United States energy law is a function of the federal government, states, and local governments. At the federal level, it is regulated extensively through the United States Department of Energy. Every state, the federal government, and the District of Columbia collect some motor vehicle excise taxes. [1] Specifically, these are excise taxes on gasoline, diesel fuel, and gasohol. [1] While many western states rely a great deal on severance taxes on oil, gas, and mineral production for revenue, most states get a relatively small amount of their revenue from such sources. [2]
The practice of energy law has been the domain of law firms working on behalf of utility companies, rather than legal scholars or other legal actors (such as private lawyers and paralegals), especially in Texas, but this is changing. Some officials from energy agencies may take jobs in the utilities or other companies they regulate, such as the former FERC chairman did in 2008. [3]
The American Bar Association (ABA) has a Section of Environment, Energy, and Resources, which is a "forum for lawyers working in areas related to environmental law, natural resources law, and energy law." [4] The Section houses several substantive committees on environmental and energy law that release current information on topics of interest to practitioners and news of committee activities. [5] The ABA recognized 'environmental and energy law' as one of the practice areas where legal work may be found in 2009. [6]
The United States' oil production peaked in February 2020, at about 18,826,000 barrels per day. [7]
Under the common law, persons who owned real property owned "from the depths to the heavens". [8] [9] Therefore, real estate traditionally has included all rights to water, oil, gas, and other minerals underground. [8] The United States Supreme Court has held that as far as air rights, "this doctrine has no place in the modern world," [10] but it remains as a source of law to this day, or "fundamental to property rights in land." [8]
An easement or license to drill for oil, gas, or minerals generally runs with the land, and thus is an appurtenant easement.[ citation needed ] However, a utility easement generally runs with the owner of the easement, rather than running with the land, and as such, is an example of an easement in gross.[ citation needed ]
The West digest system, used in WestLaw, has allocated several topics in energy law:
There are many library research resources available about American oil and gas law. [11]
Previous to the 1920s, the role of the federal government in energy was restricted to the disposition of oil, gas, and coal on federal lands. The Mineral Leasing Act of 1920 30 U.S.C. § 181 et seq. is the major federal law that authorizes and governs leasing of public lands for developing deposits of hydrocarbons and other minerals. Previous to the act, these materials were subject to mining claims under the General Mining Act of 1872. In BP America Production Co. v. Burton , 549 U.S. 84 (2006), the Supreme Court held that a statute of limitations does not apply to government actions for contract claims for an agency to recover royalties on such leases.
Concerned that a predicted imminent shortage of petroleum would not leave enough fuel for naval vessels, President William Howard Taft established the first Naval Petroleum Reserve by withdrawing federal land over the Elk Hills Oil Field in California from being claimed and drilled by private companies. A number of additional Naval Petroleum Reserves and Naval Oil Shale Reserves were established by Taft and his successor, Woodrow Wilson.
Until the 1920s, "the federal government did not play an active role in the energy industries," sometimes explained as due to "the widespread belief in the unlimited supply of energy." [12] The first US law was the Federal Power Act of 1920 (later amended in 1935 and 1986). [12] [13] [14] [15] The Manhattan Project of the 1940s "initiated the era of nuclear regulation." [12] In 1946, the Atomic Energy Act was passed. [16]
The Price-Anderson Nuclear Industries Indemnity Act was first enacted in 1957, and has been renewed periodically, which governs a no-fault insurance regime for nuclear accidents. [17] The statute was upheld as constitutional in Duke Power Co. v. Carolina Environmental Study Group , 438 U.S. 59 (1978). [18]
The Department of Energy and its constituent Federal Energy Regulatory Commission (FERC) were created in 1977, [12] through the Department of Energy Organization Act. [19] The stated purposes of these "federal energy laws and regulations is to provide affordable energy by sustaining competitive markets, while protecting the economic, environmental, and security interests of the United States." [12] The U.S. Nuclear Regulatory Commission (NRC) regulates the use of nuclear power and its uses as a defense weaponry. [12]
Other statutes are the Public Utility Regulatory Policies Act, [20] the Energy Security Act, [21] the Price-Anderson Nuclear Industries Indemnity Act, and the Energy Policy Act of 1992 [22] Most of these laws are codified at U.S. Code, Title 16, Chapter 12 – Federal regulation and development of power. The Commodity Futures Modernization Act of 2000 also affects energy trading companies. The Oil Pollution Act of 1973 and Oil Pollution Act of 1990 affect the transportation of oil on the high seas.
