Environmental Defense Fund Satellites to Monitor Methane Emissions From Oil and Gas Operations

The Environmental Defense Fund has signed contracts with two aerospace companies that will compete for the opportunity to construct the organization’s planned satellite project to quantify and map heat-trapping methane emissions from oil and gas facilities and other man-made sources around the globe.

A post on the Mitchell, Williams, Selig, Gates & Woodyard website quotes Mark Brownstein, Senior Vice President of the EDF energy program:

“Significant reductions in oil and gas methane emissions now can materially lower the rate of global temperature rise in our lifetime. MethaneSAT will give us the data we need to seize this moment.”

Walter G. Wright of Mitchell, Williams describes MethaneSAT “as using the latest scientific and technological innovations in sensor design, spectroscopy, data retrieval algorithms and flux inversions, a state-of-the-art modeling technique to distinguish emissions from ambient methane and trace them back to their source.”

Read the article.



Texas Case Offers Three Lessons for Contract Drafters

The Texas Supreme Court recently heard oral argument in Barrow-Shaver Res. Co v. Carrizo Oil & Gas, Inc., on the interpretation of a farmout agreement providing that an assignment could not be made “without the express written consent,” according to a post on the website of Porter Hedges.

“The issue—whether the provision means consent can be withheld arbitrarily or only reasonably,” the post states. “Regardless how the Texas Supreme Court rules, there are three lessons in Barrow-Shaver for contract drafters: (1) be precise in contractual language; (2) address the use of non-final drafts in interpretation disputes; and (3) consider other provisions that may be impacted by the implied reasonableness issue.”

The post offers some pointers on each of those three points.

Read the article.



2018’s Bad Guys in Energy

Charles Sartain of Gray Reed & McGraw has posted a list of what he calls “2018’s parade of reprobates, rapscallions and others generally lacking in moral hygiene” in the world of energy law.

He reports on a “mendacious filing” in an SEC civil enforcement action against Chris Faulkner; seven defendants, nine co-conspirators and three unnamed “government officials” allegedly involved in the embezzlement of funds from Venezuela’s government-owned oil company; a former Chevron employee charged with conspiracy to commit many felonies; a former Texas state senator; the culprit in a garden variety wire fraud and money laundering case; and more.

Read the article.




Jordan, Lynch & Cancienne Wins Take-Nothing Decisions in Texas, Louisiana

Trial lawyers with Jordan, Lynch & Cancienne PLLC scored big defense wins recently for two separate clients, securing a quick summary judgment for The Dow Chemical Company in Texas and prevailing in a jury trial for Union Carbide Corporation in New Orleans.

In the Texas case, MMR Constructors Inc. tried to claim an additional $17 million from Dow after it had already paid MMR for work on its plant in Freeport, Texas. That case ended with a summary judgment for the defense.

And in the New Orleans case, jurors heard three weeks of testimony related to the death of an oil field worker who died of mesothelioma. The jury found Union Carbide and Montello were not responsible.

Read details of the cases.



Local Taxation of Oil and Gas Activities Fails Again

The Texas Supreme Court issued four opinions addressing the taxation of compressors used to deliver natural gas into pipelines, according to a post on Gray Reed & McGraw’s Energy & the Law blog.

Charles Sartain and Isreal Miller introduce a discussion of the rulings:

“Local taxing authorities frequently look to out-of-towners to bear what the locals consider the outsiders’ fair share of the burdens of increased oil and gas activity. The counties are often small and rural. (See the Dimmit County road tax).You can’t blame them, but  Reeves County (county seat: Pecos, 2010 pop. 13,783), Loving (county seat: Mentone, 2010 pop. 1,340), and Ward (county seat: Monahans, 2010 pop. 10,658) have been reminded by the big guys and gals in Austin that these efforts are not likely to succeed. It didn’t work for Huey Long and it isn’t working well now.”

Read the article.




National Law Journal Names Chrysta Castañeda to 2018 Elite Trial Lawyers List

Chrysta Castañeda has been awarded The National Law Journal’s Elite Trial Lawyers Award for 2018.

