Two cases set to be argued next week are important to the oil and gas industry. Here’s a thumbnail of what’s at stake in the cases, and the lawyering involved:
HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association
At Issue: The renewable fuel standard program in the Clean Air Act requires increasing amounts of renewable fuel to be blended into the products of refiners. Recognizing that this rule would harm small refineries, Congress allowed them to seek extensions of hardship exemptions. The U.S. Court of Appeals for the Tenth Circuit interpreted the word “extension” to mean that a small refinery may obtain an exemption only if it has received continuous extensions previously.
Argument day: April 27.
Petitioner brief: “If affirmed, that holding would foreclose most small refineries from obtaining hardship exemptions and create a one-way ratchet that would effectively phase out the exemption.” — Peter Keisler, partner at Sidley Austin, counsel of record for HollyFrontier. Also on the brief: Melissa Buhrig, executive vice president, general counsel and secretary of CVR Energy, Inc. in Sugar Land Texas. HollyFrontier Corporation is based in Dallas, with refineries in Kansas, Oklahoma, New Mexico and Utah.
Amicus brief supporting HollyFrontier: “This case will determine whether small refineries in Wyoming and across the nation survive. This decision likely marks the beginning of the end for most small refineries. Few small refiners can meet this test today and eventually none will be able to meet it.” – Matt VanWormer, senior assistant Wyoming attorney general, and counsel of record on behalf of Wyoming, Louisiana, Ohio, Oklahoma, Texas, Utah, and West Virginia.
Respondent brief: “The Tenth Circuit’s interpretation of the small refinery exemption provisions is the only interpretation that conforms with the statute’s text, structure, and purpose. Continuity of the temporary exemption is inherent in … the ordinary meaning of the word ‘extension.’ – Matthew Morrison, partner at Pillsbury Winthrop Shaw Pittman, counsel of record for Renewable Fuels Association. The Biden administration filed a brief siding with Renewable Fuels, a switch from the position the Trump administration took in the case.
PennEast Pipeline Company, LLC v. New Jersey
At issue: Under the Natural Gas Act, can the authority to exercise the federal government’s eminent-domain power for rights-of-way be delegated to pipeline companies, when a state claims an interest. New Jersey sought to block construction of a 116-mile natural gas pipeline across Pennsylvania and New Jersey. The U.S. Court of Appeals for the Third Circuit ruled that the delegation to pipeline companies does not apply when a state has a claim against the project.
Argument Day: April 28
Petitioner Brief: “It was established long before the Founding that eminent-domain power can be validly delegated. The classic delegation empowered a private party tapped to execute a public improvement project—whether a dam or turnpike—to secure rights-of-way and provide property owners with just compensation.” — Paul Clement, partner at Kirkland & Ellis, on behalf of PennEast Pipeline Company. The Biden administration in a brief sided with PennEast, as did the Trump administration.
Supreme Court advocate: The case is “is enormously important to the energy industry. If the Third Circuit’s decision stands, each of the 50 states would be able to nullify federally approved pipeline-construction plans any time the proposed pipelines cross state property. While that outcome seems absurd, the case presents novel questions of state sovereign immunity and whether the federal government may delegate its power of eminent domain to private entities—questions that will get a close look from the more conservative Justices who have sometimes sided against industry where state sovereignty or nondelegation principles are in play.” – Aaron Streett, chair of Baker Botts’ Supreme Court and appellate practice.
Respondent brief: “This Court can and should simply reject PennEast’s invitation to create a novel, ahistorical carveout to sovereign immunity for condemnation suits … How the states could have consented to private federal condemnation suits involving sovereign land at a time when the federal condemnation power itself remained open to debate is anyone’s guess.” – Jeremy Feigenbaum, state solicitor of New Jersey and counsel of record for the state.