November 20, 2017

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Energy, Oil and Gas Law

Energy Industry Law covers the taxing and use of energy and its sources. The science and law of this area is complex, so the advice of an Energy Industry Attorney is highly recommended. View qualified Energy Law Firms in your area to find Energy Industry Lawyers.

Although in the last century most of the law focused on gas and oil, the recent acceleration in interest in alternative energies has expanded the field of energy law, including:

  • Wind power (wind turbines) which is estimated to be capable of generating 20% of electricity needs by 2030.
  • Hydroelectric power which in 2008, produced over 60% of all renewable power in the U.S.
  • Ethanol and other biofuels
  • Solar power both at large power plants (photovoltaic farms) and on individual homes (distributed solar power)
  • Geothermal

Regulation

Federal Regulation

At the federal level, energy is primarily regulated by the Department of Energy, and its affiliated agency, the Federal Energy Regulatory Commission. Together, these agencies, along with Nuclear Regulatory Commission, enforce the nation’s varied energy laws including:

  • Food and Energy Security Act of 2007 (2008 U.S. Farm Bill)
  • Energy Independence and Security Act of 2007 (CLEAN Energy Act of 2007)
  • Energy Policy Act of 2005
  • Energy Policy Act of 1992
  • Energy Security Act
  • Public Utility Regulatory Policies Act

State Laws

State laws’ primary importance in this area relates to the ownership and control of oil and gas rights. Typically, the owner of land owns the mineral rights to those natural resources under the surface which are considered part of the real property.

A property owner may sell or lease the right to extract minerals from under his property. Notably, once the oil or gas is extracted, it becomes personal property, so even if it is placed in an underground storage (such as natural gas), it does not become part of that real property.

Interestingly, if adjoining property owners share an underground resource, such as a pool of oil, one owner may legally extract all of that resource, as long as he has not drilled at an angle to get at it.

Taxation

Federal and state governments tax energy, in the form of extraction taxes (for taking it out of the ground) and excise taxes (for using it).

Tax policy can also be used to further policy goals, such as energy efficiency. Recently, this has been encouraged by the passage of the Non-business Energy Property Tax Credit which reduces a homeowner’s tax burden by the amount spent making the home more efficient (for qualified expenditures).

Economic Stimulus

Congress combined economic recovery with incentives for energy conservation through the American Recovery and Reinvestment Act of 2009 (ARRA) which provided over $62 billion in investment and incentives, including:

  • Funding to local and state governments for investments in efficient energy
  • Loan guarantees for renewable energy
  • Weatherizing homes
  • Updating federal vehicle fleets

Related areas:

Real Estate Law, Business & Corporate Law, Energy Taxation, Renewable Energy, Energy Industry Lawyers, Energy Trade Law