It depends on whom you ask. But considering last week’s “extinction event” and the prospect that climate hysteria will return to fashion, today we offer under-reported observations from those better educated on the topic than I who say the answer to the question is, not well. In order to dignify the debate I will not describe any person or organization mentioned in the articles as a paid NGO shill, UNIPCC plant, or lizard person.

Roger Pielke, Jr. in The Honest Broker doubts there has been an actual energy “transition” … despite costing $4 trillion in 13 years, says Irina Slav. Due to increasing fossil fuel consumption, the goal is even further away than ever.

Engineer Ronald Stein explains in David Blackmon’s substack why and how California’s green agenda does not meet California’s fuel demands.

J. T. Young in RealClear Politics explains, among other things, how the Inflation Reduction Act did the opposite of what was claimed it would do and, of course, the costs far-exceeded the promises.

Regardless of economics, science and common sense, take a look at the stances, positions and proposals from our new Congressional overlords in Washington. Compare the current rhetoric to that of the past. Which to they really believe? We will find out soon enough.

Financial advisor Hedgeberg explains how Europe’s abandonment of refining capacity jeopardizes its economy.

Coal is not the enemy to your health it once was due to technological innovations, says Stephen Heins at Energy Security and Freedom.

The election can be deplored/celebrated in song:

For our Texas Republican Senate candidate.

An even better one for him … so true!

For the Dems good news.

For the Repubs, its their fault.

Myrt Hales v. Kerr-McGee Oil & Gas Onshore LP, et al. is the most recent legacy Louisiana oilfield contamination lawsuit.

Hales alleges that 10 defendants and/or their predecessors-in-interest conducted oil field activities on his Richland Parish property over a period of decades. Hales claimed a litany of operations, all of which contaminated and otherwise damaged his property causing environmental harm, diminution of property value, and “stigma”: construction and abandonment of wells, sumps, flowlines, pipelines, tank batteries, wellheads, unlined earthen pits, measuring facilities, barges, production platforms, separators, and injection facilities.

Hales seeks recovery (present tense because the suit lives on) a variety of theories under Louisiana law:

  • Strict liability under pre- and post- 1996 versions of Civil Code article 667, governing liability for works causing damage to neighbors;
  • Strict liability under pre- and post- 1996 versions of Civil Code articles 2317 and 2322, imposing liability on owners and custodians for damage caused by things in their custody or by the ruin of buildings;
  • Breach of contract for violations of applicable mineral and surface leases;
  • Failure to notify under Civil Code article 2688 (which requires a lessee to notify the lessor of damage or required repairs);
  • Punitive and/or exemplary damages under former Civil Code article 2315.3;
  • Recovery of “fruits” (economic benefits) derived from the property;
  • Loss of enjoyment and use of the property, land loss, and subsidence;
  • Unjust enrichment;
  • Fraud; and
  • Negligence.

Hales seeks compensatory, punitive and/or exemplary damages associated with restoring the lands to their original, unpolluted state, compensation for diminution of property value and resulting “stigma”, injunctive and equitable relief, and attorney’s fees

Three motions to dismiss were filed. Stipulations and Consent Judgments resolved motions filed by other defendants and most of the issues in the motion filed by NGS Sub. Corp. After denying NGS’s argument that the claims against it were asserted as a group pleading against all defendants, the court considered three issues:

  • liability under CC article 2688;
  • liability under CC articles 2317 and 2322; and
  • breach of contract.

The magistrate judge’s Report and Recommendation recommending dismissal with prejudice:

  • Claims under article 2688 (inapplicable because there was no proof that NGS executed a lease after the article’s 2005 effective date),
  •  Strict liability under the pre-1996 versions of articles 2317 and 2322 (no allegation that NGS held a property interest prior to 1996 tort reform legislation), and
  • Breach of contract (Hales asserted no breach of express lease provisions and the Civil Code could not “fill in the blanks”.

The court recommended the motion be denied as to the remaining claims. The court declined to assess the sufficiency of Hales’ post-1996 claims under articles 2317 and 2322, reasoning that it would be unnecessary and inefficient to do so because the elements of those claims overlap with Hales’ general negligence claim (NGS did not challenge this one and it will remain regardless of the motion’s outcome).