As of January 1, 2008, the federal excise tax was 18.3 cents per gallon on gasoline, 24.3 cents per gallon on diesel, and 13 cents per gallon on gasohol. [1]
The most recent major law is the Energy Policy Act of 2005, an attempt to combat growing energy problems, which changed the energy policy of the United States by providing tax incentives and loan guarantees for energy production of various types. [23] [24] [25] There were various criticisms of the Act. [26] [27] One of the most controversial provisions of that Act was to change daylight saving time by four to five weeks, depending upon the year; [28] some scholars have questioned whether daylight saving results in a net energy savings. [29] It also directs a study for the development of oil shale and tar sands resources on public lands especially in Colorado, Utah, and Wyoming. [30] The Act further sets Federal reliability standards regulating the electrical grid (done in response to the Blackout of 2003). [31] [32] [33] There was also criticism of what was not included: the bill did not include provisions for drilling in the Arctic National Wildlife Refuge (ANWR) even though some Republicans claim "access to the abundant oil reserves in ANWR would strengthen America's energy independence without harming the environment." [34] There are a number of tax credits in the Act, including the Nonbusiness Energy Property Tax Credit.
Two federal laws passed in 2007 were the Energy Independence and Security Act of 2007, [35] [36] and the Food and Energy Security Act of 2007. [37]
The auto industry said federal regulators are pushing too far, too fast in their effort to raise fuel-mileage rules. The complaints from the industry, which had previously voiced support for tougher standards, underscore how economic hardship is affecting a major policy debate.
— The Wall Street Journal [38]
The Biomass Research and Development Board was expected to release a report in late 2008 about biomass as fuel.
In August 2008, it was revealed that oil speculators had increased the volatility of the price of oil; Congressman John Dingell criticized the Commodity Futures Trading Commission for failing to scrutinize oil futures traders, in particular the Swiss company Vitol. [39] On June 22, 2008, Obama proposed the repeal of the Enron loophole as a means to curb speculation on skyrocketing oil prices. [40]
In October 2008, as the Democratic Party approached victory in the 2008 elections, they remained divided on energy policy, thus a consensus was not expected in energy law. [41] President Barack Obama's first Secretary of Energy, Steven Chu, [42] [43] had no prior expertise in law.
The Department of Energy (DOE) will, by administrative measures, reduce the Hanford nuclear reservation (originally 586 square miles) to 10 square miles. [44] Much of the remaining area will go to the 300-square-mile (780 km2) Hanford Reach National Monument. [44]
In October 2009, Secretary Chu announced a new program, Arpa-e, which will fund grants authorized under the Energy Independence and Security Act of 2007. [45]
The "Energy Credit for Qualified Fuel Cell Property and Qualified Microturbine Property" was created in 2008, [46] but it appears to have expired as of 2013.
Individual taxpayers may claim several energy credits to reduce their federal income taxes, if they file the Long Form 1040 along with Form 5695 attached. These include the "Resident energy efficient property tax credit", and starting in the 2012 tax year, a "nonbusiness energy property credit". [47] Some of these provisions were extended by ARRA (see below) and by later bills. [48]
As part of the $787 billion stimulus package or "ARRA" (technically the American Recovery and Reinvestment Act of 2009), [49]
US law now allows rebates for energy efficient products and for weatherization. [50] Energy law and policy are significantly affected by this new law. [51] [52] [53] [54]
The states affect energy in numerous ways, including taxes, land use controls, regulation of energy utilities, and energy subsidies. States may establish environmental standards stricter than those set by the federal government. Regulation of oil and gas production, particularly on non-federal land, is largely left up to the states.
