Oil, Gas, and Mineral Law Commons^™

Owning Geothermal Energy, Gabriel Eckstein

Michigan Journal of Environmental & Administrative Law

Geothermal energy holds vast potential for decarbonizing the U.S. energy system, yet the sector remains significantly underdeveloped, supplying only 0.4% of the nation's electricity. A principal barrier to growth is the fragmented and ambiguous legal landscape currently governing ownership of geothermal resources: thirty-three states lack any clear statutory or common-law framework identifying who owns subsurface thermal energy. This Article examines the physical characteristics of geothermal energy, recent developments in the U.S. geothermal sector, and the principal doctrinal approaches that might govern ownership of subsurface heat, including the ad coelum doctrine, common-pool and open-access frameworks, the rule of capture, and public …

Solving The Stranded Asset Problem Of Retiring Coal Plants: An Evaluation Of Regulatory Approaches, Matthew Appel

Michigan Journal of Environmental & Administrative Law

Meeting the Biden administration's goal of cutting greenhouse gases by at least 50 percent from 2005 levels by 2030 will necessarily require transitioning the U.S. energy system away from carbon-intensive fossil fuels like coal. However, coal plants that are retiring early in states with regulated electricity markets usually still have undepreciated book value that has not yet been recovered from ratepayers. If not handled correctly, these "stranded assets" could have financial consequences for utility companies and cause them to actively oppose the energy transition. This Note aims to evaluate possible solutions to this problem. Through the prism of ratemaking legal …

On The Cultural Stakes Of Deep Seabed Mining, Julian Arato, Aline Jaeckel, Lucas Lixinski

Other Publications

Ownership over the deep seabed and its mineral riches was unsettled until well into the twentieth century. Yet, by the 1960s, a remarkable spirit of universalism prevailed. States declared the deep seabed to be the common heritage of [hu]mankind, determining that its exploitation and protection would require collective management. The seabed beyond national jurisdiction (or, the “Area”) spans roughly half of the surface of the Earth. It contains critical minerals, such as cobalt and copper, which technological advances have rendered increasingly within reach. States have worked collectively and proactively to regulate the near-future exploitation of the deep seas, thus far …

Toward Rationality In Oil And Gas Leasing: Building The Toolkit For Programmatic Reforms, Rachel Rothschild, Max Sarinsky

Other Publications

For decades, the federal government has inadequately considered the environmental harms of oil and gas extraction in its management of public lands and waters. As a result, fossil-fuel developers have been handed vast swaths of land at bargain prices, causing dangerous levels of greenhouse gas pollution that exacerbates climate change while depriving the public of more beneficial uses of the land.

That is all likely to change soon. A week into his term, President Biden called for a comprehensive review of the oil and gas program.1 That review is now underway and is likely to result in substantial programmatic reforms …

The Energy Transition And Mining: Reconciling The Growth Of Renewable Energy With The Need For New Mineral Development, Alexandra B. Klass, Allison J. Mitchell

Articles

Under the Paris Agreement, the global governmental signatories embraced the goal to hold global average temperature increase to “well below 2°C above pre-industrial levels” while “pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” Almost every country in the world signed on to the Paris Agreement, adopting the prevailing science that anthropocentric greenhouse gas emissions would result in rising global temperatures and catastrophic damages from climate change in the absence of immediate action. In pursuit of this goal, the signatories agreed that all member countries would work together to bring greenhouse gas emissions to zero within the …

A Bridge To Nowhere? Our Energy Transition And The Natural Gas Pipeline Wars, Sam Kalen

Michigan Journal of Environmental & Administrative Law

This article chronicles how natural gas has replaced coal as today’s energy dilemma. The pipeline wars illustrate landowners’ concern with special treatment for industry seeking to condemn lands, while some states and the public object to the Federal Energy Regulatory Commission’s (FERC or Commission) approach to approving new pipeline projects, or the Commission’s assessment of GHG emissions associated with project development.