Your Veterans Day musical interlude (well known but gruesome)

Co-author Gunner West

The Fifth Circuit continues to busy itself with deepwater port applications in the Gulf of Whatever-It’s-Called-For-Now. The Deepwater Port Act allows one port per “application area”, which the U.S. Maritime Administration (MARAD) draws for each application. In Citizens for Clean Air & Clean Water in Brazoria County v. U.S. Department of Transportation, the Fifth Circuit vacated MARAD’s approval of Texas GulfLink’s crude export terminal off Freeport, Texas, and remanded to the agency. The court held that the application area must include the proposed port’s pipeline. GulfLink’s pipeline would cross the pipeline of the Sea Port Oil Terminal (SPOT), a competing project MARAD had already approved.

Three applications

MARAD received applications for SPOT, Texas COLT, and Texas GulfLink in 2019. Its notices for SPOT and COLT drew each application area as a circle around the platform plus a quarter nautical mile on each side of the pipeline route to shore. GulfLink’s pipeline would cross both. In GulfLink’s notice, MARAD dropped the pipeline corridor and drew only a circle around the platform, reasoning that Congress had focused on the area around a port’s loading point. COLT withdrew. MARAD approved SPOT in 2022 and GulfLink in February 2025. The Brazoria County plaintiffs petitioned for review … and here we are.

The statutory definition of a deepwater port

Applying Loper Bright, the court gave MARAD no deference. Section 1504(d)(1) of the Deepwater Port Act requires an application area “encompassing the deepwater port site.” The court read “encompass” to mean “surround”. The Act defines “deepwater port” to include its pipelines seaward of the high water mark, and the statutory definition controls unless applying it would be incompatible with Congress’s regulatory scheme or would destroy one of the statute’s major purposes. Therefore, the application area must surround the pipeline as well as the platform.

The government argued that Section 1504(d)(2), which allows “any reasonable geographical area” up to a maximum circle, is the more specific provision and should control. The court disagreed, noting that the “deepwater port” definition is itself specific. Subsection (d)(1) sets the minimum size of the area, (d)(2) sets the maximum, and MARAD’s discretion lies in between. The government’s reading would have made the “encompassing” requirement meaningless. The court also read “deepwater port site” as simply the place where the port will be built.

GulfLink and the government warned that counting pipelines would undercut the Act’s purpose of promoting deepwater ports, because Gulf pipelines cross each other in many places. The court answered that most Gulf pipelines serve production platforms and are not components of a deepwater port. As for pipeline crossings, the one-port rule is implicated only when a proposed port’s pipeline would cross another port’s pipeline, and the Gulf currently has one operating deepwater port, the Louisiana Offshore Oil Port.

The court applied the default remedy of vacatur; MARAD could not cure on remand an error that went to a basic requirement of the Act.

Standing – always a question

Five weeks earlier, in Center for Biological Diversity v. U.S. Department of Transportation, the Fifth Circuit rejected for lack of standing a challenge to MARAD’s 2025 license for Delfin LNG’s floating export terminal. None of the declarants showed a concrete injury traceable to the project. For example, a Louisiana fisherman never said where he fished in relation to Delfin’s facilities. Another declarant lost even though the court assumed he lived close enough to the project; he could not tie his harms to Delfin rather than to industry across the region.

In GulfLink, the court found standing based on a member who owns a home about a mile and a half from GulfLink’s planned tank farm and close to its pipeline route. He said the tank farm could cause flooding that would pollute his well water, bring light and noise that could lower his property value, and draw truck traffic that would damage local roads. He tied those harms to specific places the project would affect, which was enough for injury in fact. The injury was also traceable to MARAD’s approval and redressable by vacatur.

Several lesser-known tunes by Dylan:

Precious Angel

Went to See the Gypsy (Elvis?)

Walking Down the Line

Co-author Gunner West

In Healthy Gulf v. Secretary, Louisiana Department of Natural Resources, the Louisiana Third Circuit Court of Appeal affirmed coastal use permits issued by the Office of Coastal Management (OCM) to Venture Global for its CP2 LNG export terminal and supply pipeline. The court rejected the argument by the environmental group plaintiff that a terminal site almost entirely outside the coastal zone required denial. Such a site is one alternative to weigh in evaluating a permit application, not an automatic bar.

