Roth: When power attacks science

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 10, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

When power attacks science

What do Okemah, Oklahoma, today’s EPA and Galileo have in common? Life lessons about the resilience of science across the history of humankind, even when those in power would attack it for political gain. Allow me to explain.

The Woody Guthrie Folk Festival, in Guthrie’s hometown of Okemah, is set for another music celebration July 12- 16, as it’s always scheduled around his July 14 birthday. Begun in 1998, WoodyFest continues to attract world-renowned folk and rock music performers, including an artist who caught my ear named Ellis Paul. Paul attended that first year and continues to visit each year. His music is a folk-pop style that can be provocative and his lyrics have stayed with me since I first heard them, including his song Did Galileo Pray?

The song tells the story of Galileo Galilei, the famed 17th-century astronomer attacked by religious leaders for his role in the scientific revolution of the day, including telescopic confirmation of the phases of Venus, the moons of Jupiter and sunspots. He was tried in the Roman Inquisition in 1615 and found “vehemently suspect of heresy” for contradicting scriptures, and he was forced to spend the rest of his life under house arrest.

Singer Ellis Paul’s lyrics ask:

When he looked into a starry sky upon Jupiter, with its cold moons making their weary rounds.

Did he know that the Pope would claim that he ran with Lucifer and a prison cell could be where he’d lay his head down?

Was he wearing a thorny crown? When he plotted the motion of planets, was Mercury in retrograde?

But he found the truth when a lie was what was demanded. When the judges asked him pointedly he was a’ trembling that day.

Chorus:

Did Galileo pray?

And the song wraps with:

Don’t shoot the messenger, when the postman brings you truth today.

I think of this song often for its ironical question of a scientist accused of heresy because his scientifically proven research refuted the positions of those in power at the time. Lately, I’ve thought of this song daily as I read headlines about the current Trump Environmental Protection Agency purging scientists and going after those whose careers have focused on climate science and its proven research.

The EPA is apparently now being stacked with climate-change skeptics and just this month EPA Administrator Scott Pruitt announced, to a lobbying group of coal industry executives no less, that he was convening a “red team-blue team” exercise to challenge mainstream climate science and the enormous consensus that exists across the globe.

So the agency charged with protecting our country’s environment and public health is now pushing its own inquisition and bragging about it to the most polluting industry known to man.

And sadly while efforts to undermine scientific consensus, or at least to delay the response to the dangers of a changing climate, for some rehashed debate about whose fault it is, science just marches on. Proven scientific theories contain facts, which are observations that have been repeatedly confirmed and are, for all practical purposes, accepted as true. And simply put, science doesn’t care if you believe it or not.

But to deny it only risks the lives of those people who politicians have sworn an oath to protect. Guthrie’s famed guitar, which strummed his populist, pro-people messages, had an inscription that read: “This machine kills fascists.” Today it might state that science outlives them too.

So please always remember, this Land is your Land, this Land is my Land … and This Land was made for you and me. We should all protect it as the only land we have, no matter how those in power choose to attack it for political gain.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: A gathering green trend for Oklahoma

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 3, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

A gathering green trend for Oklahoma

For decades Oklahoma’s largest cities have focused more on infrastructure issues like roads, bridges and jails, at the expense of parks, sidewalks and trails. Nevertheless, the latter investments are becoming new again and Oklahoma’s urban dwellers and visitors will soon see and feel the effects of quality-of-life improvements for healthier outdoor living.

In Tulsa, the generous George Kaiser Family Foundation is leading the effort to revitalize and reshape the River Parks areas along the Arkansas River by connecting three adjacent parcels into the existing park system for a world-class experience. A Gathering Place for Tulsa will transform nearly 100 acres of Tulsa’s waterfront into a blend of activities, nature, gathering and community in the great outdoors and within several anchor destinations like a lodge, a museum, an adventure playground, a mist mountain, gardens, sport courts and a large lawn for concerts and relaxation. Truly something for everyone to enjoy, thanks to the generosity of corporate and philanthropic Tulsans.