Part II examines the pipeline wars in their historical context, portraying the rise of natural gas regulation, its increasing dominance as a fuel source, its associated environmental consequences, and the marked differences in how the Obama and Trump administrations …

The Federal Coal Leasing Program As An Actionable Subsidy Under International Trade Law, Jackson Erpenbach

Michigan Journal of Environmental & Administrative Law

The World Trade Organization (WTO) is often criticized for standing in the way of responses to climate change. Restrictions on domestic renewable energy subsidies under the Agreement on Subsidies and Countervailing Measures (SCM Agreement) have drawn particular disfavor. But critics overlook the role that the SCM Agreement can play in similarly disciplining domestic fossil fuel subsidies. This Note demonstrates that potential role by focusing on one prominent fossil fuel subsidy in the United States: The Bureau of Land Management’s (BLM) coal leasing program on federal lands. The program is an actionable subsidy under the SCM Agreement because it provides coal …

Space, The Final Frontier Of Enterprise: Incentivizing Asteroid Mining Under A Revised International Framework, Jack Heise

Michigan Journal of International Law

This Note argues that the Outer Space Treaty (the “OST”) should be modified to provide explicit permission for private entities to engage in asteroid mining while maintaining the principles of international peace and cooperation that the treaty espouses as the core of the framework governing outer space. Part I explores the current state of asteroid mining with reference to the current objectives of companies conducting missions in this realm. Part II examines the OST as applied to the enterprise of asteroid mining by private companies. Part III considers the benefits and drawbacks of various regulatory schemes to govern asteroid mining. …

Abandoned But Not Forgotten: Improperly Plugged And Orphaned Wells May Pose Serious Concerns For Shale Development, Bret Wells, Tracy Hester

Michigan Journal of Environmental & Administrative Law

This Article addresses the intersection of oil and gas law and environmental law on a topic that has profound significance for the nation’s oil industry and for the environment. In this regard, the Permian Basin is experiencing a renaissance that has fundamentally impacted oil production in the United States. Horizontal drilling and hydraulic fracturing now allow the industry to produce in the Permian Basin’s unconventional shale formations in ways that were unimaginable a decade ago. But, the hot shale plays within the Permian Basin exist above conventional fields that are littered with a century’s worth of abandoned wells. Fracturing new …

Presidential Permitting For Pipelines: Constitutionality And Reviewability, Joan Campau

Michigan Journal of Environmental & Administrative Law

Federal oversight of cross-border pipelines occurs during the presidential permitting process. Pursuant to Executive Order 13337, the Department of State is authorized to review applications and grant permits to projects that “serve the national interest.” Scholars and litigants have questioned the constitutionality of this process and reviewability under the Administrative Procedure Act (“APA”). This Note argues that the permitting process is constitutional and derives legitimacy from both the executive powers explicitly enumerated in the Constitution as well as an implicit sanction from the legislative branch. Further, this Note argues that APA review is appropriate for at least one component of …

Wrongful Benefit & Arctic Drilling, Nicolas Cornell, Sarah E. Light

Articles

The law contains a diverse range of doctrines — “slayer rules” that prevent murderers from inheriting, restrictions on trade in “conflict diamonds,” the Fourth Amendment’s exclusion of evidence obtained through unconstitutional search, and many more — that seem to instantiate a general principle that it can be wrong to profit from past harms or misconduct. This Article explores the contours of this general normative principle, which we call the wrongful benefit principle. As we illustrate, the wrongful benefit principle places constraints both on whether anyone should be permitted to exploit ethically tainted goods, and who may be permitted to profit …

Cooperative Mineral Interest Development In The Lone Star State: It's Time To Mess With Texas, Matthew K. Trawick

Michigan Journal of Environmental & Administrative Law

Since the early discoveries of the Spindletop, King Ranch, and East Texas oil fields, the oil and gas industry has dominated the Texas economy. The industry has also played an important role in shaping state politics and culture. The oil boom of the early 1900s created thousands of jobs for ordinary workers and immense wealth for a select few. Early Texas oil barons made headlines because of their lavish lifestyles and often extreme political beliefs. Legendary wildcatter H.L. Hunt typified this oil-fueled exuberance. Hunt became one of the eight richest individuals in the United States after securing mineral rights to …

