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Obama Breeds Rebellion Among the States

By Alan Caruba

The resistance to Obamacare is writing a new chapter in U.S. history. It may well become the most unpopular law since Prohibition became an Amendment to the Constitution in 1919. By 1933, another Amendment repealed it.

Obamacare passed by a straight Democratic party vote on Christmas Eve in 2009. No Republican voted for it and, as one poll recently revealed, a third of Americans are still unaware it is the law of the land. A divided Supreme Court gave it a pass, calling it a tax, but it is a profoundly unconstitutional law insofar as the federal government may not pass a law that requires Americans to purchase something and to fine them if they do not. It is also playing havoc with the economy, delaying recovery as it deters hiring and encourages firing.

Nonetheless, a number of states have gone on record seeking to nullify its enforcement and some are doing the same as regards gun control. Arizona became famous when it passed its own immigration law in response to the federal government’s failure to protect its border with Mexico. The proposed “Gang of Eight” immigration law is facing stiff opposition for its various provisions, most of which do not address the central issue of security on the southern border.

How out of touch is the President? He went to Mexico and blamed the violence arising from its drug cartels on America, saying “Most of the guns used here to commit violence came from America.” He made no mention of the scandalous “Fast and Furious” scheme in which the ATF actually ran guns into Mexico, claiming they would track them. It took an executive order to throw a blanket of silence over it and a compliant media to ignore that scandal.

It is, however, Obamacare that poses the greatest threat to the nation, intruding on the patient-doctor relationship, robbing billions from Medicare to pay for it, requiring states to fund more Medicaid when many are strapped to meet other needs, and putting 16% of the nation’s economy under federal control.

A total of twenty-seven states have filed suit against Obamacare. Two federal judges have upheld its individual mandate to purchase health insurance and two others have ruled that it is unconstitutional.

Twelve states have introduced versions of the Federal Health Care Nullification Act that was drafted by the Tenth Amendment Center. They include Texas, Montana, Wyoming, Oregon, Alabama, and Maine. All declare that Obamacare is “hereby declared to be invalid, shall not be recognized, is specifically rejected, and shall be considered null and void and of no effect.”

In South Carolina, on May 1st, the state House passed a bill that declares the bill null and void and goes a step further, criminalizing its implementation. Earlier Governor Nikki Haley, in her state of the state address, said that South Carolina does not want and cannot afford Obamacare, saying of the President’s namesake, “not now, not ever.”

The following day, Kansas Governor Sam Brownback sent a letter in response to Attorney General Eric Holder’s opposition to its Second Amendment Protection Act, declaring it unconstitutional; essentially tell him to piss off. “The people of Kansas,” said the Governor, “have clearly expressed their sovereign will.” The same day, Missouri passed a comparable law protecting the Second Amendment.

Not since the years leading up to the Civil War was kicked off on December 20, 1860 when South Carolina voted for secession, has there been such open resistance to the mandates of the federal government by the states on a range of issues. Earlier, in 1832, President Andrew Jackson had threatened to send troops to South Carolina to enforce federal laws.

Nullification, however, will not succeed as a means to rid the nation of Obamacare. To Obama’s dismay, his gun control law failed in Congress when even members of his party joined in voting against it. The fate of immigration reform remains unknown but it will come to a vote soon enough.

The reason why nullification will fail is embedded in the Constitution. The Supremacy Clause states “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the land; and the judges in every State shall be found thereby, any Thing in the Constitution or Laws of any State to the Contrary, notwithstanding.”

That has not discouraged the legislatures of many states from expressing their opposition to Obamacare, intrusions on the Second Amendment right of citizens to bear arms, and to demand the federal government enforce the laws regarding its borders.

There isn’t a constitutional scholar that does not support the Supremacy Clause. The Heritage Foundation has a policy paper on the subject of nullification that says “there is no clause or implied power in either the national or the various state constitutions that enables states to veto federal laws unilaterally.”

The states, though, can express their displeasure and their opposition to federal laws and that is what lies at the heart of the spate of nullification laws that have been passed. As sovereign republics, the states can and do express themselves and, through their elected Senators and Representatives, have the power in concert to repeal obnoxious and injurious federal laws.

That will be the fate of Obamacare.

© Alan Caruba, 2013

Posted by Alan Caruba at 3:01 PM

Gulf of Mexico: MWCC’s Subsea Equipment to Be Located in Mobile

Marine Well Containment Company (MWCC) announced today that Mobile, Ala. has been selected as the shorebase location to house the well containment company’s subsea umbilicals, risers and flowlines (SURF) equipment.

