Articles Posted in Energy, Oil & Gas Law

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This case arose from competing claims to a portion of the Yuba Goldfields, a 10,000-acre valley on both sides of the Yuba River near Marysville. At issue was whether an arbitration award resolving a dispute between plaintiff Cal Sierra Development, Inc. (Cal Sierra), and Western Aggregates, Inc., served as res judicata to bar Cal Sierra’s lawsuit against Western Aggregates’ licensee George Reed, Inc., and the licensee’s parent Basic Resources, Inc. The Court of Appeal concluded yes. View "Cal Sierra Development v. George Reed, Inc." on Justia Law

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Substantively, in three somewhat interconnected claims, Joe and Yvette Hardesty (collectively, Hardesty) attacked State Mining and Geology Board (Board) findings, contending the trial court misunderstood the legal force of his 19th century federal mining patents. He asserted he had a vested right to surface mine after the passage of SMARA without the need to prove he was surface mining on SMARA’s operative date of January 1, 1976. He argued the Board and trial court misapplied the law of nonconforming uses in finding Hardesty had no vested right, and separately misapplied the law in finding that his predecessors abandoned any right to mine. These contentions turned on legal disputes about the SMARA grandfather clause and the force of federal mining patents. Procedurally, Hardesty alleged the Board’s findings did not “bridge the gap” between the raw evidence and the administrative findings. Hardesty also challenged the fairness of the administrative process itself, alleging that purported ex parte communications by the Board’s executive director, Stephen Testa, tainted the proceedings. The Court of Appeal reviewed the facts, and found they undermined Hardesty’s claims: the fact that mines were worked on the property years ago does not necessarily mean any surface or other mining existed when SMARA took effect, such that any right to surface mine was grandfathered. However, the Court agreed with the trial court’s conclusions that, on this record, neither of these procedural claims proved persuasive. Accordingly, the Court affirmed the judgment denying the mandamus petition. View "Hardesty v. State Mining & Geology Board" on Justia Law

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The trial court properly considered evidence showing the development of a gas storage market that relied exclusively on surface acres as the valuation metric. This appeal arose out of a condemnation action in which Fred Southam and Southam & Son (collectively, Southam) sought to introduce evidence of the value of their land for an underground natural gas storage project based on reservoir volume. The trial court’s in limine ruling excluded Southam’s valuation approach based on evidence all independently operated gas storage projects in California compensate landowners based on surface acres contributed to the project. The Court of Appeal concluded the trial court properly considered evidence showing the development of an independently operated gas storage market that relied exclusively on surface acres as the valuation metric. Further, the trial court did not abuse its discretion in excluding a volume-based valuation approach based on Southam’s failure to present any evidence this vaulation approach had ever been used in the market for natural gas storage leases. Southam did not establish his entitlement to cross examine an expert before that expert may give a declaration in support of a pretrial motion. The remainder of Southam’s arguments were deemed forfeited for failure to develop the argument, to cite any legal authority, or to provide any citation to the appellate record. View "Central Valley Gas Storage v. Southam" on Justia Law

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Panoche, a producer of electricity, and Pacific Gas and Electric Company (PG&E), a utility that purchases its electricity, disputed which of them should bear the costs of complying with a legislatively-mandated program to reduce greenhouse gas emissions pursuant to the Global Warming Solutions Act (Assem. Bill 32 (2005–2006 Reg. Sess.). PG&E invoked the arbitration clause in its agreement with Panoche. Panoche resisted arbitration, arguing that the controversy was not ripe for resolution because ongoing regulatory proceedings at the California Air Resources Board and the California Public Utilities Commission would at least provide guidance in the arbitration and could render the proceeding unnecessary. The arbitration panel denied Panoche’s motion, and after a hearing determined that Panoche had assumed the cost of implementing AB 32 under the agreement and understood that at the time of signing. The arbitrators also concluded that the parties “provide[ed] for recovery of GHG costs” by Panoche through a “payment mechanism” in the agreement. The trial court agreed with Panoche, ruled that the arbitration was premature, and vacated the award. The court of appeal reversed and ordered confirmation of the award. Panoche identified no procedural disadvantage it suffered in going forward with the arbitration as scheduled and failed to meet the “sufficient cause” prong under Code of Civil Procedure 1286.2(a)(5). View "Panoche Energy Ctr. v. Pac. Gas & Elec." on Justia Law