Expanding The Renewable Energy Industry Through Tax Subsidies Using The Structure And Rationale Of Traditional Energy Tax Subsidies, Blake Harrison

University of Michigan Journal of Law Reform

Just as the government invested in oil and gas, it must now invest in new energy sources. In a sense, Americans need history to repeat itself. This Note suggests that Congress should amend the United States Tax Code to further subsidize the renewable energy industry. Congress should use subsidies historically available to the oil and gas industries as a model in its amendments. These subsidies serve as a model for promoting the renewable energy industry because such subsidies were fundamental in facilitating the oil and gas industries’ dominance today. Ultimately, Congress must further subsidize the renewable energy industry to avoid …

Applying Administrative Law Principles To Hydraulic Fracturing, Joel M. Pratt

Michigan Law Review First Impressions

The practice of hydraulic fracturing-or fracking-has become a major focus of policymakers in recent years. Federal, state, and local regulations on fracking create a confusing web for industry to navigate, and governmental entities often battle with each other for authority to regulate the practice. The fast and widespread growth of fracking in the United States has therefore exacerbated confusion over who will regulate this booming industry, and courts have so far failed to use sensible principles to resolve inconsistencies among federal, state, and local regulations. When fracking laws conflict, courts traditionally use preemption doctrine-general rules that help judges choose whether …

Fracking Patents: The Emergence Of Patents As Information-Containment Tools In Shale Drilling, Daniel R. Cahoy, Joel Gehman, Zhen Lei

Michigan Telecommunications & Technology Law Review

The advantages of new sources of energy must be weighed against environmental, health, and safety concerns related to new production technology. The rapid development of unconventional oil and gas fields, such as the Barnett and Marcellus Shales, provide an excellent context for these contrasting goals. Information about extraction hazards is an extremely important issue. In general, patents are viewed as a positive force in this regard, providing a vehicle for disseminating information in exchange for a limited property right over an invention. However, by limiting the evaluation of an invention by third parties, patents might also be used to control …

Hydraulic Fracturing: Sources Of Law And Information, Barbara H. Garavaglia

Articles

Hydraulic fracturing—also known as fracking—has become increasingly controversial in the United States over the past several years, especially in states such as Michigan with large shale gas deposits that were previously unextractable. In 2012, a Michigan fracking ban initiative failed to make it onto the November statewide ballot, but citizens groups are presently collecting signatures in an attempt to get the initiative onto the November 2014 ballot as an “initiated state statute.” And, more recently, state auctions of drilling permits have been the scenes of citizen protests driven by concerns about the potential environmental impacts of hydraulic fracturing.

Judicial Limitation Of The Epa's Oversight Authority In Clean Water Act Permitting Of Mountaintop Mining Valley Fills , Christopher D. Eaton

Michigan Journal of Environmental & Administrative Law

Mountaintop removal mining operations in the Appalachian region have expanded significantly in recent decades. The practice decimates the mountain ecosystems by leveling forests, filling headwater streams, and producing significant runoff of heavy metals, sediment, and other pollutants that impair the aquatic environment of entire watersheds. Yet environmental permitting of the practice is relatively limited. A recent trend in litigation aimed at halting mining operations has involved challenging permits that authorize the discharge of mining overburden into headwater streams pursuant to the Clean Water Act (CWA). The Army Corps of Engineers has assumed jurisdiction over such discharges under section 404 of …

Foreign Investment And Indigenous Peoples: Options For Promoting Equilibrium Between Economic Development And Indigenous Rights, George K. Foster

