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FERC, CFTC, and State Energy Law Developments
Nearly 200 comments were filed in response to FERC’s February 18, 2021 Notice of Inquiry (NOI) that sought new information and perspectives on whether it should revise its policy statement on the certification of new interstate natural gas transportation facilities (Policy Statement). As we discussed in our February 19 LawFlash, FERC sought comments on several areas, including potential adjustments to its determination of need, the exercise of eminent domain and landowner interests, FERC’s considerations of environmental impacts, and its consideration of effects on environmental justice communities. Commenters provided a wide range of perspectives, which we discuss below.
As has been reported, a recent ransomware attack has caused an interstate pipeline and fuel supplier to much of the eastern United States to shut down its operations. Although the attack did not compromise operational systems, the company opted to cease operations as a precautionary measure.
On April 19, 2021, eleven years since the Deepwater Horizon explosion, the US Government Accountability Office (GAO) released a report issued to Congress criticizing the Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) for failing to adequately monitor offshore oil and gas pipelines located on the seafloor of the Gulf of Mexico.
US Bankruptcy Judge Mary F. Walrath of the District of Delaware entered an order on April 21 in In re Nine Point Energy Holdings, Inc., Case No. 21-10570 (MFW) (Bankr. D. Del. Apr. 21, 2021), finding that Caliber Measurement Services LLC, Caliber Midstream Fresh Water Partners LLC, and Caliber North Dakota LLC (together, Caliber) violated the automatic stay by sending “reservation of rights” letters to third parties that were providing services allegedly in violation of agreements between Caliber and Nine Point Energy Holdings, Inc. and certain of its affiliates (collectively, NPE).
The Delaware River Basin Commission (DRBC) on February 25, 2021, approved a new regulation formally prohibiting high-volume hydraulic fracturing (HVHF), or fracking, in the Delaware River Basin. The final rule makes permanent a drilling moratorium imposed by the DRBC in 2010.
Is a midstream contract treated the same as other executory contracts in bankruptcy, subject to assumption and rejection pursuant to the US Bankruptcy Code? An executory contract is any contract of the debtor where both the debtor and the contract counterparty have ongoing performance obligations on the date of the bankruptcy filing. A midstream contract, if considered by the court to be an executory contract, may be assumed or rejected under 11 USC § 365.
A LawFlash prepared by our energy lawyers discusses the Federal Energy Regulatory Commission’s Notice of Inquiry regarding the certification of new interstate natural gas transportation facilities and the potential addition of environmental justice as an additional area of examination.
A LawFlash prepared by our energy team discusses likely results of the Texas power outages and blackouts during the recent winter storm, which include federal and state investigations into the outages, federal investigations into commodity and futures price spikes during the storm, force majeure inquiries, and demands for corrective actions to ensure future reliability of the grid system.
The US Department of Energy submitted a report to the president last month on “Economic and National Security Impacts under a Hydraulic Fracturing Ban.” This 80-page report analyzed the effects of a hypothetical United States ban on high-volume hydraulic fracturing technology used with any new or existing onshore wells starting in 2021 through 2025.
A natural gas trader pleaded guilty in federal district court last week to conspiring to commit commodities fraud and wire fraud in an insider trading scheme over natural gas futures. His co-conspirator had pleaded guilty last July to conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act and the Commodity Futures Trading Commission’s (CFTC) anti-manipulation rule.