GLG News by FERC Experts: Legal, Economic, and Regulatory Affairs

Leonard CoburnPresidentCoburn International Energy Co

Russia's Financial Turmoil Forces New Oil Tax Changes

September 23, 2008

Analysis of:Additional Oil Tax Cuts by 2010 | themoscowtimes.com

Russia's primary revenue sources are taxes on oil and gas. Russia's oil taxes have been falling as oil prices fall and Russian oil production stagnates. Additional oil tax changes wil occur to spur new oil productiion and increase revenues.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

FERC's Standards of Conduct NOPR: Back to the Future?

April 3, 2008

Analysis of:FERC Standards of Conduct Notice of Proposed Rulemaking | www.ferc.gov

The Federal Energy Regulatory Commission's recently issued Notice of Proposed Rulemaking on the Standards of Conduct applicable to natural gas and electric transmission providers would establish revised standards for preventing anti-competitive information sharing between those trasmission providers and their marketing affiliates. FERC’s rulemaking bluntly acknowledges that the standards of conduct adopted with much fanfare in Order No. 2004 have proven too difficult for both industry and regulators to interpret and enforce, and seeks a return to the "functional separation" regulatory approach that prevailed prior to Order No. 2004.

Orlan JohnsonChairmanSecurities Investor Protection Corporation

Potential Fines and Penalties for Energy Transfer Partners

November 12, 2007

Analysis of:Is Enron Saga Entering The Final Chapter | news.glgroup.com

A clear understanding of this area of the law has become critical  because the risks from noncompliance can subject an entire entity, including upper management, to significant fines ($1 million per day/ per violation), criminal penalties and disgorgement of undue profits.  Many energy entities need to update and in some case create substantive compliance programs to the new powers granted FERC in the Energy Policy Act of 2005.  FERC has recently begun to assess the first round of fines and penalties on entities that it determines are not demonstrating a "culture of compliance." 

Robert RosenbergPartnerSLOVER & LOFTUS

Surface Transportation Board Proposes Revising Railroad Cost of Capital Methodology

August 16, 2007

Analysis of:STB Notice of Proposed Rulemaking on Railroad Cost of Capital Methodology | www.stb.dot.gov

The Surface Transportation Board has proposed to change its methodology for calculating the railroad industry cost of capital.  The cost of capital is used for several regulatory purposes.  Lowering the cost of capital, as proposed by the agency, could increase the rate relief available to captive shippers.

Leonard CoburnPresidentCoburn International Energy Co

A Bosporus Bypass? Maybe.

March 21, 2007

Analysis of:New Pipeline Will Bypass the Bosporus but Involve Russia | www.nytimes.com

1. A Bosporus pipeline bypass would alleviate the congestion in the crowded straits, provide access to a deepwater port, and potentially allow more crude oil shipments from Russia and Central Asia.

2.  Similar proposals for a direct bypass have been discussed for more than a decade and none has come to fruition, with the exception of the BTC pipeline (Baku-Tbilisi-Ceyhan pipeline) transporting crude oil from the Caspian Sea directly to the Mediterranean Turkish port of Ceyhan.

3.  The big question whether the economics and politics are sufficient for the latest proposal and whether the pipeline actually will built.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

“Affirmative Benefits” and the Public Interest: A Higher Hurdle for Utility Mergers?

March 19, 2007

Analysis of:PUC ordered to reconsider Verizon, MCI merger issue | www.pennlive.com

Pennsylvania Commonwealth Court's decision in Popowsky underscores the importance of rate-related benefits in demonstrating that a proposed merger affords sufficient "affirmative benefits" to satisfy the statutory "public interest" standard.

Popowsky indicates that promises of continued "good corporate citizenship" and locally-based management, without more, are not sufficient to satisfy the "affirmative benefits" test.

Popowsky suggests that merger applicants will not be able to rely on federal-level approvals to avoid a state-level inquiry into a proposed merger's potential anti-competitive effects.

Leonard CoburnPresidentCoburn International Energy Co

Gas OPEC Not Likely

February 16, 2007

Analysis of:Report: Russia, Iran in talks on gas cartel | money.cnn.com

- Gas is an increasingly important commodity in world energy markets and a price-fixing cartel would raise alarm bells around the globe

- Russia, Iran and Qatar are the three largest gas reserve owners.  President Putin recently visited Qatar to expand energy cooperation.  Russia is close to Iran since it is their supplier for commercial nuclear technology and weapons.  Energy cooperation is high on the Russia-Iran agenda. 

- Despite these contacts, it is unlikely that a gas cartel will emerge due to the significant differences between oil and gas trade.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

FERC’s Standards of Conduct: Back to the Drawing Board

December 1, 2006

Analysis of:National Fuel unit settles with FERC | washington.bizjournals.com

-- D.C. Circuit decision in National Fuel Gas Supply Corp. v. FERC vacates and remands Order No. 2004 as applied to natural gas pipelines.

-- The Commission's theoretical concerns with potential anti-competitive conduct, without actual evidence of such conduct, were insufficient to justify imposing Standards of Conduct on pipelines and their non-marketing affiliates.

-- The Commission may attempt to satisfy the Court's concerns on remand and repromulgate Order No. 2004. In the meantime, it is unclear what Standards of Conduct, if any, apply to natural gas pipelines and their affiliates.

Paul ForshayPartnerSUTHERLAND, ASBILL & BRENNAN L.L.P.

FERC Opens Door to Changes in Cost of Equity Model

October 27, 2006

Analysis of:Opinion 486 and Order on Initial Decision re Kern River Gas Transmission Co with Commissioner Sptizer's concurring statement attached under RP04-274 | elibrary.ferc.gov

FERC's Kern River decision opens the door to future changes in the Commission's traditional DCF model for setting pipeline equity returns.

FERC indicates a willingness to consider future DCF proxy groups that include properly adjusted MLP distributions.

FERC also indicates a willingness to consider DCF proxy groups that include energy companies with substantial monopoly utility revenues.

Leonard CoburnPresidentCoburn International Energy Co

The Russian Energy Conversation: Implications at the G-8

July 13, 2006

Analysis of:Russian Energy Policy Doesn't Match Its G-8 Talk | online.wsj.com

The article reviews:

-- G-8 Summit
-- Russia Energy Policy
--- European and U.S. Reactions and Policy Implications

Page : 11 to 10 of 10