Phase one’s 66 acres is expected to open in late 2017 and with an estimated 1 million visitors a year will prove the importance of these types of investments to the social, cultural, economic and environmental vibrancy of a community.

On Thursday, Mayor Mick Cornett and Oklahoma City leaders broke ground on Scissortail Park, the newly named 68-acre park expected to revitalize a once-blighted residential and commercial area south of the downtown’s business core. The 37-acre upper park is underway to be opened in early 2019, including a lake, boathouse, great lawn, stage, gardens and playgrounds. The lower park, just south of Skydance Bridge and sculpture along Interstate 40, will come later and includes some environmental improvements and a transformation inviting outdoor activity and healthy, daily living for citizens and visitors. This MAPS 3-funded park will be joined by a new convention center, high-rise hotel and a mix of retail, residential and commercial uses, and will remake the feel and function of downtown Oklahoma City for generations to come.

Roadways will always be important investments and so too is the health and happiness of those citizens who would commute upon them. Soon these green living investments will pivot Oklahoma’s two largest cities toward a tomorrow where more people can actually get out of their cars near the urban core, walk from their offices, relax a little and breathe some clean outdoor air on a daily basis. This is a trend I hope continues for all Oklahomans.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

The Wrong Claim – Defining boundaries to Burk tort actions

Complaints of wrongful termination by employees have been heard in courtrooms across the nation for as long as there has been a legal venue in which to bring and defend such claims. It can be argued that the nature of the employer-employee relationship has been evolving ever since.

In Oklahoma, the employer-employee relationship is characterized by the employment-at-will doctrine. This means that either the employer or employee may end the employment relationship at any time for any reason, barring some exceptions. Exceptions for the employer include retaliatory termination, basing the decision to terminate on the employee’s race, gender, religion, national origin and other prior-identified protected classes, and whether the employee is hired under the conditions of a specific contractual agreement that lays out conditions for termination.

In the above exceptions, there are adequate remedies available through various employment and anti-discrimination laws. However, over time, there has been an evolution of claims that exist outside of this framework, where there existed no adequate legal remedies.

In 1989, the Oklahoma Supreme Court began chipping away at the employment-at-will doctrine in a landmark case known as Burk v. Kmart Corp. The Court recognized a new actionable tort claim that established an exception to the at-will termination rule in a narrow class of cases, which was subsequently referred to as a Burk tort.

“An at-will employee may have an actionable tort claim if his discharge is ‘contrary to a clear mandate of public policy as articulated by constitutional, statutory or decisional law,’” the Court held.

Burk or not Burk?

Outside of law firm offices, legislative chambers and courtrooms, the term “Burk tort” is not very remarkable. Yet, for decades, the questions of which entities can be sued for which alleged employment violations, and which legal remedies are appropriate for the matters at hand, have been and continue to be vigorously argued.

In a recent case brought before the U.S. District Court for the Western District of Oklahoma, Phillips Murrah Director Byrona J. Maule, arguing for the Defense, was granted dismissal of a wrongful termination claim brought under the Burk tort framework. This particular, seemingly obscure motion to dismiss is important because, had it not been successful, the claim could have altered current Oklahoma employment law by expanding the Burk tort into a new area.

In this recent case, the Plaintiff asserted that the Oklahoma Occupational Safety & Health Standards Act (OOSHSA) established a clear mandate of public policy that was allegedly violated by his employer, a privately owned company in Oklahoma City. However, as pointed out by Maule, in 1984, the Oklahoma legislature specifically removed private employers from the purview of OOSHSA, effectively limiting its public policy statement to only apply to public employers. Therefore, because the OOSHSA Act does not articulate a public policy with regard to a private employer, it could not support a Burk tort claim. The Court further found the federal OSHA statutes did not establish an Oklahoma public policy, and therefore did not articulate a public policy on which a Burk tort claim could be founded.