Two permits for CP2 LNG

The terminal covers 737 acres along the Calcasieu Ship Channel in Cameron Parish. The pipeline runs 85 miles, 45 of them inside the coastal zone, and includes a 40-acre compressor station. The project will affect large areas of wetlands, and Venture Global must mitigate unavoidable permanent impacts. Relying on FERC’s parallel environmental review, OCM issued both permits in March 2024; the Cameron Parish district court affirmed.

The no-deference amendment

A recent amendment to Louisiana’s Administrative Procedure Act bars courts from deferring to an agency’s interpretation of a statute or rule. The Court applied the law retroactively and concluded it overrules case law giving “considerable weight” to agency readings of their own rules. The Court still deferred to OCM’s weighing of the facts and its permit decisions, which it reviewed for arbitrariness.

The compressor station and the storm surge wall

Healthy Gulf and other plaintiffs argued that OCM never applied the guidelines to the compressor station or its integrated carbon capture system. The Court found that OCM’s “Basis of Decision” covered the station as part of the pipeline project, including FERC’s air quality and noise findings, and that OCM’s path could “reasonably be discerned.” Carbon capture wells, the court noted, are permitted by a separate office and would, if anything, support the permit.

Healthy Gulf also argued that a concrete storm surge wall around the station was a “levee,” triggering more specific guidelines. The regulations define a levee as a use that creates an “embankment” to control water. Common usage of the term “embankment” does not typically contemplate a concrete wall around industrial equipment.

Alternative sites

The guidelines require a use to avoid significant adverse impacts identified in the guidelines “to the maximum extent practicable.” Otherwise OCM must make three findings:

  • benefits clearly outweigh impacts;
  • no feasible and practical alternative locations, methods, and practices would comply; and
  • the use will produce significant public benefits or serve important regional, state, or national interests.

Healthy Gulf’s outside-the-zone site would also have eliminated the pipeline’s coastal segment. Every alternative would affect more wetlands and there were other disadvantages. Per Venture Global’s application, the selected site was already disturbed by oil and gas operations, fill, and agriculture. The first alternative would affect four times as much estuarine wetland and stretch carrier transit from three hours to eight or nine. The second, overlapping the first, also affected forestland and posed marine safety challenges. The third would affect more than five times as much, and its pipeline would cross wildlife refuges. The approved pipeline route avoided Sabine National Wildlife Refuge and the public oyster seed grounds in Calcasieu Lake.

The court held that Healthy Gulf’s reading would require denial of an application whenever a site outside the zone was available. That is because moving outside the zone always avoids impacts within it.

Commercial fishing and the public trust

Responding to Healthy Gulf’s concern about harm to commercial fishermen from LNG carrier traffic, the Court noted that the statute and guidelines require minimizing impacts only where feasible and practical and avoiding only significant ones. FERC found the effect of carrier delays moderate but not significant. Even if significant, it was being avoided to the maximum extent practicable.

The Court rejected a public trust claim under the Louisiana Constitution as duplicative, reading “welfare of the people” to include economic development in conjunction with preservation of resources.

Your musical interludes. You don’t understand the words in Cajun music? It doesn’t matter. The dead white guys didn’t even use words and it worked for them.

A waltz is usually a lament. You have permission to be melancholy when you hear it. A two-step is happy. Its an invite to commence the hip-shaking.

Co Author: David Pruitt

Just when you thought the Winter Storm Uri force majeure litigation has run its course, the Fifth Circuit certified a question in MIECO L.L.C. v. Targa Gas Marketing L.L.C. to the Supreme Court of Texas.  The question is, when gas supplies froze in the storm did Targa have to go to the spot market to buy replacement gas, at whatever the price, to satisfy its delivery obligations? The District Court said no, the Fifth Circuit first said yes, at least for a marketer such as Targa. Then, citing the “exceptional importance” of the issues and the potential effect on “settled expectations” of the Texas natural gas industry, the Court withdrew the opinion and asked the Supreme Court of Texas to decide two questions:

  1. Does the NAESB force majeure provision require a seller that is not a producer to enter the spot market during a force majeure event if it is already using that market for a portion of its supply?
  2. If so, how should “reasonable efforts” be defined?

The Facts

MIECO and Targa have a base contract on the North American Energy Standards Board form gas supply contract. In October 2020, the parties executed two transaction confirmations. Under the first, Targa would deliver 15,000 MMBtu per day at a fixed First-of-Month price. Under the second, Targa would deliver 30,000 MMBtu per day at a daily Gas Daily index price. Delivery was to be made at the NNG Demarc pool in Kansas.

