Justia U.S. Supreme Court Opinion Summaries

Articles Posted in Energy, Oil & Gas Law
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Atlantic sought to construct a 604-mile natural gas pipeline from West Virginia to North Carolina, crossing 16 miles of land within the George Washington National Forest. Atlantic secured a special use permit from the U.S. Forest Service, obtaining a right-of-way for a 0.1-mile segment of pipe 600 feet below a portion of the Appalachian National Scenic Trail, which also crosses the National Forest. The Fourth Circuit vacated the permit. The Supreme Court reversed. The Department of the Interior’s assignment of responsibility for the Appalachian Trail to the National Park Service did not transform the Trail land into land within the National Park System that is not eligible for a pipeline lease. The Forest Service had the authority to issue the special use permit. Under 16 U.S.C. 521, the Forest Service has jurisdiction over the National Forest. The National Trails System Act, 16 U.S.C. 244(a), applies to the Appalachian Trail; the Secretary of the Interior has delegated to the National Park System the authority to enter into “rights-of-way” agreements for the Trail. The Leasing Act enables any “appropriate agency head” to grant “[r]ights-of-way through any Federal lands . . . for pipeline purposes,” 30 U.S.C. 185(a), except lands in the National Park System. The National Park System is administered by the Secretary of the Interior, through the National Park Service, 54 U.S.C. 100501. The Forest Service “right-of-way” agreements with the National Park Service for the Appalachian Trail did not convert National Forest “Federal lands” under the Leasing Act into “lands” within the “National Park System.” A right-of-way grant only nonpossessory rights of use. Although the federal government owns all lands involved, a right-of-way between two agencies grants only an easement, not jurisdiction over the land itself. View "United States Forest Service v. Cowpasture River Preservation Association" on Justia Law

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The company wants to mine raw uranium ore from a site near Coles Hill, Virginia. Virginia law completely prohibits uranium mining. The company alleged that, under the Constitution’s Supremacy Clause, the Atomic Energy Act (AEA) preempts state uranium mining laws like Virginia’s and makes the Nuclear Regulatory Commission (NRC) the lone regulator. The district court, the Fourth Circuit, and the Supreme Court rejected the company’s argument. The AEA does not preempt Virginia’s law banning uranium mining; the law grants the NRC extensive and sometimes exclusive authority to regulate nearly every aspect of the nuclear fuel life cycle except mining, expressly stating that the NRC’s regulatory powers arise only “after [uranium’s] removal from its place of deposit in nature,” 42 U.S.C. 2092. If the federal government wants to control uranium mining on private land, it must purchase or seize the land by eminent domain and make it federal land, indicating that state authority remains untouched. Rejecting “field preemption: and “conflict preemption” arguments, the Court stated that the only thing a court can be sure of is what can be found in the law itself and the compromise that Congress actually struck in the AEA leaves mining regulation on private land to the states. View "Virginia Uranium, Inc. v. Warren" on Justia Law

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The Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over interstate wholesale electricity sales. States regulate retail sales. In states that have deregulated their energy markets, “load serving entities” (LSEs) purchase wholesale electricity from generators for delivery to retail consumers. PJM, which manages segments of the electricity grid, operates an auction to identify need for new generation and to accommodate long-term contracts. PJM predicts demand for three years and assigns a share of that demand to each participating LSE. Producers enter bids. PJM accepts bids until it purchases enough capacity to satisfy anticipated demand. All accepted sellers receive the highest accepted rate (clearing price). LSEs then must purchase, from PJM, electricity to satisfy their assigned share. FERC regulates the auction to ensure a reasonable clearing price. Concerned that the auction was not encouraging development of sufficient new in-state generation, Maryland enacted a program, selected CPV to construct a new power plant and required LSEs to enter into 20-year contracts with CPV. Under the contract, CPV sells its capacity to PJM through the auction, but—through mandated payments from LSEs—receives the state price rather than the clearing price. The district court issued a declaratory judgment holding that Maryland’s program improperly sets CPV's rate for interstate wholesale capacity sales to PJM. The Fourth Circuit and Supreme Court affirmed. Maryland’s program is preempted because it disregards the rate FERC requires under its exclusive authority over interstate wholesale sales, 16 U.S.C. 824(b)(1). FERC has approved PJM’s capacity auction as the sole rate-setting mechanism for those sales. Maryland attempts to guarantee CPV a rate distinct from the clearing price, contrary to the Federal Power Act’s division of authority; states may not seek to achieve ends, however legitimate, through regulatory means that intrude on FERC’s authority. View "Hughes v. Talen Energy Mktg., LLC" on Justia Law

