Environmental and Energy Law Blog

Monday, August 12, 2019

Texas Supreme Court Increases the Rights of Oil and Gas Producers


In a move that will benefit Texas oil and gas producers, the Texas Supreme Court recently held that certain costs may be deducted when calculating royalty payments based on the amount realized from a sale when royalty interest is to be delivered into certain pipelines, tanks, or other receptacles. This decision reversed an appellate court decision that held parties may allocate post-production costs in a manner they see fit.  

The Case: Burlington Resources Oil & Gas Company, L.P. v.
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Wednesday, August 7, 2019

What Is a New Source Review Permit?


The Clean Air Act (the Act) is a federal law designed to control air pollution. The Act, which is administered by the U.S. Environmental Protection Agency (EPA), is considered one of the country’s most influential modern environmental laws, and it is often referred to as one of the most comprehensive air quality laws in the world. 

Several programs have been established in furtherance of the Act, including the New Source Review (NSR) program.
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Monday, July 22, 2019

An Overview of U.S. Environmental Law


Environmental law is a broad term that encompasses federal, state, and local statutes, rules, and regulations. However, most environmental law is created at the federal level, and the responsibility of enforcement largely falls upon federal agencies. Below is an overview of key federal environmental legislation. 

Key federal environmental legislation

Federal environmental law in the United States consists primarily of the following: 

  • Clean Air Act – The Clean Air Act regulates air quality and addresses air pollution from stationary sources. Regulated entities include refineries, power plants, petrochemical plants,  and mobile sources.

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Sunday, July 14, 2019

Who Is Responsible for the Enforcement of Environmental Law?


Environmental law is a broad term that encompasses federal, state, and local statutes, rules, and regulations. Federal, state, and local agencies have broad discretion in determining whether to take enforcement action against violators of these laws. When passing environmental laws, states and local governments are generally permitted to adopt stricter requirements than those contained in federal statutes and regulations. However, state and local laws may not conflict with federal laws. And although states and local governments have some authority to enforce environmental laws, the majority of enforcement actions are initiated by federal agencies.
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Monday, June 24, 2019

Property Rights and Oil/Gas Exploration in Texas


Oil and gas exploration in Texas are guided by two kinds of property rights: the surface estate and the mineral estate. Often, the surface and mineral estate are owned by a single person. However, this isn’t always the case, as property owners sometimes choose to sell one estate and keep the other. However, when transferring property rights, a property owner must explicitly transfer ownership of only one of the two estates. Without this explicit transfer of one estate, both estates will automatically transfer to the new owner of the property.
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Friday, June 21, 2019

About the Rule of Capture and the Correlative Rights Doctrine


In the United States, the rule of capture and the correlative rights doctrine are the two primary laws that address oil and gas extraction. The rule of capture permits a producer to extract oil or gas from beneath its land without regard for adjacent properties. In other words, it doesn’t matter if some of the extracted oil or gas originated under a piece of property not owned by the producer. Thus, the rule of capture tends to incentivize the rapid extraction of oil and gas. The correlative rights doctrine, on the other hand, attempts to cure this issue by limiting the amount of oil or gas adjacent landowners may extract.
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Monday, May 27, 2019

Immunity Under the Texas Environmental, Health, and Safety Audit Privilege Act


Under the Texas Environmental, Health, and Safety Audit Privilege Act (“the Act”), those entities who conduct voluntary health, environmental, and safety audits of regulated facilities and operations are entitled to immunity from penalties for violations that are discovered, disclosed, and corrected within a specified amount of time. Below is some additional information about immunity under the Act.  

