Amicus Curiae Brief — BP p.l.c., et al., Petitioners v. Mayor and City Council of Baltimore

No. 19-1189

IN THE SUPREME COURT OF THE UNITED STATES

_______________

BP P.L.C., ET AL., Petitioners,

v.

MAYOR AND CITY COUNCIL OF BALTIMORE,

Respondent.

_______________

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

_______________

AMICI CURIAE BRIEF OF

GENERAL (RETIRED) RICHARD B. MYERS

and

ADMIRAL (RETIRED) MICHAEL G. MULLEN,

IN SUPPORT OF PETITIONERS

_______________

Tristan L. Duncan

(Counsel of Record)

SHOOK, HARDY & BACON L.L.P.

2555 Grand Blvd.

Kansas City MO 64108

(816) 474-6550

tlduncan@shb.com

Counsel for Amici Curiae

i

TABLE OF CONTENTS

INTEREST OF AMICI CURIAE ............................. 1

INTRODUCTION AND SUMMARY OF THE

ARGUMENT.................................................. 3

ARGUMENT ............................................................ 4

I.

Beginning in the early 20th century, the

Federal Government developed and

controlled significant oil production

from domestic oil and gas companies to

support national defense efforts. .................. 5

II.

During the second half of the 20th

Century, the Federal Government

continued to exercise substantial

control and direction over the

production of oil and gas. ............................ 11

III.

The Federal Government’s efforts to

ensure a dependable, abundant supply

of oil and gas have continued over

recent decades. ............................................ 18

CONCLUSION ....................................................... 22

ii

TABLE OF AUTHORITIES

Page(s)

Cases

California ex rel. Brown v. Watt,

668 F.2d 1290 (D.C. Cir. 1981) ............................14

Chevron U.S.A., Inc. v. United States,

116 Fed. Cl. 202 (Fed. Cl. 2014) ..........................10

Exxon Mobil Corp. v. United States,

2020 WL 5573048 (S.D. Tex. Sept.

16, 2020) ...........................................................4, 11

Laredo Offshore Constructors, Inc. v.

Hunt Oil Co.,

754 F.2d 1223 (5th Cir. 1985)..............................14

Shell Oil Co. v. United States,

751 F.3d 1282 (Fed. Cir. 2014) ....................8, 9, 11

United States v. Standard Oil Co. of

Cal.,

545 F.2d 624 (9th Cir. 1976)..................................6

Statutes

30 U.S.C. § 192 ..........................................................21

43 U.S.C. §1332(3).....................................................11

43 U.S.C. § 1341(b)....................................................18

43 U.S.C. § 1353(a)(2) ...............................................20

iii

43 U.S.C. § 1353(a)(3) ...............................................20

43 U.S.C. § 1802 ........................................................14

Defense Production Act of 1950 ................................11

Defense Production Act of 1950, Pub. L.

No. 81–774 ...........................................................11

Naval Petroleum Reserves Production

Act of 1976, Pub. L. No. 94-258

(1976), 90 Stat. 303, 307-308 (1976) ...................16

Outer Continental Shelf Lands Act ........ 11, 14, 16, 18

Pub. L. No. 94-163, 89 Stat. 871 ...............................15

Supplemental Appropriation Act of

1974, Pub. L. No. 93-245 (1974) ..........................15

Trans-Alaska Pipeline Authorization

Act of 1973............................................................13

Other Authorities

30 C.F.R. 250.1150 ....................................................17

121 Cong. Rec. S903-11 (1975) .................................17

Adam Vann, Congressional Research

Service, RL33404, Offshore Oil and

Gas Development: Legal Framework

(2018),

https://fas.org/sgp/crs/misc/RL33404.

pdf .........................................................................18

iv

Annual Message to the Congress on the

State of the Union, 1 Pub. Papers 59

(Jan. 23, 1974), at

https://quod.lib.umich.edu/p/ppotpus

/4731948.1974.001/99?view=image&

size=100................................................................13

Bureau of Safety and Environmental

Enforcement, Outer Continental

Shelf Oil and Gas Production (Nov.

4, 2020),

https://www.data.bsee.gov/Productio

n/OCSProduction/OCSProduction/De

fault.aspx..............................................................19

Cong. Rsch. Serv., R42432, U.S. Crude

Oil and Natural Gas Production in

Federal and Nonfederal Areas 3, 5

(updated Oct. 23, 2018)........................................20

Daniel Yergin, THE PRIZE: THE EPIC

QUEST FOR OIL, MONEY & POWER

(1991) ......................................................................7

Def. Logistics Agency Energy, Fiscal

Year 2019 Fact Book (2019) ................................20

H.R. Rep. No. 94-1084 (1976) ...................................16

H.R. Rep. No. 95-590 (1977) .....................................17

H.R. Rep. No. 115-965 (2017) ...................................15

v

Hearings Before Committee on Naval

Affairs of the House of

Representatives on Estimates

Submitted by the Secretary of the

Navy, 64th Cong. 761 (1915) .................................5

http://www.gao.gov/assets/90/87497.pdf ....................6

https://books.google.com/books?id=o2ei8

yOphboC&printsec=frontcover#v=on

epage&q&f=false..................................................19

https://obamawhitehouse.archives.gov/t

he-press-office/remarks-presidentenergy-security-andrews-air-forcebase-3312010........................................................19

https://quod.lib.umich.edu/p/ppotpus/47

31948.1974.001?rgn=main;view=full

text........................................................................14

https://www.energy.gov/fe/services/petro

leum-reserves/strategic-petroleumreserve/releasing-oil-spr ......................................19

https://www.nytimes.com/1973/04/19/ar

chives/excerpts-from-nixon-messagedeveloping-our-domesticenergy.html ..........................................................13