From February 15 to 20, 2021, during Winter Storm Uri, Targa delivered only a fraction of the required 45,000 MMBtu per day and on four of those days delivered nothing. Targa declared force majeure, relying on the winter storm as a regional weather event and resulting force majeure declarations by its affiliates, whose processing plants lost about 80% of their production. Targa is a marketer and produces none of the gas it sells. It could have covered its obligations by buying from non-affiliates at the spot price. Before the storm it had bought about 29% of its contract needs from 25 to 50 non-affiliate sellers each day to fulfill its obligations.

The Issue

The NAESB force majeure clause does not excuse “the loss or failure of Seller’s gas supply” except as provided in Section 11.2. It also says that economic hardship is not an excuse. So, everything turns on what counts as “gas supply.” In MIECO v. Pioneer, the Fifth Circuit held that a producer’s gas supply is the gas it owns or possesses, and that the spot market is not part of it. The analysis for a middleman like Targa requires “the next analytical step”.

The ruling and the un-ruling

The district court held that Targa was not required to buy replacement gas. The original Fifth Circuit panel reversed, reasoning that Targa’s gas supply included the spot market purchases it had already been making. Thus, Targa had to keep buying there to the extent reasonable, even at elevated storm prices. On a petition for rehearing en banc Targa, with help from a Texas Oil & Gas Association amicus brief, argued the ruling had “unsettled the expectations” of the Texas gas industry.

The Fifth Circuit agreed that the issue was close, that Texas authority was thin, and that the answer matters greatly to the Texas natural gas industry. It withdrew the force majeure section of its opinion but kept a separate jury-verdict judgment in place. It then certified the two questions to the Supreme Court of Texas.

Bottom Line

The Supreme Court of Texas will decide what “gas supply” means for the gas industry’s most common contract. Until then, marketers and buyers should not assume the answer. Those who depend on NAESB force majeure for protection should pay attention to how they source their gas. A history of buying on the spot market may become part of the supply they are expected to replace. Maybe not. Stay tuned.

Your musical interlude. Who knew Willie says his prayers … or Van Morrison, … or Lightning Hopkins?

Co Author: David Pruitt

The ongoing saga of Self, et al. v. BPX Operating Co., et al., has drawn a large audience due to its potential economic repercussions for Haynesville producers and mineral owners. Recall the question: Can the operator of a well on a Louisiana compulsory drilling unit who markets unleased mineral owners’ share of unit production deduct post-production costs from the mineral owners’ share of proceeds? The federal district court revisited this dispute and, for now anyway, the answer is yes.

The facts

The Selfs own a tract in a unit formed by the Louisiana Office of Conservation in Red River Parish. BPX is the operator. The Selfs have no lease and have not made arrangements to sell their share of production, so BPX markets the gas for them. La. R.S. 30:10(A)(3) requires the operator to pay the unleased mineral owner its “pro rata share of the proceeds of the sale of production”. The Selfs, suing on behalf of a putative class, alleged that netting post-production costs out of proceeds is improper per se.

The long road to where we are

In 2022, on a BPX motion for partial dismissal of Count 1 of plaintiffs’ complaint, the trial court ruled for BPX on the theory of negotiorum gestio, a Louisiana civil-law doctrine under which someone who manages another’s affairs may be reimbursed. The Fifth Circuit certified the question to the Louisiana Supreme Court . which held that the doctrine does not fit; a gestor acts “without authority” and an operator selling under the statute acts with statutory authority. Upon remand, BPX returned with alternative theories not addressed in the first round, including co-ownership, tacit mandate, legal representation, and unjust enrichment.

The ruling

In the end, the Court didn’t need BPX’s Civil Code theories to reach a conclusion. The answer came from a different Fifth Circuit case, Dow Construction, LLC v. BPX Operating Co.

