Fourth CIrcuit Holds Local Anti-LNG Law to be Preempted by Natural Gas Act
Submitted by Randy McMamus & Adam White, Baker Botts L.L.P.

On May 19, 2008, the U.S. Court of Appeals for the Fourth Circuit issued a decision striking down a Baltimore County ordinance enacted to block the proposed siting of a liquefied natural gas (“LNG”) import terminal, on the grounds that the local law was preempted by the “exclusive authority” of the Federal Energy Regulatory Commission (“FERC”) to authorize the siting, construction and operation of LNG terminals under Section 3 of the Natural Gas Act (“NGA”). The Fourth Circuit reversed a lower court decision that the ordinance, adopted as an amendment to Baltimore County’s coastal plan, was saved from preemption by the NGA provision preserving “the rights of States under” the federal Coastal Zone Management Act (“CZMA”).

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Protecting Reserve Estimates and Future Revenue Projections from Discovery
Submitted by Mark Waite and Bruce Wilkin, Beirne, Maynard & Parsons, LLP

A company’s reserve estimates and future revenue projections for oil and gas properties are generally considered highly confidential. When litigation over those properties develops, however, those confidential estimates and projections may be the subject of discovery requests issued by a party seeking to prove at least a floor of damages. Parties often insist on highly restrictive confidentiality and protective orders before producing these estimates and projections in litigation, but in the end they are still often produced to the other side. However, a recent opinion issued by the Fort Worth Court of Appeals may provide a model for owners of such data seeking to protect it from discovery altogether. The issue is likely to develop further as parties to other litigation may raise similar objections which reach the courts.

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No Help from Strategic Petroleum Reserve Legislation

Last month, both the U.S. Senate and House of Representatives overwhelmingly voted to stop shipments to the United State’s Strategic Petroleum Reserve until the price of oil falls below $75 a barrel. With oil and gas prices rapidly increasing, members of the House and Senate claimed such a measure would assist U.S. consumers at the pump, some claiming as much as twenty-five cents a gallon.

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Whales vs. Oil and Gas Exploration - Showdown in the Arctic Circle

A number of oil and gas companies, including Shell Oil and British Petroleum, have received permits for seismic surveying in the Chukchi and Beaufort Seas, above the Arctic Circle, off the coast of Alaska. However, conservation groups are up in arms, claiming that the noise from the underwater air guns used for such surveying is dangerous and harassing to marine mammals in the area.

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Halliburton Engaged in Bidding War for European Oil Contractor

Halliburton, the second largest oil field services company, is in a bidding war to buy European-based oil contractor Expro. In April, a private equity consortium, Umbrellastream, made a $3.2 billion offer to buy Expro. Halliburton countered with a $3.36 billion offer of its own. Within hours, Umbrellastream topped Halliburton with a $3.4 billion offer. Halliburton has until June 20th, to revise its offer, but Expro has a shareholders’ meeting on June 9th, and has recommended that shareholders accept the revised Umbrellastream offer. More bidding could follow, however, given the small spread between offers.

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Brazil Incresing its Role in the Global Market

With oil prices reaching record highs, companies can afford to invest in new drilling technology, which has propelled new players into the forefront of the global oil market. Brazil recently announced finds of huge oil and natural gas reserves in the Atlantic Ocean. Previously, reserves in such isolated locations would be inaccessible, especially to countries such as Brazil.

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5th Annual Law of LNG Conference
September 4-5, 2008 | Houston, Texas