Reese Marketos Energy Law

Energy Broker's Letter of Assurance Fails to Create Enforceable Rate Guarantee Against Pass-Through Regulatory Charges

An energy broker's Letter of Assurance promising to "assure the energy supply rate" for a Massachusetts supermarket location did not create an enforceable guarantee against mandatory pass-through regulatory charges that increased the all-in electricity price beyond initial estimates. The Southern District of Texas granted summary judgment to Finite Utility Consulting on counterclaims alleging breach of contract and misrepresentation, finding the LOA explicitly disclaimed any guarantee and stated the broker would only use "best efforts" to resolve rate disputes.

Supreme Court Restricts Standing to Challenge Federal Energy Facility Licenses in NRC v. Texas

The Supreme Court held that Texas and a private company lacked standing as "parties aggrieved" under the Hobbs Act to challenge the Nuclear Regulatory Commission's grant of a license for an off-site spent nuclear fuel storage facility, because neither obtained formal intervenor status in the administrative proceeding. The decision establishes that submission of comments on a draft environmental impact statement, without successful intervention under the Atomic Energy Act, does not confer party status sufficient to seek judicial review of the Commission's final licensing order.

Bankruptcy Court Strikes Former Counsel's Affidavit Supporting Adverse Party in Working Interest Dispute

The Southern District of Texas Bankruptcy Court struck an affidavit submitted by Larry Jacobs, former counsel to HB2 Origination, LLC, in support of Alpine Non-Op LLC's summary judgment motion seeking a declaratory judgment that non-operating working interests in oil and gas leases were not property of the bankruptcy estate. The court held that Jacobs breached his duty of loyalty under Texas Disciplinary Rules of Professional Conduct Rule 1.09(c) by submitting an affidavit containing information relating to his prior representation of HB2 on the same subject matter, directly adverse to his former client.

Fort Worth Court Rejects 'Proceeds Plus' Theory in Barnett Shale Wellhead Royalty Dispute

The City of Crowley challenged TotalEnergies' royalty calculations under a lease requiring payment based on "market value at the point of sale," arguing that lease provisions required including the third-party buyer's post-sale postproduction costs in the royalty base. The Fort Worth Court of Appeals affirmed summary judgment for TotalEnergies, holding that because the point of sale was the wellhead and no postproduction expenses were incurred prior to that point, the lease unambiguously fixed the wellhead as the valuation point and did not create a "proceeds plus" royalty.

Fifth Circuit Enforces Arbitration Against FLSA Claimant Through Incorporation by Reference in Staffing Agreement

The Fifth Circuit vacated a district court's denial of arbitration in an FLSA suit brought by safety consultant Shawn Michael Ford against ConocoPhillips, holding that Ford's Master Consulting Agreement with staffing firm Bedrock PC incorporated by reference a Master Agreement for Support Services between Bedrock Petroleum and ConocoPhillips containing a mandatory arbitration provision. The panel rejected Ford's argument that the MSA could not be incorporated because it was executed by Bedrock Petroleum rather than Bedrock PC, finding that the MSA's definition of "Contractor Group" included Bedrock Petroleum's affiliates such as Bedrock PC.

Fifth Circuit Applies Louisiana Oilfield Anti-Indemnity Act to Offshore Platform Service Contract, Rejecting Maritime Law Characterization

The Fifth Circuit held that a master service contract between an offshore platform owner and a labor provider was nonmaritime despite requiring vessel transportation, rendering the contract's indemnity provision unenforceable under Louisiana's Oilfield Anti-Indemnity Act. The court applied a two-part test focusing on whether vessels would play a substantial role in contract completion, finding that the contract's definition of work as 'Lease Operators' and the parties' expectations precluded maritime characterization under OCSLA.

Federal Court Upholds Texas LSIPA Against Preemption Challenge by Chinese-Owned Renewable Energy Company

A renewable energy subsidiary of a Chinese company challenged Texas' Lone Star Infrastructure Protection Act under the Supremacy Clause and Equal Protection Clause, arguing federal CFIUS authority preempted state restrictions on foreign investment in critical infrastructure. The Western District of Texas granted defendants' motion to dismiss, rejecting conflict preemption, field preemption, and dormant foreign affairs preemption theories, and finding the plaintiff lacked standing to assert Equal Protection claims.

Texas Supreme Court Clarifies TCEQ Antidegradation Review Standards for Water Discharge Permits in Tier 2 Waterways

The Texas Supreme Court affirmed TCEQ's grant of a wastewater discharge permit for a creek with high aquatic life designation and endangered salamander habitat, holding that Tier 2 antidegradation review requires holistic water-quality assessment rather than parameter-specific analysis of individual constituents. The Court rejected the environmental organization's challenge that TCEQ improperly collapsed Tier 1 and Tier 2 analysis, finding substantial evidence supported the agency's determination regarding dissolved oxygen criteria.

Northern District of Texas Rejects Force Majeure Defense in Winter Storm Uri Natural Gas Supply Dispute

Judge Brantley Starr granted partial summary judgment to HF Sinclair in a Winter Storm Uri natural gas supply dispute, holding that NextEra Energy Marketing could not invoke force majeure despite a 57% drop in Oklahoma gas supply and prices jumping to 100-400 times pre-storm levels. The court found that Section 11.8 of the parties' contract precluded the force majeure defense as long as gas was "available and trading on the open market" and "readily transported"—conditions the court determined were satisfied even at extreme prices.

Ninth Court of Appeals Affirms Specific Jurisdiction Over Nonresident in Papua New Guinea Oil Interest Dispute

The Beaumont Court of Appeals affirmed personal jurisdiction over a nonresident defendant in litigation involving allegations that he conspired with an oil company president to defraud a deceased attorney out of a 0.5% interest in Papua New Guinea exploration valued at $19 million. The court held that the defendant purposefully availed himself of the privilege of conducting activities in Texas and that the claims arose from those contacts, satisfying the two-prong test for specific jurisdiction under Texas's long-arm statute.