Articles Posted in Energy

On July 19, the U.S. District Court for the Southern District of New York decided the case of City of New York v. BP P.L.C., et al., granting the defendants’ motion to dismiss and dismissing the City of New York’s amended complaint. The amended complaint alleged three causes of action:  (1) public nuisance; (2) private nuisance; and (3) trespass, and sought compensatory damages and an equitable order ascertaining damages and granting an injunction to abates these injuries, which would not, however, take effect unless the defendants failed to pay court-determined damages.

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On July 10, the U.S. Court of Appeals for the D.C. Circuit decided another Federal Energy Regulatory Commission (FERC) case, Delaware Riverkeeper Network and Maya Van Rossum v. FERC. The plaintiffs levelled a broad US. Constitutional Due Process Clause challenge at the statutory mandate from Congress that FERC recover its costs from the industries it regulates. The plaintiffs argued that this provision “improperly incentivizes” FERC to grant more new natural gas pipeline applications to ensure itself of sufficient future funding. This argument was dismissed by both the U.S. District Court and the Court of Appeals.

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Another important case was decided by U.S. Court of Appeals for the D.C. Circuit on July 6, American Rivers and Alabama Rivers Alliance v. FERC. The Alabama Power Company, whose application to re-license its electrical power generating facility serving Coosa River Basin in Alabama, GA, and TN was at issue, is an Intervenor in the case. In 2013, FERC granted Alabama Power a 30 year renewal license to operate this plant, consistent with some new conditions attached to the renewed license. This action was challenged before the FERC by these petitioners, but FERC denied their requests for reconsideration. They argued that FERC, in re-licensing this facility, violated the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). The Court of Appeals , noting that the ecosystem was in a “fragile condition” after decades of power plant operations and development, agreed with the plaintiffs that the actions taken by FERC and as supported by a Biological Opinion of the U.S. Fish and Wildlife Service (Service), were in violation of these statutes. FERC’s licensing decision was vacated and the matter was remanded to FERC.

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On May 15, the U.S. District Court for the Northern District of California held that the City of Oakland’s attempt to apply a new “coal ban” ordinance to a coal handling terminal was invalid. The District Court concluded that the record evidence placed before the City Council did not satisfy the ”substantial evidence” criteria contained in the development agreement entered into by the City and Oakland Bulk & Oversized Terminal (“OBOT”) governing a bulk cargo shipping terminal to be built and operated by OBOT. The case is Oakland Bulk & Oversized Terminal, LLC v. City of Oakland.

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Section 40416 of the Bipartisan Budget Act of 2018 temporarily reinstates the Oil Spill Liability Tax that expired on December 31, 2017 for the period beginning on March 1, 2018 through December 31, 2018. Section 4611 of the Internal Revenue Code has, for many years, imposed a tax of $0.09 cents per barrel on crude oil received at a refinery, and on petroleum products entered into the U.S. for consumption, use, or warehousing.

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