Michigan Journal of International Law

The quotations above refer to distinct conflicts that are widely separated by time and geography but remarkably similar in other respects. The first describes events leading to the Black Hills War of 1876, in which the U.S. Army forced the Lakota Sioux and Northern Cheyenne onto reservations to make way for gold mining by non-Indians. The second describes a violent episode in a conflict between native groups and the Peruvian government, which began in 2009 when the government took steps to expand mining and oil operations by multinational enterprises (MNEs) in the Peruvian Amazon. In both cases, outside commercial interests …

Energy Subsidies, Market Distortion, And A Free Market Alternative, Hans Biebl

University of Michigan Journal of Law Reform Caveat

Gas and coal are cheap. They are cheap because the U.S. government subsidizes their production. The result is that the marketplace does not recognize the true cost of fossil fuels. Without the subsidies, Americans—for the first time in nearly a hundred years—would experience the cost of unsubsidized fossil fuels. In a newly competitive marketplace, renewable sources of energy would be in a better position to compete. Without gas and coal subsidies, clean energy producers, who have not been able to compete with the low price of fossil fuels, might be more willing to invest in “clean, renewable, and more energy …

The Texas Wind Estate: Wind As A Natural Resource And A Severable Property Interest, Alan J. Alexander

University of Michigan Journal of Law Reform

In 2011, Texas is again at the forefront of an energy boom: the wind energy boom. In 2006, Texas surpassed California and became the US. state with the most installed capacity to produce wind energy, and Texas' level of installed capacity has continued to grow. But the law has not kept pace with this growth. Similar to the initial growth of the oil and gas industry in Texas, the wind energy industry was also born, and continues to grow, in the absence of clear legal and regulatory standards. Lack of regulation in the early development of the oil industry contributed …

The Gulf Spill Context: Peak Oil, Risky Oil, And Energy Strategy, Edward A. Parson

Articles

As shocking as the situation in the Gulf of Mexico may be, in this broader context it must be regarded as a normal event. That’s not to say that it’s normal in relation to past experience. Rather, the Gulf spill is “the new normal,” in the sense that our current energy strategy—or lack thereof—will make such events increasingly likely, even if we assume conditions of effective regulation and responsible compliance that evidently were not present on the Deepwater Horizon.

Metals Or Management? Explaining Africa's Recent Economic Growth Spurt, Laura Nyantung Beny, Lisa D. Cook

Articles

Explanations for Africa's poor long-run growth performance have varied over time. The theories examined include geography (Jeffrey D. Sachs and Andrew Warner 1997); institutions (William Easterly and Ross Levine 1997; Daron Acemoglu, Simon Johnson, and James Robinson 2001, 2002; Nathan Nunn 2007, 2008); health (David Bloom and Sachs 1998; Gregory N. Price 2003); and economic dependency (William Darity 1982). More recently, economists have attempted to explain what The Economist has called Africa's new "period of unparalleled economic success" (The Economist 2008a, 33). Average annual real GDP growth was 1.8 percent between 1980 and 1989 and increased to 4.4 percent between …

China's Acquisitions Abroad - Global Ambitions, Domestic Effects, Nicholas C. Howson

Articles

In the past year or so, the world has observed with seeming trepidation what appears to be a new phenomenon-China's "stepping out" into the world economy. The move, labeled the "Going Out Strategy" by Chinese policy makers, sees China acting in the world not just as a trader of commodities and raw materials, or the provider of inexpensively-produced consumer goods for every corner of the globe, but as a driven and sophisticated acquirer of foreign assets and the equity interests in the legal entities that control such assets. The New Yorker magazine, ever topical and appropriately humorous, highlighted this attention …

Gas Sale Contracts Under The Uniform Commercial Code, James J. White

Book Chapters

In the last decade, many oil and gas lawyers have learned more than they wish to know about the Uniform Commercial Code (U.C.C.). Like it or not, Article 2 of the U.C.C. governs most contracts for the sale of natural gas. Section 2-107(1) draws a distinct line between leases, deeds, and other conveyances of minerals in place, on the one hand, and the sale of the minerals by the miner or producer after the minerals have been severed, on the other. The consequence of this rule is that Article 2 has little or nothing to say about the sale of …