The Order handed down by the U.S. District Court for the Western District of Oklahoma quoted Griffin v. Mullinix, 1997 OK 120:

“See Griffin, at 179 (“[I]n 1984, the state legislature fundamentally changed the existing Occupational Safety & Health Standards Act, removing private employers from the definition under the Act … [T]he legislature’s decision to limit application of the Act to public employers limited the entire Occupational Safety & Health Standards Act, including the public policy statement. Therefore, [w]e find that an Act, which at one time applied broadly to all employers and now applies to public employers only, is not an adequate basis upon which to premise the private tort action of a private employee.”).

The Defendant’s Motion to Dismiss was granted, and a subsequent Plaintiff’s Motion to Amend Complaint was denied, based on the Plaintiff’s failure to state a claim against the Defendant upon which relief can be granted. Since the Defendant is a privately-owned company, OOSHA did not articulate a public policy that supported a Burk tort claim.

Department of Labor files overtime exemption brief with Fifth Circuit

In a brief filed with the Fifth Circuit of the Federal Court of Appeals, USDOL seeks to preserve salary level in determining overtime exemption status.

 

On Friday, June 30, the United States Department of Labor filed a brief with the Fifth U.S. Circuit Court of Appeals in New Orleans seeking to preserve a minimum salary requirement as a part of a three-part test to determine which workers are exempt from Fair Labor Standards Act (FLSA) minimum wage and overtime pay protections.

The three-part test, referred to as EAP, (executive, administrative, professional) relates to whether a worker is:

  1. Paid on a salary basis
  2. Earns a specified salary level
  3. Satisfies a duties test

The brief filed Friday concerns the second part.

The brief was filed in the case of Nevada v. DOL , 5th Cir., No. 16-41606 by the State of Oklahoma and 20 other states questioning whether the DOL under President Obama had the authority to set the annual salary threshold at $47,476, just over double the amount previously set in 2004 by the Bush Administration.

The Trump Administration brief asks the court to uphold DOL’s legal authority to set the salary threshold, but does not address the appropriate salary level, stating that the court should “simply lift the cloud” created by litigation questioning the Department’s authority to establish any salary level test.

“Instead, the department soon will publish a request for information seeking public input on several questions that will aid in the development of a proposal,” the agency stated it its brief.

To view the brief, click this link.

 


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USDOL Reinstates Wage & Hour Opinion Letters

The U.S. Department of Labor announced today that they will reinstate the issuance of opinion letters, which had been replaced in 2010 by issuance of USDOL general guidance. This action allows the USDOL’s Wage and Hour Division to use opinion letters as one of its methods for providing guidance to covered employers and employees.

Opinion letters are official opinions written by the Wage and Hour Division (WHD) of how to apply rules related to the Fair Labor Standards Act and other statutes in specific circumstances presented by an employer, employee or other entity seeking clarity. Opinion letters had been the general practice for seeking clarity since the Fair Labor Standards Act’s inception in 1938.

“By using the opinion letters, laws can be interpreted differently without the need of going through the administrative process,” explains Byrona J. Maule, Phillips Murrah Director and Co-Chair of the Firm’s Labor and Employment Practice Group.

This comes on the heels of the action taken by USDOL earlier this month, which withdrew two Obama-era guidance letters that sought to clarify worker classifications regarding independent contractors and joint employment.

U.S. Secretary of Labor Alexander Acosta in today’s release:

“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes. The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

USDOL also announced a website portal whereby those seeking clarity can search for existing guidance or submit a request for an opinion letter. Today’s release explained: “The webpage explains what to include in the request, where to submit the request, and where to review existing guidance. The division will exercise discretion in determining which requests for opinion letters will be responded to, and the appropriate form of guidance to be issued.”

Employers should be vigilant in reviewing the opinion letters issued by the USDOL for trends and reversals of prior legal positions.