MWCC’s SURF equipment is an integral part of the company’s expanded containment system (ECS) that will enhance the company’s well containment capabilities in the deepwater U.S. Gulf of Mexico. MWCC will utilize the facilities and services of Technip USA and Core Industries to store, maintain and test the equipment.

Technip USA, a leader in subsea project management, engineering and construction for the energy industry, and Core Industries, a multi-faceted firm with vast industry knowledge and close proximity to the U.S. Gulf of Mexico, are well equipped to provide MWCC’s required services. MWCC is confident in its decision to partner with these companies as together they offer significant storage, maintenance, testing and deployment capabilities, as well as expertise, which are essential to achieving MWCC’s mission.

“Should our SURF equipment be needed to respond to a well control incident in the deepwater U.S. Gulf of Mexico, we know that we have the right support in place to respond safely and effectively,” said MWCC CEO, Marty Massey. “MWCC is committed to serving the U.S. Gulf and is proud to be a part of the Mobile community.”

The selection of Mobile for its SURF shorebase also allowed MWCC to tap into the skilled and industry-experienced workforce of Alabama to achieve its mission to be continuously ready to respond to a deepwater well control incident in the U.S. Gulf of Mexico. The company will soon be transporting all of its SURF equipment to the Mobile shorebase where it will be properly stored and maintained at all times.

MWCC’s expanded system is scheduled for delivery starting later this year, and will further advance the company’s deepwater well containment technology and capabilities. The ECS will be able to cap and flow a well in up to 10,000 feet and will have the capacity to contain up to 100,000 barrels of liquid per day.

Subsea World News – MWCC’s Subsea Equipment to Be Located in Mobile, USA.

GulfMark Orders Two Platform Supply Vessels from BAE Systems (USA)

GulfMark Americas, Inc. has selected BAE Systems’ shipyard in Mobile, Alabama to build two new platform supply vessels that will serve offshore drilling operations. The contract reflects continued growth in U.S. commercial shipbuilding for BAE Systems and a major step forward in the company’s support to the oil and gas industry.

Each of the GulfMark vessels will be qualified under the U.S. Jones Act and will measure 288 feet long and 62 feet wide. The selection also includes options to build two additional platform supply vessels in the future.

“GulfMark is excited about partnering with BAE Systems on this important project,” said David Rosenwasser, chief operating officer of GulfMark Offshore. “BAE Systems demonstrated unique capabilities that are essential to us, and we look forward to building a long-term relationship going forward.”

The design for the BAE Systems-built Green DP2 vessels will be provided by MMC Ship Design & Marine Consulting, Ltd. of Poland and will be based on similar platform supply vessels currently under construction for GulfMark abroad. The new vessels will be U.S. flagged and will support the anticipated future demand in the Gulf of Mexico offshore market, as well as other areas around the world as necessary.

“This contract reinforces our commitment to new construction in the commercial market and strengthens BAE Systems’ position as a highly competitive and financially stable builder of technically sophisticated ships,” said Richard McCreary, vice president of BAE Systems Southeast Shipyards. “We continue to grow our backlog of projects and build our workforce in Mobile.”

The GulfMark contract is part of a recent expansion at the Mobile shipyard. Last month, the company teamed with Mid Ocean Tanker Company and Alterna Capital to complete the American Phoenix, a U.S. flag/Jones Act-qualified product chemical tanker. Measuring 616 feet long and 105 feet wide, it is the largest vessel ever built and launched in the State of Alabama. BAE Systems has also begun construction on the MV Magdalen, a trailing suction hopper dredge that is scheduled to be delivered in 2014.

In addition to the vessels under construction in Mobile, BAE Systems announced in June that it was awarded a contract with Great Lakes Dock & Dredge Company to build two dump scows, which are used for dredging operations. Construction on the 262-foot-long dump scows is expected to start in October.

BAE Systems currently employs more than 650 people in Mobile and expects to hire an additional 275 workers there by the end of this year.

With state-of-the-art craft shops and fabrication facilities, no job is too big or too small for BAE Systems — from container and supply vessels to mega-yachts and tugs. Serving both military and commercial markets, the company operates six full-service shipyards in Mobile, Alabama; San Francisco and San Diego, California; Jacksonville, Florida; Norfolk, Virginia; and Pearl Harbor, Hawaii.