Voluntary disclosure of violations 

In order for an entity to receive immunity, a disclosure must be voluntary and preceded by a notice of audit. A disclosure is considered voluntary if the following conditions are met:

  • The disclosure was made soon after the violation was discovered
  • The disclosure was submitted in writing 
  • The disclosure was made prior to the initiation of an independent investigation 
  • The violation was disclosed as the result of a voluntary audit
  • Efforts to correct the violation are initiated by an entity within a reasonable amount of time of the disclosure
  • The disclosing entity cooperates during the investigation of the issues identified
  • The disclosed violation hasn't caused injury or an imminent risk of injury
  • The disclosure isn't required by an enforcement decree or order 

    And when a violation is discovered during an audit that was conducted prior to an acquisition closing date, the person making the disclosure must certify the following:

  • Before the closing date, he or she wasn't responsible for compliance at the regulated entity
  • Before the closing date, he or she didn't have the largest ownership share of the seller
  • Before the closing date, he or she and the seller didn't have a common corporate parent 

 Limitations

Immunity does not apply under any of the following circumstances:

  • The disclosed violation was committed intentionally or knowingly 
  • The disclosed violation was committed recklessly
  • The disclosed violation resulted in a significant economic benefit that gave the violator an advantage over its competitors
  • An administrative law judge or court finds that the person or entity claiming immunity has continuously committed significant violations and hasn't tried to bring the facility into compliance

Texas Environmental Law Attorneys 

If you or your company have been cited for non-compliance or are facing legal action based on non-compliance, then you need an experienced


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Thursday, May 16, 2019

An Overview of CERCLA Enforcement and Penalties


The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) provides federal funds to clean up uncontrolled or abandoned hazardous waste sites, accidents, spills, and other emergency releases of pollutants and contaminants into the environment. Below is an overview of enforcement and penalties under CERCLA. 

Enforcement under CERCLA   

CERCLA provides the Environmental Protection Agency (EPA) with the authority to ensure the cleanup of the above pollutants. For example:

  • EPA can clean hazardous sites and later recover cleanup costs from responsible parties.
  • EPA can gather information, access a site, and seek penalties for non-compliance with agreements and orders.

Read more . . .


Friday, April 19, 2019

An Overview of Submissions Under the Texas Environmental, Health, and Safety Audit Privilege Act


Under the Texas Environmental, Health, and Safety Audit Privilege Act (“the Act”), those who conduct voluntary environmental or health and safety audits of regulated operations and facilities are entitled to immunity from administrative penalties for violations that are discovered, disclosed, and corrected within a certain amount of time. Under the Act, an audit that qualifies for protection is a voluntary evaluation, assessment, or review of compliance with environmental or health and safety laws or a related permit conducted by an operator or owner. Below is an overview of the submissions required under the Act. 

Submissions under the Act 

There are three types of documents a person may submit under the Act: 

  • A notice of audit letter
  • A disclosure of violations letter
  • A request for an extension 

Notice of audit letter 

An individual must submit a notice of audit letter prior to commencing an audit. A notice of audit letter must include:  

  • The name of the individual conducting the audit
  • The date and time that the audit will commence 
  • A description of the leases, properties, or facilities to be audited
     

Disclosure of violations letter 

In order to gain immunity under the Act, an individual must submit a disclosure of violations letter, which is a voluntary disclosure of violations identified as a result of the audit.


Read more . . .


Friday, April 12, 2019

What is the Comprehensive Environmental Response, Compensation, and Liability Act?


The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was passed in 1980 in response to the hazardous waste practices of the time. CERCLA provides federal funds to clean up abandoned or uncontrolled hazardous waste sites, spills, accidents, and other emergency releases of contaminants and pollutants into the environment. CERCLA is an important environmental program, as it both ensures that valuable removal actions are taken and  enforces against responsible parties. As is discussed below, CERCLA relies on a number of enforcement tools to ensure that the above pollutants and hazards are removed in a timely manner. In addition, CERCLA promotes community involvement, accountability, and long-term protectiveness.
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Thursday, March 28, 2019

The Timely Payment of Oil and Gas Royalties in Texas


In Texas, royalties for oil and gas production are due at least 120 days after the end of the month of first sale of production from a well. This timeline allows operators approximately four months after a well starts producing to complete required administrative tasks and begin paying royalties. After this, royalties are payable 60 days or 90 days after the end of the month in which subsequent production is sold. However, operators are not required to make timely royalty payments if the royalty owner’s interest is subject to a title defect or a royalty owner declines to sign a division order. Below is some additional information about the timely payment of oil and gas royalties in Texas.
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