Visit this link to view currently published opinion letters: Wage and Hour Division (WHD) Opinion Letters – Fair Labor Standards Act

 


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Roth: Yellowstone grizzlies scratched from endangered list

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 26, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Yellowstone grizzlies scratched from endangered list

How many Yellowstone grizzly bears is enough? Well, it might appear that 700 is the number, based upon the Interior Department’s announcement this past week to remove the animal from the endangered species protection. Seven hundred is today’s estimated population, having rebounded from fewer than 150 at its low point. For 42 years, the Endangered Species Act has provided protection for these animals to repopulate the remote areas in and around Yellowstone Park, mostly concentrated in parts of Montana, Idaho, Washington and Wyoming. Once having ranged from Alaska to Mexico and as far east as the Hudson Bay, the grizzly bear has a much smaller range today and that is especially true for the Yellowstone grizzly.

The Endangered Species Act of 1973, signed by President Nixon, is an environmental law passed to protect imperiled species from extinction and the ecosystems upon which those species depend. The act was America’s effort to carry out the Convention on International Trade in Endangered Species of Wild Fauna and Flora. With its primary goal to prevent the extinction of imperiled plants and animals, the act’s second goal is to recover and maintain those populations by removing or lessening threats to their survival.

This act does allow for “delisting” or “downlisting” a species, based upon several factors. To delist, the threats must have been eliminated or controlled, population size and growth of the species are considered and the stability of the habitat is determined. To downlist, similar analysis occurs and concludes that some of the threats have been controlled and the population has met recovery objectives, allowing the species protection level to go from “endangered” to “threatened.”

The Endangered Species Act, written by scientists and lawyers working together, has been affirmed by courts over the course of its existence. This solid legal standing has allowed the law to be effective and successful in its missions, although many believe it could be stronger.

Species with increased population size since being placed on the endangered list include: American bald eagle (increased from 417 in 1963 to over 11,000 pairs in 2007 when it was delisted); whooping crane (increased from 54 to over 450 from 1967 to 2005); gray wolf (population increases confirmed although accurate numbers are hard to estimate); and red wolf (increased from 17 in 1980 to over 250 in the last decade).

Nonetheless, the act of “delisting” a species is controversial and is rare. Over the history of the act, while most delisting has occurred because of recovery of the species, about 20 percent of the delisting has occurred because of actual extinction.

And as it relates to today’s Yellowstone grizzly bears, their fate may now fall to the wildlife management practices of the respective states they call home. However, the federal authorities will still get to monitor the state management practices for five years and if the population falls below 600 in that time, special actions will trigger to reduce hunting and restrict other activities attributable to the bears’ deaths.

It is my hope that if you are lucky enough to be in the backcountry around Yellowstone and encounter a Yellowstone grizzly bear, that the only thing you will shoot is your camera. Whether “listed” or not, some American treasures deserve to remain living trophies for all generations to enjoy.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Global decline of coal

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 19, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Global decline of coal

The global consumption numbers are in for 2016 and coal production and consumption hit a 35-year low in the United States and had an even deeper slide around the world.

After peaking in the U.S. in 2007, consumption of this traditional fossil fuel has slid by nearly one-third since. And the decline seems to be picking up speed. The first quarter of 2016 saw the lowest quarterly production since 1981, with the steepest quarter-over-quarter drop in nearly 30 years.

Many of America’s utilities have been moving away from coal in power generation. In 2008, about one-half of our electricity was coal-powered. Today’s its about 30 percent due in large part to cheaper, abundant, clean natural gas and the greater deployment of cheap and clean renewable energy sources.

The U.S. Department of Energy recently estimated an annual coal export decline of 12 percent in 2017, as the decline now appears global as well. Worldwide consumption dropped for the second consecutive year, by 1.6 percent last year, to its 2004 levels, as electricity remained flat and coal continued to be displaced by cleaner fuels. Even China, the largest coal consumer in the world, finished 2016 with a drop in its coal use for the third year in row. And since China has the distinction of being the world’s largest polluter today, compared with our country as the largest polluter over history, China is aggressively moving away from coal to other technologies like wind and solar.