Ian O. Lessor, Resources and Strategy:

Vital Materials in International

Conflict 1600 – The Present (1989) ...................6, 7

vi

Jay Hakes, A Declaration of Energy Independence at 17 (2008) ......................................12

John W. Frey & H. Chandler Ide, A

History of the Petroleum

Administration for War, 1941-1945

(1946) ......................................................................8

Letter from J.R. Grey, Standard Oil, to

Jack L. Bowers, Acting Secretary of

the Navy (Jan. 7, 1975)........................................15

National Petroleum Council, A National

Oil Policy for the United States

(1949) ......................................................................8

Nixon Message, N.Y. Times, Apr. 19,

1973 ......................................................................13

OCS EIS/EA BOEM 2012-030, 1-4

(2012) ....................................................................21

President Barack Obama, Remarks on

Energy at Andrews Air Force Base,

Maryland, (Mar. 31, 2010) ...................................19

Press Secretary, White House Office of

Communications, Statement on

North Slope Oil Bill Signing (Nov.

28, 1995), 1995 WL 699656, at *1 .......................18

Report of the Activities of the Joint

Committee on Defense Production,

S. Rep. No. 94-1, Pt. 1 (Jan. 17,

1975, 1st Sess.).....................................................14

vii

Robert Lindsey, Elk Hills Reserve Oil

Will Flow Again, N.Y. Times (July 3,

1976), at

https://www.nytimes.com/1976/07/03

/archives/elk-hills-reserve-oil-willflow-again-modest-output-dueinitially.html ........................................................16

Special Message to the Congress on the

Energy Crisis, 1 Pub. Papers 29

(Jan. 23, 1974)................................................13, 14

Statement of Abigail Ross Hopper,

Director, Bureau of Ocean Energy

Management, Before the House

Committee on Natural Resources

(Mar. 2, 2016),

https://www.boem.gov/FY2017Budget-Testimony-03-01-2016 ............................21

Statement By President George W.

Bush Upon Signing [H.R. 6111], 2 ......................19

Statement of George A. Wilson,

Director of Supply and

Transportation Division, Wartime

Petroleum Supply and

Transportation, Petroleum

Administration for War, Special

Committee Investigating Petroleum

Resources, S. Res. 36 (Nov. 28, 1945) ...................9

viii

Statement of Hon. John F. O’Leary,

Administrator, Federal Energy

Administration, Hearing before the

Committee on Interior and Insular

Affairs, U.S. Senate, on FEA’s

Strategic Petroleum Reserve Plan,

at 30 (Feb. 4, 1977) ..............................................16

Statement on the Strategic Petroleum

Reserve, 2 Pub. Papers 1406 (Nov.

13, 2001) ...............................................................21

Statement of Ralph K. Davies, Deputy

Petroleum Administrator of War,

Special Committee Investigating

Petroleum Resources, S. Res. 36

(Nov. 28, 1945) .......................................................7

Statement of Senator O’Mahoney,

Chairman, Special Committee

Investigating Petroleum Resources,

S. Res. 36 (Nov. 28, 1945) ....................................11

ix

Statements of Commodore W.G.

Greenman, U.S. Navy, Director, Naval Petroleum Reserves, Hearing

Records at 3693–94, at

https://books.google.com/books?id=H

JMsKHXdpFYC&pg=PA3693&lpg=

PA3693&dq=statements+of+commo

dore+w.+g.+greenman,+United+stat

es+navy,+director,+naval+petroleum

+reserves&source=bl&ots=fqoEpKuz

xd&sig=ACfU3U3qOpSzwlL3gGFm

7lOaboO3d_eRaw&hl=en&sa=X&ve

d=2ahUKEwib3KaAg4XtAhVDbKw

KHasrBiQQ6AEwA3oECAMQAg#v=

onepage&q=statements%20of%20commo

dore%20w.%20g.%20greenman%2C

%20United%20states%20navy%2C%

20director%2C%20naval%20petrole

um%20reserves&f=false ......................................10

Steven Rattner, Long-Inactive Oilfield

is Open—for Now, N.Y. Times (Oct.

31, 1977) ...............................................................16

U.S. Dep’t of Energy, Strategic

Petroleum Reserve Annual Report

for Calendar Year 2010, at 18 (2011)

(“SPR 2010 Report”).............................................21

U.S. Dep’t of Interior, Bureau of Ocean

Energy Management, OCS Oil and

Gas Leasing Program: 2012-2017

Final Programmatic Environmental

Impact Statement (“2012-2017 EIS”)..................20

x

U.S. Energy Info. Admin., U.S. Energy

Facts Explained (Apr. 27, 2020),

https://www.eia.gov/energyexplained

/us-energy-facts/imports-andexports.php...........................................................20

U.S. Gov’t Accountability Off.,

GAO/RCED-87-75FS, Naval

Petroleum Reserves: Oil Sales

Procedures and Prices at Elk Hills,

April Through December 1986, at 3

(1987) (“GAO Fact Sheet”) ...............................6, 10

U.S. Gov’t Accountability Off., Naval

Petroleum Reserve No. I: Efforts to

Sell the Reserve, GAO/RCED-88-198

at 14 (July 1988),

https://www.gao.gov/assets/220/2103

37.pdf (“GAO Report”) .....................................9, 10

1

INTEREST OF AMICI CURIAE1

United States Air Force General (Retired) Richard

B. Myers was appointed Vice Chairman of the Joint

Chiefs of Staff by President Clinton in 2000 and was

appointed by President George W. Bush in 2001 to

become the 15th Chairman of the Joint Chiefs of

Staff. In that capacity, he served as the principal military advisor to the United States President, Secretary of Defense, and the National Security Council.