The New Gold Rush: Mine Tailings In Southeast Alaska And Perversion Of The Clean Water Act, Beth Leibowitz

University of Michigan Journal of Law Reform

Part I of this Note provides a basic explanation of the mine tailings problem. Part II of this Note discusses the evolution of the agencies' tailings decision and the statutory and regulatory context in which it occurred. Part III outlines briefly the actual decision, which involved the theory that neither the EPA nor the Corps should apply the usual CWA permit requirements to the initial discharge of mine waste. Part IV evaluates the legal basis for that decision and concludes, based on the language of the CWA, the EPA's own prior policy, and judicial precedent, that the decision was without …

The Constitutional Conundrum Of Black Lung Appeals: Two Proposed Solutions, Pete S. Michaels

University of Michigan Journal of Law Reform

Part I of this Article explains the statutory requirements that a black lung benefits claimant must meet and how these claimants' failure to meet statutory prerequisites results in the dismissal of their claims. Part II argues that the current procedures are inadequate to protect the rights of black lung benefits claimants. Dismissal of their claims violates the petitioners' rights to due process of law and pro se representation. Part III proposes two solutions to the crisis. The first proposal is simply a form that would be distributed to all claimants explaining the procedures they must follow to avoid dismissal. Part …

Pennsylvania's Implementation Of The Surface Mining Control And Reclamation Act: An Assessment Of How "Cooperative Federalism" Can Make State Regulatory Programs More Effective, John C. Dernbach

University of Michigan Journal of Law Reform

This Article first explains the background against which Pennsylvania's implementation of SMCRA has occurred. Coal mining has had a serious and continuing effect on the State's environment, as Part I explains. In response to these effects, Pennsylvania began to regulate coal mining many decades ago. This regulatory development reached a milestone when the State achieved primacy under SMCRA in 1982.

Part II suggests that the new program in Pennsylvania has been responsible for substantial reductions in adverse environmental effects from surface coal mining, particularly less erosion and sedimentation, less acid mine drainage, and more backfilling. In addition, Part II explains …

Coal Policy--Need It Be The West Against The Rest?, C. Peter Goplerud Iii, Duffy Ruimerman

University of Michigan Journal of Law Reform

This Article will analyze the legal issues involved in this "West against the rest" conflict. While numerous areas of disagreement exist within the larger picture of Western-federal relations, the Article will focus on two specific issues of present concern. First, the Article will explore the role of the states under the Surface Mining Control and Reclamation Act of 1977. This section includes an analysis of recent litigation involving regulations promulgated by the Secretary of the Interior relating to the establishment of state mining programs. Second, the Article will address the imposition of state severance taxes on coal, with particular emphasis …

Refunding Overcharges Under The Emergency Petroleum Allocation Act: The Evolution Of A Compensatory Obligation, Michigan Law Review

Michigan Law Review

The DOE's authority to order noncompensatory remedies has been seriously questioned. This Note will evaluate the propriety of such remedies in light of the history of petroleum price control enforcement. Although the DOE's enabling legislation does not explicitly impose a compensatory obligation, the Note finds that Congress anticipated that remedies would compensate, to the extent feasible, those persons actually overcharged. Part I traces the development of a compensatory obligation through the various stages of price regulation. Part II criticizes the DOE for abnegating that obligation. The Note concludes that the Department's recent consent orders violate both its own rules and …

Allocation Of Scarce Goods Under Section 2-615 Of The Uniform Commercial Code: A Comparison Of Some Rival Models, James J. White

Articles

Section 2-615 of the Uniform Commercial Code authorizes a contract seller to allocate goods in short supply when full performance has become commercially impracticable. Most of the cases under and commentary on that section have focused on the issue of commercial impracticability. The allocation aspects of the section have attracted much more modest attention in the cases and in the scholarly journals. The purpose of this article is to examine critically the allocation rule set out in section 2-615(b). That subsection authorizes a seller, upon a finding of commercial impracticability, to allocate "in any manner which is fair and reasonable." …