La. R.S.30:103.1 requires the operator to send unleased mineral owners sworn, itemized reports of costs, including “operating costs and expenses” and “all other unit costs allocable to an owner”. An operator who fails to report surrenders its right to demand contribution for “the costs of the drilling operations”. Under Dow (citing Louisiana appellate opinions), post-production costs fall within that forfeiture provision. According to the Court here, Dow construed the meaning of operating costs consistently within the confines of both 30:10 and 30:103.1 et seq, thereby promoting statutory harmony and the consistent interpretation of conservation laws

The Court followed Dow to its logical end. A cost must be chargeable before an operator can forfeit the right to charge it. In the Court’s words, “there can be no reporting or forfeiture of costs for which an operator bears full responsibility”. A contrary rule, the Court said, would produce absurd results. The Court also read “operating costs” consistently across Sections 30:10 and 103.1. Post-production costs are therefore deductible as operating costs under 30:10(A)(2)(b)(i), and BPX’s motion to dismiss was granted.

The case is not over. There will be appeals, and the ruling is only on a motion for partial dismissal.

Yor musical interlude

A lot, when there are conflicting uses of the property. Louisiana Minerals, Ltd. v. Weyerhaeuser Co. resolved a dispute over a 99-year Timber Sale and Lease Contract. Louisiana Minerals (LML) owns and leases 200,000 acres in North Louisiana to Weyerhaeuser, who conducts large-scale timber operations on the property and other lands.

The Timber Contract

Several portions of the contract governed the dispute: 

Article 5: Weyerhaeuser has broad rights to use the land for any purpose it desired, expressly excluding the right to explore for or produce minerals. LML reserved all rights necessary for the ownership, use, and development of minerals.

Article 6: LML has all rights necessary or desirable for all aspects of ownership of the minerals.

Article 7: Weyerhaeuser is to be compensated for damage to the property and to obtain compensation from third parties at the rate of $60 per acre, adjusted for inflation.

What happened (highly condensed)

Since inception, third parties seeking access to the surface consulted both parties (or their predecessors). Weyerhaeuser would enter into surface use agreements and pipeline rights of way with the third parties. LML asserted that Weyerhaeuser was charging exorbitant prices for drill sites and pipeline locations such that the prices would hamper the development of LML’s minerals. Trial testimony showed that Weyerhaeuser determined the amount it would charge LML’s lessees for surface access and damages based on how much the operator “stood to make” using the land through 2085, not the Timber Contract.

The Court’s reasoning

Custom and usages suggested that operation of a pipeline to transport minerals is not generally considered to be exploration and production of minerals. A typical mineral lease, said the court, does not authorize construction of pipelines except to exclusively transport minerals produced from the leased premises and land unitized therewith.

The Court concluded that in light of the nature of the contract, equity, usages, and conduct of the parties, Weyerhaeuser may enter into third-party agreements for activities that do not fall within LML’s reservation of rights. The Timber Contract does not restrict Weyerhaeuser from entering into surface use agreements with pipelines that carry minerals across the property but do not produce LML’s minerals.

Weyerhaeuser’s charges were excessive and improperly required prepayment of damages, but those actions did not prevent LML from concluding oil and gas leases with a third party or caused it to lose business opportunities.

The Court’s ruling

The court held:

  • LML has the sole and exclusive right to enter agreements necessary and incidental to mineral exploration and production on the property.
  •  Because Weyerhaeuser holds no right to explore for or produce minerals, it cannot grant access rights to third parties that it does not itself posses
  •  Weyerhaeuser’s compensation for surface use is strictly limited to Article 7’s formula: fair market value of timber damaged plus $60 per acre annually (CPI-adjusted), payable in annual installments as the surface is actually utilized — not via lump-sum pre-payments extending to 2085
  • Weyerhaeuser violated the Timber Contract by charging excessive fees and requiring pre-payment.
  • LML’s breach of contract claim failed because LML failed to establish actual damages. LML’s witnesses acknowledged they could not identify any lost business opportunities, lost leases, or lost compensation caused by Weyerhaeuser’s conduct.

The Court’s judgment declared:

  • LML holds the sole right to enter into mineral access agreements on the property;
  • Weyerhaeuser may only contract with mineral lessees to obtain compensation under Article 7;
  • Weyerhaeuser may not negotiate additional access fees;
  • damages must be calculated annually; and
  • Weyerhaeuser may enter surface use agreements for pipelines that cross the property without producing LML’s minerals.

Your musical interlude.

Anadarko Petroleum Corporation v. Alternative Environmental Solutions Inc. addressed a Master Services Agreement for environmental services. The busy Fifth Circuit decided what law should apply, excused Anadarko for failing to raise issues in a previous suit, partially reversed an attorney’s fees award, denied punitive damages, and ignored a failure-to-give-notice defense.

