Articles Posted in Energy, Oil & Gas Law

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Jeffrey Ware, Ph.D., was a University of Pennsylvania neuroscientist, studying the effects of radiation on biological organisms with the goal of better understanding how radiation affects astronauts while in orbit. Ware used cesium-137 irradiators to track the effects of low-level radiation on mice and rats. In 2010, Ware suffered a rare form of brain cancer, gliosarcoma. His widow, Boyer, claims gliosarcoma is associated with radiation exposure but produced no expert reports and that Ware’s cancer specifically resulted from radiation exposure that UPenn failed to properly monitor, protect against or warn of. Ware underwent chemotherapy and radiation at the University’s hospital. Boyer alleges that Ware was not given appropriate information about these treatments; that, given the advanced stage of his disease, they provided little benefit; and that a UPenn doctor enrolled Ware in a research study to investigate the effects of chemotherapy and radiation on brain cancer patients without his knowing consent. The Third Circuit affirmed the application of the Price-Anderson Act, 42 U.S.C. 2011, and its remedy-limiting provisions to Boyer's suit. The Act gives federal courts jurisdiction to resolve a broad set of claims involving liability for physical harm arising from nuclear radiation. Boyer’s case is within the Act’s reach. View "Estate of Ware v. Hospital of the University of Pennsylvania" on Justia Law

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Plaintiffs assert that they developed cancer after being exposed to excessive radiation emissions from the Nuclear Material and Equipment Company’s Apollo, Pennsylvania facility. The district court held that their common-law claims against were preempted by the Price-Anderson Nuclear Industries Indemnity Act and rejected their Price-Anderson “public liability” claims on summary judgment. The Third Circuit affirmed. Although the Act preempted common-law negligence claims, the public liability claims require Plaintiffs to prove versions of the traditional negligence elements: duty, breach, causation, and damages. With respect to duty, the court noted the restrictions on access to the facility; Plaintiffs did not establish the existence of excessive radiation outside the restricted area. The facility’s license did not establish a tort duty. Even with state-of-the-art data, it is impossible to determine with certainty that radiation is the cause of a given incidence of cancer. Plaintiffs failed to offer evidence from which a jury could find that each plaintiff was exposed to radiation from Defendants’ uranium effluent sufficiently frequently, regularly, and proximately to substantially cause their illnesses. View "McMunn v. Babcock & Wilcox Power Generation Group, Inc." on Justia Law

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SemGroup purchased oil from producers and resold it to downstream purchasers. It also traded financial options contracts for the right to buy or sell oil at a fixed price on a future date. At the end of the fiscal year preceding bankruptcy, SemGroup’s revenues were $13.2 billion. SemGroup’s operating companies purchased oil from thousands of wells in several states and from thousands of oil producers, including from Appellants, producers in Texas, Kansas, and Oklahoma. The producers took no actions to protect themselves in case 11 of SemGroup’s insolvency. The downstream purchasers did; in the case of default, they could set off the amount they owed SemGroup for oil by the amount SemGroup would owe them for the value of the outstanding futures trades. When SemGroup filed for bankruptcy, the downstream purchasers were paid in full while the oil producers were paid only in part. The producers argued that local laws gave them automatically perfected security interests or trust rights in the oil that ended up in the hands of the downstream purchasers. The Third Circuit affirmed summary judgment in favor of the downstream purchasers; parties who took precautions against insolvency do not act as insurers to those who took none. View "In re: SemCrude LP" on Justia Law