And America is helping to lead that trend too. Just this past week Bloomberg’s New Energy Finance Outlook estimated that solar technologies will rival the cost of new coal plants in America and Germany by 2021. It also estimated that solar will soon be cost-competitive in quick-growing markets like India and China. This scenario is called “China’s tipping point” and suggests that once that happens, coal’s days will only further dwindle. And the reality is that once China has forever lessened its coal appetite, the demand curve for coal will likely never recover here or abroad.

Let’s hope we too have migrated toward cleaner energy options that are abundant in Oklahoma and America like natural gas, wind and soon solar.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: What happens in Vegas…

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 12, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

What happens in Vegas…

It’s been said that “What happens in Vegas, stays in Vegas,” yet Las Vegas and Nevada are making news that is worth talking about for Oklahoma and elsewhere.

In this new era of state-led environmental leadership, one state is getting its renewable energy policies back on track – Nevada. Already a longtime environmental leader, Nevada was in the top 20 when Forbes published its list of the greenest states back in 2007. In 2016, the Mandalay Bay Convention Center in Las Vegas became the largest rooftop solar installation in the U.S.

This session, Nevada lawmakers voted-in several solar-friendly measures: one that will bring back net-metering at 95 percent of retail rate (net-metering is a mechanism whereby distributed generation customers are paid for the excess power their systems place back on to the grid), and another bill that directs the state’s public utility to plan for expansion of electric vehicles and infrastructure, begin accounting for the costs of carbon emissions, and to look into energy storage opportunities.

Nevada made big green news last year when MGM Resorts International and Wynn Resorts, two of the largest customers of the state’s public utility – the Berkshire Hathaway-owned NV Energy – were permitted to pay exit fees of more than $127 million to cease obtaining power from the public utility in order to pursue sourcing power on their own from renewable energies. This opportunity to source power from a third party was the result of a 2001 law that promoted new power generation in the state at that time.

News of the approved exit fees was even more noteworthy since one of the first applications for autonomy from the public utility came from Nevada technology company Switch, but was denied. That company eventually forged a deal whereby NV Energy would provide the 100 percent renewable energy Switch sought to attain.

It is exciting to see successful free-market environmentalism. The bold moves of these giant companies are illustrative of what I discussed last week, which is to say states and businesses, and not the federal government, have the power, influence, and desire to design and construct our energy and environmental landscape. And that is important as much of “corporate America” is moving toward self-styled energy options to control their operating costs and improve their brand’s environmental reputation.

Providing some semblance of hope for Oklahoma after a legislative session that was not kind to our state’s renewable energy blessings is that Nevada’s bright future comes after a recent dark past. In late 2015, despite a recent report that indicated solar consumers give more to the grid than they cost, the Nevada Public Utility Commission voted unanimously to remove the state’s net metering policy, leaving customers who had invested in solar infrastructure no longer being paid for energy they placed onto the grid.

Oklahoma is familiar with the proverbial pulling-the-rug-out laws. The distributed generation surcharge bill – Senate Bill 1456 – was passed in 2014 and created a lot of market uncertainty for Oklahomans and the rooftop solar industry. Since its passage, Oklahoma’s regulated utilities have been unsuccessful in their efforts to add a new surcharge as the Oklahoma Corporation Commission has rightly analyzed the evidence and determined that rooftop solar is in fact not being subsidized by non-rooftop customers. In fact, the evidence revealed the opposite. Now it’s time for the Oklahoma Legislature to follow the lead of states like Nevada and allow Oklahomans the legal right to earn the true value of the energy they create for the greater grid and the greater good.

Good news for Nevadans: Tesla and solar installer Sunrun indicate these new policies will allow them to resume operations in the state after having recently departed due to industry-threatening policies. Also, you might be interested to know that the iconic Welcome to Fabulous Las Vegas Nevada sign is itself actually powered by solar energy. Now that is welcome news.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

USDOL withdraws 2015 and 2016 informal guidance on joint employment and independent contractors

On Wednesday, June 7, 2017, the U.S. Department of Labor’s Office of Public Affairs announced the withdrawal of recent guidance regarding joint employment and independent contractors.

