Energy & Environmental Law Blog

FERC Technical Conferences

Vorys — Thu, 11 Mar 2010 09:31:05 -0500

The Federal Energy Regulatory Commission (FERC) has issued several notices regarding upcoming technical conferences: for Electronic Tariff Filings, see here; for Guidance on the Preparation of Market-Based Rate filings, see here (with webcast available); and for FERC Form 552 potential changes, see here.

[Update: If you are interested in the technical conference on FERC Form 552, it will now be webcast. See here for the details. (Moved up.)]

Earthquakes

Vorys — Thu, 11 Mar 2010 08:19:59 -0500

A new study released by the University of Texas and Southern Methodist University finds a correlation between a series of minor earthquakes in north Texas and the operations of a disposal well on Dallas-Fort Worth International Airport property, according to this article in the Houston Chronicle. The take away at the end of the article: "But he [i.e., an SMU geophysicist who worked on the study] said the study raises more questions, since no quakes have been reported around the 200 other disposal wells in seven north Texas counties."

Just remember: Correlation does not imply causation.

EQT

Vorys — Thu, 11 Mar 2010 08:09:45 -0500

The WSJ is reporting that EQT intends to sell at least 12.5 million shares to fund production operations at its Marcellus Shale and Huron-Berea properties. It also plans to raise its capital expenditures for the year by 41%, to $1.2 billion.

(Note: Subscription required.)

Solar to Increase Utility Costs in CA?

Vorys — Thu, 11 Mar 2010 08:03:02 -0500

The NYT is reporting on a plan by the Los Angeles Department of Water and Power to increase electric utility rates to cover a $6 million a week budgetary shortfall and subsidize renewable energy sources, including the use of solar panels by Los Angeles' residents to contribute to the power grid. While noting that solar energy should be a thriving local industry, the article further observes "that has never been the case, and experts cite cost as the main reason."

WV Reporting Legislation Moves Forward

Vorys — Tue, 09 Mar 2010 06:54:17 -0500

The Charleston Daily Mail is reporting that legislation to require reporting on source water and disposal plans related to hydraulic fracturing, as well as the additives used in the frac fluids, has cleared the Senate Natural Resources Committee. Next stop: the Senate Energy, Industry and Mining Committee.

Mexico's Oil Production

Vorys — Tue, 09 Mar 2010 06:49:54 -0500

The future of oil production in Mexico looks bleak, according to this article in the NYT. The U.S. link: "'As you lose Mexican oil, you lose a critical supply,' said Jeremy M. Martin, director of the energy program at the Institute of the Americas at the University of California, San Diego. 'It’s not just about energy security but national security, because our neighbor’s economic and political well-being is largely linked to its capacity to produce and export oil.'”

Wind Power's Challenges

Vorys — Tue, 09 Mar 2010 06:42:07 -0500

The NYT has an article on the challenges for expanding U.S. wind power generation, including a push for American jobs, rather than sending jobs to China; and low prices for competitive fuels such as natural gas.

Laser Marcellus

Vorys — Mon, 08 Mar 2010 19:12:51 -0500

We reported previously on the petition filed by Laser Marcellus Gathering Company, LLC, for a declaratory order that pipeline facilities it intends to construct from Pennsylvania into New York are functionally gathering and therefore exempt from Federal Energy Regulatory Commission jurisdiction under Section 1(b) of the Natural Gas Act. The Commission recently granted that petition, noting that the fact that the facilities crossed the Pennsylvania-New York border did not affect the exemption:

The history of Commission and court interpretation of Section 1(b), … makes clear that there is a distinction between gathering and transportation, such that the two functions are mutually exclusive. Consequently, otherwise non-jurisdictional production or gathering does not become jurisdictional on the basis that the facilities employed therefor cross a state line.

For a copy of the Commission's decision, see here (search Docket No. CP10-35).

Sage Grouse

Vorys — Mon, 08 Mar 2010 19:01:44 -0500

The Department of the Interior has found that the greater sage-grouse warrants protection under the Endangered Species Act (ESA), but that its listing is precluded by the need to address higher priority species first. See here. As a consequence, it will be placed on a list of candidates for future action and not receive statutory protection under the ESA.

For commentary, see this NYT article.

EPA Effluent Guidelines

Vorys — Mon, 08 Mar 2010 07:53:44 -0500

On December 28, 2009, U.S. EPA issued a Notice of Availability of Preliminary 2010 Effluent Guidelines Program Plan (74 Fed. Reg. 68599) (see here) and asked for comments on both its preliminary 2010 Plan and on its 2009 review of existing effluent guidelines and pretreatment standards, including comments on industrial categories not currently regulated by effluent guidelines and pretreatment standards. See Docket No. EPA-821-R-09-006 at www.regulations.gov.