Alaska has vast energy resources:
Likewise, Alaska receives a large proportion of its state revenues from its severance tax on oil: a full 68% of all revenue, much more than any state (only Wyoming coming close). [2] Its dependence on petroleum revenues and federal subsidies allows it to have the lowest individual tax burden in the United States. [58] [59]
The state created the Alaska Permanent Fund from this "golden egg", which is owned and managed by the state, and "created by a constitutional amendment": [60]
In November 1976, Alaskans voted to amend their state constitution to create the Permanent Fund. The state constitution and supporting statutes set out the Fund's purpose and how it works.
— Alaska Permanent Fund [61]
The constitutional provisions are found at Alaska Constitution Article IX, Section 15. [62] Statutes regulate how the Fund is to be invested, [63] as well as how the income is to be disbursed. [64] Regulations state additional details regarding control of the Fund. [65]
The federal government runs the Alaska Natural Gas Transportation Projects, which are new pipelines, and its "Federal Coordinator" (director) is nominated with advice and consent of the Senate by the President of the United States. [66] [67] Drue Pearce was the first director; she was nominated by George W. Bush and served from December 13, 2006, through January 3, 2010. [66] [67] Larry Persilly is the current coordinator; he was nominated by Barack Obama on December 9, 2009, and was confirmed by the United States Senate on March 10, 2010. [68]
The most populous state in the United States, California has gone through a series of energy crises, and has reacted with several laws concerning energy. The California Energy Code, or Title 24 of the California Code of Regulations, also titled "The Energy Efficiency Standards for Residential and Nonresidential Buildings", were established in 1978 in response to a legislative mandate to reduce California's energy consumption. The standards are updated periodically to allow consideration and possible incorporation of new energy efficiency technologies and methods, such as the programmable communicating thermostat. [69]
California assesses an excise tax with the same basic rate of 18 cents per gallon on gasoline, diesel fuel, and gasohol. [1] The state collects a relatively small 6.6 percent of its revenue from extraction and related taxes. [2]
On November 5, 2024, California voters will decide on a ballot proposal about energy law, 2024 California Proposition 4.
As a major energy producer, New Mexico has government offices related to energy, including the Energy Conservation and Management Division, [70] which is part of the state's Energy, Minerals and Natural Resources Department. [71] All of the major laws impacting energy are available from the Division's website. [72] These include links to all of the state's statutes and related government websites, federal and state regulations, and executive orders. [72]
Uranium mining in New Mexico had been significant from about 1950 until 1998. [73] Several oil and gas companies developed uranium ore mines in New Mexico during that period. [74] As of 2007, at least one company was evaluating development by in-situ leaching; there are potentially large deposits of coffinite and uranium oxide ores available in New Mexico. [75]
New Mexico has enacted a number of new laws related to energy, including to create a New Mexico Renewable Energy Transmission Authority and to increase its renewable portfolio standards. [72] [76] According to one law firm's summary of President Obama's Economic Recovery Package, the state stands to gain much from the new administration, because "New Mexico leaders and laboratories are at the forefront of energy policy." [77] For example, former University of New Mexico Law School professor Suedeen G. Kelly was a member of the Federal Energy Regulatory Commission. [77] [78] [79] [80]
The state collects an effective rate of 18.875 cent per gallon tax on gasoline and gasohol, and 22.875 cents per gallon on diesel. [1] Like many western states, it collects significant revenue from extraction taxes—20.9 percent of its overall sources. [2]
The city of Albuquerque passed an ordinance to regulate "efficiency standards for heating and cooling equipment," which was struck down by the U.S. District Court as violating the Commerce Clause of the U.S. Constitution. [81]
The town board of Taos passed a "strict new new building code" in 2009 that mandated energy savings:
The ordinance ... mandates that residential construction meet Home Energy Rating System standards that gradually phase in starting this year, and commercial construction must meet Leadership In Energy and Environmental Design certified standards beginning this year.
— AP report, March 4, 2009. [82]
The town debated the proposed Ordinance 08-16, High Performance Building Ordinance, starting in October 2008, [83] postponed it for legal review, [84] debated it in February 2009, [85] and passed it in March 2009.
