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Environmental groups and other opponents of high-volume hydraulic fracturing (also known as fracking) for oil and natural gas have roundly applauded Governor Cuomo’s decision to ban the process in the state of New York. The ban, which confirms New York’s more than five-year moratorium on the process, has been lauded as an environmental success and a model for other states.   The ban is neither. 

Oil and natural gas prices are at their lowest prices in years. Interest in expanding drilling in the Marcellus Shale, which is the geologic formation holding natural gas deposits under New York, Pennsylvania, and West Virginia, is correspondingly low.  That makes the fracking ban an easy decision because there is relatively limited interest in drilling in state.

There are those with interest in drilling in New York, of course, but as long as prices are low and there are other places to drill (like Pennsylvania and West Virginia), that interest will remain modest.  The ban also raises the value of Pennsylvania and West Virginia mineral rights by reducing competition, so companies with interests in the entire region have little reason to weigh in forcefully.

In this environment, then, an outright ban was easier to put in…

I’m currently flying at about 30,000 feet on my way to Dickinson, North Dakota.  Regular readers know I do much of my research in the energy sector and that the impacts of horizontal drilling and hydraulic fracturing have had on the local, regional, national, and global economies are an interest of mine.  This trip marks my first return to North Dakota since I left the University of North Dakota School of Law in the summer of 2012, and it will be my most extended trip to the Bakken oil patch in the western part of the state. 

I have the benefit of traveling with a group from West Virginia University, and we’re gathering information for a variety of applications, all of which I hope will help us plan for a more sustainable economic and environmentally viable energy future.  The trip is scheduled to include meetings with government officials (state and local), industry representatives, landowners, farmers, educators, and others.  I’m looking forward to this rare opportunity to hear so many different perspectives from people living in the heart of the U.S. oil boom. 

Over the last few years, I have written about the challenges and opportunities related to the shale oil and…

As someone who teaches and researches both business law and energy law, I often focus on the overlap of the two areas, which I find to be significant.  One of my most recent projects has been to write a new casebook, Energy Law: A Context and Practice Casebook, which will be available for courses taught this fall. I wrote a detailed description of the book in a guest post at the Energy Law Professor blog, but here I wanted to highlight the business aspects of the book. 

The second chapter of my book is titled The Business of Energy Law.  That chapter begins with some key vocabulary, and I then provide students with a client issue to frame the reading for the chapter. The issue: 

Your firm has just taken on a new client who is a large shareholder in many companies. She is particularly concerned about her holdings in Energex, Inc., a publicly traded energy company. Energex was founded in 1977 by a oil and gas man from Louisiana who is still the CEO and a member of the board of directors. The client is concerned that the CEO is taking opportunities for himself that she thinks

…

A recent article discussing the American Society of Civil Engineers’ Report Card on U.S. infrastructure explains:

Without adequate investment on infrastructure the US could face a $2.4 trillion drop in consumer spending by 2020, a $1.1 trillion loss in total trade and experience the loss of 3.5 million jobs in 2020 alone.

This is just a sliver of the doom and gloom the American Society of Civil Engineers predicted this week with the release of their final report in the “Failure to Act” series that focuses on the impacts associated with continued infrastructure deterioration. The latest installment of the ASCE reports focuses on specifically on economic impacts.

Under current investment trends, only 60% of the investment funding required by 2020 will be secured and this underinvestment in infrastructure will have a “cascading impact on the nation’s economy” and culminate in a “gradual worsening of reliability over time,” Gregory E. DiLoreto, ASCE President told the participants on a conference call.

Back in 2007, I published an article titled, Misguided Energy: Why Recent Legislative, Regulatory, and Market Initiatives are Insufficient to Improve the U.S. Energy Infrastructure (here). In that article, I argued: 

Soaring energy prices, natural gas supply shortages, and blackouts

…

The WVU College of Law’s Center for Energy and Sustainable Development is seeking a fellow for 2014-16, and the details are below.  As I  have written before, the Future of Business is the Future of Energy. Just today, the New York Times Dealbook has an article, Norway’s Sovereign Wealth Fund Ramps Up Investment Plans, which notes: 

Norway’s giant sovereign wealth fund said on Tuesday that it would manage its $884 billion portfolio more aggressively over the next three years, taking larger stakes in companies and increasing its real estate portfolio.

. . . .

The fund’s investments have grown increasingly sophisticated under Yngve Slyngstad, the chief executive of Norges Bank Investment Management, who came to the fund in 1998 to build an equity portfolio and became C.E.O. in 2008. Since the end of 2007, equities have increased as a percentage of the portfolio to about 61 percent from 42 percent.

Mr. Slyngstad has also diversified the holdings into smaller companies and into emerging markets, but the stock investments remain concentrated in Europe and North America. The fund’s largest equity holdings are all companies based in Europe, including Nestlé, Novartis, HSBC Holdings, the Vodafone Groupand Royal

…

The New York Times Dealbook Blog reports that France is opposing GE’s attempt to acquire a large portion of Alstom:

“While it is natural that G.E. would be interested in Alstom’s energy business,” France’s economy minister, Arnaud Montebourg, said in a letter to Jeffrey R. Immelt, the G.E. chairman and chief executive, “the government would like to examine with you the means of achieving a balanced partnership, rejecting a pure and simple acquisition, which would lead to Alstom’s disappearing and being broken up.”

The government’s legal means for stopping a deal would appear to be limited, though it could refuse to approve such an investment on national security grounds. The government does not hold Alstom shares, but the company is considered important enough to have received a 2.2 billion euro bailout in 2005. And Mr. Montebourg noted in the letter on Monday that the government was Alstom’s most important customer.

Alstom’s energy units, which make turbines for nuclear, coal and gas power plants, as well as the grid infrastructure to deliver electricity, contribute about three-quarters of the company’s 20 billion euros, or about $30 billion, in annual sales.

Alstom is France’s largest industrial entity, and the government says the deal…

I (Josh Fershee) will follow up with a post of some (I hope) substance
shortly, but I thought I’d take a moment to briefly re-introduce myself.   When I last wrote for BLPB, I was teaching
at the University of North Dakota School of Law. Last fall, we made the move to
West Virginia University College of Law. 
(I say “we” because my wife (Kendra Huard Fershee) not only moved with me, but because she is
also on the law faculty.)   I joined WVU as part of a university-wide
energy-law expansion and work with the Center for Energy and Sustainable
Development.

I teach business law courses and energy law courses, with
most of my research relating somehow to energy business and regulation.  I teach Business Organizations, Energy Law
Survey, Energy Business: Law & Strategy, and Energy Law and Practice.  I plan to add a Hydraulic Fracturing
Seminar, too, in the near future. 

Of perhaps some interest to our readers, I have taught my Energy Business: Law & Strategy course once, and I plan to do so again in the
spring.  I think it is a unique class,
especially in the law school environment, with its focus on how law comes to be and how businesses are strategic in their use of law and regulation.  (Note: I am of the mind that this reality is important to understand whether you want to work for businesses and employ such strategies or if you want to work to limit businesses in the ability to do so.)  I have the students work in groups, and they draft a written final
project, which they also present to the class. 

Below the jump, I provide the books, course description, goals, and
assessment items for the course. I welcome any comments or suggestions for additional teaching
materials or concepts.