Circuit

The U.S. Court of Appeals for the District of Columbia Circuit on Friday upheld much of the Federal Energy Regulatory Commission’s mammoth and hotly contested Order 637, which removed prices caps in the short-term capacity release market on a two-year experimental basis.

In a split decision for natural gas producers, the U.S. Court of Appeals for the District of Columbia Circuit has upheld the federal government’s right to include downstream marketing costs when computing royalties owed by individual producers. But, it said producers’ firm transportation demand charges for unused capacity were not subject to the same royalty consideration.

In what appears to be a split decision for natural gas producers, the U.S. Court of Appeals for the District of Columbia Circuit has upheld the federal government’s right to include downstream marketing costs when computing royalties owed by individual producers. But, it said producers’ firm transportation demand charges for unused capacity were not subject to the same royalty consideration.

An “outraged” El Paso Natural Gas and El Paso Merchant Energy Co. called on FERC last week to short-circuit an attempt by its Office of General Counsel’s Market Oversight and Enforcement Section (MOE) to expand an investigation into whether the two affiliates conspired last winter to artificially drive up prices for natural gas delivered to the Southern California border.

The Bush administration has petitioned the U.S. Court of Appeals for the Ninth Circuit to review a federal judge’s decision in June that blocked oil and natural gas exploration off the coast of California until the state’s Coastal Commission could assess the environmental impact of future drilling activity.

The Ninth Circuit Court of Appeals in San Francisco took little time in rejecting an emergency request by the California legislature to force FERC to cap wholesale energy prices. The request was filed last Tuesday and tossed out by Friday. The panel ruled that the legislature did not demonstrate that the case warranted emergency action.

The U.S. Court of Appeals for the D.C. Circuit upheld the mostsignificant aspects of FERC Orders 888 and 889 in a ruling releasedon Friday. “Finding few defects in the orders, we uphold them innearly all respects,” the court stated in its decision(Transmission Access Policy Study Group, et al. v. FERC No.97-1715).

In what one gas industry official close to the case called a”major victory,” the District of Columbia Circuit Court of Appealsupheld the Environmental Protection Agency’s program for reducingnitrogen oxide (NOx) emissions for 19 eastern and midwestern statesplus the District of Columbia last week. Barring any furtherappeals, the NOx SIP Call rule will be added to the Clean Air Act,requiring the states included in it to reduce their NOx emissionsby a total of 1.2 million tons, or 28% of current levels, annually.

Its prior ruling basically putting the Kansas ad valorem taxcontroversy to rest was based on two incorrect factual assumptions,the U.S. Court of Appeals for the D.C. Circuit conceded last week.But despite the errors, the court said the thrust of its opinionremains the same — Kansas producers owe refunds to customers whopurchased gas in the early 1980s at prices that, because theyincluded the tax, were above the maximum legal limit.