The New Mexico Gas Company offers an Energy Star Home Rebate. [86]
In October 2009, Governor Bill Richardson announced 21 grants for energy projects that were being funded by $8 million in ARRA funds. [87] [88]
New York has an Energy Law. [89] Under New York law, "energy" and "energy resources" are defined as:
Energy" means work or heat that is, or may be, produced from any fuel or source whatsoever. ... "Energy resources" shall mean any force or material which yields or has the potential to yield energy, including but not limited to electrical, fossil, geothermal, wind, hydro, solid waste, tidal, wood, solar and nuclear sources.
— N.Y. Energy Law § 1-103 (5) and (6). [90]
The chief regulator is the "Commissioner" or "president" of the New York State Energy Research and Development Authority (also called NYSERDA). [91] [92] The board of directors of NYSERDA includes—as a matter of law—several utility insiders, as well as ex officio commissioners. [92] [93] Vincent DeIorio, a lawyer, is chairman of the board, [94] and Francis J. Murray Jr. is president and CEO. NYSERDA was created as a public benefit corporation under NY law. [95] [96] New York's other regulatory bodies and entities include the New York State Public Service Commission, the New York State Department of Health, the New York Power Authority, and the Long Island Power Authority.
In addition to Energy Law, the state has a variety of laws regulating and taxing energy, and its courts have issued significant case law concerning energy taxes. Two trial court cases in 2012 allowed local zoning law to pre-empt state law by effectively banning hydrofracking, but this is being appealed. [97]
Under New York law, both the New York Attorney General or a district attorney may prosecute alleged polluters who make oil spills. [98] The state has enacted a number of recent laws to control carbon emissions. [99]
The state collects an effective rate of 24.4 cent per gallon tax on gasoline and gasohol, and 22.65 cents per gallon on diesel. [1] New York collects one of the smallest amounts of revenue from extraction taxes of any state—only 5.8 percent of its overall sources. [2]
Oil, gas, and other energy resources are regulated by the powerful Texas Railroad Commission. [100] It is the oldest regulatory agency in Texas, having been created in 1891. [101] It "oversee[s] the Texas oil and gas industry, gas utilities, pipeline safety, safety in the liquefied petroleum gas industry, and the surface mining of coal." [101]
According to Forbes, the University of Houston has an "exceptional" energy policy and law program. [102]
The state of Vermont, like other states, has a comprehensive statutory scheme governing energy generation and transmission issues, colloquially referred to as "Section 248." The reference is to 30 V.S.A. Sec. 248, which is administered by Vermont's Public Service Board, a quasi-judicial board with three members. Section 248 is not to be confused with Vermont's comprehensive law governing land development and subdivision – Act 250. [103] The state has an independent energy distributor, the Vermont Electric Cooperative.
Wyoming is the top coal producer of the 50 states in the United States, has significant oil and gas reserves, and its government and laws reflect an interest in energy production, especially fossil fuels. [104] The Wyoming Oil and Gas Conservation Commission regulates many aspects of oil, coal, and gas development in this resource-rich state. [105] There is an annual state Gas Fair. [106] The University of Wyoming is well known for its research on energy development. [104] The university sponsored a symposium on coal gasification in 2007. [107] [108]
Wyoming assesses an excise tax with the same rate of 14 cents per gallon on gasoline, diesel fuel, and gasohol. [1] The state collects the largest percentage—46 percent of its revenue—from extraction and related taxes, the second highest of the states, surpassed only by Alaska. [2]
Governing has noted that starting in 2000, many observers have viewed the state's "overreliance on minerals taxes" to be "fiscally unhealthy", but it was rescued by the oil, gas, and coal boom; there remains a political wariness about imposing an income tax, yet in 2012 the state imposed a tax on wind turbines. [109]
Florida and South Carolina have instituted utility fees to finance planned nuclear reactors. [110]
Indiana passed in 2009 a law "that allows the state's finance authority to negotiate long-term contracts to buy and sell synthetic natural gas from a planned southern Indiana coal-gasification plant." [111]
Massachusetts Governor Deval Patrick successfully pushed for "clean energy initiatives" in the 2008 legislative session, calling it "one of the most productive in a long, long time." [112]
New Hampshire passed in 2008 an energy law, signed by Governor John Lynch, which "provides guidelines for residential wind energy systems ... such as height, noise, setbacks and aesthetics and outlines a process for input from neighbors." [113] This was found necessary because a University of New Hampshire student, Laura Carpenter, found that "most communities had no ordinances or zoning rules that specifically address small residential wind turbines." [113]
Ohio requires utilities to meet regulatory goals for conservation. [114]
Oregon has established an Energy Efficiency Center, one of 31 Industrial Assessment Centers.