The Castañeda Firm, based in Dallas, represents litigation clients in the energy industry.

“One of Ms. Castañeda’s most notable recent victories was a $145 million verdict on behalf of T. Boone Pickens and Mesa Petroleum, which was recognized as one of the largest in the nation in 2016 by NLJ and one of the largest in Texas by Texas Lawyer,” the firm said in a release.

Castañeda served as lead trial counsel for Pickens’ company in the long-running dispute, which resulted in a five-week trial in Pecos, Texas.

Read details of the award.





Arbitrator’s Undisclosed Relationships Sink Oil and Gas Awards

An arbitrator’s failure to disclose his longstanding business relationships with one of the parties requires setting aside the arbitration awards, the U.S. District Court for the Southern District of Texas ruled, according to Bloomberg Law.

Reporter Brian Flood writes that Patrick Long, part of a three-member arbitration team, heard a contractual dispute over joint oil and gas operations between OOGC America LLC and Chesapeake Exploration LLC. But the court found that Long lied when he “claimed that he did not have professional or social connections with the parties or witnesses.”

“In reality, Long was a long-time business partner of Yong Siang Goh, the board chairman of FTS International Inc., an affiliate of Chesapeake Exploration,” Flood writes. “In addition, Long failed to disclose that he had represented FTS as a lawyer, that FTS’s deputy general counsel was a former partner at his law firm, and that his law firm had employed Goh’s daughter.”

The court vacated the awards.

Read the Bloomberg Law article.



Texas High Court Invokes the Discovery Rule

The Texas Supreme Court has held that the discovery rule delayed the running of the statute of limitations on behalf of the holder of a recorded right of first refusal to purchase mineral interests, reports the Energy & the Law blog of Gray Reed & McGraw.

Gray Reed partner Charles Sartain explains: “The trustees sued the Tregellases for buying the minerals without allowing the Trust to exercise its ROFR, contending that a contract was formed when they sued more than four years after the Tregellases’ purchase; the suit was their acceptance of the right to purchase the minerals, they said.”

The appellate court held that the trust suffered an injury when the minerals were sold, but the discovery rule delayed limitations.

Read the article.




What Colorado’s and Washington’s Pro-Energy Votes Could Mean for the Rest of the Industry

Check mark box on ballot.Just because voters in two states rejected measures that energy companies opposed, but that doesn’t mean the fight is over for oil and gas companies, warns Buchanan Ingersoll & Rooney in a website post.

Colorado voters turned down an initiative that would have dramatically limited the use of hydraulic fracturing. And Washington voters rejected a proposed carbon fee on fossil-fuel emissions.

“Though it’s early, East Coast lawmakers in states like Connecticut, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island and Vermont may introduce their own carbon-pricing legislation in the near future. And of course, Washington isn’t quite ready to give up yet either,” according to the post.

Read the article.




Expropriation Ruling Explains Landowner’s Burden to Prove Severance Damages to a ‘Legal Certainty’

Oil and gas pipelineA Louisiana appellate court has added to the relatively sparse body of appellate rulings in pipeline expropriation matters with an unpublished opinion affirming that landowners whose property is expropriated must prove their entitlement to severance damages to a “legal certainty.”

Writing in the Liskow & Lewis Energy Law Blog, Laura Springer Brown discusses the case of  Enterprise Products Operating, LLC, v. Southwood Terminal, L.L.C.

In its ruling, the court affirmed a two-part test for severance damages: The landowner must prove a diminution in value, “and only then could the jury continue on to the issue of the amount of damages.”

Read the article.



Federal Judge Blocks Keystone Pipeline XL in Major Blow to Trump Administration

Image by Elvert Barnes

A federal judge temporarily blocked construction of the controversial Keystone XL pipeline, ruling late Thursday that the Trump administration had failed to justify its decision granting a permit for the 1,200-mile long project designed to connect Canada’s oil sands fields with Texas’s Gulf Coast refineries.

