Q&A: Energy boom means plenty of work for lawyers

HOUSTON — Jason Leif, a partner in the Houston office of the Jones Day law firm, was elected recently as president of the Energy Bar Association, a national organization of 2,600 members active in various aspects of energy law. Leif’s practice focuses on pipelines as well as liquefied natural gas permitting and construction. His clients have included BP, CenterPoint Energy and Chevron, among others.

Before joining the law firm, he worked at the Federal Energy Regulatory Commission and advised judges on litigation involving pipelines and utilities. He discussed the legal side of energy with FuelFix. These are excerpts from the interview, condensed and edited for clarity:

FuelFix: The Energy Bar Association must include everyone from property lawyers to environmental lawyers to mergers and acquisitions lawyers. It must be a pretty big tent.

Leif: The association has been around since the 1940s. It was mostly D.C.-based with a federal regulatory focus. Over the years the footprint has sort of grown. Now, it has chapters across the U.S. It goes into Canada as well as Mexico. Somewhere in the ballpark of 60 percent of our membership broadly speaking is in the Northeast. And we’ve got a big chunk in Houston.

We have regional chapters to pick up areas of interest throughout the country. Energy issues in California are different from energy issues in Houston. We also have 21 committees dealing with issues like transactions, alternative dispute resolution, antitrust, and energy regulation.

FuelFix: Has the domestic energy boom meant a boom for energy lawyers too?

Leif: It’s certainly a good time. There always are interesting issues you never would have thought about. The thing you can be sure of is, no matter how much anybody thinks about it and tries to come up with the perfect study to forecast what will happen, in five to 10 years you can be pretty sure it will be wrong. That inevitably means there are business deals that haven’t played out the way people wanted them to. Whether industry participants like it or not, that often means lawyers have to be involved. From our perspective, we like to think we help try to come up with the answers, but sometimes, it also means you end up rolling up your sleeves and fighting about things.

FuelFix: How did you come to focus on the energy sector?

Leif: I was in D.C., and like so many people, you start off thinking you’re heading one way and you bumble into something else and find it’s interesting. I had the opportunity to clerk for an administrative law judge at the Federal Energy Regulatory Commission while I was in law school. I went to Jones Day in Washington, and after a year found I was really interested in the energy practice. I liked the intersection between the transactional side of things and the litigation side.

FuelFix: What big cases have you been involved in?

Leif: I got involved pretty early in my career in a case related to the Trans-Alaska Pipeline System involving the method used to figure out the different qualities of crude produced in the North Slope. They have different ownership interests. My firm was representing BP. Some of the crude, if you could take it right to market to a refinery, has more value than other crude produced in a different part of the field. But it also gets blended in the pipeline. So some people get better stuff coming out than they otherwise would.

The trick was figuring out how to compensate or debit people on the slope because of this co-mingling process. What’s the method of valuing it? Nothing’s ever simple. Not surprisingly it ended up in a lot of litigation over the years. The way we ultimately gravitated towards valuing it and getting it as precise as possible was by building a hypothetical refinery to figure out what the crude was worth. The neat thing about the case was it hit every piece of the industry.

FuelFix: You worked with FERC and you’ve worked with the industry on liquefied natural gas exports. Do you think applications are being processed too slowly, as some in the industry have complained?

Leif: I think nothing’s fast enough for the industry. That’s the reality. FERC has been pretty consistent about the pace. I think the Department of Energy is faced with issues they’ve never seen before. They’re resource constrained. They have a lot of projects in front of them. My view is you have to sort of give them a break. It makes some people nervous, but at this point, they seem to be approving things at a decent clip.

FuelFix: What are your priorities for the Energy Bar now that you’re president?

Leif: I’m the first person, I think, outside of the Northeast who’s been president. One of the things we’ve tried to do over the years is expand the reach of the organization to cover more than just regulatory issues and to increase the overall footprint.

I got a lot more involved once I got to Houston. It’s particularly important to me to ensure all of our activities outside the D.C. area are as strong and vibrant as within. And I think they are.

FuelFix: How has your organization changed as the industry has evolved?

Leif: There’s a lot more focus on compliance and enforcement, when it comes to marketing and trading, and the organization has been at the forefront in dealing with issues like that whether it’s FERC or the U.S. Commodity Futures Trading Commission. It’s grown in importance for energy companies as the CFTC has been more focused on questions about market activities and alleged market manipulation, as well as additional regulatory oversight they have through Dodd-Frank (the 2010 regulatory overhaul passed in response to the financial crisis). That’s been an interesting change in a lot of our practices.

Climate change has been up and down. At one point, every Energy Bar program seemed like it had an extraordinarily deep climate change component to it, and that waned as the cap and trade bill (to set carbon emissions limits) didn’t make it.

Certainly there’s been a lot of talk about hydraulic fracturing at this point and all the environmental issues that come with that. We try really hard to be position-neutral and develop programming and opportunities for people to sit down and talk through the issues and see both sides.


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