OPA News Release:
June 7, 2017 [link] WASHINGTON – U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

The Administrator Interpretation Letters – Fair Labor Standards Act, which have been withdrawn are:

  • FLSA 2015-1: “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contractors”
  • FLSA 2016-1: “Joint employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act”

What does this mean for employers?

For employers, this means:

  • Joint employment and independent contractor status are no longer reviewed by the DOL under these previous Administrator’s Interpretations
  • Employees no longer have FLSA 2015-1 and FLSA 2016-1 to cite before the courts.

However, the Administrator’s Interpretations relied upon case law, statutes and regulations that are still good law.  Further, how the courts define joint employment and identify misclassified independent contractors has not changed because the common law, statutes and regulations are still in effect.

The definition of joint employment may depend on the state and federal Circuit Court where the employer is located. Independent contractor status is also defined by the FLSA, common law, statutes, and regulations as well as state law. Some states may have a different standard for independent contractors and joint employment.

Employers should consult with their attorney regarding questions about classifying independent contractors, joint employment and state laws that may vary. Although the removal of the DOL Administrator’s Interpretations is not a change in the law, it may indicate a change in DOL enforcement in these two areas. Stayed tuned for more information or changes from the DOL.

U.S. House of Representatives passes Working Families Flexibility Act of 2017

Last month, the United States House of Representatives passed H.R. 1180, which states that private sector employees shall be given the option of receiving paid time off, known as compensatory time, in lieu of monetary compensation known as overtime pay. The Act, known as the “Working Families Flexibility Act of 2017,” amends the Fair Labor Standards Act of 1938, which established overtime pay, among other employee rights.

The comp time option allows for one and a half hours off for every hour worked beyond 40 hours in a week. In order to be eligible for the compensatory option, an employee must have been employed by the employer for at least one consecutive year, during which time the employee must have worked at least 1,000 hours.

Other stipulations in H.R. 1180 include:

  • Regarding labor unions or other forms of organized labor, compensatory time is provided to members only in accordance with collective bargaining agreements.
  • Employers may not make the compensatory time option a condition for employment.
  • Maximum accrual of compensatory time is limited to 160 hours.
  • Compensatory time that is not used by the employee by the end of the calendar year, or an alternative 12-month period, must be paid in overtime by the employer within 31 days of the end of such 12-month period.
  • If an employee acquires in excess of 80 hours of compensatory time, the employer may provide monetary compensation at any time after giving the employee at least a 30-day notice.
  • Employers who opt to provide compensatory time may discontinue the option after giving employees a 30-day notice.
  • An employee may give notice of withdrawal from any compensatory time agreement at any time, and the employer must provide monetary compensation for unused time within 30 days of receiving notice.
  • An employer providing compensatory time is prohibited from actions that “directly or indirectly intimidate, threaten or coerce any employee” in any attempt to interfere with an employee’s rights to choose or use compensatory time.
  • The employee may use accrued compensatory time within a reasonable amount of time after a request is made as long as it does not unduly disrupt the operations of the employer.
  • Upon termination, any unused compensatory time accrued by the employee will be considered unpaid overtime compensation.

H.R. 1180 passed the House vote, 229-197. It now must also pass a Senate vote, which may prove to be an uphill battle, as similar bills have historically died in the Senate.

Should the H.R. 1180 pass the Senate, an Employer should immediately revise its leave and overtime policies to implement the option of comp time in lieu of overtime compensation, with special attention given to how the employee will notify the Employer of the employee’s desire to receive the comp time in lieu of overtime compensation, when and how the comp time will be taken, and what would “unduly disrupt the operations” of the Employer’s specific company.

Click here to view details of the Working Families Flexibility Act of 2017 on the U.S. House of Representatives website.