The Washington Post characterized the order as a  major defeat for President Trump, who attacked the Obama administration for stopping the project in the face of protests and an environmental impact study.

Post reporters explain that the order “requires the administration to conduct a more complete review of potential adverse impacts related to climate change, cultural resources and endangered species. The court basically ordered a do-over.”

Read the Washington Post article.




‘Frack Master’ of Texas Oil Fame Pleads Guilty to Massive Fraud, Faces Up to 12 Years in Prison

The Dallas Morning News reports that Texas businessman Christopher Faulkner, better known by his now infamous moniker “Frack Master,” has admitted to securities fraud, tax evasion and money laundering and faces up to 12 years in prison, federal officials said Tuesday.

Reporter Jess Mosier writes that Faulkner, the former CEO of Dallas-based Breitling Energy, became a star in business circles for his high-profile media appearances defending hydraulic fracturing or fracking. He used fake college degrees and skimpy business experience to convince Dallas business elite and Texas political elite that he was an oil and gas expert.

“The SEC effectively shut down Breitling Energy and related businesses after suing Faulkner and 11 others in 2016 for misusing $23.8 million of the $80 million they raised for oil and gas investments,” according to Mosier. “Besides the prison time, Faulkner must pay back the nearly $24 million made from his schemes, under the terms of his settlement.”

Read the Dallas News article.



Pipeline Companies Should Do More to Prepare for NTSB Accident Investigations

The National Transportation Safety Board is well known for its sleuthing on plane crashes. However, oil and gas executives often need better education about how the agency tackles one of its other responsibilities—investigating pipeline accidents, advise attorneys with the national law firm LeClairRyan.

The catastrophic gas explosions that destroyed dozens of homes in Massachusetts this month have called attention to the NTSB’s role in investigating such incidents, noted Mark A. Dombroff, an Alexandria-based member of LeClairRyan and co-leader of its Transportation Industry practice. “Most, but not all, in the pipeline business are aware that something like this will immediately trigger a federally mandated and led investigation,” he said. “But their counterparts in aviation tend to be far better prepared to contend with the highly specific—and high-stakes—investigative process relied upon by NTSB.”

Read the article.




Understanding Similarities and Differences in Four Oilfield Anti-Indemnity Acts

Indemnity provisions are widely used in the energy industry as a method of contractually apportioning liability between parties. These provisions are a staple in Master Service Agreements and can be unilateral or mutual, explains Zoe Vermeulen in a post on the website of Kean Miller LLP.

The author discusses oilfield anti-indemnity acts in Texas, Louisiana, New Mexico and Wyoming,.

The article also covers construction anti-indemnity acts.

“Like the Oilfield Anti-Indemnity Acts, these construction anti-indemnity acts vary widely from state to state and have many exceptions and nuances. And awareness of and familiarity with these statutes is also critical to adequately evaluating the viability of a contractual indemnity provision,” writes Vermeulen.

Read the article.





Class Action Royalty Litigation in the Shale Plays

A recent article posted on the website of Haynes and Boone analyzes nationwide trends in the filing and certification of royalty class action cases, which result in much greater exposure to producers than individual royalty owner cases. For example, in the past five years, producers have settled class actions for amounts in excess of $80 million.

“Ninety-six putative class actions filed during the period from 2001 to the present are analyzed in this article. Since Congress enacted the Class Action Fairness Act of 2005 (CAFA), most of these cases were litigated in federal court,” write David Ammons and Mike Stewart.

“These cases deal almost exclusively with alleged underpayment of natural gas royalties (oil royalty litigation rarely arose during the period analyzed).”

Read the article.



What Will the 2018 Elections in Colorado, New Mexico, Wyoming and Alaska Mean for the Energy Industry?

Oil wellsHolland & Hart will host a panel discussion titled “Shifting Tides: What Will the 2018 Elections in Colorado, New Mexico, Wyoming, and Alaska Mean for the Energy Industry?”

The event, which includes lunch, will be Friday, Oct. 12, 2018, 11 a.m.-1 p.m. in the firm’s Denver office.

