Liz E. Klingensmith, Jeremy A. Mercer, Amy L. Barrette
In Samson Exploration, LLC v. T.S. Reed Properties, Inc., the Texas Supreme Court affirmed the decision by the Ninth Court of Appeals siding with royalty owners in concluding that the operator of a well within two overlapping units had to pay twice.
Samson’s leases contractually authorized unilateral pooling. Samson created Unit 1, which had boundaries of 6,000 to 13,800 feet subsurface, and obtained production from two wells within Unit 1’s boundaries, Well No. 1 and Well No. 2. Well No. 1 produced from 12,304 feet to 12,332 feet subsurface. Well No. 2 produced from 13,150 to 13,176 feet. Samson then unilaterally amended Unit 1 to reduce the surface acreage and change the depth to 12,400 feet subsurface and below (the “Amended Unit”). No production from Well No. 1 was attributed to the Amended Unit. Continue reading “You Made Your Bed, Now Lie in It: Samson Exploration, LLC v. T.S. Reed Properties, Inc.“
On June 20, the Pennsylvania Supreme Court issued its opinion in Pennsylvania Environmental Defense Foundation (PEDF) v. Commonwealth, 2017 Pa. LEXIS 1393 (Pa. June 20), in connection with the so-called Environmental Rights Amendment or ERA (Article 1, Section 27 of the Pennsylvania Constitution). Suffice it to say, the opinion has reopened the debate as to the meaning of the ERA, and more importantly, how the ERA is implemented as a practical and legal matter. In brief, the court ruled that amendments to the state’s fiscal code (which sought to address budgetary shortfalls by redirecting money from a fund containing rents and royalties from oil and gas leases on commonwealth land to the general fund) violated the ERA. While the facts before the court were narrowly drawn, the court used the opportunity to revisit the decades old “test” applied in evaluating ERA claims, an issue it first addressed in its 2013 plurality opinion in Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. 2013). It abruptly rejected the well-established Payne v. Kassab test and roughly 45 years of ERA-related case law, thereby placing the ERA, and industry, back into legal limbo. Despite some legal uncertainty, this opinion should not be interpreted as a major stumbling block to key energy and infrastructure projects.
On July 14, 2017, Federal District Judge Shah (N.D. Ill.), in EPSA v. Star, 1:17-cv-01164, dismissed the complaints of electricity consumers and an array of electric power generators and their association seeking to invalidate the Illinois Future Energy Jobs Act, enacted in December 2016. The Act created “zero emission credits” (“ZECs”) for the benefit of two nuclear power plants, which the plant owner (Exelon) threatened to retire absent outside economic support. As the Act’s title indicates, a principal motivation for the legislation was the prospect of significant job loss and other economic harms caused by shuttering the two nuclear plants, but the environmental benefit of “zero emission” nuclear power was a major driver as well. Continue reading “ZECs and RECs: A Quick Look at the EPSA v. Star Decision on Nuclear Plant Subsidies”
In American Petroleum Institute (“API”) v. Environmental Protection Agency (“EPA”), 2017 WL 2883867 (D.C. Cir. July 7, 2017), the D.C. Circuit upheld, severed, and vacated portions of a 2015 EPA final rule, Definition of Solid Waste, 80 Fed. Reg. 1,694, 1,738/3 (Jan. 13, 2015) (the “Final Rule”). As explained below, the court: 1) upheld “Factor 3” of the “legitimate recycling” test defined in the rule; 2) vacated “Factor 4” of the legitimate recycling test; 3) vacated the Verified Recycler Exclusion (“VRE”), thereby reinstating the Transfer Based Exclusion (“TBE”) while retaining emergency preparedness requirements for generators and expanded containment requirements; and 4) held that the court did not have jurisdiction to review a deferred action by the EPA on containment and notification conditions for materials, products, or processes specifically excluded from the definition of “solid waste.” Continue reading “Recent D.C. Circuit Decision and Definition of Solid Waste”
We are pleased to announce the launch of our new blog, Energy and Environmental Trends Watch, which will provide insight and analysis on the latest developments in energy and environmental law.
