On October 15, 2015, FERC issued a declaratory order stating that asset management agreements (AMAs) entered into by natural gas suppliers are exempt from the prohibition on buy-sell transactions (http://www.ferc.gov/whats-new/comm-meet/2015/101515/G-4.pdf).  The Commission issued the order in response to a request for declaratory order filed by Rice Energy Marketing, LLC, which asserted that the Commission’s previous orders regarding AMAs could be construed to exempt delivery AMAs from the buy-sell prohibition, but continue to apply that prohibition to supply AMAs.
Continue Reading FERC Order: Supply AMAs Are Exempt from Prohibition on Buy-Sells

The summer of 2015 saw several controversial EPA rulemaking proceedings that will affect the energy, transportation, waste management and construction sectors across the United States.  These rulemakings implement President Obama’s 2013 Climate Action Plan, which has a goal of  reducing greenhouse gas (GHG) emissions to mitigate the impacts of climate change.
Continue Reading Climate Action Plan Takes Shape

EPA has proposed to resolve an issue that has vexed the oil and gas industry for years—how to determine which operations compose a single “source” for permitting decisions.  Unfortunately, the proposed resolution introduces new ambiguities.  The proposal comes as part of President Obama’s Climate Action Plan, but in reality is the latest chapter in EPA’s storied history[1] of attempting to establish a clear policy to determine when emissions from physically separate sources should be aggregated for purposes of determining permitting obligations under the Clean Air Act.
Continue Reading EPA’s Newest Attempt at Aggregating Emission Sources in the Oil & Gas Industry

On August 18, 2015, EPA released additional components of President Obama’s Climate Action Plan.  The four separate actions are intended to reduce greenhouse gases and other emissions from the oil and natural gas sector.  The newly-released components include:

1) Additional New Source Performance Standards;

2) New Control Techniques Guidelines;

3) Proposed revisions to the regulatory definition of covered oil and gas equipment; and

4) A proposed Federal Implementation Plan for Indian Country New Source Review.

Each is discussed in turn.
Continue Reading EPA Releases Additional Elements of President Obama’s Climate Action Plan

On August 3, 2015, the United States Environmental Protection Agency (EPA) released the final version of the Existing Source Performance Standards (ESPS) component of the Obama Administration’s Clean Power Plan (CPP), setting the first-ever carbon dioxide emission reduction goals for States. Environmental Protection Agency, Carbon Pollution Emission Guidelines for Existing Stationary Sources, 40 CFR Part 60, Docket No. EPA-HQ-OAR-2013-0602, RIN 2060-AR33 (April 3, 2015). When fully implemented by 2030, the CPP is expected to reduce CO2 emissions from the power sector by 32% over 2005 levels. The final version includes significant changes from the original proposal, 79 Fed. Reg. 34829 (June 18, 2014).
Continue Reading Clean Power Plan: EPA Issues Final Carbon Reduction Rule for Existing Stationary Sources

Last week, the U. S. Supreme Court handed down an important decision on the jurisdictional reach of the Natural Gas Act (NGA).  The Court concluded that the NGA does not pre-empt a long-running group of state-law antitrust suits aimed at alleged misconduct by natural gas pipelines.

In Oneok, Inc. et al. v. Learjet, Inc. et al., No. 13-271, the Court considered claims brought as class actions and consolidated in 2003 as the Western States Wholesale Natural Gas Antitrust Litigation in federal court in Nevada.  The plaintiffs are manufacturers, hospitals, and other institutions that buy natural gas directly from interstate pipelines.  These purchasers sued more than a dozen pipelines for reporting false information to natural gas price indexes, claiming injury because contract prices, based on the price indexes, were inflated by the allegedly false reports.
Continue Reading Natural Gas Act Does Not Pre-empt State Antitrust Laws

The Federal Energy Regulatory Commission (FERC or Commission) last week released its final rule, Coordination of the Scheduling Processes of Interstate Natural Gas Pipelines and Public Utilities, 151 FERC ¶ 61,049 (2015) designated as Order No. 809, in docket RM14-2.  In Order No. 809, the Commission took action on the Notice of Proposed Rulemaking (NOPR) where it had proposed changing the start of the gas day and making scheduling and other changes to the natural gas industry.  The Commission in Order No. 809 (1) declined to adopt its NOPR proposal to move the 9 a.m. Central Clock Time (CCT) start of the gas day to 4 a.m. CCT; (2) adopted proposals submitted by the North American Energy Standards Board (NAESB) revising the interstate natural gas nomination timeline and adding an intraday nomination cycle; and (3) adopted a change in its regulations to allow contracting flexibility for natural gas customers through multi-party contracts.
Continue Reading FERC Issues Final Order on Gas Day NOPR

On March 16, 2015, the Commodity Futures Trading Commission (CFTC) announced that it had entered into an administrative settlement with ICE Futures U.S., Inc. (ICE), a subsidiary of Intercontinental Exchange, Inc., to resolve charges that ICE violated a number of data reporting requirements regarding certain energy futures products over a 20-month period. As part of the settlement, ICE agreed to pay a civil monetary penalty of $3 million and to implement various compliance-related directives. Although the CFTC routinely files and settles charges against persons and firms registered in the commodities industry, charges are rarely brought against designated contract markets.
Continue Reading CFTC Fines ICE Futures U.S. $3 Million as Part of Settlement for Recurring Data Reporting Violations Regarding Certain Energy Products

On Monday, February 16, 2015, a sharply divided Ohio Supreme Court held in a 4-3 decision that Ohio local governments do not have authority to enact certain local zoning ordinances restricting hydraulic fracturing. The Court found that an Ohio statute regulating oil and gas well production operations that gives state government “sole and exclusive authority” to regulate such operations does not allow for a municipality to impose its own permit requirements on oil and gas drilling operations.
Continue Reading Ohio Supreme Court Invalidates Local Fracking Restrictions

The Obama Administration (Administration) on January 14, 2015 unveiled new plans to regulate methane emissions from the nation’s oil and natural gas sector.  Specifically, it announced a new goal to cut methane emissions from the sector by 40 – 45 percent from 2012 levels by 2025.
Continue Reading Obama Administration Announces Plan to Cut Methane Emissions