The Energy Law Blog : Energy Lawyer & Attorney : Liskow & Lewis Law Firm : Gulf Coast, Offshore

By Anundra M. Dillon

As previously reported, the Louisiana Supreme Court held that Act 312 of 2006 is constitutional and reversed the district court’s judgment declaring Act 312 unconstitutional and unenforceable under La. Const. art. V, § 16, La. Const. art. I, § 4 and the Fifth Amendment of the U.S. Constitution. M.J. Farms, Ltd. v. Exxon Mobil Corp., 2007-2371 (La. 7/1/08); ____ So. 2d ____. However, on page 30 of the Court’s Opinion in M.J. Farms, the Court stated:

In making this determination, we hasten to add that Act 312 exempts from its application all cases in which a contractual agreement exists between the parties that contains a remediation provision that exceeds state standards. La. Rev. Stat. §§ 30:29(A) and (H). It is only when no such proviso exists, that Act 312 mandates the state’s involvement.

Exxon Mobil Corporation and the State of Louisiana filed Applications for Rehearing asking the Court to modify, reconsider or strike this paragraph of the Court’s Opinion because Act 312 applied to all claims, including claims based on a contract that may contain a remediation provision that exceeds state standards.

On September 19, 2008, the Court granted the Applications for Rehearing in part and deleted the paragraph on page 30 from its Opinion. To read the Louisiana Supreme Court’s modified Opinion in M.J. Farms click on the following link: http://www.lasc.org/news_releases/2008/2008-58.asp. For more information regarding Act 312, please contact Robert B. McNeal (rbmcneal@liskow.com) or Anundra M. Dillon (amdillon@liskow.com).

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by John Almy.

Grand Isle Shipyard Inc. v. Seacor Marine, LLC (5th Cir. 2008)

The 5th Circuit reversed a Louisiana District Court decision that held a platform worker’s injuries, sustained while being transported from platform to platform by vessel, were subject to the Louisiana Oilfield Anti-Indemnity Act through the Outer Continental Shelf Lands Act (OCSLA). In rendering its decision, the District Court relied on the 5th Circuit’s finding in Union Texas Petroleum Corp. v. PLT Engineering, Inc. that “the locations where substantial work pursuant to the contract was done were covered situses,” to determine that OCSLA applied, and thus Louisiana law applied as surrogate federal law.

In reversing, the 5th Circuit pointed to three issues. First, the District Court relied too heavily on the fact that the locations of substantial work were covered situses as that was only one of several factors that weighed in favor of finding OCSLA applicable in PLT. Second, and more importantly, the District Court failed to apply the test for the application of OCSLA outlined in Demette v. Falcon Drilling which explicitly carves out ships and vessels from the list of potential OCSLA sites. Finally, the District Court failed to note the Supreme Court’s holding in Offshore Logistics, Inc. v. Tallentire that a individual’s status as a platform worker is not particularly relevant to the OCSLA analysis. Since the worker’s injuries occurred on a vessel, and not while on or in contact with an appropriate OCSLA situs, OCSLA could not apply.

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The U.S. House of Representatives passed Speaker Pelosi’s Energy Bill, H.R. 6899, titled “Comprehensive American Energy Security and Consumer Protection Act.” Title I addresses the existing moratoria, future OCS access, exploration, production and royalty questions. Below is a synopsis of the bill.

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by:  April L. Rolen-Ogden

Currently, the talk of the town in North Louisiana is the “Haynesville Shale.” Experts describe this mineral formation “as one of the richest fields of natural gas ever discovered in this region.” Technically speaking, the Haynesville Shale is defined as “a layer of sedimentary rock more than 10,000 feet below the surface.” The Shreveport Times reports that “[a]t least 40 rigs are running now and 70 or more are to be in place by the end of next year . . .” This has been coined as the largest domestic find of natural gas in recent history.

The first Haynesville Shale EXPO, which is free to the public, is being held on November 21, 2008 at the Shreveport Convention Center. Persons and businesses interested in learning more about the Haynesville Shale and the opportunities it presents to landowners and the oil and gas exploration and production industry alike will benefit from this EXPO.

The EXPO is being presented by Petrohawk Energy, Chesapeake Energy, The Times, Devon Energy, EnCana Energy, and XTO Energy. For more information, please view the Shreveport Times article entitled First EXPO on Haynesville Shale Set for Nov. 21 at this link: http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20080916/NEWS01/80916026.

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By Jonathan Hunter:

In a highly anticipated decision, the Tenth Circuit held this week that the district court had subject matter jurisdiction over a qui tam action filed by an MMS auditor concerning royalty payments on crude oil produced from offshore federal leases. The district court had dismissed the case on the grounds that the auditor, who received relevant information from an employee of the State of Louisiana, was not the "original source" of the information on which the claim was based. The appellate court reversed, holding that "the transfer of information between a federal employee and a state government auditor who is under a duty of confidentiality is not a public disclosure and therefore does not deprive the courts of jurisdiction." The court also ruled that "Mr. Maxwell was not prevented from serving as a relator on the basis that he is a federal auditor who discovered the information underlying his suit in his official governmental role." A link to the decision is attached.

http://www.ca10.uscourts.gov/opinions/07/07-1193.pdf

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The Environmental Protection Agency announced several updates to its Audit Policy this month that promise to make the system more convenient for users and more forgiving for new owners of regulated facilities. 

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