Comments were submitted by both industry and environmental groups on the appropriateness of effluent guidelines for the oil and gas industry. Earthjustice, for example, submitted comments urging U.S. EPA to expand its study of CBM operations "to include all techniques that may result in contamination of surface water or groundwater, including hydraulic fracturing in all formations." See here. The American Petroleum Institute filed comments, on the other hand, noting that CBM operations should not be subject to national effluent limitations guidelines and objecting to an expansion of U.S. EPA's study of CBM extraction to oil and gas operations more generally.

Eagle Resources Targets Illinois Prospects

Vorys — Mon, 08 Mar 2010 06:57:21 -0500

The Courier Press is reporting that Eagle Resources is targeting the New Albany Shale Group in southeastern Illinois. Its current plans: To drill three core sample wells around the first quarter of 2011, followed, hopefully, with drilling for production. To success!

U.S. Supreme Court PMPA Decision

Vorys — Sun, 07 Mar 2010 19:42:22 -0500

The U.S. Supreme Court recently held in Mac's Shell Service, Inc. v. Shell Oil Products Co., LLC, Docket No. 08-240 (Mar. 2, 2010), that a franchisee cannot recover for constructive termination under the Petroleum Marketing Practices Act (PMPA) if the franchisor's wrongful conduct failed to compel the franchisee to abandon the franchise. See here.

Negotiated Rates (FERC)

Vorys — Sun, 07 Mar 2010 19:23:39 -0500

The U.S. Court of Appeals for the District of Columbia Circuit recently rejected a shipper's attempt to require FERC approval for a pipeline's rate changes under a negotiated contract. See Iberdrola Renewables, Inc. v. Federal Energy Regulatory Commission (Docket No. 08-1195) (Feb. 26, 2010) (see here - opinions). The court found that:

The contract’s plain language settles this matter. Even if we were to consider this extrinsic evidence, it is of no help to Iberdrola. Both parties were aware that FERC had instructed Alliance to remove that language [i.e., language making rate changes subject to FERC review] from its tariff and to include it in the Transportation Agreement if the parties wanted FERC approval for any negotiated rate changes. They were, therefore, on notice that FERC would only review rate changes if the parties included such a provision in their contract. Their knowledge of how FERC would read the contract is the most probative piece of extrinsic evidence of the parties’ intent, and it cuts strongly against Iberdrola.

Because the negotiated contract did not include an express role for FERC, the court followed "the well-established rule that freely negotiated rates are presumed just and reasonable."

Colorado Conversion

Vorys — Sun, 07 Mar 2010 19:02:10 -0500

The Daily Sentinel has an article on potential Colorado environmental legislation that would convert several coal-fired power plants to natural gas (900 megawatts). From the article, it looks like everyone wins.

Sen. Rockefeller Introduces GHG Legislation

Vorys — Fri, 05 Mar 2010 15:42:16 -0500

Senator Rockefeller (D-WV) has introduced legislation to delay action by U.S. EPA on greenhouse gas regulation for stationary sources for a period of two years, according to this press release from the Senator's office. "The legislation directs that for two years after enactment the EPA can take no regulatory action and that no stationary source shall be subject to any requirement to obtain a permit or meet a New Source Performance Standard under the Clean Air Act with respect to carbon dioxide or methane, except for the widely-supported motor vehicle emission standards."

The press release provides a link to the proposed legislation.

Energy Security

Vorys — Fri, 05 Mar 2010 14:57:04 -0500

The NYT is reporting on steps being taken by the European Union (EU) to strengthen its access to reliable natural gas resources, including pledging nearly $300 million to fund the Nabucco project - a pipeline designed to bring gas in from the Caspian Sea region and bypass Russian supplies.

Mobile Methane Detectors

Vorys — Fri, 05 Mar 2010 14:49:51 -0500

The Dallas Morning News is reporting on claims made by researchers that mobile methane detectors have found plumes near natural gas facilities located in Barnett Shale counties. Looks like they may be centered around compressor stations.

EIA Storage Report

Vorys — Fri, 05 Mar 2010 14:44:35 -0500

The Energy Information Administration (EIA) has reported a 116 Bcf decline in storage from the previous week. Graphically:

That leaves working gas in storage at 1,737 Bcf, only 21 Bcf above the 5-year average and well within the 5-year range (as illustrated above).

Wave Power

Vorys — Wed, 03 Mar 2010 08:40:40 -0500

Several utilities and states are looking at harnessing the hydrokinetic energy of ocean waves, according to this article in the NYT. Marine renewables? Very interesting.

Bush Tougher on Polluters than Obama?

Vorys — Wed, 03 Mar 2010 08:32:27 -0500

We couldn't resist the title. The WSJ is reporting that U.S. EPA under the Obama administration has forced polluters to pay in fiscal 2009 less than in the previous year: "In fiscal 2009, the EPA's enforcement office required polluters to spend more than $5 billion on cleanup and emission controls—down from $11.8 billion the previous year, according to a report recently published by the agency."

That won't last, will it?

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