He served in that role until 2005. General Myers

joined the Air Force in 1965 through the ROTC program at Kansas State University. He served in the

Vietnam War and had over 600 combat flying hours

in Vietnam. He has held numerous commands and

served in significant staff positions in the Air Force.

General Myers has received numerous awards and

decorations for his service, including, the Legion of

Merit, the French Legion of Honor, and the Presidential Medal of Freedom. He received his fourth-star in

1997 and retired from active duty in 2005, after more

than forty years of active service. General Myers began serving as the Interim President of Kansas State

University in late April 2016, and was announced as

the permanent President on November 15, 2016.

United States Navy Admiral (Retired) Michael G.

Mullen, served as the 17th Chairman of the Joint

amici curiae certify that, no

counsel for a party authored this brief in whole or in part, and

no party or party’s counsel contributed money that was intended to fund preparing or submitting the brief. All parties were

timely notified of the amici’s interest in filing this brief. Petitioners filed a blanket consent to the filing of amicus briefs and

Respondent provided written consent to the filing of this brief.

1 Pursuant to Rule 37.6, counsel for

2

Chiefs of Staff from 2007-2011 under both President

George W. Bush and President Obama. A graduate

of the United States Naval Academy in 1968, Admiral Mullen served in the Vietnam War and commanded his first ship, the USS Noxubee, from 19731975. He earned a Master’s Degree in Operations

Research in 1985 and, later that year, took command

of the guided-missile destroyer USS Goldsborough.

Admiral Mullen participated in Harvard University’s

Advanced Executive Management graduate program

in 1991. He was promoted to Rear Admiral in 1997

and, in 1998, was named Director of Surface Warfare

in the office of the Chief of Naval Operations (CNO).

Admiral Mullen is one of only four naval officers who

has the distinction of receiving four, 4-Star assignments. In 2003, Admiral Mullen was named Vice

Chief of Naval Operations and was tapped to head

the United States Naval Forces in Europe and

NATO’s Joint Force Command in Naples. He then

was appointed Chief of Naval Operations in 2005,

and, in 2007, he was nominated by George W. Bush

to be the 17th Chairman of the Joint Chiefs of Staff.

Admiral Mullen retired from this position in 2011

after serving for four years under both a Republican

and a Democratic president.

The focus of this brief is not on the underlying

merits of the litigation. Amici express no view, and

take no position, on climate change policy questions.

They strongly believe these important national and

international policy issues should be addressed to

Congress and the Executive Branch, not adjudicated

piecemeal across the country in a multitude of state

courts. Instead, this brief provides a history of the

Federal Government’s control and direction of the

3

production and sale of gasoline and diesel to ensure

that the military is “deployment-ready”. For more

than a century, petroleum products have been essential for fueling the United States military around the

world. In amici’s view, the use of fossil fuels was crucial to the success of the armed forces when amici

served as Chairmen of the Joint Chiefs of Staff, and

it remains crucial today to advance the Nation’s paramount interest in national defense. In light of that

concern, amici believe this history and their experience demonstrate that removal of this case to federal

court is proper.

INTRODUCTION AND SUMMARY OF

THE ARGUMENT

This case centers on the global production, sale

and consumption of oil and gas products that are

used by virtually every person on the planet every

single day. Respondent seeks to impose ruinous liability on Petitioners’ production and sale of these essential products through claims brought in state

courts around the country. Due to the extensive

Federal Government involvement in the development and growth of the domestic oil and gas industry, Respondent’s claims should be governed by federal law and adjudicated in federal courts.

Oil and gas products are critical to national security, economic stability and the military preparedness

of the United States. For more than 100 years, the

Federal Government has actively encouraged domestic exploration and production of oil and gas. As federal courts have recognized, petroleum products have

been “crucial to the national defense,” including but

4

by no means limited to “fuel and diesel oil used in the

Navy’s ships; and lubricating oils used for various

military machines.” Exxon Mobil Corp. v. United

States, 2020 WL 5573048, at *31 (S.D. Tex. Sept. 16,

2020) (emphasis added); see also id. at *47 (noting the

“value of [the] petroleum industry’s contribution to

the nation’s military success”). The Federal Government has both incentivized and contracted with Petitioners to obtain oil and gas products for use by the

Federal Government in the national interest and to

ensure a dependable, abundant supply of oil and gas

for the nation’s economic and military security.

Respondent’s Complaint relates to and seeks substantial relief from Petitioners regarding their past

and present production of oil and gas on federal

lands and under the direction of the Federal Government. Their claims necessarily implicate and are

subject to federal law which places jurisdiction of

these matters in federal courts. This amicus brief

provides an historical background of the Federal

Government’s oversight and control of the oil and

gas industry, which underscores why federal jurisdiction is warranted here.