Key governors’ races in the energy-producing states of Colorado, New Mexico, Wyoming, and Alaska are in full swing, the firm says on its website. The panel will discuss how these races, along with potential shifts in the make-up of state legislatures, might affect energy policy and future development in these critical states.

Moderator: Sean Parnell
Attorney | Holland & Hart LLP
Former Alaska Governor


Eric Waeckerlin
Partner | Holland & Hart LLP

Tracee Bentley
Colorado Petroleum Council Executive Director

Ryan Flynn
New Mexico Oil & Gas Association Executive Director

Susan Aldridge
Anadarko Petroleum Corporation Director, Wyoming Regulatory and External Relations

Joe Milczewski
Anadarko Petroleum Corporation Government Relations Manager

Holland & Hart LLP
555 17th Street,
Suite 3200
Denver, CO 80202

For more information contact Lauren Israel at 303.295.8201 or lmisrael@hollandhart.com.

Register for the event.



Minimum Volume Commitments in the Midstream Industry

Oil and gas pipelineMinimum volume commitment contracts (MVCs), often referred to as throughput agreements, are agreements under which a shipper or producer—a counterparty—undertakes to transport an agreed minimum volume of a commodity such as natural gas, NGL or crude oil through a third-party operator’s assets, such as pipelines or processing plants, over a specified period, explains a post on the website of Opportune.

“In the midstream industry, these contracts are typically utilized to enable the operator to recoup the costs of constructing infrastructure, such as a processing plant or pipeline lateral, for the benefit of the counterparty. Under these agreements a counterparty pays a shortfall or deficiency fee if the MVC is not met for a specified period—monthly, quarterly or annually,” the authors write.

Read the article.



EPA Proposes Affordable Clean Energy Rule to Replace Clean Power Plan

The U.S. Environmental Protection Agency’s proposed Affordable Clean Energy (ACE) rule would establish guidelines for states to develop plans to address greenhouse gas emissions from certain existing fossil-fuel-fired power plants.

A post on the Beveridge & Diamond website says ACE would replace the Obama Administration’s 2015 Clean Power Pla, which EPA has proposed to repeal on the basis that it exceeded EPA’s authority.

“In particular, the current Administration does not believe it has authority under Section 111 of the Clean Air Act to require regulated entities to take actions “outside the fenceline,” as contemplated by the CPP.  Accordingly, the ACE plan would impose only “inside the fenceline” requirements on electric generating units,” write authors Brook J. Detterman and Grant Tolley.

Read the article.



Webinar Looks at Research on Landowner Coalitions in Shale Gas Development

Marcellus Shale landowner coalitions — their form, function and impact — will be the topic of a one-hour, web-based seminar offered by Penn State Extension at 1 p.m. on Thursday, Aug. 23, 2018.

Presenting the webinar will be Grace Wildermuth, a Penn State doctoral degree student in the Department of Agricultural Economics, Sociology, and Education. She will discuss research from her thesis on landowner coalitions.

Topic will include:

  • coalition models and forms
  • benefits and detriments of membership in a coalition
  • best practices identified by members of coalitions
  • specific effects of participation in a coalition for agriculturalists
  • potential future applications of the landowner coalition model.

Register for the webinar.



Department of Energy Streamlines Small-Scale LNG Export Authorizations

The Department of Energy has announced a final rule that will expedite the approval process for small-scale exports of natural gas, reports Cadwalader.

Special counsel Brett A. Snyder writes:

The DOE explained that the new rule is intended to accelerate its processing of small-scale export applications and reduce administrative burdens for the small-scale natural gas export market.

Effective August 24, 2018, the DOE will issue an export authorization, without public notice and comment, to an applicant submitting a complete application to export natural gas, including liquefied natural gas (“LNG”), to countries with which the United States has not entered into a free trade agreement (“FTA”) that requires national treatment for trade in natural gas and with which trade is not prohibited by U.S. law or policy (i.e., non-FTA countries), if the application meets two criteria.

Read the article.