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Under Pub. Util. Code 1701(a)1, the Public Utilities Commission (PUC ) promulgated Rule 1.1, stating: Any person who . . . transacts business with the Commission . . . agrees . . . never to mislead the Commission or its staff by an artifice or false statement of fact or law. After a massive 2010 explosion of an underground gas pipeline owned and operated by Pacific Gas and Electric (PG&E), the PUC imposed reforms, including requiring that PG&E improve its recordkeeping and information technology capabilities. PG&E was directed to keep the PUC informed of any reported pipeline leaks and any discovered information regarding the safety of pipeline operations. Following discovery of a pipeline leak, PG&E also discovered that some information it had provided to the PUC concerning the internal pressure at which certain pipelines could be safely operated might not be correct. About seven months after internally verifying the information, PG&E, communicated to the PUC via a written “Errata”‖ to a previous filing. Following extensive hearings, the PUC deemed this filing both a substantive and a procedural violation and imposed civil penalties totaling $14,350,000. The court of appeal affirmed, finding that the penalties were not grossly disproportional to the gravity of PG&E‘s tardiness. View "Pac. Gas & Elec. Co. v. Pub. Util. Comm'n" on Justia Law

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This appeal stemmed from plaintiff's applications to SCE to interconnect solar generating systems to the SCE electricity grid to generate electricity for use on plaintiff's properties and to sell to SCE. At issue is the potential conflict between Public Utilities Code section 1759,2 which limits jurisdiction to review an order of the PUC to the Court of Appeal and the Supreme Court, and section 2106, which grants jurisdiction to the superior court to hear actions for damages against a public utility that violates California law. The court concluded that the trial court correctly held that the PUC had exclusive jurisdiction over plaintiff’s claims under its Supreme Court’s holding in San Diego Gas & Electric Co. v. Superior Court because adjudication of plaintiff’s claims would “‘hinder or frustrate the commission’s declared supervisory and regulatory policies’” with respect to interconnection of solar generating facilities under Rule 21, Rule 16 and the California Renewable Energy Small Tariff (CREST) and Net Energy Metering (NEM) programs. To the extent plaintiff has viable damage claims following the PUC’s adjudication of his administrative complaints currently pending before the PUC, those claims will only become ripe for filing in the trial court once the PUC reaches a final decision. The court affirmed the judgment. View "Davis v. Southern Cal. Edison" on Justia Law

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In this tax refund case, Chevron challenged the method by which the Kern County Assessor and Assessment Appeals Board valued oil and gas wells as new construction during three tax years, Rev. & Tax. Code, 5140 et seq. The trial court found that the Board used the wrong valuation method and remanded. Both parties appealed. The court concluded that Chevron has standing to maintain this action; concluded that the Board did not abuse its discretion or act contrary to law when it approved the assessor's valuation method; rejected Chevron's exemption argument; and reversed in part, affirming in part.View "Chevron USA v. County of Kern" on Justia Law

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In 2010, a PG&E natural gas pipeline exploded in San Bruno, CA, causing death, great physical injuries, and extensive property damage. Governmental entities investigated the incident and PG&E’s business practices. The Public Utilities Commission retained an independent firm, Overland, to review PG&E’s gas transmission safety-related activities from a financial and regulatory audit prospective. Plaintiffs sued, seeking redress for PG&E’s alleged misappropriation of over $100 million in authorized rates that it should have used for safety-related projects. According to the complaint, PG&E misrepresented and concealed material facts when it used money collected from ratepayers to pay shareholders and provide bonuses to its executives instead of spending the money on infrastructure and safety measures. The complaint alleged that PG&E’s negligent handling of the pipe that exploded in San Bruno was unlawful and arose from PG&E’s corporate culture that valued profits over safety and that PG&E’s actions constituted an unlawful business practice under California Business and Professions Code section 17200. The superior court dismissed without leave to amend, finding the action barred by Public Utility Code section 1759 because it would interfere with the California Public Utilities Commission’s jurisdiction.” The appeals court affirmed.View "Guerrero v. Pacific Gas & Elec. Co." on Justia Law