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Shale Gas Boom: Hydraulic Fracturing and Potential Legal Claims

Joshua W. Mermis
Friday, June 22, 2012

A “gas rush” is revitalizing the domestic petroleum exploration industry, and the legal ramifications could be felt for decades. Through hydraulic fracturing (fracking), petroleum companies access once cost prohibitive shale gas formations by creating fractures in underground rock formations, thereby facilitating oil or gas production by providing pathways for oil or gas to flow to the well. These pathways are commonly referred to as the “fractures.” The legal consequences of fracking could impact more than half of the Lower 48 states.

Background of Hydraulic Fracturing

The basic technique of fracking is not new. In fact, fracking has been used in wells since the late 1940s. The first commercial fracking job took place in 1949 in Velma, Oklahoma, however, sequestered layers of shale gas were inaccessible until 1985, when pioneers such as Mitchell Energy and Development Corporation combined fracking with a newer technology called directional, or horizontal drilling in the Austin Chalk. Directional drilling gave producers access to the shale gas because it allowed them to turn a downward- plodding drill bit as much as 90 degrees and continue drilling within the layer for thousands of additional feet. The positive results were soon transferred to the Barnett Shale in North Texas. To date, more than one million wells have been fractured.
The “hottest” shale plays are as follows:

  • Bakken (Montana, South Dakota and North Dakota)
  • Barnett Shale (Texas)
  • Eagle Ford (Texas)
  • Haynesville (Arkansas, Louisiana, and Texas)
  • Marcellus Shale (New York, Ohio, Pennsylvania, and West Virginia)
  • Utica (Kentucky, Maryland, New York, Ohio, Pennsylvania, Tennessee, West Virginia and Virginia)

Confirmed and/or prospective shale plays are also found in Alabama, California, Colorado, Illinois, Indiana, Kansas, Michigan, Mississippi, Missouri, Nebraska, Utah and Wyoming. Shale plays have been confirmed in countries around the world, but the US is the leader in shale gas exploration.

More Money, More Problems

The new application of an old technology made it possible to profitably produce oil and gas from shale formations. Domestic and international companies quickly rushed to capitalize on the large reservoirs of shale gas. But unlike the preceding decades, where new oil and gas exploration had occurred offshore and in deepwater, oil and gas drilling started to occur in areas that were not accustomed to oil and gas activity. Overnight ranchers became millionaires as landmen leased large swaths of property to drill. The media started reporting about enormous domestic supplies of oil and gas that could be profitably produced from shale formations and politicians touted energy independence that could alleviate the country’s demand for foreign reserves. But with the increased attention came increased scrutiny.

Environmental groups have criticized the industry for fracking. The chief concern is that fracking will contamination of drinking water. Movies such as “Gasland” and “Gasland 2” fueled the public’s concerns that the drilling caused polluted water wells and flammable kitchen faucets. Additionally, the industry received criticism for the engineering process that involved high-rate, high-pressure injections of large volumes of water and some chemicals into a well to facilitate the fracking. The EPA and state regulatory bodies have become involved in the discussion and new regulations are likely to follow. In the meantime, some lawsuits have already been filed.

Pending Hydraulic Fracturing Litigation

Plaintiffs have filed approximately forty shale-related lawsuits across the country. These lawsuits include: (1) tort lawsuits; (2) environmental lawsuits; or (3) industry lawsuits. As the shale boom accelerates more suits are anticipated.

1. Tort Lawsuits

Tort lawsuits have been brought by individuals and as class actions. Typically the claimants assert claims for trespass, nuisance, negligence and strict liability. Their complaints involve excessive noise, increased seismic activity, environmental contamination (air, soil and groundwater), diminution in property value, death of livestock/animals, mental anguish and emotional distress. The plaintiffs seek actual damages and, in some instances, injunctive relief. A few parties have even sought the establishment of a medical monitoring fund. The majority of these lawsuits have been filed in Texas, Pennsylvania and Louisiana. The first wave of lawsuits has established new law in the respective jurisdictions as the appellate courts weigh in with published opinions on issues that range from oil and gas lease forfeiture, consequences of forged contracts and contract formation.

2. Environmental Lawsuits

Environmental organizations and some citizen groups are seeking to enforce environmental laws and regulations in an effort to protect the environment and the public from what the litigants perceive to be negative consequences of fracking. In some instances they are even seeking to restrict the use of hydraulic fracking until it is proven to be environmentally safe. A popular target among these litigants is federal and state regulatory bodies, such as the EPA, and federal statutes, such as the Clean Air Act.

