Posted on March 26, 2007 by Jason Johanson

The Fifth Circuit Remands to FERC

In 2002, Jupiter Energy Corporation ("Jupiter") applied to the Federal Energy Regulatory Commission ("FERC") for a determination that two of its pipelines in the Gulf of Mexico were not for the primary purpose of transporting gas -- a purpose within the FERC's regulatory jurisdiction -- but were instead for the primary purpose of gathering gas -- a purpose beyond the FERC's regulatory jurisdiction.  Relying on a 1966 order that the pipelines in question were a transport system, the FERC determined that the pipelines were for the primary purpose of transporting gas.  Jupiter appealed, and the Fifth Circuit vacated and remanded. 407 F.3d 346 (5th Cir. 2005). 

On remand, the FERC arrived at the same conclusion, and Jupiter again appealed.  Once again, the Fifth Circuit vacated and remanded. No. 05-61173 (5th Cir. March 15, 2007).  The panel concluded that several features of the pipelines weighed in favor of the finding that their primary purpose was the gathering of gas.  Specifically, the panel held that "[t]he glaring shortfall in the Commission's order is the lack of a reasoned explanation to support its disregard of the length, diameter, operating pressure, and non-physical factor's of Jupiter's system, which all weigh in favor of a gathering function."

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Posted on March 26, 2007 by Jason Johanson

Offshore and Onshore Tracts for Sale in Louisiana

At its April 11 lease sale, the Louisiana Department of Natural Resources will offer four offshore tracts, one in the Grand Isle area and three in the Main Pass area.  The Department will also offer 17 tracts in waters that the state designates as inland.  Six tracts are in the Chandeluer Sound area, two will cover portions of the Chandeleur Sound, and nine will be offered in the Main Pass area.

For more information, visit the Department's website here.

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Posted on March 26, 2007 by Jason Johanson

Offshore Drilling Bills Introduced

United States Senators have introduced three new bills that may impact offshore drilling:

Senators Byron Dorgan, D.-N.D., and Larry Crais, R-Idaho, have introduced the Security and Fuel Efficiency Energy Act 2007, S. 875.  The legislation would allow offshore drilling in the Eastern Gulf of Mexico to as close as 45 miles off the coast of Florida.  The bill, currently before the Senate Finance Committee, would also allow an inventory off the coast of Virginia, North and South Carolina and Georgia, which could lead to more offshore drilling there as well.

Senator Mel Martinez of Florida has also introduced S. 876, which would amend the Cuban Liberty and Demoratic Solidarity Act of 1996 by denying a United States visa to any foreign agent or entity who contributes to the development of Cuba's oil exploration plan.  The bill would also impose sanctions on individuals or entities who invest more that one million dollats in the devlopment of Cuba's oil and gas resources.

Senator Herb Kohl, D.-Wis. has alos introduced the Oil Industry Merger Antitrust Enforcement Act, or S. 878, which will demand evidence from merging oil and gas entities that their transaction will not harm competition.

The text of all three bills may be found at the United States Congress's website here.

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