ARGUMENT

For more than a century, and to this day, the Federal Government has incentivized and controlled aspects

of United States oil production and has reserved rights

to take additional control of such operations for the

benefit of the nation’s defense, security and economy.

The Federal Government has required and otherwise been inextricably involved in oil and gas com-

5

panies’ development of the nation’s domestic oil resources both for governmental use and the use of billions of consumers. Any claims arising from the historic production and sale of domestic oil and gas necessarily implicate the Federal Government’s historical and current role in this industry, including the

extensive history of federal laws, contracts and leases that supported and controlled significant portions

of our nation’s fuel supply. Petitioners’ exploration

and production of oil and gas, including production

on the Outer Continental Shelf (“OCS”) and on federal lands, has been conducted substantially under

the direction of the Federal Government. Accordingly, removal of Respondent’s claims from state to federal court is proper.

I.

Beginning in the early 20th century, the

Federal Government developed and

controlled significant oil production

from domestic oil and gas companies to

support national defense efforts.

More than a century ago, in 1910, President Taft

implored Congress to develop domestic oil sources:

“As not only the largest owner of oil lands, but as a

prospective large consumer of oil by reason of the increasing use of fuel oil by the Navy, the Federal

Government is directly concerned both in encouraging rational development and at the same time insuring the longest possible life to the oil supply.”

Hearings Before Committee on Naval Affairs of the

House of Representatives on Estimates Submitted

by the Secretary of the Navy, 64th Cong. 761 (1915).

6

Within two years, on September 2, 1912, President

Taft established by Executive Order the first "Naval

Petroleum Reserve" at Elk Hills, California, taking

the extraordinary step of withdrawing large portions

of land from eligibility for private ownership and

designating them instead to be used for the development of fuel resources to ensure the United States

Navy was “deployment-ready” in the event of war.

United States v. Standard Oil Co. of Cal., 545 F.2d

624, 626-628 (9th Cir. 1976); see also U.S. Gov’t Accountability Off., GAO/RCED-87-75FS, Naval Petroleum Reserves: Oil Sales Procedures and Prices at

Elk Hills, April Through December 1986, at 3 (1987)

(“GAO Fact Sheet”) (“The Elk Hills Naval Petroleum

Reserve (NPR-1) . . . was originally established in

1912 to provide a source of liquid fuels for the armed

forces during national emergencies.”).2

Indeed, the defining characteristic of World War I

was “the mechanization of armies” (i.e., the prominence of tanks, aircraft, and submarines), as a result

of which “oil and its products began to rank as

among the principal agents by which the Allies

would conduct war and by which they could win it.”

Ian O. Lessor, Resources and Strategy: Vital Materi-

als in International Conflict 1600 – The Present

(1989) at 42. The necessity was echoed among the

Allies, as British Cabinet Minister Walter Long expressed in an address to the House of Commons in

1917:

2 http://www.gao.gov/assets/90/87497.pdf

7

Oil is probably more important at this moment than anything else. You may have men,

munitions, and money, but if you do not have

oil, which is today the greatest motive of power that you use, all your other advantages

would be of comparatively little value.

Yergin, THE PRIZE: THE EPIC QUEST FOR OIL, MONEY

& POWER (1991) at 177.

By 1917, American oil became vital for war efforts.

As the Admiralty Director of Stores stated,

“[W]ithout the aid of oil from America our modern

oil-burning fleet cannot keep the sea.” Lessor, Resources and Strategy at 43. In response to the Allies’

cry for help, the United States provided over 80 percent of the Allied requirements for petroleum products and greatly influenced the outcome of the war.

Id. (“A failure in the supply of petrol would compel

the immediate paralysis of our armies, and might

compel us to a peace unfavorable to the Allies….

The safety of the Allied nations is in the balance. If

the Allies do not wish to lose the war, then, at the

moment of the great German offensive, they must

not let France lack the petrol which is as necessary

as blood in the battles of tomorrow” (quoting Clemenceau’s letter to President Wilson)). Id.

Two decades later, World War II confirmed petroleum’s role as a key American resource and underscored the government’s interest in maintaining and

managing it. Statement of Ralph K. Davies, Deputy

Petroleum Administrator of War, Special Committee

Investigating Petroleum Resources, S. Res. 36, at 4

(Nov. 28, 1945) (“Our overseas forces required nearly

twice as many tons of oil as arms and armament,

8

ammunition, transportation and construction

equipment, food, clothing, shelter, medical supplies,

and all other materials together. In both essentiality

and quantity, oil has become the greatest of all munitions.”); National Petroleum Council, A National

Oil Policy for the United States at 1 (1949) (“A prime

weapon of victory in two world wars, [oil] is a bulwark of our national security.”).

In 1941, as the United States prepared to enter

World War II, its need for large quantities of oil and

gas to produce high-octane fuel for planes (“avgas”),

oil for ships, lubricants, and synthetic rubber far

outstripped the nation’s capacity at the time. Avgas

was viewed as “the most critically needed refinery

product during World War II and was essential to

the United States’ war effort[.]” Shell Oil Co. v.

