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.

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.

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.

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.

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.

POWER magazine has posted the first of a two-part series examining what dealmakers need to know before making any power industry mergers and acquisitions.

The authors, Jeff M. Dobbs and Robert S. Goldberg, are partners with Mayer Brown LLP in the firm’s Houston office.

The series is designed to describe the legal due diligence process, the types of agreements, and issues that are frequently encountered in the diligence review of operating electric power generation assets. It also will outline the structure of a typical acquisition agreement for these assets, and highlight typical provisions and issues that are heavily negotiated between buyers and sellers.

Read the article.

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.

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.

Holland & 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

Speakers:

COLORADO
Eric Waeckerlin
Partner | Holland & Hart LLP

Tracee Bentley
Colorado Petroleum Council Executive Director

NEW MEXICO
Ryan Flynn
New Mexico Oil & Gas Association Executive Director

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

Joe Milczewski
Anadarko Petroleum Corporation Government Relations Manager

Location:
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 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.

Utility-scale battery energy storage system transactions present unique legal issues and require special analysis of traditional contract provisions, according to Solar Industry.

Rodrigo Figueroa lists and then discusses the top five legal issues to consider when contracting for utility-scale energy storage.

Those issues include:

1. Uptime Guarantee
2. Intellectual Property
3. Security for Payment and Performance
4. Force Majeure and Changes in Law
5. Indemnity and Insurance

Read the article.

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.

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.

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.

Attorney Tom Schroedter with Hall Estill represented Oklahoma Industrial Energy Consumers (OIEC), an association of OG&E’s large power users, as an intervenor in Oklahoma Gas and Electric Co.’s application for Corporation Commission approval of a rate hike.

In a release, the firm said that Oklahoma Gas and Electric Company’s industrial customers will realize significant benefits from the largest single rate reduction ever awarded a state electric utility following the Oklahoma Corporation Commission’s approval of a settlement in mid-June.

The firm has offices in Tulsa, Oklahoma City, Denver, Northwest Arkansas and Oregon.

The firm’s release continues:

The commission’s order approved a settlement agreement which provides for a large rate reduction and a one-time refund to OG&E customers resulting from federal income tax law changes. Large industrial consumers will realize meaningful savings and avoid cost increases as a result of the rate case settlement. OIEC worked with the Oklahoma Attorney General’s office in advocating for and negotiating this significant decrease which results in fair and reasonable rates for OG&E customers.

“It is tremendously rewarding to work on this historic settlement which provides such substantial savings for industries and businesses across the state,” said Schroedter.

Beginning in July 2018, OG&E customers received a rate reduction of $64 million along with a one-time refund of $18.5 million that appeared as a credit on the July bill.

“We are fortunate to have outstanding attorneys like Tom who work diligently on behalf of our clients to represent the interests of Oklahoma’s industries,” said Mike Cooke, Managing Partner for Hall Estill. “Tom is a fabulous asset to our clients and brings a great depth of industry knowledge and unmatched enthusiasm to our team.”

Schroedter has practiced at Hall Estill for over 25 years and has built his legal career around Energy & Natural Resources and Utilities Law.

Bruce “Chip” Morris of Kane Russell Coleman Logan has posted a new podcast in the firm’s Energy Law Today blog about the top 10 mistakes employers can make—in the oilfield, and beyond—when drafting non-compete agreements.

Morris, a director in the firm’s Houston office, is the head of the firm’s Intellectual Property Group.

The 10 mistakes involve such areas as overbroad restrictions, choice of forum clauses, agreements that aren’t appropriate for all employees, and agreements that haven’t kept up with technology.

Listen to the podcast.

After 30 years of wrestling with the cumbersome six-part test for determining whether a contract to perform services related to oil and gas exploration on navigable waters is maritime, the 5th Circuit took up a case earlier this year in an effort to streamline the test and bring clarity to an area of the law mired in uncertainty, reports The Energy Law Blog of Liskow & Lewis.

Deciding that several of the factors were either redundant or unnecessary, the court carved away at Davis & Sons until it was left with a two prong test, write John Almy and William W. Pugh.

Those two prongs are:

(1) Is the contract to provide services to facilitate drilling or production of oil and gas on navigable waters? and

(2) Does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract?

Read the article.

Reuters reports that the former chief executive of Energy XXI Ltd agreed to settle civil charges that he failed to disclose to investors more than $10 million in personal loans obtained from company vendors and a candidate for the company’s board, the U.S. Securities and Exchange Commission said.

John D. Schiller Jr. didn’t admit or deny the charges, but he settled with the SEC by paying a $180,000 penalty and agreeing not to serve as an officer or director of a public company for five years, the SEC said.

The Reuters article explains: “The SEC alleged Schiller maintained an extravagant lifestyle using a leveraged margin account secured by his shares in the oil and gas producer. When oil prices tumbled in 2014 and he was faced with margin calls, Schiller accepted more than $7.5 million in personal loans from companies that did business with Energy XXI, the SEC claimed.”

Read the article.

The oil and gas industry is benefiting from a surge in start-up companies focused on digital transformation and radical change proving that the oil and gas start-up ecosystem is alive and growing.

Frost & Sullivan’s Oil & Gas Innovation Council will present a complimentary webinar titled “Start-ups Driving Innovation in Upstream Oil & Gas” on Tuesday, July 31, 2018, at 10 a.m. CDT.

Dylan Ellett, a Frost & Sullivan leading oil and gas analyst, and a panel of industry experts from start-up companies will showcase their solutions, impacts on the industry and real-world scenarios of success and hardships along the journey, from founding to investment.

• Discover start-up companies that are providing innovative solutions to industry challenges
• Hear real success stories and pain points from start-ups
• Interact with start-up companies

Register for the webinar.

Energy giant Halliburton failed to act as two Muslim workers in North Texas were regularly harassed about their religion by supervisors and co-workers, the federal government alleges in a lawsuit.

Bloomberg Law reports the Equal Employment Opportunity Commission alleges Hassan Snoubar and Mir Ali were harassed and otherwise discriminated against because of their national origin. Snoubar is from Syria, and Ali is from India. Both worked for Halliburton Energy Services Inc. as operator assistants, the EEOC says.

Reporter Patrick Dorrian  writes: “The lawsuit continues the agency’s crackdown on employer practices or other workplace behaviors that target workers who are Muslim or Sikh, or of Arab, Middle Eastern, or South Asian descent. Eliminating such discrimination is one of the federal job rights watchdog’s top enforcement priorities.”

Read the article.