Energy Legal Blog

Mark Lewis, an oil & gas attorney and Managing Partner of Bracewell & Giuliani’s Washington, D.C. office, discussed some of the latest issues affecting the oil and gas industry with Pipeline & Gas Journal editor Jeff Share.

On the menu: the effect of liquids-heavy shale production on pipeline development, state versus national regulation, and the importance of clear stakeholder communication for pipeline developers.

To read the full Q&A, click here.

Another class action lawsuit has been filed against KeySpan Corporation (KeySpan) and Morgan Stanley Capital Group Inc. (Morgan Stanley), claiming damages for antitrust violations resulting from an allegedly illegal swap agreement that allowed KeySpan to manipulate energy prices in the New York City electric generating capacity market (NYC Capacity Market), see Konefsky et al. v. KeySpan Corp., et al., Case No. 1:12-cv-00017.  The complaint was filed on January 6, 2012 in the U.S. District Court for the Western District of New York on behalf of electric customers of National Grid, which purchased electric energy and capacity in the NYC Capacity Market from 2006 through 2009.  The plaintiffs, two law professors, are seeking on behalf of the class millions in damages and disgorgement of unlawfully obtained profits for alleged violations of Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act, as well as analogous New York state laws. (more…)

With the 2012 election year upon us, it promises to be an interesting year in energy politics and policy. Here are 12 (really 13 because of some creative headline writing) issues that will keep the sector hopping this year.

1. Keystone Cops – The biggest energy story of the first quarter without a doubt will be the Keystone pipeline. Not only has this issue blossomed into a larger-than-reality political issue, the President has seemingly been boxed into a corner on the issue that will force him to choose between two major constituencies – labor and environmentalists – just after he thought he got the political break he needed to delay the decision, thanks to Nebraska Republicans. Nonetheless, the battle will rage as the decision approaches. Regardless of the final result after 60 days (I’m predicting politics/jobs will win the day), the legal battle will likely begin then (promising a real fight) – of course likely delaying a final decision until after the election anyway. (more…)

On December 1, the Department of Energy (DOE) and the US Environmental Protection Agency (EPA) had a teleconference to discuss reliability of the electric grid in the context of pending EPA regulations. DOE’s new review limited itself only to resource adequacy, which DOE admits is just one component of reliability assessment. Indeed, Commissioner Phil Moeller of the FERC identified some 22 areas of inquiry necessary to assess reliability, most of which the DOE does not address.

On the same day, Scott Segal, director of the Electric Reliability Coordinating Council (ERCC), issued a white paper about the DOE report. Segal outlined some additional points to consider in the wake of the release: (more…)

Institutional Shareholder Services, a leading corporate proxy firm, recently proposed a new policy that clarifies its support for shareholder proposals requesting greater disclosure of a company’s natural gas hydraulic fracturing operations and efforts to manage and mitigate the potential impacts of those operations. As background for the new policy, ISS notes the increasing media and public policy attention on hydraulic fracturing operations, the high level of support hydraulic fracturing proposals received in 2010 and 2011 and ISS’s recommendation of votes in favor of each of those proposals.

The ISS release on its proposed policy, found here, specifically requests comments on the scope and reasonableness of the proposed policy, providing exploration and production and oilfield service companies an opportunity to shape the final policy.

For a more detailed discussion of this development, click here.

The U.S. Senate unanimously passed a bill on October 17^th  intended to strengthen federal safety regulation of oil and gas pipelines.  The bill, known as the Pipeline Transportation Safety Improvement Act, includes the following provisions to address safety concerns:

• Requires strength-testing for previously untested natural gas transmission pipelines in high-population areas that operate at high pressure.
• Requires pipeline operators to verify their records to confirm the pipelines’ physical and operational characteristics and their established maximum allowable operating pressure;
• Authorizes additional pipeline inspectors and pipeline safety support employees through a phased-in increase over four years;
• Requires pipeline operators to report all maximum allowable operating pressure exceedances to the Department of Transportation;
• Increases the cap on civil penalties for violators of pipeline regulations and adds civil penalties for obstructing investigations;
• Requires installation of automatic or remote-control shut-off valves on new pipelines;
• Requires the Secretary to prescribe regulations that establish time limits on accident and leak notifications by pipeline operators to local and state government officials and emergency responders;
• Increases public availability of pipeline information, inspections and standards by requiring that this information be made available online;
• Sets more stringent standards on state “One-Call” systems by eliminating all exemptions given to local and state government agencies and their contractors on notifying “One-Call” centers before digging; and
• Permits expansion of excess flow valve requirements to include multi-family buildings and small commercial facilities.

Similar legislation is being considered in the U.S. House of Representatives.

The bill’s passage follows the Pipeline and Hazardous Materials Administration’s (PHMSA) August 25, 2011,  Federal Register publication of an advanced notice of proposed rulemaking (ANPRM) (76 Fed. Reg. 53,086) regarding changes to the regulations for the safety of gas transmission pipelines (49 CFR Parts 190-199).  The ANPRM requests comments on 15 specific topic areas that fall into two broad categories: revising and strengthening integrity management (IM) requirements and  strengthening or expanding non-IM requirements.  (more…)