Lawyers expect a spate of force majeure contract lawsuits after Hurricane Harvey tore through Southeast Texas and parts of Louisiana last month, paralyzing a fifth of U.S. fuel output and pushing some oil production offline, Reuters reports.

“Many chemical and refinery plants along the U.S. Gulf Coast have already restarted operations or are beginning to ramp up after damage by Harvey,” writes Bryan Sims. “Once they do, customers may insist on reviewing contractual terms with their energy industry suppliers for the product they did not receive while plants were shuttered.”

He quotes Jessica Crutcher, an attorney for Houston law firm Mayer Brown:

“Every force majeure clause is different, especially when you’re dealing with heavily negotiated contracts in the energy sector.”

Read the article.

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The Trump administration is quietly moving to allow energy exploration in the Arctic National Wildlife Refuge for the first time in more than 30 years, according to documents obtained by The Washington Post, with a draft rule that would lay the groundwork for drilling.

“Congress has sole authority to determine whether oil and gas drilling can take place within the refuge’s 19.6 million acres,” reports Juliet Eilperin for The Post. “But seismic studies represent a necessary first step, and Interior Department officials are modifying a 1980s regulation to permit them.”

Environmentalists and some of Alaska’s native tribes have fought against exploration in the ANWR for years, but state politicians and many Republicans in Washington have pressed to extract the billions of barrels of oil lying beneath the refuge’s coastal plain, Eilperin writes.

Read the Post article.

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The battle over the Clean Power Plan has intensified as Democratic state officials are publicly locking horns with Scott Pruitt, the head of the U.S. Environmental Protection Agency, over the legal advice that he has given to states that oppose the Obama-era carbon-cutting plan, reports Forbes.

Ken Silverstein explains that in March Pruitt wrote a letter in which he advised the states that they do not have to meet the deadlines set by the Clean Power Plan that aims to cut CO2 emissions by 32% by 2030, from a 2005 baseline. But 14 state attorneys general disagree, saying the regulation remains in effect unless the courts would rule otherwise.

“The country is well on its to way to achieving the desired outcome of the regulation: carbon emissions in this country have dropped from 6.13 billion metric tons in 2007 to 5.35 billion metric tons last year because natural gas is replacing coal-fired generation,” writes Silverstein.

Read the article.

Texas courts have continued to evaluate the nature and extent of liability that property owners have for the acts of independent petroleum contractors, points out Marcy Rothman in Kane Russell Coleman Logan’s Energy Law Today blog.

She explains that a new opinion from the Eastland Court of Appeals is highly relevant for owners, operators, and drillers.

The Texas Supreme Court specifically held that the plain language of the Liability for Acts of Independent Contractors statute in the Texas Civil Practice & Remedies Code protects only the property owner, not its employees.

Boiling the Eastland court’s decision to its most practical terms, when it comes to claims for negligent hiring, companies are subject to claims that they knew or should have known that the contractors were not competent, Rothman writes.

Read the article.

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The fall in oil prices has driven energy executives to focus on reducing production costs, according to Schneider Electric. However, are the benefits accrued from this price-influenced cost cutting only temporary or can they be made permanent and sustainable?

Eric Koenig of Schneider Electric will present will discuss that question during a webinar Oct. 3, 2017, at 9 a.m. CDT.

“Experience evidences the link between influence over costs and project stage. Each specific project lifecycle phase – from conception and front-end design to daily operations-incorporates specific solutions for maximizing profitability,” according to the invitation to the webcast. “Engineering and integration technologies designed to optimize existing architectures, increase production efficiency, and improve safety performance are currently available and are powerful tools for succeeding in today’s challenging marketplace. This webcast will explore how Oil & Gas companies can reinvent their control engineering processes, and leverage these tools to sustain and improve project delivery payback and operational efficiencies.”

During this session explore how to:

– Get up to 20% on CapEx and up to 25% on OpEx savings with a new power distribution approach
– Get up to 14% on CapEx and up to 9% on OpEx with an integrated process, power and safety management
– Implement virtual reality training simulators to secure higher uptime operations and to accelerate the training of Millennian new employees.
– Correct potential errors at earlier stages of the project with engineering simulation tools.

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With two new commissioners confirmed by the Senate and sworn in, FERC’s seven-month period without a quorum is over and it can get back to business, reports Covington & Burling on its Inside Energy & Environment blog.

He writes that two more nominations are now before the Senate with a hearing scheduled for Sept. 7. Them the agency should be at full strength within the next few months and ready to take on important policy issues.

“There are quite a few critical generic electricity policy initiatives already teed up and awaiting Commission action. Together, the initiatives address fundamental issues spanning a broad range of FERC’s electricity authorities,” according to Peterson.

Read the article.

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In a Maryland case, the U.S. Supreme Court rejected the state’s effort to offer incentives for new gas fired power plants, ruling that the subsidies impermissibly encroached on the Federal Energy Regulatory Commission’s authority under the Federal Power Act, writes Hugh E. Hilliard, a senior counsel with O’Melveny & Myers. But the Court left open the broader issue of whether states have the power to offer other forms of energy incentives.