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The Federal Power Act authorizes the Federal Energy Regulatory Commission (FERC) to regulate “sale of electric energy at wholesale in interstate commerce,” including wholesale electricity rates and any rule or practice “affecting” such rates, 16 U.S.C. 824(b), 824d(a), 824e(a), leaving the states to regulate retail sales. To ensure “just and reasonable” wholesale rates. FERC encourages nonprofit entities to manage regions of the nationwide grid. These entities hold auctions to set wholesale prices, matching bids from generators with orders from utilities and other wholesale buyers. Bids are accepted from lowest to highest until all requests are met. Rates rise dramatically during peak periods and the increased flow of electricity can overload the grid. Wholesalers devised demand response programs, paying consumers for commitments to reduce power use during peak periods. Offers from aggregators of multiple users or large individual consumers can be bid into the wholesale auctions. When it costs less to pay consumers to refrain from use than it does to pay producers to supply more, demand response can lower prices and increase grid reliability. FERC required wholesalers to receive demand response bids from aggregators of electricity consumers, except when the state regulatory authority bars participation. FERC further issued Order 745, requiring market operators to pay the same price for conserving energy as for producing it, so long as accepted bids actually save consumers money. The D.C. Circuit vacated the Rule as exceeding FERC’s authority. The Supreme Court reversed. FERC has authority to regulate wholesale market operators’ compensation of demand response bids. The practice directly affects wholesale rates; FERC has not regulated retail sales. Wholesale demand response is all about reducing wholesale rates as are the rules and practices that determine how those programs operate. Transactions occurring on the wholesale market unavoidably have natural consequences at the retail level. View "Fed. Energy Regulatory Comm'n v. Elec. Power Supply Ass'n" on Justia Law

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The Clean Air Act (CAA) directs the Environmental Protection Agency (EPA) to regulate emissions of hazardous air pollutants from stationary sources, such as refineries and factories, 42 U.S.C. 7412; it may regulate power plants under this program only if it concludes that “regulation is appropriate and necessary” after studying hazards to public health. EPA found power-plant regulation “appropriate” because power plant emissions pose risks to public health and the environment and because controls capable of reducing these emissions were available. It found regulation “necessary” because other CAA requirements did not eliminate those risks. EPA estimated that the cost of power plant regulation would be $9.6 billion a year, but that quantifiable benefits from the reduction in hazardous-air-pollutant emissions would be $4-$6 million a year. The D. C. Circuit upheld EPA’s refusal to consider costs. The Supreme Court reversed and remanded. EPA interpreted section 7412(n)(1)(A) unreasonably when it deemed cost irrelevant to the decision to regulate power plants. “’Appropriate and necessary’ is a capacious phrase.” It is not rational, nor “appropriate,” to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. That other CAA provisions expressly mention cost indicates that section 7412(n)(1)(A)’s broad reference to appropriateness encompasses multiple relevant factors, including cost. The possibility of considering cost at a later stage, when deciding how much to regulate power plants, does not establish its irrelevance at the earlier stage. Although the CAA makes cost irrelevant to the initial decision to regulate sources other than power plants, the point of having a separate provision for power plants was to treat power plants differently. EPA must decide how to account for cost. View "Michigan v. Envtl. Prot. Agency" on Justia Law