The Bureau of Land Management (BLM) is an agency within the United States Department of the Interior responsible for administering U.S. federal lands. Headquartered in Washington, D.C., the BLM oversees more than 247.3 million acres (1,001,000 km2) of land, or one-eighth of the United States's total landmass.
The Environmental Protection Agency (EPA) is an independent agency of the United States government tasked with environmental protection matters. President Richard Nixon proposed the establishment of EPA on July 9, 1970; it began operation on December 2, 1970, after Nixon signed an executive order. The order establishing the EPA was ratified by committee hearings in the House and Senate.
The Trans-Alaska Pipeline System (TAPS) is an oil transportation system spanning Alaska, including the trans-Alaska crude-oil pipeline, 12 pump stations, several hundred miles of feeder pipelines, and the Valdez Marine Terminal. TAPS is one of the world's largest pipeline systems. The core pipeline itself, which is commonly called the Alaska pipeline, trans-Alaska pipeline, or Alyeska pipeline,, is an 800-mile (1,287 km) long, 48-inch (1.22 m) diameter pipeline that conveys oil from Prudhoe Bay, on Alaska's North Slope, south to Valdez, on the shores of Prince William Sound in southcentral Alaska. The crude oil pipeline is privately owned by the Alyeska Pipeline Service Company.
The Oil Pollution Act of 1990 (OPA) was passed by the 101st United States Congress and signed by President George H. W. Bush. It works to avoid oil spills from vessels and facilities by enforcing removal of spilled oil and assigning liability for the cost of cleanup and damage; requires specific operating procedures; defines responsible parties and financial liability; implements processes for measuring damages; specifies damages for which violators are liable; and establishes a fund for damages, cleanup, and removal costs. This statute has resulted in instrumental changes in the oil production, transportation, and distribution industries.
Charles Joseph Melançon is an American politician and former secretary of the Louisiana Department of Wildlife and Fisheries.
The Energy Policy Act of 2005 is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems, changed US energy policy by providing tax incentives and loan guarantees for energy production of various types. The most consequential aspect of the law was to greatly increase ethanol production to be blended with gasoline. The law also repealed the Public Utility Holding Company Act of 1935, effective February 2006.
The question of whether to drill for oil in the Arctic National Wildlife Refuge (ANWR) has been an ongoing political controversy in the United States since 1977. As of 2017, Republicans have attempted to allow drilling in ANWR almost fifty times, finally being successful with the passage of the Tax Cuts and Jobs Act of 2017.
The energy policy of the United States is determined by federal, state, and local entities. It addresses issues of energy production, distribution, consumption, and modes of use, such as building codes, mileage standards, and commuting policies. Energy policy may be addressed via legislation, regulation, court decisions, public participation, and other techniques.
The Alaska gas pipeline is a joint project of TransCanada Corp. and ExxonMobil Corp. to develop a natural gas pipeline under the AGIA, a.k.a. the Alaska Gas Inducement Act, adopted by Alaska Legislature in 2007. The project originally proposed two options during its open season offering over a three-month period from April 30 to July 30, 2010. An 'open season' in layman's terms is when a company conducts a non-binding show of interest or poll in the marketplace, they ask potential customers "if we build it, will you come?".
The Energy Independence and Security Act of 2007, originally named the Clean Energy Act of 2007, is an Act of Congress concerning the energy policy of the United States. As part of the Democratic Party's 100-Hour Plan during the 110th Congress, it was introduced in the United States House of Representatives by Representative Nick Rahall of West Virginia, along with 198 cosponsors. Even though Rahall was 1 of only 4 Democrats to oppose the final bill, it passed in the House without amendment in January 2007. When the Act was introduced in the Senate in June 2007, it was combined with Senate Bill S. 1419: Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007. This amended version passed the Senate on June 21, 2007. After further amendments and negotiation between the House and Senate, a revised bill passed both houses on December 18, 2007 and President Bush, a Republican, signed it into law on December 19, 2007, in response to his "Twenty in Ten" challenge to reduce gasoline consumption by 20% in 10 years.
Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. It is the largest oil field in North America, covering 213,543 acres (86,418 ha) and originally contained approximately 25 billion barrels (4.0×109 m3) of oil. The amount of recoverable oil in the field is more than double that of the next largest field in the United States by acreage (the East Texas Oil Field), while the largest by reserves is the Permian Basin (North America). The field was operated by BP; partners were ExxonMobil and ConocoPhillips until August 2019; when BP sold all its Alaska assets to Hilcorp.
Energy laws govern the use and taxation of energy, both renewable and non-renewable. These laws are the primary authorities related to energy. In contrast, energy policy refers to the policy and politics of energy.
New York energy law is the statutory, regulatory, and common law of the state of New York concerning the policy, conservation, taxation, and utilities involved in energy. Secondary sources have also influenced energy law in New York.
In a report compiled by the government of Alaska, the real GDP of Alaska was $51.1 billion in 2011, $52.9 billion in 2012 and $51.5 billion in 2013. The drop-off that occurred between 2012 and 2013 has been attributed to the decline in the mining sector, specifically the oil and gas sectors, a consequence of declined production. The state's economy has been described by University of Alaska Anchorage economist Scott Goldsmith as a "three-legged stool" – with one leg being the petroleum and gas industry, the second leg being the federal government and the third leg being all other industries and services. Between 2004 and 2006, the federal government was responsible for 135,000 Alaska jobs, the petroleum sector provided 110,000 jobs and all other industries and services combined for 122,000 jobs.
The climate change policy of the United States has major impacts on global climate change and global climate change mitigation. This is because the United States is the second largest emitter of greenhouse gasses in the world after China, and is among the countries with the highest greenhouse gas emissions per person in the world. Cumulatively, the United States has emitted over a trillion metric tons of greenhouse gases, more than any country in the world.
ConocoPhillips Alaska, Inc. is a subsidiary of ConocoPhillips, with its headquarters in Anchorage, Alaska. The company has major lease holdings on the North Slope and is Alaska's largest producer of oil and gas, employing about 1,000 persons.
The energy policy of the Obama administration was defined by an "all-of-the-above" approach which offered federal support for renewable energy deployment, increased domestic oil and gas extraction, and export of crude oil and natural gas. His presidency's first term was shaped by the failure of his signature climate legislation, the American Clean Energy and Security Act, to pass, and then climate and energy disasters including the Deepwater Horizon oil spill in 2010 and then Hurricane Sandy, which took place during the 2012 election. In his second term, Obama lifted the ban on crude oil exports and approved liquified natural gas exports; his planned regulatory approach to reducing greenhouse pollution in the electricity sector, the Clean Power Plan, was blocked by the U.S. Supreme Court.
Larry Persily is a newspaper publisher and former Federal Coordinator of the Alaska Natural Gas Transportation Projects 2010–2015. The office was charged with coordinating federal agency responses to private-sector efforts to develop a natural gas pipeline from Alaska's North Slope to supply the North American market. The Federal Coordinator is nominated with advice and consent of the Senate by the President of the United States. He was nominated by Barack Obama on December 9, 2009, and was confirmed by the United States Senate on March 10, 2010. The office closed down in 2015 as the private companies turned their attention to a gas export project instead.
United States policy in regard to biofuels, such as ethanol fuel and biodiesel, began in the early 1990s as the government began looking more intensely at biofuels as a way to reduce dependence on foreign oil and increase the nation's overall sustainability. Since then, biofuel policies have been refined, focused on getting the most efficient fuels commercially available, creating fuels that can compete with petroleum-based fuels, and ensuring that the agricultural industry can support and sustain the use of biofuels.
There are many exemptions for fracking under United States federal law: the oil and gas industries are exempt or excluded from certain sections of a number of the major federal environmental laws. These laws range from protecting clean water and air, to preventing the release of toxic substances and chemicals into the environment: the Clean Air Act, Clean Water Act, Safe Drinking Water Act, National Environmental Policy Act, Resource Conservation and Recovery Act, Emergency Planning and Community Right-to-Know Act, and the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund.
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