Wednesday, November 13, 2013 4:02 pm by Lowell Rothschild and Matthew Haynie
Rule Could Have Significant Impact on Infrastructure, Energy and Land Development
On September 18, we blogged about the pending release of a draft rule which would establish the scope of waters subject to the federal Clean Water Act – a rule which could have significant impacts on entities engaged in infrastructure or other land development activities, such as upstream and midstream oil and gas development, highway projects and real estate developers. While still not yet formally proposed, a leaked version of the draft rule has surfaced, providing insight on what the US Environmental Protection Agency and Army Corps of Engineers’ proposed rule will eventually look like. (more…)
Category: Courts, Enforcement, Environmental, National Energy Law, Upstream Energy
Tuesday, October 1, 2013 9:42 am by Sandy Rizzo
In a 149 page opinion, the US District Court for the District of Maryland yesterday ruled in PPL EnergyPlus, LLC et al. v. Nazarian that the State of Maryland’s actions to secure the development of new power plants by setting the price to be received by a new plant in the PJM market for the next 20 years intruded on the federal government’s role to set wholesale prices and thus violates the Supremacy Clause of the US Constitution due to field preemption. This case is critically important to incumbent generators because successful state actions to suppress wholesale prices in organized markets by mandating the execution of contracts for new generation at non-market prices would undermine the ability to make merchant investments based upon expectations of future supply and demand dynamics. A similar case is pending in the US District Court for the State of New Jersey based on that state’s law requiring utilities to purchase supply from “new generators” at an established price.
In addressing the competing claims between the plaintiffs and defendant as to the authority of the federal government versus the states, the court explained as follows:
While Maryland may retain traditional state authority to regulate the development, location, and type of power plants within its borders, the scope of Maryland’s power is necessarily limited by FERC’s exclusive authority to set wholesale energy and capacity prices under, inter alia, the Supremacy Clause and the field preemption doctrine. Based on this principle, Maryland cannot secure the development of a new power plant by regulating in such a manner as to intrude into the federal field of wholesale electric energy and capacity price-setting. Furthermore, Maryland’s stated purpose to use the Generation Order to secure the existence of sufficient and reliable electric energy for Maryland residents does not permit invasion into a federally-occupied field. Where a state action falls within a field Congress intended the federal government alone to occupy, the good intention and importance of the state’s objectives are immaterial to the field preemption analysis. (more…)
Category: Courts, FERC, Organized Markets, Power
Monday, September 30, 2013 4:13 pm by Austin Lee and Chris Miller
On January 7, 2013, the Court of Appeals for the First District of Texas (Houston) (the “Court”) held that under Texas law the implied surface easement inherent in the mineral estate limited the mineral estate owner’s right to use a surface road on a pooled tract to benefit the production from the pooled unit, subject to the accommodation doctrine, to only instances in which such use benefited wells that produced from beneath the surface tract that such road crossed . In Key Operating & Equipment, Inc. v. Will Hegar and Loree Hegar, (2013 WL 103633 (Tex.App.-Hous. (1 Dist.))) (hereinafter “Key Operating”), the Court affirmed the trial court’s issuance of a permanent injunction against Key Operating & Equipment, Inc.’s (“Key”) use of a surface road across the Hegar family’s (“Hegar”) surface estate because the pooled unit’s production did not include any production from the portion of the pooled mineral estate beneath the Hegar’s surface estate.
Key’s operations included two neighboring tracts of land referred to as the Rosenbaum-Curbo tract and the Richardson tract. In 1994, Key constructed a road across the Curbo tract (a subpart of the Rosenbaum-Curbo tract) that was utilized to service wells on both the Curbo and Richardson tracts. In 2000, Key’s lease on the Rosenbaum-Curbo tract terminated upon the cessation of production from the well on the Curbo tract. Key’s owners subsequently acquired a 1/16th interest in the Curbo tract mineral estate and leased their interest to Key. Later that year, Key pooled its mineral interests in the Richardson and Curbo tracts and Key produced from the pooled unit through wells located on the Richardson tract that it accessed via the road on the Curbo tract. In 2002, Hegar (the surface owner at issue in this case) purchased the surface estate and a 1/4th mineral interest in the Curbo tract. In 2007, Hegar sued Key for trespass and sought a permanent injunction against Defendant’s use of the road after a significant increase in Key’s use of the road. (more…)
Category: Courts, Natural Gas/LNG, Regional Energy Law, Upstream Energy
Monday, September 16, 2013 11:45 am by Bryan Loocke and Stephen Boone
On September 6, 2013, the Texas Supreme Court (the “Court”) declined to clarify whether the statutory condemnation system set forth in the Texas Property Code (specifically, the interpretation of Tex. Gov’t Code §21.021) requires a court to make a “preliminary finding” of common carrier status before awarding temporary possession to a pipeline company. The court’s refusal to weigh in on the dispute represents a missed opportunity to clarify the statutory framework at a time of increasing pipeline projects fueled by the continued expansion of oil and gas drilling activity in Texas.
Texas Rice Land Partners, L.P., James E. Holland and David C. Holland (collectively, “TRL”) own farmland in Jefferson County, Texas. In re Texas Rice Land Partners, Ltd., 402 S.W.3d 334, 336 Tex. App.—Beaumont 2013. TransCanada Keystone Pipeline, L.P. (“TransCanada”) is the owner and operator of the U.S. portion of the planned 2,151 mile crude petroleum Keystone Pipeline System designed to bring Canadian oil sands to Mid-West and Gulf Coast refineries. TransCanada filed a petition for condemnation for an easement across TRL’s farmland after unsuccessful negotiations. The trial court issued TransCanada’s requested writ of possession and awarded TRL $20,808 as compensation for the easement. (more…)
Category: Courts, Natural Gas/LNG, Regional Energy Law, Upstream Energy
Sunday, September 8, 2013 6:00 pm by Michael Weller and Heather Corken
The New York State Court of Appeals has announced that it will hear a challenge to municipal bans on hydraulic fracturing operations in two separate cases. The announcement comes three months after a ruling issued by a midlevel appellate court in which a four-judge panel unanimously held that municipalities can effectively “zone out” oil and gas operations by passing zoning ordinances and that the state’s Oil Gas and Solution Mining Law (OGSML) cannot be invoked to nullify such local bans. (more…)
Category: Courts, Enforcement, Environmental, Natural Gas/LNG, Regional Energy Law, Shale Development, Upstream Energy
Friday, August 16, 2013 11:09 am by Sandra Snyder
August has been a busy month for issues related to the Renewable Fuels Standard (“RFS”).
On August 6, EPA denied the petitions for reconsideration filed by the American Petroleum Institute (“API”) and the American Fuel & Petrochemical Manufacturers (“AFPM”) regarding the 2013 Biomass-Based Diesel Renewable Fuel Volume. EPA sent a letter to AFPM and another to API before publishing notice of this decision in the Federal Register on August 14. As EPA’s technical response memo explains, EPA believes that there is no need to reconsider the applicable volume of biomass-based diesel for 2013 because the issues raised by API and AFPM could have been raised during the comment period and the issues raised do not provide substantial support for revising the standard. In particular, EPA explained that there is no statutory prohibition to increasing the biomass-based diesel requirement over the 1.0 billion gallon standard even that will result in higher prices. EPA disregarded two other arguments by explaining that when the Agency set the 2013 standard, it was aware of and considered both the 2012 drought and the RIN fraud issue. (more…)
Category: Air Quality/Climate Change, Courts, Environmental, National Energy Law, Renewable Energy/Cleantech