Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 39

Topics discussed in this week’s Report include:

  • Environmental groups criticize FERC pipeline permitting process.
  • Groups push EPA for zero discharge hydraulic fracturing in the Gulf.
  • Maryland Department of the Environment will miss deadline for regulations.
  • Pennsylvania extends drilling moratorium in state forests.
  • New Oklahoma seismologist wades into disposal well issues.
  • Researchers use satellite data to attribute Texas seismicity to disposal wells.

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Energy Enforcement Update

Recent developments:

  • CFTC Chairman Massad plans to recommend that the CFTC abandon its proposal to allow private rights of action in RTO/ISO markets.
  • FERC and City Power file joint status report in district court proceeding.
  • District court judge denies TOTAL’s request for reconsideration.
  • BP files petition for review with Fifth Circuit, and FERC grants BP’s motion for modification of payment directive at FERC.

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Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 38

Topics discussed in this week’s Report include:

  • D.C. Circuit stays construction of contested portion of Dakota Access pipeline.
  • Oklahoma regulators close 32 more disposal wells.
  • Ohio: Supreme Court upholds decision to keep anti-hydraulic fracturing measures off the ballot in November.
  • Total S.A. to acquire Chesapeake Energy Corp.’s Barnett Shale assets.

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Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 37

Topics discussed in this week’s Report include:

  • Federal agencies block construction of Dakota Access pipeline pending further agency review, despite federal court order authorizing work to proceed.
  • Federal court holds that BLM violated NEPA in allowing hydraulic fracturing on federal lands in California.
  • EPA and state regulators adjust restrictions on wastewater disposal wells in Oklahoma in response to earthquake.
  • Projections for U.S. oil production overall improve, while oil and gas production in Ohio trend in opposite directions.

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FERC files response regarding supplemental authorities in Silkman case

On August 29, FERC filed a response to Silkman’s filing of supplemental authorities (the recent decisions in the Maxim Power and City Power cases on de novo review) before the U.S. district court in Maine.  FERC’s response repeats many of the arguments it made in opposing Silkman’s request for discovery.  According to FERC, Judge Woodlock has already decided the threshold issue that was before the Maxim Power and City Power courts:  whether FERC conducted an adjudication subject to judicial review or whether a plenary trial is required.  Based on Judge Woodlock’s decision denying the motion to dismiss and transferring the case to Maine, FERC argues that it is the law of this case that FERC conducted an adjudication subject to judicial review.  According to FERC, “The Court should focus instead on the question left open by Judge Woodlock’s ruling:  how the Court will perform its review; that is, whether the Court will rule immediately after its review of the administrative record or whether its review requires supplementation of the administrative record through discovery, a hearing, or both.”  Arguing that Judge Woodlock’s prior decision is not “clearly erroneous,” FERC asserts that the decision by the Maxim Power and City Power courts to proceed in a different manner should not affect how this case proceeds.

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Maxim Power files answer to FERC complaint

On September 2, Maxim Power filed its answer to FERC’s complaint in the U.S. District Court for the District of Massachusetts. As we previously reported, Judge Mastroianni issued an order denying Maxim Power’s motion to dismiss FERC’s case on July 21. Maxim Power’s answer denies many of the allegations in FERC’s complaint. Maxim Power also asserts a number of defenses, including that FERC’s complaint fails to state a claim for which relief can be granted, Maxim Power made no false statements or material omissions, the alleged misstatements are non-actionable statements containing expressions of opinion, and lack of fair notice.

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BP files motion for modification of payment directive at FERC

On September 8, BP filed a  motion for modification of the payment directive in FERC’s natural gas market manipulation proceeding against BP.  As you may recall, FERC ordered BP to disgorge its unjust profits in the amount of $207,169 to the Low Income Home Energy Assistance Program (LIHEAP) of the state of Texas for the benefit of its energy consumers.  In its request for rehearing, BP sought clarification of the disgorgement, requesting that it be permitted to post a bond (under protest) during the pendency of the review proceedings.  FERC has not yet acted on the clarification, and the payment of the disgorgement is due by September 9.  Thus, BP contacted the Texas Department of Housing, the state agency that administers the LIHEAP program for Texas.  BP was informed that the Texas Department of Housing is only permitted to disburse amounts approved by the Texas legislature and is not set up to receive amounts directed by FERC.  BP has been provided with a list of charities that reportedly administer LIHEAP in Texas.  BP’s motion requests that FERC modify the payment directive to specify the charities to which BP should pay the disgorgement amount, and grant such other relief as may be warranted.

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FERC settles with National Energy and David Silva

On September 1, FERC issued orders approving separate settlements with National Energy and its former employee David Silva.  The settlements involve allegations that National Energy and Silva manipulated natural gas prices at several trading hubs.  National Energy agreed to pay a civil penalty of $1.15 million and disgorgement of $305,780.  Silva agreed to pay a civil penalty of $40,000 and a one-year ban from trading in FERC-jurisdictional natural gas markets.  Considering the fact that National Energy is no longer a going concern, Enforcement recommended a downward departure from its Penalty Guidelines for the penalty against National Energy.  National Energy and Silva neither admitted nor denied the allegations.

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Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 36

Topics discussed in this week’s Report include:

  • Colorado voters will not see fracking measures on the November ballot.
  • Oklahoma shuts down wastewater disposal wells following earthquake.
  • Victoria becomes first Australian state to introduce ban on hydraulic fracturing.

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TOTAL requests revised judgment and files amended complaint in district court

On August 12, TOTAL filed a motion to alter judgment and motion to file a second amended complaint in federal district court.  This case involves TOTAL’s declaratory judgment action in federal court in Texas claiming FERC lacked jurisdiction to adjudicate the manipulation claims against TOTAL.  As we previously reported, U.S. District Judge Nancy F. Atlas issued an order on July 15 dismissing TOTAL’s declaratory judgment action against FERC.  TOTAL argues that it is entitled to a declaratory judgment stating that FERC must litigate alleged market manipulation violations in federal district court because such a process is mandated by Section 24 of the Natural Gas Act, as well as the Constitution and the Administrative Procedure Act.  FERC’s response to TOTAL’s motion is due by August 29.

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