Energy Legal Blog

On February 2, 2010, the SEC issued the written interpretive release that it approved last week to guide how public companies should evaluate the impacts of climate change in their communications with shareholders. As companies in the energy industry should note, the guidance does not change the existing principles of corporate disclosure, founded on an assessment of materiality and likelihood. That said, the structure and perspective of the guidance suggest that the SEC expects to see greater attention being given to the evaluation and disclosure of risks and opportunities arising from climate change. (more…)

On January 27, by a vote of three to two, the SEC adopted new interpretive guidance on how public companies should evaluate the impacts of climate change in their communications with shareholders.  Such guidance had long been sought by certain pension funds, shareholder advocacy groups and states, who were unsatisfied with the varied nature of corporate disclosure concerning climate change.  While a copy of the guidance has not yet been made available, the Commissioners discussed the guidance at length.

The SEC identified four topics to be evaluated and, as appropriate, discussed in disclosures:

• The impact of existing as well as pending climate-change legislation and regulation.
• The impact of international accords and treaties on climate change or greenhouse gas emissions.
• The actual and potential indirect consequences of climate change regulation or business trends (e.g., reduced demand for carbon-intensive products).
• The actual and potential impacts of the physical effects of climate change. (more…)

The Federal Energy Regulatory Commission (“Commission”) issued on January 21, 2010 a Notice of Proposed Rulemaking (“NOPR”) in Docket No. RM09-16 that would permit a new class of transactions to proceed without the need for a Federal Power Act Section 203 order.  Comments on the proposal are solicited and will be due 60 days after its publication in the Federal Register.  (more…)

PR News announced that Bracewell & Giuliani’s Energy Legal Blog will be recognized as the best “Legal PR Blog” at its annual Corporate Social Responsibility & Legal Awards Luncheon on February 24, 2010 at the National Press Club in Washington, D.C. This award recognizes an outstanding and influential law-related weblog or online journal written by a representative of the organization with the goal of espousing the brand or a certain message and written with flair and personality.

“Managing a crisis and working with legal counsel are two areas of communication that will always be a part of a PR professional’s responsibilities,” notes Diane Schwartz, vice president of PR News. “The Legal PR Awards shines a light both on how law firms are communicating to their stakeholders and to how the PR industry is in the driver’s seat when a crisis hits.”

More information on the award program and this year’s winners is available at http://www.prnewsonline.com/awards/csr2009_event-finalists.html.

The so-called FRAC Act, legislation introduced in June of last year by Rep. Diana DeGette (D-CO) and Rep. Maurice Hinchey (D-NY) in the House of Representatives and Senators Casey (D-PA) and Shumer (D-NY) in the Senate, received a fresh jolt of publicity this week when the House Energy and Commerce Subcommittee on Energy and Environment convened a hearing on the recently announced merger between ExxonMobil and XTO Energy, Inc., one of the nation’s largest independent natural gas producers.  While nominally about the impact of the proposed merger on the natural gas market, the hearing, chaired by Rep. Ed Markey (D-MA), quickly focused in on hydraulic fracturing, the practice of injecting a high-pressure fluid mix of water, sand and a proprietary chemical mix into formations to release natural gas.  Hydraulic fracturing is specifically exempted from EPA regulation under the Safe Drinking Water Act.  The FRAC Act seeks to repeal this exemption and also to require operators to disclose the chemical constituents of the fracing fluid used at any given well. (more…)

In U.S. v. Apex Oil, a three-judge panel of the Seventh Circuit ruled 3-0 that EPA’s cleanup injunction against the corporate successor to a chemical company was not discharged in Chapter 11 because the injunction does not create a right to payment and, consequently, is not a ‘debt’ under the Bankruptcy Code.

In essence, Apex had argued that the injunction would require the company to incur costs upward of $150 million and that the purpose of the restructuring would be defeated if these costs had to be incurred. Judge Posner’s opinion turns on the fact that the order required cleanup and was not a substitute for payment; consequently, liability under the order was not a “debt” recognized by the Bankruptcy Code. The court recognized but disavowed a contrary ruling of the Sixth Circuit, thereby setting up a split between the circuits on this important issue.