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

By Jessica Gladney

In Broussard v. Hilcorp Energy Corp., 08-233, 2008 WL 5158887 (La. App. 3 Cir. 12/10/08) the plainiffs owned five separate and incongruous tracts of land located in three sections in Vermilion Parish, Louisiana. Mineral, surface, and subsurface leases on the various properties have been granted to seven separate entities for oil and gas operations on the property. Kern Broussard first filed suit in the Civil District Court of Orleans Parish against the various entities and their successors in interest for alleged damage and concealment of damage to the property as a result of oil and gas operations. The case was then transferred to Vermillion Parish, Louisiana pursuant to exceptions filed by the defendants for improper venue. A number of exceptions were raised by the defendants in Vermillion Parish, to include the exception of improper cumulation of actions. The trial judge ultimately granted the exceptions and dismissed the plaintiffs’ action without prejudice on May 7, 2007.
On appeal, the Third Circuit held that the actions were improperly cumulated. As recognized by the court, the properties that were allegedly contaminated were on five incongruous tracts located in three separate sections, and different parties were alleged to have contributed to the contamination on each tract. Furthermore, the proof of damages, if any, would be entirely separate for each tract. These factors contributed to the court’s ultimate conclusion that the claims do not share a community of interest and the actions were improperly joined.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Shreveport and Bossier City as well as Caddo and Bossier parishes have been working on a comprehensive set of ordinances to give local governments leverage in controlling drilling in the Haynesville Shale natural gas field. Most of this oversight now lies with the state. Attorneys have been working on the proposed drafts since November and once the proposals are in the hands of elected officials, residents will be able to have access to them. The ordinances are aimed at protecting water, limiting road drainage, and controlling noise, lighting and hours of operation at drilling sites. The Shreveport area has taken note from Fort Worth, Texas, where the local government drew up similar laws for Barnett Shale production.

For more information see, http://www.shreveporttimes.com/article/20090217/NEWS01/902170307
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The American Recovery & Reinvestment Act of 2009, signed into law yesterday by President Obama, includes several key provisions for the energy industry including $20 billion in tax incentives and $30 billion in spending for certain renewable energy plans. For more information regarding specific energy related provisions and incetives in the stimulus package, including energy related tax credits and tax-based subsidies, go to http://www.cailaw.org/iel_elert/

• Email This
• Print
• Comments
• Trackbacks
• Share Link

By Sarah Steward-Lindsey

In Flint Hill Resources, LP v. JAG Energy, Inc., No. 08-20152, ___ F.3d ___, 2009 WL 336129 (5th Cir. Feb. 12, 2009), a panel of the United State Court of Appeals for the Fifth Circuit heard an action arising from a contract to supply natural gas condensate in south Texas. Flint Hills, a crude oil refiner, agreed to purchase Mexican condensate from JAG. In 2006, Flint Hills received information that PMI/Pemex had been experiencing thefts of condensate. Fearing criminal liability if the condensate received from JAG was stolen from PMI/Pemex, Flint Hills informed JAG that they refused to accept further deliveries. Two days later, Flint Hills clarified that it was suspending payments until JAG could provide evidence that the condensate was purchased from PMI/Pemex at some downstream point. JAG identified two of its immediate suppliers and promised to forward documents showing that PMI/Pemex was the first link in its supplier chain, but never did so. Flint Hills cancelled the agreement and JAG brought a contract action alleging breach. The district court determined that Flint Hills had acted unreasonably in suspending payment and awarded JAG damages for breach of contract. Reversing the district court, the Fifth Circuit panel noted that Flint Hills could suspend payment under the terms of the agreement upon any “dispute or lack of information affecting” title. The right to suspend payment was not conditioned on the presence of an adverse claim or objective evidence of wrongdoing. In addition, the contract provided unconditionally that JAG agreed to furnish evidence of title to Flint Hills if requested. Because Flint Hills was entitled to request evidence of title and suspend payment until the lack of information was resolved to its satisfaction, the district court “improperly imposed extra-contractual requirements of commercial reasonableness and verifiable proof.” The verdict of the district court was reversed and a take nothing judgment rendered in favor of Flint Hills.

http://www.ca5.uscourts.gov/opinions%5Cpub%5C08/08-20152-CV0.wpd.pdf

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On February 10, 2009, United States Secretary of the Interior Ken Salazar detailed a four-part strategy to establish a comprehensive offshore energy plan. First, Salazar extended the public comment period on President Bush’s OCS plan by an additional 180 days. He explained the extension was necessary to “restore order to a broken process.” Second, Salazar directed the MMS, USGS and other department scientists to assemble all available information pertaining to offshore resources, both conventional and renewable, and about the potential impacts of development. The Secretary expects to be provided with a report containing this information within 45 days. The third part of Salazar’s strategy will use this report to identify any areas requiring more information and will create a plan to best gather this information. Finally, Salazar announced that in the coming months he will issue a final rulemaking on offshore renewable energy resources. The Secretary believes this rulemaking “will allow us to move from the ‘oil and gas only’ approach of the previous Administration to the comprehensive energy plan that we need.”
 

To read Secretary Salazar’s remarks, please use the following link: http://www.doi.gov/secretary/speeches/021009_speech.html
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link