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Institutions that buy natural gas directly from interstate pipelines sued, claiming that the pipelines had violated state antitrust laws: that they reported false information to the natural-gas indices on which natural-gas contracts were based. The indices affected both retail and wholesale natural-gas prices. The pipelines sought summary judgment, arguing that the Natural Gas Act pre-empted state-law claims. That Act gives the Federal Energy Regulatory Commission (FERC) authority to determine whether rates charged by natural-gas companies or practices affecting such rates are unreasonable, 15 U.S.C. 717d(a). It limits FERC’s jurisdiction to the transportation of natural gas in interstate commerce, the sale in interstate commerce of natural gas for resale, and natural-gas companies engaged in such transportation or sale, leaving regulation of other portions of the industry, such as retail sales, to the states. The district court granted the motion. The Ninth Circuit reversed. Acknowledging that the pipelines’ index manipulation increased wholesale prices, it held that the state-law claims were not pre-empted because they were aimed at obtaining damages only for excessively high retail prices. The Supreme Court affirmed, emphasizing the importance of considering the target at which the state-law claims aim. Here, the claims are aimed at practices affecting retail prices, a matter “firmly on the States’ side of [the] dividing line.” State antitrust laws are not aimed at natural-gas companies in particular, but rather all businesses and states have long provided “common-law and statutory remedies against monopolies and unfair business practices.” The industries did not identify a specific FERC determination that state antitrust claims are pre-empted by the Act. View "Oneok, Inc. v. Learjet, Inc." on Justia Law

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The Clean Air Act requires permits for stationary sources, such as factories and powerplants. The Act’s “Prevention of Significant Deterioration” (PSD) provisions make it unlawful to construct or modify a “major emitting facility” in “any area to which [PSD program] applies” without a permit, 42 U.S.C. 7475(a)(1), 7479(2)(C). A “major emitting facility” is a stationary source with the potential to emit 250 tons per year of “any air pollutant” (or 100 tons per year for certain sources). Facilities seeking a PSD permit must comply with emissions limitations that reflect the “best available control technology” (BACT) for “each pollutant subject to regulation under” the Act and it is unlawful to operate any “major source,” wherever located, without a permit. A “major source” is a stationary source with the potential to emit 100 tons per year of “any air pollutant,” under Title V of the Act. In response to the Supreme Court decision, Massachusetts v. EPA, the EPA promulgated greenhouse-gas (GHG) emission standards for new vehicles, and made stationary sources subject to the PSD program and Title V, based on potential GHG emissions. Recognizing that requiring permits for all sources with GHG emissions above statutory thresholds would render the programs unmanageable, EPA purported to “tailor” the programs to accommodate GHGs by providing that sources would not become newly subject to PSD or Title V permitting on the basis of their potential to emit GHGs in amounts less than 100,000 tons per year. The D.C. Circuit dismissed some challenges to the tailoring rule for lack of jurisdiction and denied the rest. The Supreme Court affirmed in part and reversed in part, finding that the Act does not permit an interpretation requiring a source to obtain a PSD or Title V permit on the sole basis of potential GHG emissions. The Massachusetts decision held that the Act-wide definition of “air pollutant” includes GHGs, but with respect to PSD and Title V permitting provisions, EPA has employed a narrower, context-appropriate meaning. Massachusetts did not invalidate the long-standing constructions. “The Act-wide definition is not a command to regulate, but a description of the universe of substances EPA may consider regulating.” The presumption of consistent usage yields to context and distinct statutory objects call for different implementation strategies. EPA has repeatedly acknowledged that applying PSD and Title V permitting requirements to GHGs would be inconsistent with the Act’s structure and design, which concern “a relative handful of large sources capable of shouldering heavy substantive and procedural burdens.” EPA lacked authority to “tailor” the Act’s unambiguous numerical thresholds to accommodate its GHG-inclusive interpretation. EPA reasonably interpreted the Act to require sources that would need permits based on emission of conventional pollutants to comply with BACT for GHGs. BACT, which has traditionally been about end-of-stack controls, may be fundamentally unsuited to GHG regulation, but applying BACT to GHGs is not "disastrously unworkable," and need not result in a dramatic expansion of agency authority. View "Util. Air Regulatory Grp. v. Envtl. Prot. Agency" on Justia Law