United States, 751 F.3d 1282, 1285 (Fed. Cir. 2014)

(“Shell II”). The Federal Government created agencies to control petroleum production and distribution; it directed the production of certain petroleum

products; and it managed resources.

In 1942, President Roosevelt established several

agencies to oversee wartime petroleum production,

including the War Production Board (“WPB”) and

the Petroleum Administration for War (“PAW”). The

PAW centralized the government’s petroleumrelated activities. The “PAW told the refiners what

to make, how much of it to make, and what quality.”

Shell II, 751 F.3d at 1286 (quoting John W. Frey &

H. Chandler Ide, A History of the Petroleum Administration for War, 1941-1945, at 219 (1946)). “PAW

was further expected to designate for the military

forces the companies in a given area from which the

9

product could be secured, as well as the amount to be

produced by each company and the time when the

product would be available.” Statement of George A.

Wilson, Director of Supply and Transportation Division, Wartime Petroleum Supply and Transportation, Petroleum Administration for War, Special

Committee Investigating Petroleum Resources, S.

Res. 36 at 212 (Nov. 28, 1945). The Office of the Petroleum Coordinator for National Defense stated

that “[i]t is essential, in the national interest that

the supplies of all grades of aviation gasoline for military, defense and essential civilian uses be increased immediately to the maximum.” Shell II, 751

F.3d at 1286 (quoting Office of Petroleum Coordinator for National Defense Recommendation No. 16).

(emphasis added).

To maintain and preserve a sufficient fuel supply,

the Navy sought complete control over development

of the entire Elk Hills Reserve and production of oil

therefrom. On March 21, 1942, President Roosevelt

“stated that if satisfactory arrangements could not

be promptly concluded with [Standard Oil of California], the Secretary of the Navy was authorized to

start condemnation proceedings through the Department of Justice to acquire the property” for the

Federal Government. See U.S. Gov’t Accountability

Off., Naval Petroleum Reserve No. I: Efforts to Sell

the Reserve, GAO/RCED-88-198 at 14 (July 1988),

https://www.gao.gov/assets/220/210337.pdf

(“GAO

Report”).

The Navy and Standard Oil entered into the Elk

Hills Unit Plan Contract that President Roosevelt

approved on June 28, 1944, “to govern the joint op-

10

eration and production of the oil and gas deposits . . .

of the Elk Hills Reserve.” Chevron U.S.A., Inc. v.

United States, 116 Fed. Cl. 202, 205 (Fed. Cl. 2014);

see also Statements of Commodore W.G. Greenman,

U.S. Navy, Director, Naval Petroleum Reserves,

Hearing Records at 3693–94. (“[T]he agreement between the Navy and Standard . . . placed the control

of production from both Standard [Oil] and Navy

lands under the absolute control of the Secretary of

the Navy.”). Although the Navy could have developed the resources on the Reserve itself, it chose to

hire Standard Oil to operate the Reserve to maximize production as quickly as possibly because

“[a]substantial increase in production…was urgently

requested by the Joint Chiefs of Staff to meet the

critical need for petroleum on the West Coast to supply the armed forces in the Pacific theatre,” and

Standard Oil was more qualified than the Federal

Government itself to do so. Elk Hills Historical Documents at 1.3

“Shortly after the unit plan contract was signed, the

Congress, according to DOE, authorized the production at [the Elk Hills Reserve] at a level of 65,000 B/D

[barrels per day] to address fuel shortages on the West

Coast and World War II military needs.” GAO Report

at 15. Production reached this “peak of 65,000 barrels

per day in 1945.” GAO Fact Sheet at 3. At the direction of the Federal Government, the oil companies increased avgas production “over twelve-fold from approximately 40,000 barrels per day in December 1941

3 Available at Delaware District Court, Case no. 1:20-cv-01429,

ECF no. 1-1, pp. 279-281, https://ecf.ded.uscourts.gov/doc1/

04314990968

11

to 514,000 barrels per day in 1945, [which] was crucial

to Allied success in the war.” Shell II, 751 F.3d at

1285. “No one who knows even the slightest bit about

what the petroleum industry contributed … can fail to

understand that it was, without the slightest doubt,

one of the most effective arms of this Government” in

fulfilling the government’s core defense functions.

Statement of Senator O’Mahoney, Chairman, Special

Committee Investigating Petroleum Resources, S. Res.

36, at 1 (Nov. 28, 1945) (emphasis added).

II.

During the second half of the 20th Century, the Federal Government continued to exercise substantial control and

direction over the production of oil and

gas.

In 1950, President Roosevelt’s successor, President

Truman, established the Petroleum Administration for

Defense (“PAD”) under authority of the Defense Production Act of 1950, Pub. L. No. 81–774 (“DPA”). The

PAD ordered production of oil and gas to ensure adequate quantities of avgas for military use. Exxon,

2020 WL 5573048, at *28; see also id. at *15 (detailing

the government’s use of the Defense Production Act of

1950 to “force” the petroleum industry to “increase [its]

production of wartime . . . petroleum products”).

To further promote domestic oil and gas production

in 1953, Congress passed the Outer Continental

Shelf Lands Act (“OCSLA”), directing the U.S. Department of the Interior to make nearly 27 million

acres of the OCS available for “expeditious and orderly development” of fossil fuel production. 43

U.S.C. §1332(3).

