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On June 17, 2016, the Texas Supreme Court ruled that an oil and gas producer (“Southwest”) was not entitled to a statutory exemption from sales taxes on its purchases of casing, tubing and pumps used in the production of oil and gas (the “Equipment”).

At issue in Southwest Royalties, Inc. v. Hegar was whether the Equipment qualifies under the so-called “manufacturing exemption” found in Section 111.104(a)(2) of the Texas Tax Code,  which exempts:

tangible personal property directly used or consumed in or during the actual manufacturing, processing, or fabrication of tangible personal property for ultimate sale if the use or consumption of the property is necessary or essential to the manufacturing, processing, or fabrication operation and directly makes or causes a chemical or physical change to:

(A) the product being manufactured, processed, or fabricated for ultimate sale; or

(B) any intermediate or preliminary product that will become an ingredient or component part of the product being manufactured, processed, or fabricated for ultimate sale[.]
Continue Reading Texas Supreme Court Rules Oil and Gas Producer Not Entitled to Sales Tax “Manufacturing Exemption”

On May 4, 2016, environmental groups sued the U.S. Environmental Protection Agency (EPA), seeking to compel EPA to “fulfill long-delayed nondiscretionary duties” under the Resource Conservation and Recovery Act (RCRA) by issuing revised regulations governing oil and gas wastes.  The complaint alleges that EPA’s regulations “are outdated, contain generic provisions that do not specifically address…

Hydraulic fracturing, or “fracking,” is a hotly debated topic in many states.  In New York and Pennsylvania, anti-fracking groups have obtained a statewide ban on fracking and the allowance of local authority to regulate fracking, respectively.  Texas, however, has enacted a state law expressly preempting local authority over a number of drilling activities.  In March…

In the next few days, the Bureau of Ocean Energy Management (BOEM) will publish in the Federal Register a Proposed Rule that would result in a significant change on how the agency regulates air emissions from oil and gas operations on the Outer Continental Shelf (OCS), in the Central and Western Gulf of Mexico (GOM). …

On February 25, 2016, the EPA proposed revisions to its Risk Management Program (RMP) rule.  Click here to see the proposed rule.  The rule revisions are required by Executive Order 13650, which called for additional improvements on chemical facility safety and security.  Click here to see Executive Order 13650.  While the proposed rule does not…

The group of petitioners challenging the EPA rules imposing strict limits on carbon dioxide emissions from existing power plants filed its opening briefs on Friday, February 19.  The lawsuit, West Virginia v. EPA (D.C. Cir. No. 15-1363) is unusual because of its sheer volume.  Petitioners include thirty States, State agencies, and local government entities and…