration in support of a pretrial motion. The remainder of Southam’s arguments were deemed forfeited for failure to develop the argument, to cite any legal authority, or to provide any citation to the appellate record. View "Central Valley Gas Storage v. Southam" on Justia Law

Stephens Production Company sought to condemn underground natural gas storage easements and surface easements to complete an underground natural gas storage facility on and underneath approximately 900 acres of mostly rural property in Haskell County. Approximately 140 Defendants were named in the Petition. Stephens Production had previously offered such Defendants "just market value" for their respective interests, but the Defendants refused the offers. The trial court appointed three commissioners to value just compensation due for each Defendant listed in the Petition. All Defendants except one, appellant Royce Larsen, settled with Stephens Production. The Commissioners valued Larsen's property taken and the damage to the remainder at $12,400.00. Larsen objected to this amount, and his case proceeded to trial. Larsen's expert testified the just compensation value was approximately $419,000.00; Stephens Production's expert valued the just compensation at $9,000.00. The trial court determined that just compensation for the property was $9,000.00. Without any evidence from Larsen regarding the reasonable probability of combination or the market demand for underground gas storage in the area, the highest and best use of the property was the use to which it was subject at the time of the taking - natural resource, agricultural, and recreational use. The Supreme Court concluded the record supported the trial court's valuation of just compensation at $9,000.00. View "Stephens Production Co. v. Larsen" on Justia Law

This case involved a dispute over the ownership of mineral rights appurtenant to several tracts of land located in Haskell County, Kansas. Michael Leathers and his brother Ronald Leathers each inherited half of these mineral rights from their mother. But an error in a quit claim deed subsequently executed between the brothers left it unclear whether Ronald’s one-half interest in the mineral estate had been conveyed to Michael. In a series of orders spanning several years, the district court (1) reformed the quit claim deed to reflect that Ronald had reserved his one-half interest in the mineral estate; (2) awarded half of Ronald’s one-half interest to Ronald’s wife Theresa (pursuant to Ronald and Theresa’s divorce decree); and (3) held that Ronald owed approximately $1.5 million to the IRS and that the IRS’s tax liens had first priority to any present and future royalties due to Ronald from his remaining one-quarter mineral interest. Ronald appealed, but finding no reversible error in the district court’s judgment with respect to the reformation and the interests, the Tenth Circuit affirmed the district court on all grounds. View "Leathers v. Leathers" on Justia Law

After BP America Production turned of the well valve to a gas well, Red Deer Resources, LLC, the top-lease holder, filed suit, asking the trial court to declare that BP’s lease had terminated. The jury found that the well was incapable of production in paying quantities the day after BP closed the valve and eight days after the last gas was sold or used. Based on these findings, the trial court declared that BP’s lease had lapsed and terminated, thus terminating BP’s lease in its secondary term. The court of appeals affirmed. The Supreme Court reversed the judgment of the court of appeals and rendered a take-nothing judgment in favor of BP, holding that because Red Deer never obtained a finding that the well was incapable of production in paying quantities on the material date under the plain language of the lease, BP’s lease remained valid. View "BP America Production Co. v. Red Deer Resources, LLC" on Justia Law

Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

Louisville Gas and Electric Company (LG&E) sought a permit authorizing it to discharge certain pollutants into the Ohio River in conjunction with the operation of its recently expended generating facility. The Commonwealth of Kentucky, Energy and Environment Cabinet’s Division of Water issued the permit. The circuit court vacated the permit. The Court of Appeals affirmed. The Supreme Court reversed and reinstated LG&E’s permit, holding (1) in vacating the permit, the circuit court and Court of Appeals misapplied controlling federal law; and (2) the Cabinet’s determination that the LG&E permit should proceed under 40 C.F.R. 125.3(c)(1) was a reasonable interpretation of the regulation. View "Louisville Gas & Electric Co. v. Kentucky Waterways Alliance" on Justia Law

Charles W.H. Monson, LeeAnn Tarter, and KayCee Williams ("the Monsons") appealed a district court judgment reforming a deed executed in 1980 and quieting title in favor of Steve Goodall, Robert Goodall, Anne Stout, Joanne Quale, and Darrel Quale ("the Goodalls"). This case involved the sale of mineral rights to four tracts of land executed in one deed. In 1980, George and Dorothy Hoffman executed a deed transferring an undivided 508.26/876.26 mineral interest to Francis and Alice Goodall. Subsequent to the execution of these deeds, the Hoffmans retained a total of 508.26 mineral acres out of 876.26 total acres in the subject property. This fractional interest language in the 1980 deed is at the center of this dispute. Dorothy Hoffman died in 1985. George Hoffman died intestate in 1998. The Monsons acquired by intestate succession any mineral interests the Hoffmans retained beneath the subject property. Sometime after George Hoffman's death, members of the Monson family entered into oil and gas lease agreements with Enerplus Resources and Northern Oil and Gas, Inc. In 2013, the Goodall's filed a complaint requesting the district court quiet title in their favor. The Monsons moved for summary judgment, arguing the 1980 deed was unambiguous, the Hoffmans only transferred a fractional interest to the Goodalls, and the Monsons inherited their interests from what the Hoffmans retained in the transaction. The Goodalls claimed the deed did not reflect the parties' intentions, which was to transfer all of the Hoffmans' 508.26 mineral acres to Francis and Alice Goodall. After a hearing, the district court denied the Monsons' motion for summary judgment. After review, the Supreme Court concluded the district court did not err in admitting extrinsic evidence to support the Goodalls' argument that a mutual mistake had been made, and the district court's findings supporting reformation of the deed were not clearly erroneous. View "Goodall v. Monson" on Justia Law

Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. 824a-3, seeks to reduce reliance on fossil fuels by increasing the number of energy-efficient cogeneration and small power-production facilities. Oregon implements its PURPA responsibilities largely through its Public Utility Commission (OPUC), which has directed utilities subject to its jurisdiction to draft off-the-shelf, standard-form power-purchase agreements that OPUC then reviews for compliance with PURPA. OPUC has approved two standard-form power-purchase agreements submitted by petitioner Portland General Electric. Petitioner PáTu Wind Farm, a six-turbine, nine-megawatt generator in rural Oregon, is classified under PURPA as a small power producer. This appeal stems from the parties' dispute over the nature of Portland General's purchase obligation. The Commission ruled that under PURPA, Portland General must purchase all of PáTu’s power, though it rejected PáTu’s insistence that Portland General do so by utilizing a technology known as dynamic scheduling. The court concluded that PáTu’s petition dealing exclusively with Portland's refusal to utilize dynamic scheduling is without merit. Accordingly, the court denied PáTu’s petition. The court dismissed Portland's petition challenging the Commission's ruling that it must purchase all of PáTu’s power for lack of jurisdiction because FERC's orders were advisory. View "Portland General Electric Comp v. FERC" on Justia Law