12

During the Cold War era, the U.S. military commanded the development of more innovative military

fuels and continued its role as the major consumer

and driving force behind domestic production. During the 1960s, U.S. energy consumption increased

51%, compared to only 36% during the previous decade. Jay Hakes, A Declaration of Energy Independence at 17 (2008). As demand continued to climb into the early 1970s, domestic supply failed to keep

pace and the Nation faced a precarious shortage of

oil.

To avert a national energy crisis, in 1973, President Nixon ordered a dramatic increase in development for ready-production from the OCS:

Approximately half of the oil and gas resources in this country are located on public lands, primarily on the Outer Continental Shelf [OCS]. The speed at which we

can increase our domestic energy production will depend in large measure on how

rapidly these resources can be developed. I

am therefore directing the Secretary of the

Interior to take steps which would triple

the annual acreage leased on the Outer

Continental Shelf by 1979, beginning with

expanded sales in 1974 in the Gulf of Mexico and including areas beyond 200 meters

in depth under conditions consistent with

my oceans policy statement of May, 1970.

13

Nixon Message, N.Y. Times, Apr. 19, 1973.4

Also in 1973, President Nixon announced a goal

of energy independence for the U.S. by 1980. Annual Message to the Congress on the State of the

Union, 1 Pub. Papers 59 (Jan. 23, 1974).5 “Project

Independence 1980” ordered, among other things,

that the Secretary of the Interior “increase the

acreage leased on the [OCS] to 10 million acres beginning in 1975, more than tripling what had originally been planned.” Special Message to the Congress on the Energy Crisis, 1 Pub. Papers 29 (Jan.

23, 1974).6

Congress passed the Trans-Alaska Pipeline Authorization Act of 1973, determining that it was in

the “national interest” to deliver oil and gas from

Alaska’s North Slope “to domestic markets … because of growing domestic shortages and increasing

dependence upon insecure foreign sources.” TransAlaska Pipeline Authorization Act, Pub. L. No. 93153, § 202(a), 87 Stat. 576, 584 (1973), Pub. L. No.

93-153,

at

https://www.govinfo.gov/content/pkg/

STATUTE-87/pdf/STATUTE-87-Pg576.pdf.

To address “immediate and critical” petroleum

shortages in the military brought by the 1973

OPEC Oil Embargo, the Federal Government invoked the DPA to bolster its reserves with additional petroleum from domestic oil and gas comhttps://www.nytimes.com/1973/04/19/archives/excerpts-fromnixon-message-developing-our-domestic-energy.html.

4

5

https://quod.lib.umich.edu/p/ppotpus/4731948.1974.001/99?view

=image&size=100

6 https://quod.lib.umich.edu/p/ppotpus/4731948.1974.001/69

14

panies. Twenty-Fourth Annual Report of the Activities of the Joint Committee on Defense Production, S. Rep. No. 94-1, Pt. 1, at 442 (Jan. 17,

1975, 1st Sess.). The Interior Department subsequently issued directives to 22 companies to supply a total of 19.7 million barrels of petroleum

during the two-month period from November 1,

1973, through December 31, 1973, for use by the

DOD.

In 1974, responding to President Nixon’s direction

to “increase the acreage leased on the Outer Continental Shelf”, Congress amended OCSLA. This

amendment increased federal control over lessees “to

result in expedited exploration and development of

the Outer Continental Shelf in order to achieve national economic and energy policy goals, assure national security, reduce dependence on foreign

sources, and maintain a favorable balance of payments in world trade.” California ex rel. Brown v.

Watt, 668 F.2d 1290, 1296 (D.C. Cir. 1981) (quoting

43 U.S.C. § 1802); see also Special Message to the

Congress on the Energy Crisis, 1 Pub. Papers 29

(Jan. 23, 1974).7 Recognizing the substantial federal interests in the OCS leasing program, Congress

granted federal courts original jurisdiction “to the

entire range of legal disputes that it knew would

arise relating to resource development on the Outer

Continental Shelf.” Laredo Offshore Constructors,

7

https://quod.lib.umich.edu/p/ppotpus/4731948.1974.001?rgn=m

ain;view=fulltext.

15

Inc. v. Hunt Oil Co., 754 F.2d 1223, 1228 (5th Cir.

1985) (emphasis added).

Congress also authorized preliminary activity to

develop Elk Hills and other National Reserves to

their full economic potential. See Supplemental Appropriation Act of 1974, Pub. L. No. 93-245 (1974),

https://uscode.house.gov/statutes/pl/93/245.pdf.

At

this point, Standard Oil withdrew from operating

Elk Hills to concentrate on other federal objectives:

[T]he current domestic energy situation is so

serious that all oil companies are devoting

their available resources to the discovery and

production of new oil reserves. The President

has requested that every effort be made to increase production of petroleum, and Standard

is focusing its attention on this objective.

Letter from J.R. Grey, Standard Oil, to Jack L. Bowers, Acting Secretary of the Navy, requesting to terminate its position as Operator of the Elk Hills Reserve (Jan. 7, 1975).

In the 1975 Energy Policy Conservation Act, Congress created the Strategic Petroleum Reserve

(“SPR”), a “stockpile of government-owned petroleum

managed by the Department of Energy [created] as a

response to gasoline supply shortages and price

spikes. . . to reduce the impact of disruptions in supplies of petroleum products and to carry out U.S. obligations under the 1974 Agreement on an International Energy Program.” Pub. L. No. 94-163, 89

Stat. 871; see H.R. Rep. No. 115-965, at 3 (2017).