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Transco, which operates the 10,000-mile Transcontinental pipeline, extending from South Texas to New York City, sought federal approval to expand a portion of the pipeline, called the Leidy Line, which connects gas wells in Central Pennsylvania with the main pipeline. Pursuant to the Clean Water Act, the Pennsylvania and New Jersey Departments of Environmental Protection (PADEP; NJDEP) reviewed the proposal for potential water quality impacts and issued permits. Environmental groups challenged the approvals. The Third Circuit concluded that it had jurisdiction to hear the petitions and that NJDEP and PADEP did not act arbitrarily in issuing the permits. To bar review of PADEP’s actions in permitting an interstate natural gas facility pursuant to the Natural Gas Act and the Clean Water Act would frustrate the purpose of Congress’s grant of jurisdiction and render superfluous the explicit exception from federal judicial review of the Coastal Zone Management Act. The court also rejected NJDEP’s arguments that the court had no jurisdiction over the Freshwater Wetlands Individual Permits or the Water Quality Certifications, and even if it had jurisdiction over those authorizations, it could not reach issues regarding aspects of Freshwater Wetlands Individual Permits that concern transition areas and threatened and endangered species, Letters of Interpretation, or Flood Hazard Area Individual Permits. View "Dela. Riverkeeper Network v. Sec'y Pa. Dep't of Envtl. Prot." on Justia Law

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Columbia, an interstate natural gas company subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC), seeks to replace a portion of a natural gas pipeline that runs in and around York County, Pennsylvania. Because the original location of the pipeline has become heavily populated, the replacement will not track the original line but will be outside the existing right of way. To obtain easements necessary to complete construction of the replacement, in 2013, Columbia filed Complaints in Condemnation against four Landowners in federal court. The district court held that Columbia did not have the right of eminent domain required to condemn the easements, reasoning that 18 C.F.R. 157.202(b)(2)(i), was ambiguous. The Third Circuit reversed, finding that the regulation clearly anticipates replacement outside the existing right of way and contains no adjacency requirement. The district court erroneously adopted its own definition of “replace” and concluded that a “notice” of “proposed rulemaking” for “Emergency Reconstruction of Interstate Natural Gas Facilities” promulgated by FERC after 9/11 was relevant. View "Columbia Gas Transmission, LLC v. 1.01 Acres in Penn Twp" on Justia Law

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The Federal Power Act, 16 U.S.C. 791a., authorizes federal regulation of transmitting and selling electric power in interstate commerce and grants the Federal Energy Regulatory Commission (FERC) jurisdiction over transmission of electric energy in interstate commerce and sale of such energy at wholesale in interstate commerce. The “filed rate doctrine” requires that interstate power rates filed with or fixed by FERC be given binding effect by state utility commissions determining intrastate rates. The electric companies suffered $250 million in “line losses,” energy lost when electricity travels over power lines, and interest related to those costs. Their line losses had increased under a mandate by FERC relating to calculation. The companies attempted to recover those costs on their customers’ utility bills. The Pennsylvania Public Utility Commission (PUC) rejected their proposal to classify line-loss costs as a cost of transmission (as opposed to a cost of electricity generation), preventing them from passing those costs through to their customers. The companies lost in Pennsylvania state courts; the U.S. Supreme Court denied review. The companies then sought declaratory judgment and injunctive relief in federal court against the PUC. The district court held that their unsuccessful state efforts precluded relief in federal court under the doctrine of issue preclusion. The Third Circuit affirmed. View "Metro. Edison Co. v. PA Pub. Util. Co." on Justia Law

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Dissatisfied with the stock and reliability of power-generating facilities in New Jersey, the state adopted the Long Term Capacity Pilot Program Act (LCAPP), instructing New Jersey’s Board of Public Utilities to promote construction of new power-generating facilities in the state. Rather than pay for the construction of these plants directly, the Board of Public Utilities crafted a set of contracts, called Standard Offer Capacity Agreements, which assured new electric energy generators 15years of revenue from local utilities and, ultimately, New Jersey ratepayers. LCAPP guaranteed revenue to new generators by fixing the rates those generators would receive for supplying electrical capacity, that is, the ability to make energy when called upon. The district court found LCAPP invalid. The Third Circuit affirmed. With the Federal Power Act, Congress placed “the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce” under federal control, 16 U.S.C. 824(a). When New Jersey arranged for LCAPP generators to receive preferential capacity rates, the state entered into a field of regulation beyond its authority. Federal law preempts, and invalidates, LCAPP and the related Standard Offer Capacity Agreements. View "PPL EnergyPlus, LLC v. Solomon" on Justia Law