“Now several cases before the courts are raising just that question, with potentially far-reaching implications for nuclear and renewable energy, although recent decisions in those cases have upheld state subsidies that are not directly tethered to sales of electric energy at wholesale, which are subject to FERC’s exclusive jurisdiction,” according to Hilliard.

He writes that the latest developments in federal courts indicate that state subsidies for renewable energy, including renewable-energy portfolio standards and mandated procurement programs, are safe from challenges, at least for now.

Read the article.

An immediate legal appeal was in the works after a federal judge upheld Illinois’ controversial zero-emissions credit program aimed at providing millions of dollars of taxpayer-funded subsidies to keep two money-losing Exelon nuclear plants from closing, reports Platts.

Nuclear generators in other states also are seeking legislative and administrative support to help plants compete against cheaper gas and renewables in a low wholesale power price environment, explains Bob Matyi.

“Chicago-based Exelon, the nation’s largest nuclear generator, won the first round of the legal battle Friday when Judge Manish Shah of the US District Court for the Northern District of Illinois in Chicago dismissed a lawsuit filed late last year by a competitive power group that includes Calpine, Dynegy, NRG Energy and the Electric Power Supply Association,” according to Matyi.

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Locke Lord partner Martin Gibson (Austin) and associate Kerstie Moran (Houston) co-authored an article examining a decision by the San Antonio Fourth Court of Appeals in Webb et al. v. Martinez in a property dispute including reservations of a mineral estate.

The article was originally published by the National Association Of Division Order Analysts.

“This decision further emphasizes the importance of properly phrasing a reservation clause, as to avoid inadvertently granting an interest in a mineral estate. The Webb Court demonstrates the way in which courts consistently interpret grantor’s intent based on the plain language of the deed,” according to the authors.

The appellate court affirmed the trial court’s take-nothing summary judgment regarding a property dispute in favor of Martinez. Webb had owned the entire surface and 75% of the mineral estate. The remaining 25% of the mineral estate was owned by a third party. Webb agreed to sell the entire property to Martinez through a contract of sale. The 1998 deed included a reservation clause that was at the heart of the litigation.

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The Department of Energy has published a request for information soliciting guidance on potential regulations that should be modified or repealed to reduce burdens and costs, reports K&L Gates.

“This is part of a government-wide initiative to overhaul the federal government’s regulatory regime, set in motion with an executive order signed by President Trump just after his inauguration. This RFI also comes after President Trump signed an executive order, ‘Promoting Energy Independence and Economic Growth,’ which seeks to review all regulatory actions that hamper the domestic production of fossil fuels and nuclear energy,” according to the article.

Authors Tim L. Peckinpaugh, David L. Wochner, Kathleen L. Nicholas and David L. Benson write that the RFI sets a July 14, 2017, deadline for public comment.

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Foley Hoag’s Energy and Cleantech practice and NECEC recently present a webinar discussion with offshore wind developers, leading public officials, investors and experts at the cutting edge of the Northeast’s emerging offshore wind market.

The recorded webinar is now available for on-demand viewing on the firm’s website.

After decades of speculation about offshore wind’s future in the United States, the industry that has long powered grids in Europe has finally arrived in the Northeast, the firm said on its website. In the last year America’s first offshore wind project — off the coast of Rhode Island — started spinning and delivering power to the grid, Massachusetts Governor Charlie Baker signed into law a bill authorizing the procurement of 1,600 megawatts of offshore wind, and New York Governor Andrew Cuomo committed to 2,400 megawatts of offshore wind off the coast of New York by 2030. Meanwhile, major utilities have announced agreements with developers to purchase energy generated from the projects planned for the eastern seaboard.

Watch the on-demand webinar.

Gray Reed & McGraw’s Energy & the Law Blog discusses Perdenal Energy LLC v. Bruington Engineering, Ltd., which asked whether a court must dismiss an engineering defect lawsuit filed without a certificate of merit with prejudice or may dismiss without prejudice.

“Texas law requires a plaintiff to file a ‘certificate of merit’ with its original petition for claims arising out of work by licensed or registered engineers,” explain authors Charles Sartain and Chance Decker. “The certificate must be from a qualified engineer and must detail the manner in which the professional services were faulty.”

They outline approaches for handling this situation, both from the standpoint of the defendant and the plaintiff.

Read the article.

Courtesy of BP Public Affairs Staff, via BOEM.gov

A recent podcast from Columbia Energy Exchange features host Bill Loveless speaking with Tommy Beaudreau, a non-resident Fellow at the Center on Global Energy Policy and partner in the Environment, Land & Resources Department of Latham & Watkins in Washington, D.C.

The podcast series is presented by Columbia University’s Center on Global Energy Policy.

In the podcast, the two discuss details of the latest executive order on offshore oil and gas drilling; what political and legal challenges the order will face; how the U.S. government have improved drilling and safety standards since the Deepwater Horizon oil spill; and next steps in the offshore review process.