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The Clean Air Act requires permits for stationary sources, such as factories and powerplants. The Act’s “Prevention of Significant Deterioration” (PSD) provisions make it unlawful to construct or modify a “major emitting facility” in “any area to which [PSD program] applies” without a permit, 42 U.S.C. 7475(a)(1), 7479(2)(C). A “major emitting facility” is a stationary source with the potential to emit 250 tons per year of “any air pollutant” (or 100 tons per year for certain sources). Facilities seeking a PSD permit must comply with emissions limitations that reflect the “best available control technology” (BACT) for “each pollutant subject to regulation under” the Act and it is unlawful to operate any “major source,” wherever located, without a permit. A “major source” is a stationary source with the potential to emit 100 tons per year of “any air pollutant,” under Title V of the Act. In response to the Supreme Court decision, Massachusetts v. EPA, the EPA promulgated greenhouse-gas (GHG) emission standards for new vehicles, and made stationary sources subject to the PSD program and Title V, based on potential GHG emissions. Recognizing that requiring permits for all sources with GHG emissions above statutory thresholds would render the programs unmanageable, EPA purported to “tailor” the programs to accommodate GHGs by providing that sources would not become newly subject to PSD or Title V permitting on the basis of their potential to emit GHGs in amounts less than 100,000 tons per year. The D.C. Circuit dismissed some challenges to the tailoring rule for lack of jurisdiction and denied the rest. The Supreme Court affirmed in part and reversed in part, finding that the Act does not permit an interpretation requiring a source to obtain a PSD or Title V permit on the sole basis of potential GHG emissions. The Massachusetts decision held that the Act-wide definition of “air pollutant” includes GHGs, but with respect to PSD and Title V permitting provisions, EPA has employed a narrower, context-appropriate meaning. Massachusetts did not invalidate the long-standing constructions. “The Act-wide definition is not a command to regulate, but a description of the universe of substances EPA may consider regulating.” The presumption of consistent usage yields to context and distinct statutory objects call for different implementation strategies. EPA has repeatedly acknowledged that applying PSD and Title V permitting requirements to GHGs would be inconsistent with the Act’s structure and design, which concern “a relative handful of large sources capable of shouldering heavy substantive and procedural burdens.” EPA lacked authority to “tailor” the Act’s unambiguous numerical thresholds to accommodate its GHG-inclusive interpretation. EPA reasonably interpreted the Act to require sources that would need permits based on emission of conventional pollutants to comply with BACT for GHGs. BACT, which has traditionally been about end-of-stack controls, may be fundamentally unsuited to GHG regulation, but applying BACT to GHGs is not "disastrously unworkable," and need not result in a dramatic expansion of agency authority. View "Util. Air Regulatory Grp. v. Envtl. Prot. Agency" on Justia Law

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This case concerned three rivers which flow through Montana and then beyond its borders. At issue was whether discrete, identifiable segments of these rivers in Montana were nonnavigable, as federal law defined that concept for purposes of determining whether the State acquired title to the riverbeds underlying those segments, when the State entered the Union in 1989. Montana contended that the rivers must be found navigable at the disputed locations. The Court held that the Montana Supreme Court's ruling that Montana owned and could charge for use of the riverbeds at issue was based on an infirm legal understanding of the Court's rules of navigability for title under the equal-footing doctrine. The Montana Supreme Court erred in its treatment of the question of river segments and portage and erred as a matter of law in relying on evidence of present-day primarily recreational use of the Madison River. Because this analysis was sufficient to require reversal, the Court declined to decide whether the State Supreme Court also erred as to the burden of proof regarding navigability. Montana's suggestion that denying the State title to the disputed riverbeds would undermine the public trust doctrine underscored its misapprehension of the equal-footing and public trust doctrines. Finally, the reliance by petitioner and its predecessors in title on the State's long failure to assert title to the riverbeds was some evidence supporting the conclusion that the river segments over those beds were nonnavigable for purposes of the equal-footing doctrine. Accordingly, the judgment was reversed. View "PPL Montana, LLC v. Montana" on Justia Law

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Respondent, widow of an employee of Pacific Operators Offshore, sought benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901 et seq., pursuant to the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1333(b), which extended LHWCA coverage to injuries "occurring as the result of operations conducted on the [OCS]" for the purpose of extracting natural resources from the shelf. The ALJ dismissed her claim, reasoning that section 1333(b) did not cover the employee's fatal injury because his accident occurred on land, not on the OCS. The Labor Department's Benefits Review Board affirmed, but the Ninth Circuit reversed. The Court concluded that the Ninth Circuit's "substantial-nexus" test was more faithful to the text of section 1333(b). The Court understood the Ninth Circuit's test to require the injured employee to establish a significant causal link between the injury that he suffered and his employer's on-OCS operations conducted for the purpose of extracting natural resources from the OCS. View "Pacific Operators Offshore, LLP v. Valladolid" on Justia Law