3. Industry Lawsuits

The final category of lawsuits includes those brought by the industry against the government. Claimants have sought to challenge federal, state and local government actions that have impeded the industry’s ability to drill.

Fracking Lawsuits 2.0 – Transportation, Construction, Personal Injury and Beyond

The survey of current fracking lawsuits does not take into account the claims that will spin out of the new shale plays. In fact, the engineering and logistical side of the fracking process – not fracking itself – will lead to many more attendant claims.

  • Transportation: The survey of current fracking lawsuits does not take into account the claims that will spin out of the new shale plays. In fact, the engineering and logistical side of the fracking process – not fracking itself – will lead to many more attendant claims.
  • Commercial: Lessor involved in mineral disputes will lead to commercial claims. Many lessors will feel they were shorted, or want a better deal as those now positioned to lease their rights sign a more lucrative mineral-rights lease. Company-to-company disputes will also rise as the price of natural gas fluctuates.
  • Construction: The contractors and design professionals building the midstream facilities, among others, will lead to construction-defect and delay claims. Many states have recently adopted anti-indemnity statutes that will impact claims that arise during construction of midstream facilities, pipelines and other infrastructure-related construction projects.
  • Insurance: Coverage issues will arise as parties file first- and third-party claims for myriad reasons. Issues including comparative indemnity agreements, flow-through indemnity and additional insured endorsements, among others, will need to be analyzed.
  • Personal Injury: Additional workers drilling and working the wells will lead to an increase in personal injury and work-place accident claims. Many of the shale plays are located in what have traditionally been considered “plaintiff friendly” venues. A claim in Pennsylvania will have a different value than one located in Webb County, Texas.
  • Product Liability: The products and chemicals used to drill and extract the oil and gas will lead to product liability claims involving both personal and property damage. The BP Deep Water Horizon well-blowout in the Gulf of Mexico will not be lost on those involved in domestic oil and gas exploration.

How To Reduce Future Fracking Litigation Risk?

Parties can act now to discourage litigation or better position themselves in the event they are named in a suit.

1. Institute electronic records protocol

The proliferation of email and increased retention and archival capabilities means that emails never die. A potential defendant would be well served with a protocol in place that outlines to its employees what are acceptable electronic communications.

2. Strictly comply with fracking fluid disclosures

For those parties who could be exposed to claims regarding the fluids used during drilling, it is important that they minimize the public’s suspicion that they are withholding information about the fluids. The best way to neutralize that misconception is to strictly comply with the state-mandated disclosure rules where applicable. It may even behoove them to voluntarily disclose the fluids’ contents through the
companies’ websites.

3. Be prepared for a fire-drill

A party must be ready to quickly assert its position when a claim is brought. The best way to do so is to track current litigation. Following the cases will provide the company a preview as to what claims it may be subject to, and it also allows them to evaluate defenses. It may also enable the company to insulate itself from suit by avoiding certain actions. Along those same lines, knowing the facts, documents, emails, fact witnesses and expert witnesses will work to a party’s advantage. Some industry leaders have proactively retained experts even though they have not been sued.

4. Know your neighbors

Parties should view their neighbors as allies and potential jurors. To that end, it makes sense to open a dialogue about fracking with the regulators on a local, state and federal level. It would also benefit the parties to engage the community and publicize information about the benefits associated with fracking, e.g., jobs, lower energy prices, cleaner energy, energy independence, etc. Certain midstream players have rolled out a public education campaigns aimed at that very goal.

Conclusion

Articles on shale gas and fracking adorn the front pages of the Wall Street Journal and New York Times. 60 Minutes runs stories on shale-gas drilling and the faux pundit Stephen Colbert discusses fracking’s impact on his tongue-and-cheek news show. The promise of profits, domestic jobs and energy independence has the country talking about the gas shale plays that dot the landscape. Fracking and all that it encompasses will serve as the backdrop for a variety of legal issues during the foreseeable future.

Joshua W. Mermis is a partner at Johnson, Trent, West & Taylor in Houston, Texas, where he primarily practices in construction and energy litigation. He received his B.A. from the University of Kansas and J.D. from the University of Texas School of Law. This article previously appeared in the Spring/Summer 2012 issue of USLAW magazine.

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