The MSC chose General Maritime Law or Texas law, and venue would be in Harris County, Texas. AES would “ … be responsible for and assume all liability for and… defend, release, indemnify and hold harmless Anadarko from and against claims arising in connection with AES’s violation of Applicable Laws.” AES’s work was performed in Wyoming and Louisiana.

Pawlosky, an owner of AES, sued his former co-owner in Louisiana state court for a scheme in which Anadarko was defrauded by overbilling. Pawlosky also sued Anadarko for vicarious liability for the participation by Howard, an Anadarko employee, in the scheme. After several years of litigation in Louisiana state court, Anadarko sued in the Southern District of Texas for a declaration that AES had a duty to defend and indemnify Anadarko. This is the case as issue here. On appeal, a trial court judgment for Anadarko was affirmed in part and vacated in part.

Which law to apply?

Louisiana law could override the contractual choice of law only in limited circumstances. Texas law won out. Texas’ connection with the contract was a bit more significant than Louisiana’s in light of the factors courts consider when determining that question, and Louisiana did not have a materially greater interest in the dispute.

Application of Texas law would not be contrary to the fundamental policy of Louisiana. AES argued that the Louisiana Oilfield Indemnity Act voided the contract. The LOIA addresses indemnities for bodily injury; this was a contract dispute. AES then argued the indemnity was for an illegal purpose because Howard took part in the illegal scheme and Anadarko could not seek indemnity for its own actions. The court rejected that argument as well. The contract itself was not for an illegal purpose, and Anadarko was seeking indemnity for AES’s violations, not Howard’s.

Judicial estoppel

Denied. The Fifth Circuit disagreed with AES’ assertion that litigating in Louisiana state court without raising the choice-of-law or indemnity provisions estopped Anadarko from invoking them in federal court. AES offered no evidence that Anadarko ever took an inconsistent position in the Louisiana case and the new claims need not be raised as compulsory counterclaims in the Louisiana litigation. The Court suggested that AES could have argued waiver or forfeiture.

Punitive damages

The District Court’s judgment by its wording could have allowed for recovery of exemplary and punitive damages, indemnity for which were excluded by the MSC. The Fifth Circuit vacated that portion of the judgment and remanded for the district court to modify its judgment to explicitly exclude punitive and exemplary damages.

Failure to give notice

AES argued Anadarko failed to give notice of its claims as required under the MSC. Denied. A notice provision has to be employed when it is useful to do so. To require notice in this case would have been futile.

Attorney’s fees

The District Court erred in awarding attorney’s fees to Anadarko. The award included fees for both the declaratory action and the Louisiana lawsuit. Attorney’s fees incurred in a separate lawsuit because of a breach of a duty to defend are actual damages to be proven at trial. The award of attorney’s fees for the declaratory action itself was affirmed.

Your musical interlude. Peggy Lee and an inventive drummer.

Co Author: David Pruitt

In re Shale Oil Antitrust Litigation considers whether the nation’s largest shale producers conspired to restrain domestic shale oil production to artificially increase the price of crude oil and its derivative products throughout the United States. The U.S. District Court for the District of New Mexico concluded that the allegations against the defendants are plausible, which is sufficient for the case to move forward.

The Court granted in (small) part and denied in (large) part motions to dismiss the 54-count consolidated class action alleging that eight shale oil producers: Permian Resources, Chesapeake (now Expand Energy), Continental Resources, Diamondback Energy, EOG Resources, Hess, Occidental Petroleum, and Pioneer Natural Resources, along with former CEOs Scott Sheffield and John B. Hess, conspired to restrain domestic shale oil production and artificially inflate prices.

The facts

Plaintiffs are end-payors: individuals, businesses, and political subdivisions who purchased gasoline, diesel, heating oil, and other petroleum products at allegedly inflated prices. Their theory: during the “Shale Revolution,” defendants became “swing producers” capable of materially influencing crude oil prices and beginning around 2021 collectively throttled production growth even as prices soared past $120 per barrel and their breakeven costs hovered around $30. Plaintiffs pointed to private dinners between defendants and OPEC officials at the annual CERAWeek conference in Houston, public statements touting “discipline” over growth, and FTC consent decrees that barred Sheffield and John Hess from joining the boards of their companies’ acquirers based on evidence of years-long price-fixing efforts.

