Power companies ask Supreme Court to strike down nuclear power subsidies

On January 7, 2019, the Electric Power Supply Association, one of the nation’s leading trade associations representing independent power producers, filed two petitions for writs of certiorari with the U.S. Supreme Court. The writs for cert arise from appeals of a Second Circuit Court of Appeals decision, which is summarized here, and a Seventh Circuit Court of Appeals decision, which is summarized here, that both upheld state subsidies for nuclear power generation facilities in New York and Illinois, respectively. The question presented by both appeals is “[w]hether the [Federal Power Act (FPA), 16 U.S.C. § 791a et seq.] preempts only state subsidies that explicitly require a wholesale generator to sell its output in FERC-approved auctions, or whether the FPA also preempts state subsidies that lack such an express requirement but that, by design, subsidize only generators that sell their entire output via such auctions, thereby achieving the same effect.”

Both petitions urged the Court to recognize the great importance of the decisions from the Second Circuit and Seventh Circuit if upheld. “The economic and policy stakes are enormous,” and the subsidies will grossly distort market outcomes. “Unless this Court intervenes, these subsidy schemes will impose huge costs and threaten serious distortions of the FERC-authorized mechanisms for setting wholesale rates at economically efficient levels and sending appropriate price signals to wholesale market participants.” To the petitioners, the decisions ratify “a fundamental transfer of regulatory authority to the States and away from the federal government and its policy of relying on market forces to set just and reasonable wholesale rates and send economically efficient signals regarding market entry and exit.”

This case will have major ramifications across the country but particularly here in Ohio, as the outcome could work to either essentially permit or effectively preempt future attempts at providing nuclear subsidies to failing generation facilities. The response date for both petitions has been set for February 7, 2019.

National, Oil & Gas Litigation

TransCanada transforming to TC Energy

Canadian pipeline company TransCanada Corp. will soon be changing their name to TC Energy, according to the Washington Post. If approved, the company says their new name will reflect their growth into the U.S. and Mexico markets. For more, read the full story

Global, National

Ohio among top states for oil and natural gas proved reserves

In newly released data by the U.S. Energy Information Administration, Ohio is now among the top five states for oil and natural gas proved reserves, according to the Dayton Business Journal. Other top states include Pennsylvania, Texas, West Virginia and Louisiana.  For more, read the full story.

National, Ohio

Natural gas production on the rise in Ohio

At the end of the third quarter, Ohio’s natural gas production was up 39% to 6.9 billion cubic feet per day, according to API SmartBrief.  Belmont, Jefferson and Monroe counties and Ascent Resources were top producers. For more, read the full story.

Ohio

Ohio EPA issues permits for potential cracker plant construction

The Ohio EPA recently issued air and waterways discharge permits to allow PTTGCA and Daelim Industrial Co. to construct a multi-billion cracker plant along the Ohio River, according to Columbus Business First. While both companies have yet to announce a final decision on the project, these newly issued permits are one of the last needed to start construction. For more, read the full story

Ohio

Sixth Circuit upholds immediate access for NEXUS pipeline construction

The Sixth Circuit recently confirmed an interstate natural gas pipeline company’s ability to seek and obtain immediate access to property, prior to a just compensation hearing. In Nexus Gas Transmission, LLC v. City of Green, No. 18-3325 (Dec. 7, 2018), the Sixth Circuit joined several other circuit courts that have followed the Sage approach, which recognizes the ability of a pipeline company, having established the substantive right to condemn under the Natural Gas Act (NGA), to obtain an injunction granting it access to property in order to construct the pipeline, prior to final condemnation. The Sixth Circuit rejected the argument raised in an amicus curiae brief that the Sage approach goes against Congressional intent (arguing that Congress had not provided for statutory “quick take” in the NGA). The Sixth Circuit also found that the District Court had not erred in finding NEXUS had established the preliminary injunction factors, including that the public interest will be served by allowing immediate access.   

National, Oil & Gas Litigation

Court distinguishes oil and gas land professionals from real estate agents/brokers

On December 19, S.B. 263 was signed into law by Governor Kasich, establishing the concept of an “oil and gas professional.” This distinction is important because it separates those involved in the purchase and sale of oil and gas land from the licensure requirements imposed on real estate agents and brokers. Despite this exemption, oil and gas land professionals are still required to fulfill newly-established registration requirements, including an annual fee and membership within a national oil and gas land professional group. This topic has been a source of debate within the court system, so the new law is a welcome resolve within Ohio’s oil and gas industry.  

Ohio

$86 million Risberg Line project approved for construction

The $86 million Risberg Line project was approved by the Federal Energy Regulatory Commission on Dec. 14, according to Star Beacon. The project will extend the natural gas pipeline by 28 miles through northwest Ashtabula County and is expected to increase job opportunities and tax revenue for the surrounding areas. For more, read the full story.

Ohio, Pennsylvania

Funding approved for new railyard facility in Hannibal

U.S. Senator Sherrod Brown announced $20 million in funding for the construction of a new railyard and pipeline facility in the town of Hannibal, Ohio on Dec. 6, according to The Daily Jeff. The rail transloading project is expected to increase the area’s energy exports and connectivity to global markets. For more, read the full story.

Ohio

Ohio Supreme Court: Oil and gas royalty reservation preserved under the Ohio Marketable Title Act

On December 13, 2018, in Blackstone v. Moore, 2018-Ohio-4959, the Ohio Supreme Court ruled that a reference that includes the type of interest created and to whom the interest was granted is sufficiently specific to preserve the interest in the record title under the plain language of the Ohio Marketable Title Act (OMTA). The Court rejected the appellant’s claim that the oil and gas royalty was extinguished because the reference did not provide the volume and page number where the interest was created or the date the interest was created.

The sole issue was whether the reference to an oil and gas interest in the deed was sufficient to preserve that interest under the Ohio Marketable Title Act. Here, the property was conveyed to the Blackstones in 1969, with the following exception: “Excepting the one-half interest in oil and gas royalty previously excepted by Nick Kuhn, their [sic] heirs and assigns in the above sixty acres.” The Court reasoned that “one-half interest,” and “Nick Kuhn and their [sic] heirs,” was free from ambiguity because it included the type of interest created and who originally reserved that interest. According to the Court, the royalty interest had been sufficiently identified by the plain language of the exception contained in the 1969 deed, and as a result, the oil and gas royalty interest had not been extinguished by the OMTA.

In her concurring opinion, Justice DeGenaro noted that the majority opinion was not to be read to affirmatively state that the OMTA applied to oil and gas interests in light of the “more specific” Ohio Dormant Mineral Act (ODMA). Thus, according to Justice DeGenaro, the Court still needs to consider the question of whether the ODMA, the OMTA or both can be used in seeking to quiet title in oil and gas interests in Ohio. That question is already being hotly litigated in the State of Ohio. Check back with ShaleOhio for updates in this area.

Ohio
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