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Winter Storm Uri left millions in Texas without electricity and water in mid-February 2021, opening up threats of mass litigation.  Texans seek to hold the state’s primary grid operator, Electric Reliability Council of Texas (ERCOT) and electricity retailers liable. Among the litigation is a $100 million suit brought by family members of an 11-year-old boy and 95-year-old man who both froze to death during the storm. Additionally, a class action suit against ERCOT alleging gross negligence has been filed in Harris County, Texas. More litigation is likely forthcoming as experts predict an avalanche of insurance claims. But should potential Texan defendants be shaking in their cowboy boots? Generally, no, as the current state of the law shows potential defendants may be protected from mass litigation.
Continue Reading Texas power outages threaten mass litigation: Should potential defendants be shaking in their cowboy boots?

Recent decisions issued by the Ohio Supreme Court have provided reminders that there are meaningful limits to the jurisdiction and powers of the Public Utilities Commission of Ohio (PUCO) and other state agencies. Those challenging the final orders and decisions of Ohio’s various state commissions and agencies often find themselves facing a steep uphill climb. In addition to demonstrating prejudicial error, such challengers face entrenched doctrines of judicial deference to agency decision-making.
Continue Reading Ohio Supreme Court wraps up 2020 by repeatedly reminding state agencies to stay in their statutory lanes

Porter Wright has provided advice and industry insight to our energy clients and to the broader community for decades. In order to accurately reflect the scope of our experience and capabilities, and to continue to provide the latest energy-related updates and information in an easily accessible way, we have expanded and relaunched our Oil & Gas Law Report blog as the Energy Law Report.
Continue Reading From the editors: New name and expanded focus

The Ohio Supreme Court has finally put to rest a long-standing debate about whether Ohio’s Marketable Title Act (MTA), Dormant Mineral Act (DMA), or both, may be applied to reunite severed mineral interests with the overlying surface estate. In a majority opinion decided Dec. 2, 2020, the court held that both acts may be independently applied to mineral estates. The court held, “The Marketable Title Act and the Dormant Mineral Act afford independent procedures, either of which may be used to effect the termination of a severed mineral interest, depending on the circumstances of the case and the time that has elapsed.” West v. Bode, 2020-Ohio-5473, ¶ 44.
Continue Reading Ohio Supreme Court holds that the Marketable Title Act and the Dormant Mineral Act both apply to severed oil and gas interests

Ohio landowners and holders of mineral interests should soon receive clarification regarding certain mineral rights. On Sept. 1, 2020, the Supreme Court of Ohio accepted Fonzi v. Brown for review, a case involving the Ohio Dormant Mineral Act (ODMA). Fonzi joins Gerrity v. Chervenak and West v. Bode, as the third major case on the court’s docket that raises questions about the ODMA and/or Marketable Title Act (MTA).
Continue Reading Supreme Court of Ohio to decide three cases regarding subsurface rights

The Ohio Department of Natural Resources – Division of Oil & Gas Resources Management (DOGRM) recently revised its rules governing spacing of horizontal oil and gas production wells. The new rules, which became effective on Oct. 10, 2019, will bring Ohio’s horizontal well spacing regulations in line with what accepted science and drilling data indicates is a more efficient and productive spacing for horizontal wells in Ohio.

Under the prior version of Ohio Administrative Code §1501:9-1-04, which applied to both conventional and horizontal wells, any oil and gas production well drilled into a pool located at least 4,000 feet in depth must be set back at least 500 feet from the boundary of the leased tract or drilling unit. That prior version of the rule also required a spacing of at least 1,000 feet between wells producing from the same pool.
Continue Reading New Ohio regulations reduce minimum spacing requirements for horizontal oil and gas wells

The Ohio Supreme Court recently settled an open question under Ohio’s Marketable Title Act (MTA), determining that a reference to the type of interest created and to whom it was granted is all that is necessary under the MTA to preserve the interest. And interestingly, despite the existence of the Dormant Mineral Act (DMA), the Supreme Court applied the MTA to an oil and gas interest.

In Blackstone v. Moore, landowners filed a lawsuit against the owners of an oil and gas royalty interest underlying the landowners’ property, seeking to extinguish the interest under the MTA (Because the appellees (Kuhn heirs) had filed an affidavit to preserve their mineral interest within sixty days of receiving the Blackstones’ notice of intent to declare the mineral interest abandoned, there was no question that they had preserved their interests under the DMA). Created in 1915, the oil and gas royalty interest arose prior to the “root of title” (the last recorded title transaction before the preceding 40 years from when marketability is being determined) and therefore was subject to extinguishment under the MTA.Continue Reading Reference to oil & gas royalty interest deemed sufficient under the Marketable Title Act

Many thanks to Kevin Scott for his assistance in preparing this post.

On June 14, 2018, Governor Kasich signed into law H.B. 430 which will go into effect in September of 2018. The bill clarifies the language covering sales and use tax exemptions for certain oil and gas industry participants. Specifically, the new law modifies the existing statute governing the sales and use tax exemption for property used directly in producing oil or gas. Following recent actions by the Ohio Department of Taxation, H.B. 430 can help to ensure predictability and stability by reaffirming the sales tax exemptions received by Ohio oil and gas operators and service providers.
Continue Reading New Ohio tax law clarifies and expands sales and use tax exemptions for the oil and gas industry

On March 5, 2018, the West Virginia Legislature passed new legislation known as the Cotenancy Modernization and Majority Protection Act, W. Va. Code § 37B-1-1 et seq. (Cotenancy Statute). This new Cotenancy Statute, which became effective June 3, 2018, is intended to facilitate oil and gas development of West Virginia properties that have numerous fractional oil and gas owners. It applies to tracts in which there are seven or more owners of the oil and gas in place, and changes West Virginia law by allowing an operator to produce oil and gas without the consent of all oil and gas owners under certain circumstances.

Background

Prior to passage of the Cotenancy Statute, West Virginia law mandated consent of 100 percent of the oil and gas owners before an operator could lawfully develop the oil and gas estate. If any oil and gas owner refused to sign a lease, regardless of how small that non-consenting owner’s fractional interest, the operator was compelled to either forego development or file a partition action under W. Va. Code § 37-4-3. Through partition, an operator could acquire the non-consenting owner’s interest at fair market value, as appraised by three special commissioners appointed by the court.
Continue Reading West Virginia joins majority view on oil and gas leasing with new cotenancy statute

The Ohio Supreme Court’s latest oil and gas decision is good news for the industry. On Jan. 3, 2018, the Court decided Alford v. Collins-McGregor Operating Co., Slip Opinion No. 2018-Ohio-8, which held that under Ohio law, “there is no implied covenant to explore further separate and apart from the implied covenant of reasonable development.” Id. at ¶25.

The facts are straight forward and did not seem to make much difference in the decision. The Plaintiff-appellant filed suit in 2015 in Washington County against Defendant, a conventional oil and gas operator who had continuously operated a conventional Gordon Sand well on Plaintiff-appellant’s 74 acre parcel since 1981.  
Continue Reading Ohio Supreme Court rejects implied covenant to explore further