Listen to the podcast.

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In an episode of Kane Russell Coleman Logan’s energy law podcast, director Tom Ciarlone discusses the nation’s first legislative fracking ban.

That action came in Maryland when the legislature passed a bill that prohibits petroleum fracking across the state, Ciarlone says. The Maryland governor signed the bill that supplants a two-year moratorium that was set to expire later this year.

The podcast also discusses a lower bar for class certification in royalty underpayment actions, as well as multiple decisions out of the Texas Supreme Court that could spawn a wave of widespread mineral title disputes.

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Charles Sartain of Gray Reed & McGraw asks the question: Should the sufficiency of reworking operations under the cessation-of-production clause of an oil and gas lease be limited to the producing well?

In his post in the firm’s Energy & the Law blog, Sartain discusses Crystal River Oil and Gas, LLC et al v. Patton, a suit to terminate an oil and gas lease due to cessation of production.

In the case, a saltwater disposal well servicing a producing became inoperable for a a period in 2011. The appellate court found that the trial court’s prohibition from considering operations on the salt water disposal well was reversible error.

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A provision of the “energy independence” executive order signed by President Trump is so broad in scope that legal experts say it could affect numerous government responsibilities far beyond those that deal directly with energy and climate change, according to a post by Climate Central.

Under the order, federal agencies must review all of their actions that have the potential to “burden” both the development and use of domestic fossil fuels and nuclear energy in the U.S., writes Bobby Magill.

“For example, it could affect the speed with which the government permits oil and gas drilling, how much information about energy development the government provides to the public, and other decisions federal employees make on a daily basis,” Magill explains. “It may also affect the willingness of the government to allow wind and solar development to go forward because more use of renewable energy could lead to less use of fossil fuels.”

Read the article.

The U.S. District Court for the District of Columbia recently dismissed plaintiffs’ complaint that the statutory requirement that the Federal Regulatory Energy Commission recover its annual operating costs directly from the entities it regulates results in perceived or actual bias against plaintiffs who contest applications for needed certificates from FERC.

Anthony B. Cavender and Amy Pierce wrote about the case in Pillsbury Winthrop Shaw Pittman LLP’s Gavel2Gavel blog.

The case is Delaware Riverkeeper Network, et al., v. FERC.

“Because of this bias, the plaintiff asked the District Court either to declare FERC’s reimbursement mechanism to be unconstitutional or declare its power of eminent domain or authority to preempt state and local laws to be unconstitutional,” the authors explain. “Holding that the plaintiffs have failed to state a claim because allegations of actual bias cannot create structural bias where the court determines there is none, and the law does not on its face create an unconstitutional funding mechanism, the District Court granted FERC’s motion to dismiss.”

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Reforms in the U.S. tax code proposed by President Donald Trump and Republican Congressional leaders could have significant implications for the energy industry in the U.S., and worldwide, according to an article published on the website of Hogan Lovells.

Authors of the article are Washington partners Jamie Wickett, John Stanton and Robert Glennon.

“Full expensing of capital expenditures and a reduction in the U.S. corporate tax rate from the current 35 percent to 20 percent or 15 percent will on balance significantly reduce the tax cost of doing business in the U.S.,” they write. “On the other hand, the loss of the deduction for net interest expense proposed in the Blueprint — will raise the cost of debt in the U.S.”

Also, “The ability for U.S.-based corporations to repatriate profits from foreign subsidiaries on a tax free basis (after paying a one-time tax on all accumulated earnings and profits of foreign subsidiaries) should significantly increase the incentive for these companies to repatriate cash and use it to make U.S. investments (or perhaps to pay down debt or pay dividends).”

Read the article.

Image by U.S. Coast Guard

Textron Systems will present a webinar demonstrating how remote sensing and geospatial mapping products can be employed to quickly respond to an evolving oil spill.

The event will be on Thursday, March 16. 2017, beginning at 1 p.m. EST.

“Remote sensing and geospatial data play a pivotal role in disaster management allowing responders to analyze the overall situation on a large scale and continually monitor events using satellite imagery and real-time ground truth,” Textron says on its website. “In the case of the Gulf Oil Spill, remote sensing played a critical role in tracking the movement of the oil slick on the ocean surface and its eventual penetration into sensitive coastal areas. This presentation will demonstrate how remote sensing and geospatial mapping products can be employed to quickly respond to an evolving crisis situation.”

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Image by Elvert Barnes

Reuters is reporting that opponents of two controversial oil pipelines face an uphill battle if they fight construction of the lines.

The report by Joseph Ax relied on experts who commented after the Trump administration issued orders to advance the Keystone XL and Dakota Access projects.

The orders signed by President Trump could revive Keystone XL, which would bring oil from Canada, and Dakota Access, a nearly completed pipeline that was planned to under a lake near a Native American reservation in North Dakota

“Nevertheless, several groups immediately said they would challenge in court any attempt to resume the projects, which have become hot-button political issues at the intersection of environmentalism, Native American tribal rights and energy needs,” writes Ax.

Read the Reuters article.

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