The Act declared it national policy “to store up to 1

billion barrels of petroleum products, provides for an

16

early reserve, to contain at least 150 million barrels

by December 1878 [sic], and for an eventual storage

system of at least 500 million barrels by December

1982. It [was] estimated that a 500 million barrel

reserve, combined with conservation measures,

[could] essentially replace lost imports, for a period

of 6 months for the most likely interruptions.”

Statement of Hon. John F. O’Leary, Administrator,

Federal Energy Administration, Hearing before the

Committee on Interior and Insular Affairs, U.S.

Senate, on FEA’s Strategic Petroleum Reserve Plan,

at 30 (Feb. 4, 1977).

The following year, Congress enacted the Naval

Petroleum Reserves Production Act of 1976, Pub. L.

No. 94-258, 90 Stat. 303, 307-308 (1976), which reopened the Elk Hills Reserve and “directed that [the

Reserve] be produced at the maximum efficient rate

for 6 years.” See also Steven Rattner, Long-Inactive

Oilfield is Open—for Now, N.Y. Times (Oct. 31,

1977). Then-Commander Roger Martin, the naval

officer in charge of the facility explained: “We expect

to reach a level of about 100,000 barrels daily in a

few months, and 300,000 by the end of [the] 1970’s.”

Robert Lindsey, Elk Hills Reserve Oil Will Flow

Again, N.Y. Times (July 3, 1976).

In 1978, as part of amendments to OCSLA, the

Congressional Ad Hoc Select Committee on the OCS

concluded again that “alternative sources of energy

will not be commercially practical for years to come,”

H.R. Rep. No. 94-1084, at 254 (1976) and

“[d]evelopment of our OCS resources will afford us

needed time—as much as a generation—within

which to develop alternative sources of energy.”

17

H.R. Rep. No. 95-590, at 53 (1977). Notably, Congress at that time considered but rejected creating a

national oil company to develop oil and gas on the

OCS:

The Federal Government can conduct this

program by using the same drilling and exploration firms that are usually hired by oil companies. The taxpayers of the United States—

rather than the oil companies—would be the

clients for these drilling companies, and the

information received would pass directly into

the public domain.

121 Cong. Rec. S903-11 (1975). See 30 C.F.R.

§ 250.1150.

While Congress ultimately declined to nationalize

these operations, to this day, the federal OCS leases

with oil and gas companies include terms and conditions that provide for continued federal oversight

and mandate that the lessees develop these lands to

achieve national energy objectives. These terms require the lessees to produce oil and gas, control the

methods of production, and direct how oil and gas

are sold to benefit the national economy. For example, the leases require lessees to “maximize the ultimate recovery of the hydrocarbons from the leased

area”; require that drilling take place “in accordance

with an approved exploration plan (EP), development and production plan (DPP) or development operations coordination document (DOCD) [as well as]

approval conditions”; and specify that the Federal

Government retains the right to oversee the lessee’s

18

rate of production from its leases.8 To ensure military fuel supply deployment-readiness and other

Federal Government policy objectives, the government conditions OCS leases with a right of first refusal to purchase all minerals in time of war or when

the President orders. See 43 U.S.C. § 1341(b).

III.

The Federal Government’s efforts to ensure a dependable, abundant supply of

oil and gas have continued over recent

decades.

In 1995, Congress amended OCSLA to permit the

Secretary of the Interior to “unlock an estimated

15 billion barrels of oil in the central and western

Gulf of Mexico” for energy companies’ exploration

and production. Press Secretary, White House Office of Communications, Statement on North Slope

Oil Bill Signing (Nov. 28, 1995), 1995 WL 699656,

at *1.

Federal promotion and use of domestic oil continued to grow in the 2000s. In 2006, the Bush administration opened for exploration and production leases of approximately 8 million additional acres of OCS

See generally Mineral Lease of Submerged Lands Under the

Outer Continental Shelf Lands Act, Form MMS-2004 (Jun.

1991); Oil and Gas Lease of Submerged Lands Under the Outer

Continental Shelf Lands Act, Form BOEM-2005 (Feb. 2017);

Unit Plan Contract between the Navy and Standard (Jun. 19,

1944); and Oil and Gas Lease Under the Mineral Lands Leasing Act, Form 3100-aa (Oct. 2008); Adam Vann, Congressional

Research Service, RL33404, Offshore Oil and Gas Development: Legal Framework (2018), https://fas.org/sgp/crs/misc/

RL33404.pdf (describing the multi-step process for approval of

development plans and BOEM oversight procedures).

8

19

lands in the Gulf of Mexico to “address high energy

prices, protect American jobs, and reduce our dependence on foreign oil.” Statement By President

George W. Bush Upon Signing [H.R. 6111], 2 Pub.

Papers 2217 (Dec. 20, 2006).9 President Bush issued

an Executive Order to draw down the SPR in response to Hurricane Katrina in 2005.10

In 2010, President Obama “announc[ed] the expansion of offshore oil and gas exploration,” explaining “the bottom line is this: given our energy needs,

in order to sustain economic growth, produce jobs,

and keep our businesses competitive, we are going to

need to harness traditional sources of fuel even as

we ramp up production of new sources of renewable,

homegrown energy.” President Barack Obama, Remarks on Energy at Andrews Air Force Base, Maryland (Mar. 31, 2010).11

In 2019, OCS leases supplied 1.039 trillion cubic

feet of natural gas. Bureau of Safety and Environmental Enforcement, Outer Continental Shelf Oil

and

Gas

Production

(Nov.