The issues and the ruling

Political question and act of state

Defendants argued the case was nonjusticiable because it would require the court to evaluate OPEC’s conduct. The court disagreed, holding that plaintiffs’ central theory targeted a domestic conspiracy among domestic defendants, none of whom are OPEC members or foreign sovereigns.

Parallel conduct and plus factors

The court held that plaintiffs plausibly alleged parallel conduct – not through absolute production cuts, but through reduced relative growth rates compared to pre-pandemic levels. The “plus factors” pushing the claim from possible to plausible included a top-heavy market structure with inelastic demand; interfirm communications and opportunities to collude (CERAWeek dinners, etc.); the FTC investigations; horizontal shareholding through overlapping institutional investors such as BlackRock, Vanguard, and State Street; and actions against economic self-interest, namely withholding production despite falling breakeven costs and rising prices.

Antitrust standing

Defendants argued that end-payors who never purchased crude oil directly from them lacked standing. The court found that plaintiffs plausibly alleged a direct throughline: defendants restrained shale oil production, which inflated crude prices, which predictably inflated gasoline and derivative product prices paid by consumers.

A handful of state-law claims were trimmed. Alabama’s antitrust statute, for example, does not reach interstate conspiracies. The vast majority of claims survived.

Bottom line

The case will move forward. Allegations of coordinated “discipline”, tied to the OPEC dinners, public statements eschewing production growth, and institutional investor overlap survived the motions to dismiss. In considering a motion based on Rule 12(b)(6) the court accepts the allegations as true. So, whether any conspiracy to violate antitrust laws can be proven remains to be seen.

 Answer to last week’s quiz

David Duke. Notorious white supremacist, KKK grand wizard, serial political candidate, and target of the “Vote for the crook; it’s important” campaign slogan.

More codger-defying musical interludes:

Caamp

Florence + the Machine

Red Clay Strays

Our blog doesn’t often opine on politics; it can be bad for business. But the voters’ options for Railroad Commission compel a comment. I’m voting for the Democrat Joe Rosenthal. These opinions are mine alone. I don’t know what my law partners, clients and friends think about this race, Bo French, or Republicans and Democrats generally.

Bo French claims he is not a politician. He’s just, he protests, a rancher and oil and gas investor steeped in the honorable, Christian and manly pursuits of a real Texan, the kind they don’t make enough of anymore. If he really is a politician, which is what you are when you are a candidate for a powerful statewide office, he is the wrong kind of politician. He abused his platform as chair of the Tarrant County Republican Party to widely broadcast his xenophobia. This post by my friendly competitor John McFarland provides details.

DO NOT VOTE FOR BO FRENCH! — Oil and Gas Lawyer Blog — August 31, 2026

Mr. French’s campaign promised during the primary:

  • Stop “an Islamic invasion of Texas” from stealing oil and gas resources. (Huh?)
  • End Diversity, Equity and Inclusion initiatives, funding and practices at the Texas Railroad Commission. (Our solidly Republican RRC leadership leans woke left? Who knew?)
  • Establish a “pro-family credentialing program” for oil and gas operators. (Take-your-kid-to-work-day … on the rig … steel-toed boots, drug tests and hard hat required).

At an industry event this past summer he was questioned about his paranoid worldview and asked whether his attitudes were the look that reflects well on Texas and its public officials. His response: He was merely “repeating what Texans think”. His comments, he said, were “taken out of context by a far-left reporter” (from the Fort Worth Star-Telegram?)

Do you want a shameless bigot and political opportunist as your commissioner? I’d rather have Mr. Rosenthal the Democrat; could be too liberal for the average Texan but at least he’s honest and knows the business. Mr. Rosenthal promises he isn’t a California, New York or Colorado Democrat. Maybe. We might get to see.

There’s more!

This week, as reported by the Texas Tribune, Cornyn calls out Bo French over racist social media post Mr. French proposed to deport 100 million people and denigrated minority University of Texas students.

Heaping more shame on the Republican voting base, when asked for a comment the morally and ethically challenged Republican nominee for the U.S. Senate elected not to criticize French’s latest bigotry.

If it weren’t so important it could be written off as fremdschämen.

Your musical interlude.

Quiz: Can you identify the recent historical figure in the photo? Look for the answer in the next post.