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 vehicleexcise 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]
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]
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.
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.
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]
American Recovery and Reinvestment Act of 2009[edit]
Loans and investments into green energy technology is a significant part of ARRA
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]
Official seal of the American Recovery and Reinvestment Act of 2009.
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.
The Trans-Alaska Pipeline pumps up to 2.1 million barrels (330,000 m3) of crude oil per day, more than any other crude oil pipeline in the United States.
Substantial coal deposits are found in Alaska's bituminous, sub-bituminous, and lignite coal basins. The United States Geological Survey estimates that there are 85.4 trillion cubic feet (2,420 km3) of undiscovered, technically recoverable gas from natural gas hydrates on the Alaskan North Slope.[55]
Alaska also offers some of the highest hydroelectric power potential in the country from its numerous rivers, and large swaths of the Alaskan coastline offer wind and geothermal energy potential as well.[56] As of 2001, the state's Energy Plan stated that, although wind and hydroelectric power are abundant, with low-cost electric interties they were judged uneconomical.[57]
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.
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 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]
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 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.
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.
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]
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]
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]
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]
^ abcThomas Merrill, Establishing Ownership: First Possession versus Accession, p. 14, fn. 22-23, Law and Economics Workshop (University of California, Berkeley 2007 Paper 3), found at CDLib website. Retrieved September 17, 2008.
^Written as cjus est solum, ejus est usque ad coelum et ad inferos. This has been translated as "To whomever the soil belongs, he owns also to the sky and the depths." Black's Law Dictionary (6th ed. 1990). From Merrill, fn. 22, q.v..
^Ken Belsen and Matthew L. Wald, " '03 Blackout Is Recalled, Amid Lessons Learned", New York Times, August 13, 2008, found at NY Times website. Retrieved August 27, 2008.
^David Freedlander, "It could happen again: On fifth anniversary of blackout, nation still vulnerable", A.M. N.Y., August 12, 2008. See response at Letter to the Editor. Retrieved August 27, 2008.
^Report, Energy and Commerce Committee, "Blackout 2003: How Did It Happen and Why? Full Committee on Energy and Commerce, September 4, 2003, found at Energy and Commerce Committee website. Retrieved August 27, 2008. Archived November 25, 2008, at the Wayback Machine
^Summary of the Energy Independence and Security Act of 2007, "New Energy Law Raises CAFE Standards," December 19, 2007, found at Environment BLR website. Retrieved February 17, 2009.
^("2007 Farm Bill"), Pub.L. 110-234, 122 Stat. 923 Pub. L.Tooltip Public Law (United States)110–234 (text)(PDF).
^Matthew L. Wald, "Energy Dept. Aid for Scientists on the Edge," New York Times, October 25, 2009, found at NY Times article. Retrieved October 26, 2009.
^Internal Revenue Service, 1040 Instructions, Form 1040 line 52, instructions pages 5, 45, and Form 5695. Instruction for Form 1040 Found online at [1], and for Form 5695 at [2]. Both accessed April 11, 2013.
^Internal Revenue Service, Energy Incentives for Individuals in the American Recovery and Reinvestment Act, found at [3]. Updated November 4, 2011. Accessed April 11, 2013.
^"Alaska Administrative Code (AAC) pertaining to the Permanent Fund," 15 AAC Chapter 137. "Revenue Receipt, custody, investment and management of state funds," found at
Alaska Permanent Fund website. Retrieved March 10, 2009. Archived May 24, 2009, at the Wayback Machine
^ ab"Across the USA: Alaska:Fairbanks," USA Today, November 13, 2009, p. 13A.
^See, e.g., Brookins, Douglas G. (1977) Uranium deposits of the Grants mineral belt: geochemical constraints on origin, in Exploration Frontiers of the Central and Southern Rockies, Denver: Rocky Mountain Association of Geologists, p. 337–52; Granger, H.C. et al., "Sandstone-type uranium deposits at Ambrosia Lake, New Mexico-an interim report," Economic Geology, Nov. 1961, pp. 1179–1210.
^ abKelly de la Torre & Julia Jones, Memorandum of Law, "Update: President-elect Barack Obama's Renewable Energy Policy and New Mexico," (n.d., December 2008?), found at Beatty & Wozniak P.C. Law firm websiteArchived 2012-11-27 at the Wayback Machine. Retrieved February 17, 2009.
^"District court puts brakes on N.M. energy law," Contractor Magazine, December 1, 2008 (Penton Media), found at Contractor Magazine website. Retrieved February 17, 2009.
^N.Y. Energy Law § 1-103 (5) and (6), found at New York State Legislature official website, go to "ENG", then "Article 1", finally "1-103 – Definitions". Retrieved August 6, 2008.
^N.Y. Public Authorities
Law §§ 1850 et seq., found at New York State Legislature official website, go to "PBA", then "Article 8", finally "Title 9 – (1850–1883) NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY". Retrieved August 6, 2008.
^Anschutz Exploration Corp. v. Town of Dryden __ N.Y.S.2d ___ (Index # 2012-0902) (N.Y. Supreme Ct. Tompkins Co. February 21, 2012), and Cooperstown Holstein Corp. v. Town of Middletown, __ N.Y.S.2d ___ (Index # 2012-0930) (N.Y. Supreme Ct. Otsego Co. February 24, 2012). For discussion of these cases, see Charles Gottlieb, Hydrofracking, Local Zoning, and State Preemption, paper presented at the Warren M. Anderson Legislative Breakfast Series,『Hydrofracking – Balancing the 3 E's: Energy, Environment, and Economic Development,』February 28, 2012 (Albany Law School); Andrew Carden, "Judge rules local governments can ban fracking," Legislative Gazette, February 28, 2012, page 13; Andrew Carden, "Another victory for anti-frackers," Legislative Gazette, March 6, 2012, pp. 8, 19. Compare N.Y. Environmental Conservation Law § 23-0303 (2), found at N.Y. State assembly website. Retrieved February 29, 2012.
^Mark Fass, "Panel Finds D.A. Can Prosecute Polluter Under N.Y. Law", New York Law Journal (N.Y.L.J.), August 22, 2008, may be found at Bloglines website[permanent dead link]orN.Y.L.J. website (Subscription Required). Citing People v. Quadrozzi, No. 2006-065575 (2d dep't 2008), which cited N.Y. ECL §§ 71-0403 and 71-1933 (9), see NY Laws at the Assembly official website, go to "ENV – Environmental Conservation", then "ARTICLE 71 – ENFORCEMENT". Links accessed August 27, 2008. [dead link]
^Press release, "School of Energy Resources Symposium Will Explore Coal Gasification in Wyoming", February 14, 2007, found at University of Wyoming official website. Retrieved August 21, 2008.
^Paul Davidson, "Nuclear power inches back into energy spotlight," USA Today, March 30, 2009, at B1, found at USA Today story of March 30, 2009. Retrieved March 30, 2009.
^Rick Callahan, "Governor signs coal-gasification bill," Associated Press (as published in the Chicago Tribune), March 24, 2009, found at Chicago Tribune website. Retrieved March 25, 2009.
^Matt Viser, "Patrick touts clean energy, economic initiatives, Boston Globe, August 5, 2008 found at Boston Globe website. Retrieved August 21, 2008.
^AEP Ohio Meets Goal of New Ohio Energy Law by Filing Electric Security Plan Below Market Rates; Continues Lowest Rates in the State; Balanced and progressive plan demonstrates "AEP's Commitment to Ohio's Future", found at Market Watch website[permanent dead link]. Retrieved August 21, 2008.