4,

2020),

https://www.data.bsee.gov/Production/OCSProductio

n/OCSProduction/Default.aspx. Private companies

produced nearly one billion barrels of oil from federal

offshore and onshore leases managed by the Interior

Department. Historically, annual oil and gas production from federal leases has accounted for as

https://books.google.com/books?id=o2ei8yOphboC&printsec=

frontcover#v=onepage&q&f=false.

10 https://www.energy.gov/fe/services/petroleum-reserves/strategic

-petroleum-reserve/releasing-oil-spr.

11 https://obamawhitehouse.archives.gov/the-press-office/remarkspresident-energy-security-andrews-air-force-base-3312010

9

20

much as 36% of domestic oil production and 25% of

domestic natural gas production. See Congressional

Research Service, R42432, U.S. Crude Oil and Natural Gas Production in Federal and Nonfederal Areas

3, 5 (updated Oct. 23, 2018).12

In 2019, the United States became a net total energy exporter for the first time since 1952. U.S. Energy Info. Admin., U.S. energy facts explained (Apr.

27, 2020), https://www.eia.gov/energyexplained/usenergy-facts/imports-and-exports.php. The Department of Defense alone purchased 94.2 million barrels

of military-spec compliant fuel products, totaling

$12.1 billion in procurement actions.13

The OCS leases are also a significant source of

revenue for the Federal Government. OCS lease bonuses, rental payments, and royalties generate billions of dollars to the U.S. Treasury.14 U.S. Dep’t of

12 https://crsreports.congress.gov/product/pdf/R/R42432

Def. Logistics Agency Energy, Fiscal Year 2019 Fact Book

(2019) at 4, 27, https://www.dla.mil/Portals/104/Documents/

Energy/Publications/FactBookFiscalYear2019_highres.pdf?

ver=2020-01-21-103755-473.

14 As one example of the ways in which the Federal Government

directs and controls operations of petroleum production to ensure military readiness and national security, the government

also reserves the right to purchase up to 16⅔ percent of lease

production, less any royalty share taken in-kind. 43 U.S.C. §

1353(a)(2). The Secretary of the Interior may direct a lessee to

deliver any reserved production to the General Services Administration (government civilian operations), the Department of

Defense (military operations), or the Department of Energy

(e.g., Strategic Petroleum Reserve). 43 U.S.C. § 1353(a)(3). For

onshore leases, administered by Interior’s Bureau of Land

Management (“BLM”), the Secretary may take any royalty

owed on oil and gas production in-kind and “retain the same for

13

21

Interior, Bureau of Ocean Energy Management, OCS

Oil and Gas Leasing Program: 2012-2017 Final Programmatic Environmental Impact Statement (“20122017 EIS”).15

When Respondent’s Complaint is viewed within

the historical context of the Federal Government’s

pervasive control and direction of oil and gas production, it is clear that Respondent’s claims arise under

federal law. Respondent seeks to hold Petitioners liable for actions taken under the direction of federal

officers in pursuit of Federal Government policies to

secure the national defense by developing fossil fuel

resources. This is more than sufficient to permit removal of this case from state to federal court.

the use of the United States.” 30 U.S.C. § 192. By way of example, after the September 11 attacks, President George W.

Bush ordered that the SPR “be filled . . . principally through

royalty-in-kind transfers to be implemented by the Department

of Energy and the Department of the Interior.” Statement on

the Strategic Petroleum Reserve, 2 Pub. Papers 1406 (Nov. 13,

2001),

https://www.govinfo.gov/content/pkg/PPP-2001book2/pdf/PPP-2001-book2.pdf. From 1999 to December 2009,

“the Strategic Petroleum Reserve received 162 million barrels

of crude oil through the RIK program” valued at over $6 billion.

U.S. Dep’t of Energy, Strategic Petroleum Reserve Annual Report for Calendar Year 2010, at 18, 37, and 39 (Table 13) (2011)

(“SPR

2010

Report”),

https://www.energy.gov/sites/prod/

files/2015/02/f20/2010%20SPR%20Annual%20Report.pdf.

15See

also OCS EIS/EA BOEM 2012-030, 1-4 (2012),

https://www.boem.gov/sites/default/files/uploadedFiles/BOEM/

Oil_and_Gas_Energy_Program/Leasing/Five_Year_Program/20

12-2017_Five_Year_Program/2012-2017_Final_PEIS.pdf;

see

also Statement of Abigail Ross Hopper, Director, Bureau of

Ocean Energy Management, Before the House Committee on

Natural

Resources

(Mar.

2,

2016);

https://www.boem.gov/FY2017-Budget-Testimony-03-01-2016.

22

CONCLUSION

The judgment of the court of appeals should be reversed. In the alternative, the judgment should be

vacated and the case remanded for further proceedings.

Respectfully submitted,

Tristan L. Duncan

(Counsel of Record)

SHOOK, HARDY & BACON L.L.P.

2555 Grand Blvd.

Kansas City MO 64108

(816) 474-6550

tlduncan@shb.com

Counsel for Amici Curiae