Energy Legal Blog

The D.C. Circuit’s remand today of a FERC transmission incentive rate of return order relating to Southern California Edison Company (“SoCal Edison”) is less interesting for its affirmance of the Commission’s rate of return methodology, than it is for its remand based on FERC’s misuse of the official notice provisions of the Administrative Procedure Act (“APA”).

The case, SoCal Edison v. FERC, U.S. Court of Appeals for the D.C. Circuit, No. 11-1471, May 10, 2013, essentially affirmed FERC’s determination to change its yardstick on measuring required returns on equity (“ROE”) for inclusion in incentive rate formulae for transmission projects. For a number of years FERC had determined ROEs for electric companies by applying its discounted cash flow (“DCF”) methodology to a proxy group of comparable publicly-traded companies and using the midpoint of the range of that group. (more…)

In New York, municipalities can more effectively seek to “zone out” oil and gas operations by passing zoning ordinances. An appellate panel of the New York Supreme Court affirmed the decision of a lower court, holding local municipalities have the power to enact zoning ordinances that ban “all activities related to the exploration for, and the production or storage of, natural gas and petroleum within its borders.” Town of Dryden et al., v. Norse Energy Corp., New York State Supreme Court, Appellate Division Third Department (May 2, 2013).

Back in 2011, the Town of Dryden, New York amended its zoning ordinance to ban all activities related to the exploration for, and the production or storage of, natural gas and petroleum. Anschutz Exploration Corporation, an operator with oil and natural gas wells leases covering approximately 22,200 acres of land in Dryden, filed suit seeking invalidation of the zoning ordinance amendment. The NY Supreme Court granted Dryden’s motion for summary judgment, holding that the zoning ordinance was not preempted by the New York Oil, Gas and Solution Mining Law (OGSML). (more…)

 The end of February saw a flurry of news regarding the status of the Polar Bear under the Endangered Species Act.  On February 20, the US Fish and Wildlife Service reissued its so-called “4(d)” rule regarding the Bear, outlining the rules “necessary and advisable” to protect it.  Nine days later, the U.S. Court of Appeals for the DC Circuit upheld FWS’s listing of the Polar Bear as a “threatened” species under the ESA.   Each development is significant in its own right; together, they offer solid guidance as to where FWS is heading on using the ESA to address climate change and how climate change is affecting the listing of potentially endangered species. (more…)

On November 7, 2012, the Federal Trade Commission announced it had closed its investigation of Hilcorp Alaska LLC’s proposed $375M acquisition of Marathon Oil Company’s Cook Inlet, Alaska natural gas production, storage, and pipeline assets, despite identifying several competitive concerns with the transaction. The FTC explained in a written statement that this unusual move was based upon the “unique circumstances” of the case, specifically, that the effects of the proposed acquisition are confined solely to consumers in Alaska and that the State of Alaska has negotiated a consent decree that the State believes alleviates the competitive concerns arising from the transaction and mitigates the State’s energy security concerns. (more…)

President Obama describes his energy policy as an “All of the Above” approach that encourages production of traditional fossil fuels while supporting the growth of renewables. Despite an increase in overall U.S. energy production over the past four years, output in federal waters of the Gulf of Mexico has dropped well below recent government projections and onshore energy production from federal lands remains minuscule. Under a second Obama term, will federal waters and lands play a leading role in U.S. energy production, or will they continue to lag behind their potential?

How federal lands policy - and related energy policy - develops under the President’s second term will reflect the dueling instincts within the Administration: the desire to push an active, even aggressive regulatory-reform program, and the desire to create a more bipartisan legacy on issues such as energy independence. We suspect we’ll see elements of both as the administration continues a reformist Executive Branch regulatory agenda while exploring more common ground among Democrats and Republicans in Congress and the caucuses.

Other changes we see on the horizon: (more…)

Regardless of the final result, one thing is certain: the debate that took place in the 2012 election cycle over energy and environmental issues was a diametrically different debate that the one that took place just four years ago. Cap-and-trade legislation? Nowhere to be seen or heard. Climate change? See cap-and-trade. Shale gas development? A competition over who favors it more. Permits for offshore oil and gas development? A debate over who has or will get them out the door fastest. Perhaps nothing signified this stunning turn of events more than President Obama’s campaign running pro-coal advertisements in Ohio that attacked Governor Romney for once saying that pollution from coal plants was dangerous to public health.

Now that the election is over and President Obama has been reelected, where does all of this rhetoric leave energy and environmental issues heading into a second Obama term? In this post my colleagues Jeff Holmstead and Scott Segal and I examine the likely impacts on the major areas of energy and environmental policy. (more…)