FERC to Review Its Policies Regarding the Determination of the Return on Equity in Jurisdictional Rates

Mark R. Haskell, Brett A. Snyder, and George D. Billinson

FERC is conducting a comprehensive review of its method for determining the appropriate return on equity in jurisdictional rates across the energy industry. Comments are due no later than 90 days, and reply comments no later than 120 days, after the publication of the NOI in the Federal Register.

On March 21, 2019, the Federal Energy Regulatory Commission (“FERC” or “the Commission”) issued a Notice of Inquiry (“NOI”) as to whether it should modify its policies (and, if so, how) for calculating the return on equity (“ROE”) for jurisdictional rates.1 Although ostensibly directed at policies applicable to public utilities, the NOI also seeks comment as to whether those policies should also be applied to interstate natural gas pipelines and oil pipelines. Continue reading “FERC to Review Its Policies Regarding the Determination of the Return on Equity in Jurisdictional Rates”

Charting Climate Change Cases: A Survey of Recent Litigation

Margaret Anne Hill and Stephen C. Zumbrun

Introduction

Right now, cases involving climate change are being heavily litigated in courts across the United States. Hundreds of climate change-related cases have been filed in both federal and state courts, where parties are challenging governments’ and industry’s knowledge of and contribution to climate change. In the abstract, one would think that litigation involving emissions of greenhouse gases (“GHG”) linked to climate change would largely focus on the federal Clean Air Act. Yet, climate change-related cases now involve ever-expanding causes of action, including not only claims under the federal Clean Air Act and other federal statutes, but claims under the U.S. Constitution, state law claims, and common law claims.

There are several active cases that may have major implications on the government’s role in determining the direction of climate change policy, and on private companies’ past and future liability for alleged contributions to climate change, as well as knowledge of climate change impacts on business decision-making. This article discusses notable current cases involving climate change. Continue reading “Charting Climate Change Cases: A Survey of Recent Litigation”

Pennsylvania Superior Court Fractures Long-Standing Rule of Capture

Christopher A. Lewis and Stephen C. Zumbrun

Citing distinctions between hydraulic fracturing and conventional gas drilling, the Pennsylvania Superior Court held on April 2, 2018, in Briggs v. Southwestern Energy Production Company[1] that the rule of capture does not preclude liability for trespass due to hydraulic fracturing, reversing a summary judgment that had been granted by the trial court in favor of Southwestern Energy Production Company. The Briggs ruling exposes operators to potential tort liability where subsurface fractures, fracturing fluid, and proppant cross boundary lines and extend into the subsurface estate of an adjoining property, resulting in the extraction of natural gas from the adjoining property. Continue reading “Pennsylvania Superior Court Fractures Long-Standing Rule of Capture”

It’s Catching On—Hydraulic Fracturing Is Not an Abnormally Dangerous Activity in Pennsylvania

Jeremy A. Mercer, Amy L. Barrette, and Elizabeth E. Klingensmith

Yes, a federal court made the determination in 2014 and 2015 that hydraulic fracturing associated with unconventional oil and gas development in Pennsylvania is not an abnormally dangerous activity that is subject to strict liability. See Ely v. Cabot Oil & Gas Corp., 38 F. Supp. 3d 518 (M.D. Pa. 2014) (Report & Recommendation issued in January; adopted in April); see also Kamuck v. Shell Energy Holdings GP, LLC, Civil No. 4:11-CV-1425, 2015 U.S. Dist. LEXIS 37538 (M.D. Pa. March 25, 2015) (concluding hydraulic fracturing is not abnormally dangerous or subject to strict liability). In the Ely decision, the court undertook an extensive review of the factual record developed after years of discovery and concluded that there simply was no support for a view that hydraulic fracturing was an abnormally dangerous activity. Now, a Pennsylvania appellate court has reached the same conclusion—twice. Continue reading “It’s Catching On—Hydraulic Fracturing Is Not an Abnormally Dangerous Activity in Pennsylvania”

Under Scrutiny: PA Superior Court Splits from Own Precedent and Allows Unilateral Oil & Gas Lease Severance in Montgomery

Jeremy A. Mercer

Lessees of oil and gas leases in Pennsylvania who have been assigned or are assigning less than all of the geologic strata under lease should give careful attention to whether those leases have been severed vertically by unilateral actions. A lease may not be held by production if that production is in a geologic strata not included in the assignment of rights. This article explains a recent decision on the issue.

By its 2-to-1 non-precedential decision that an oil and gas lease unilaterally can be severed horizontally and vertically, the Superior Court of Pennsylvania appears to have split from its own published precedent and created new law in Pennsylvania—leaving lessees in limbo, possibly giving unscrupulous lessors a unilateral tool to terminate oil and gas leases, and ultimately harming both lessors and lessees in the process. Continue reading “Under Scrutiny: PA Superior Court Splits from Own Precedent and Allows Unilateral Oil & Gas Lease Severance in Montgomery

Not So Fast—Your Oil and Gas Lease Primary Term May Be Longer Than You Thought

Jeremy A. Mercer, Amy L. Barrette, and Elizabeth E. Klingensmith

Under Pennsylvania law, a defined primary term of an oil and gas lease may actually be longer than that stated term of year. In a September 12, 2017, unreported decision, the Pennsylvania Superior Court remanded a case to the trial court for consideration of whether a “limitation of forfeiture” provision, which required notice and opportunity to cure, extended the primary term by the length of the cure period. See L.D. Oil & Gas Enters., Inc. v. Loop, No. 1883 WDA 2016, 2017 WL 4001655 (Pa. Super. Ct. Sep. 12, 2017). In overturning the trial court’s grant of judgment on the pleadings to the lessor, the Superior Court returned the case to allow the trial court to take parol evidence of the impact of the “limitation of forfeiture” provision on the length of the primary term. Continue reading “Not So Fast—Your Oil and Gas Lease Primary Term May Be Longer Than You Thought”

FERC Gets Quorum and New Acting Chairman

Joseph McMonigle

First business meeting set for September 20. NEXUS Natural Gas Pipeline leads the list of backlog of projects awaiting approvals.

New FERC Commissioner Robert Powelson, formerly of the Pennsylvania Utility Commission and former President of NARUC, was sworn last Thursday, giving the Commission a quorum for the first time in six months.

Continue reading “FERC Gets Quorum and New Acting Chairman”