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Shamokin Filler, a coal preparation facility in Shamokin, Pennsylvania, has been regulated by the Federal Mine Safety and Health Administration (MSHA) since 1977. After a change in ownership in 2009, the new owners challenged MSHA’s jurisdiction, contending that the Occupational Safety and Health Administration (OSHA), not MSHA, should oversee it. Presumably the new owners wanted to avoid the more stringent requirements imposed by MSHA regulations and the Federal Mine Safety and Health Act of 1977, 30 U.S.C. 801. MSHA, rather than OSHA, has much stricter oversight requirements including regarding respirable coal dust standards. The Secretary of Labor and an Administrative Law Judge for the Federal Mine Safety and Health Review Commission disagreed and concluded that Shamokin was engaged in the “work of preparing the coal,” as defined in the Mine Act. Shamokin argued that its plant does not engage in the “work of preparing the coal” because it makes its 100% coal products out of already processed coal. The Third Circuit rejected the argument and denied a petition for review. Shamokin’s interpretation of the statute lacked any basis in the text of the Mine Act. View "Shamokin Filler Co. Inc v. Fed. Mine Safety & Health Review Comm'n" on Justia Law

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The Federal Energy Regulatory Commission is a federal agency that, under the Federal Power Act, regulates rates charged by public utilities for transmission and sale of energy in interstate commerce, and rules pertaining to such rates, 16 U.S.C. 824d. In 2006, FERC approved a new tariff (rules governing interstate sale of electricity and electric capacity) for the PJM market, covering 13 states and the District of Columbia, as a result of an extensively negotiated settlement between power providers, utility companies, government authorities and others. The order required that load serving entities (LSEs) in the market procure a certain amount of energy capacity for access during peak load; included a rule that offers for the sale of capacity in the markets at artificially low prices would, with some exceptions, be required to be raised to a competitive level (mitigation). In 2011, FERC altered the 2006 Order: eliminating a mitigation exemption for resources built under state mandate; eliminating a provision that guaranteed that LSEs would be able to use “self-supply” to satisfy capacity obligations; and changing factors used in determining whether an offer was subject to mitigation. Objectors argued that the changes amounted to direct regulation of power facilities in violation of the FPA, and that FERC arbitrarily eliminated the mitigation exemption for state-mandated resources. Electric utilities challenged elimination of self-supply assurances for LSEs. Others challenged new rules governing calculation of a resource’s net cost of new entry (for determining whether an offer for sale of capacity will be mitigated) and FERC’s determination that a new generation resource must clear only one capacity auction to avoid further mitigation. The Third Circuit rejected all of the challenges. View "NJ Bd. of Pub. Utils. v. Fed Energy Regulatory Comm'n" on Justia Law

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The companies supplied oil and gas to SemCrude on credit. After SemCrude petitioned for bankruptcy, the companies filed a complaint contending that they retained property and statutory lien rights in those commodities and asserted that their claims could not be discharged without affording them the opportunity to litigate their claims in an adversary proceeding. They were not given that opportunity. The court instead established global procedures that entitled the companies to file one representative proceeding for each state in which they supplied oil and gas. All interested parties had the right to brief, and present oral argument on, their claims. Regardless whether a company participated, however, the rulings from the representative action would be binding on it. After such proceedings, the court rejected the companies’ claims that that they retained property and statutory lien rights. Following confirmation of Semcrude’s reorganization plan, the companies appealed to the district court, which rejected their claims as equitably moot. The Third Circuit reversed. The record did not support SemCrude’s claims that granting the companies relief would collapse its plan of reorganization or undermine the justifiable reliance of third parties to their significant harm. View "In re: SemCrude LP" on Justia Law