“Energy and environmental law are two of the most demanding practice areas for attorneys and clients due to nonstop developments in the energy industry and environmental activism,” said Margaret A. Hill, co-chair of the Firm’s Energy, Environment, and Mass Torts practice group. “Although the ever-changing landscape can be difficult to monitor, our seasoned attorneys have the necessary depth and knowledge to identify issues and cases in our blog that will enable you to better understand significant developments in these industries.”
“There is no question that we live in interesting, yet challenging, times in the energy space and our environmental regulatory scheme,” added Kevin J. Bruno, co-chair of the Firm’s Energy, Environment, and Mass Torts practice group. “We hope our blog can be a useful tool for our clients in being made aware of and understanding the latest trends in these areas.”
Our Energy and Environmental Capabilities
Blank Rome’s energy practice offers a full range of energy industry-specific services. With more than 60 attorneys practicing across the United States, the group provides strategic and forward-looking insight into an ever-evolving industry while also understanding the unique business concerns of our clients. Likewise, Blank Rome’s nationally recognized environmental practice covers every substantive area of environmental law. The group provides counsel to clients in every major business sector, municipal and county governments, and redevelopment authorities. Both groups are comprised of attorneys who bring a wealth of experience from diverse backgrounds in industry and government. The teams include former U.S. Secretary of Energy, former trial attorneys from the Department of Justice, former officials of the Environmental Protection Agency, and former assistant United States attorneys.
Consistent with a line of recent Commonwealth Court decisions, the Commonwealth Court once again held that a township did not violate the Pennsylvania Constitution by passing an ordinance that allowed oil and gas development in various zoning districts, including residential-agricultural (R-A) districts. In Delaware Riverkeeper Network, et al. v. Middlesex Township Zoning Hearing Board, 2017 Pa. Commw. Unpub. LEXIS 415 (Pa. Cmwlth. June 7, 2017), the Court upheld an ordinance and the zoning hearing board’s approval of an oil and gas permit in an R-A district over the objections of numerous entities, including the Clean Air Council (“CAC”) and the Delaware Riverkeeper Network (“Riverkeepers”), who claimed that the township and/or board actions violated several provisions of the Pennsylvania Constitution. Continue reading “Robinson Rejected: Zoning Ordinance Permitting Oil and Gas Development in Residential-Agricultural Districts Is Constitutional”
Elizabeth E. Klingensmith, Jeremy A. Mercer, and Amy L. Barrette
The Texas Supreme Court annunciated two critical points in Lightning Oil Co. v. Anadarko E&P Onshore: (1) unauthorized interference may be a trespass only when it impacts the mineral lessee’s ability to exercise its rights to explore, obtain, produce, and possess the leased minerals; and (2) the trespass injury must outweigh the interests of the industry as a whole and society in maximizing oil and gas. Continue reading “Drill on Through to the Other Side: No Trespass When Drilling Through Mineral Estate with Surface Use Agreement”
The New Jersey Supreme Court’s decision in NL Industries, Inc. v. State of New Jersey will frustrate the equitable allocation of cleanup costs at sites involving pre-1977 discharges where the State would otherwise qualify as a responsible party. Such a result would be particularly severe considering the high cleanup price tag for many sites predating 1977. Any party involved in or contemplating such a contribution action against the State should be mindful of this decision when determining how best to proceed. This should include determining whether a federal forum and contribution claims under the NJ Spill Act’s federal counterpart, CERCLA, might achieve a better result. Continue reading “Stretching Sovereign Immunity: The New Jersey High Court Immunizes the State from New Jersey Spill Act Liable for Pre- 1977 Discharges”
As the agenda at this year’s Northeast U.S. Petrochemical Construction Conference (June 19-20, Pittsburgh) will attest, there’s one thing that any new buildout of downstream petrochemical facility needs and that is an ample and reliable supply of upstream and midstream feedstock extraction and transportation. In the past supply was much easier to count on than it is today. Today’s new landscape of political opposition to hydrocarbons poses new risks that must be managed just like any other financial or enterprise risk. The opposition is committed to nothing short of destruction of the hydrocarbons business from the well-pad to the chemical plant to the consumer. Thus far, industry has underestimated this political risk and that is proving to be costly. Continue reading “Stirring Up the Hornet’s Nest: Political Risk and Infrastructure”
