Oil and Natural Gas

Subscribe to Oil and Natural Gas via RSS

President Biden recently wrote a letter to FTC Chair Lina Khan urging the Commission to immediately investigate potential anticompetitive behavior in the oil and gas sector. The President noted that gas prices have been rising, while the costs faced by oil and gas companies themselves have decreased. Concerned that the two largest oil and gas companies in the country are set to double their net income over 2019 while the gap between the price of unfinished gasoline and the price at the pump is increasing, he called on the FTC to “bring all of the Commission’s tools to bear if you uncover any wrongdoing.”
Continue Reading Antitrust Scrutiny Heating Up in Oil and Gas Industries

On February 18, 2021, the Federal Energy Regulatory Commission (FERC or Commission) issued a renewed Notice of Inquiry (NOI)[1] seeking input on potential revisions to its current Policy Statement on the certification of new natural gas transmission facilities.[2]  The NOI supplements FERC’s 2018 NOI issued on the same topic.[3]  Citing changes following receipt of comments in its 2018 NOI proceeding (e.g., the Council on Environmental Quality’s promulgation of updated regulations under the National Environmental Policy Act of 1969 (NEPA) for implementation by all federal agencies[4] and Executive Order 14008[5]) FERC is seeking to refresh the record and provide “additional viewpoints.”
Continue Reading FERC Issues Second NOI Concerning Its Certificate Policy

The FERC today issued Order No. 871-A, seeking further comment on modifications last summer to its regulations under Natural Gas Act Sections 3 and 7 that prohibited initiating pipeline construction, pending timely filing of any rehearing request, or a rehearing order on the merits. The Commission has requested initial briefs promptly, by February 16, and reply briefs by March 3. Perhaps not coincidentally, Order No. 871 is currently pending judicial review.
Continue Reading FERC Seeks Further Comment Regarding Pipelines Initiating Construction While Rehearing is Pending

The changes brought about by evolutions in renewable energy technologies, and in some cases aggravated by the impacts of COVID-19, are likely to up-end traditional relationships between different forms of energy and the customers that use them. These changes are significantly impacting not just competitors, but their contract counter-parties, the risks they face, their credit-worthiness and their customers.
Continue Reading How will Energy Market Participants Protect Themselves from Ongoing Shifts in the Sources of Energy?

On July 18, 2019, the Federal Energy Regulatory Commission issued Order No. 860.  The order requires entities with or seeking market-based rate authority (sellers) to submit certain data related to FERC’s market power analyses, including its indicative screens and asset appendices, into a “relational database” maintained by FERC.  The order also requires the submission of information associated with long-term firm sales.  When changes occur to data previously submitted, the relational database must be updated monthly by sellers.  The database will be used to, among other things, develop asset appendices and indicative screens for FERC filings that require a market power analysis.  Finally, Order No. 860 altered the deadline for “change in status” filings.  Beginning on January 1, 2021, sellers will need to comply with the order by making a baseline submission and using the “relational database” to make future market-based applications.
Continue Reading FERC Order No. 860 Mandates New Market-Based Rate Filing and Reporting Requirements for Sellers of Electric Energy

On June 9, 2020, the Federal Energy Regulatory Commission (FERC) issued a regulation precluding construction authorization for pipelines approved pursuant to Sections 3 and 7 of the Natural Gas Act (NGA) until FERC acts on the merits of any timely-filed requests for rehearing or the time for filing a rehearing request has expired.  Parties seeking to construct new interstate pipeline facilities likely will contend FERC’s regulation is overbroad and burdensome.  They may contend that it imposes unnecessary delays on the construction of critical energy infrastructure already approved by FERC and found to be in the public interest.  The regulation precludes the construction of the entirety of the approved pipeline regardless of whether the scope of the rehearing request includes all of the facilities. The regulation is linked to concerns that landowners will be subject to eminent domain actions, yet ostensibly bars construction activity regardless of the basis of the rehearing request, for instance regardless of whether the rehearing request has anything to do with the exercise of condemnation rights.  Pipelines may contend that the regulation is inconsistent with the NGA, federal policy supporting the construction of needed energy infrastructure, and a recent executive order directing federal agencies to support the economic response to the COVID-19 outbreak.
Continue Reading FERC Issues Regulation Prohibiting Construction of Newly Approved Natural Gas Pipeline Facilities Until Resolution of all Rehearing Requests

On May 21, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) approved two orders by 3-1 votes revising its methods to estimate electric, natural gas and oil utilities’ returns on equity (“ROE”).[1]  Return on equity is one of the most contentious issues in cost-of-service proceedings before FERC, and FERC’s guidance is unlikely to alter that.  In many important ways, the guidance significantly deviated for electric utilities and pipelines, which raises a number of issues regarding whether such deviations are supported by each industry’s risks.
Continue Reading FERC Issues Revised Guidance Regarding Return on Equity Calculations

The Federal Energy Regulatory Commission in Order No. 856-A on July 18, 2019 granted in part and denied in part a request for rehearing of Order No. 856. Order No. 856 eased restrictions on current or potential interlocking officers and directors, where the circumstances would not involve substantial opportunities for conflicts of interest or self-dealing. Order No. 856 and 856-A will be helpful to individuals employed at financial institutions or at public utilities who seek to or currently hold positions across both types of businesses.  As described in detail below, the orders’ clarifications limited the instances when applicants would be required to obtain Commission approval or file notice of changes, permitted certain temporary appoints, and also eased FERC’s prior position regarding late filings.
Continue Reading FERC Order No. 856-A Clarifies Regulations Regarding Interlocking Directorates of Public Utilities and Certain Other Entities

On August 13, 2019, the Federal Energy Regulatory Commission (FERC) approved a request by Midcontinent Independent System Operator, Inc. (MISO) to modify its Tariff and pro forma Generator Interconnection Agreement (GIA) to permit shared interconnection facilities among multiple projects in cases where all parties are amenable to such an arrangement. The Tariff modifications now allow electric generators located in MISO to share interconnection facilities through consent agreements. Previously, MISO did not permit the sharing of interconnection facilities between different projects due to the administrative and practical challenges with such arrangements. However, MISO changed its position after FERC issued Order 807, which created a blanket waiver of certain regulatory requirements, including the obligation to file an Open Access Transmission Tariff (OATT), for certain entities. MISO noted that Order 807 significantly reduced the administrative complexity of many shared facilities arrangements, and led to increased interest in new interconnection arrangements as a means to speed development and/or reduce development costs. Nevertheless, generators should still be careful to meet all remaining MISO Tariff requirements for such agreements.
Continue Reading FERC Approves MISO’s Tariff Change Permitting Generators to Voluntarily Share Interconnection Facilities