As the number of solar projects continues to grow in Louisiana, a chief concern among Louisiana taxpayers is ensuring that these projects are properly decommissioning upon their abandonment. Solar development is largely in its infancy in Louisiana, with only a handful of projects having been constructed to date. However, lawmakers are acting now to ensure
TC Energy Corporation stated that it filed a notice of intent with the U.S. Department of State that it will make a claim against the U.S. under the North American Free Trade Agreement (NAFTA). The claim will be based on President Biden’s January 2021 revocation of TC Energy’s Keystone XL Pipeline permit.
Continue Reading TC Energy’s $15B Claim Against U.S. for Biden’s Revocation of Keystone XL Pipeline Permit
Last week, the Louisiana Governor’s Office hosted Louisiana Wind Week 2021 to assess Louisiana’s future in offshore wind energy development. Louisiana Wind Week followed the Bureau of Ocean Energy Management (BOEM)’s first Gulf of Mexico Intergovernmental Renewable Energy Task Force meeting, which was held on June 15.
Continue Reading Louisiana’s Future in Offshore Wind: Takeaways from Louisiana Wind Week
Devon Energy Production Company, L.P. v. Sheppard is a royalty dispute between several lessees, Devon Energy Production Co., L.P., et. al., and several lessors, Michael A. Sheppard, et. al., concerning a novel royalty term that may have a huge impact on the way oil and gas royalties are paid in the future. See 13-19-00036-CV, 2020 WL 6164467, at *12 (Tex. App.—Corpus Christi Oct. 22, 2020, pet. filed). The novel term, referred to as an “add-back” or “add-to-proceeds” provision, requires any deductions to the sale of production to be added back to the proceeds in order to determine the appropriate royalty base. The lessors argue that under this term, the deductions in the lessees’ sales contracts attributable to the buyers’ post-transfer costs must be added to the gross proceeds in order to establish a royalty base above the gross proceeds. The lessees disagree, countering that the clear intent of the provision is merely to prohibit the deduction of their own post-production costs, not the post-transfer costs of the buyers. The lessors won in the trial court; the court of appeals affirmed. Now the case is before the Texas Supreme Court, with a recently submitted amicus brief containing the argument that could turn the tides back in the lessees’ favor.
Continue Reading New Developments in Shocking Case Before the Texas Supreme Court Regarding Construction of Novel Oil & Gas Royalty Term
On June 30, 2021, the Louisiana Supreme Court issued an opinion redefining the nature of available damages and the “actual, statutorily permitted role of the jury in Act 312 remediation lawsuits.” The “LL&E II” decision finds that Act 312 charges the court, not the jury, to determine the funding needed to remediate property to government standards. If (and only if) an express contractual provision requires greater remediation than government standards, a jury may consider and award such “excess remediation” damages. State of Louisiana v. Louisiana Land and Exploration Co., 2020-00685 (La. 6/30/2021); — So. 3d — (“LL&E II”).[1]
Continue Reading Overturning 8 Years of “Palpable Error,” The Louisiana Supreme Court Limits Damages Available to Landowners in Oilfield Legacy Litigation
Perhaps the most important right granted in a solar development agreement is the right of the solar developer to use the surface of the property to evaluate, construct, and operate the solar farm. But how can the solar developer ensure that its right to use the surface of the property is not encumbered by or inferior to the rights of others? Or, more specifically, how can the solar developer ensure that a mineral estate owner will not be able to locate a well in the middle of its solar farm? This issue is at the forefront of the minds of the renewables industry and was the subject of a recent Texas Court of Appeals decision. As renewable energy projects continue to multiply, clashes between solar developers and mineral interest owners will increase as well.
Continue Reading Solar Leasing in Louisiana: The Accommodation Doctrine
On June 9, 2021, Texas Governor Greg Abbott signed House Bill 1284 (“HB 1284”), which was introduced along with its Senate companion, SB 450, during the state’s 87th legislative session. HB 1284 grants the Texas Railroad Commission (“RRC”), the governmental agency that regulates the state’s oil and gas industry, sole jurisdiction over Class VI Injection Wells and carbon capture, use, and sequestration (“CCUS”) activities in Texas.
Continue Reading New Legislation Signals Strong Support for CCUS in Texas
On Tuesday, U.S. District Judge Terry A. Doughty of the Western District of Louisiana granted Plaintiff States’ request for an injunction to block the Biden Administration’s pause on new federal oil and gas lease sales (“Lease Pause”). Louisiana v. Biden, Jr., Case No. 2:21-cv-00778-TAD-KK, 2021 WL 2154963 (W.D. La. June 15, 2021).
Continue Reading Federal Judge Grants Preliminary Injunction Halting the Biden Administration’s “Pause” on New Oil and Gas Lease Sales
On June 8, 2021, the Bureau of Ocean Energy Management issued a Request for Interest (RFI) to assess interest in possible commercial wind energy leasing in the Gulf of Mexico OCS. BOEM will consider the information received in response to the RFI to determine whether to schedule a competitive lease sale or issue a noncompetitive lease for any portion of the area descried in the RFI. The area covered by the RFI comprises the entire Central Planning Area and Western Planning Area of the Gulf of Mexico, excluding portions of those areas located in water depths greater than 1,300 meters.
Continue Reading BOEM Assessing Interest in Wind Energy Leasing in the Gulf of Mexico
Updated from May 18, 2021 post.
On May 17, 2021, the United States Supreme Court issued a decision in the climate change litigation affecting the fossil fuel industry. In a 7-1 decision (Justice Alito recused), the Court held that an appellate court must consider all grounds for removal when an appeal is taken pursuant to 28 U.S.C. § 1447(d), a provision that specifically authorizes interlocutory appeal of an order remanding a case removed pursuant to the federal officer removal statute.
Continue Reading United States Supreme Court Issues First Decision in Climate Litigation