Roth: Syria, Nicaragua and Trump’s America

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 5, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Syria, Nicaragua and Trump’s America

You have probably heard by now that Donald Trump has announced his intentions to withdraw the United States of America from the Paris climate accord, a non-binding agreement dealing with greenhouse gas emissions mitigation, adaptation and financing starting in 2020.

This accord was negotiated within the United Nations Framework Convention on Climate Change and as of June has been signed by 195 countries and already ratified by 148. Yes, that is most, as in almost all, of the countries of planet Earth.

Who isn’t now a party to this historic global effort to safeguard our planet? Syria (current war-torn catastrophe), Nicaragua (who believed the accord “didn’t go far enough”) and Trump’s America (which he stated was disadvantaged in job areas such as coal mining).

However, as many American business CEOs and world leaders denounce Trump’s announcement, an even more meaningful reaction is taking hold: The “other America” of state and local governments, where the great majority of Americans live, is seemingly pushing forward to honor the Paris accord and its pollution reductions.

In fact, the U.S. Climate Alliance was formed by the states of California, New York and Washington to uphold the Paris climate agreement, on the same day Trump announced his intentions for the federal government. Other states and cities will surely follow and in their course undermine Trump’s efforts to speak for all of us.

And why does this matter? Mostly because the world is now a global economy and the power of people and populations drive commerce more so than federal U.S. policy. Put another way, what California does often dictates what businesses and manufacturers do for all of America and beyond.

California, currently the sixth-largest economy in the world, has been a leader for decades in numerous American energy and environmental policies. When then-President-elect Trump began filling his Cabinet with nominees who rejected the idea that human activity effects climate change, California Gov. Jerry Brown cautioned that the state would take action if necessary to safeguard its environmental policies.

California’s large economic prowess allows it to command higher standards in many arenas, (like vehicle fuel and emission standards and natural gas storage and safety rules) since business and industry will create their products to adhere to California standards for its large market.

California is a beacon of hope for those in the climate-change-is-real category (and for those who want to see America continue to lead the world in innovation and environmental protection).

And even though these first three large states are run by Democrats, let us not forget that some formidable American environmental accomplishments came at the hands of Republicans. President Nixon signed into law the Clean Air and Clean Water acts, created the Environmental Protection Agency and the National Oceanic and Atmospheric Administration.

“Everyone talks about red states and blue states,” said Hal Harvey, CEO of Energy Innovation, a San Francisco-based policy research group. “We really have to start talking about green states and brown states. There are about a dozen states – many of them in Republican control – with very strong renewable portfolio standards and very strong utility energy efficiency programs, and utilities are going to be the prime movers in building the electric vehicle charging infrastructure.”

It is more likely than not, America’s green states will stay committed to the voluntary Paris accord and its pollution reductions because state rights and a global economy remain supreme, while Trump’s America becomes a patchwork of brown states aligned with a few outlier nations like Syria and Nicaragua. Stay tuned.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

The wrong approach

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on June 1, 2017.


Eric Davis is an attorney in the Firm’s Clean Energy Practice Group and the Government Relations and Compliance Practice Group. He represents clients in a range of regulatory and energy matters.

By Phillips Murrah Attorney C. Eric Davis

Oklahoma! Where the wind comes sweepin’ down the plain – and if some lawmakers have their way, it will be further taxed as it blows through.

For the wind industry, the tax landscape in Oklahoma changed dramatically in 2017. First, the five-year exemption from ad valorem taxes was allowed to expire beginning Jan. 1. Then the Legislature repealed the tax credit for electricity produced from zero-emission facilities powered by wind. These two tax changes represent millions of dollars annually, which will now be applied to mitigate the state’s revenue shortfall.

Now, a third major proposal has emerged: a per-kilowatt-hour production tax on wind energy, a rarity in the United States. At first blush, a production tax on wind energy may seem sensible. After all, natural gas is used to generate electricity, and it is subject to a gross production tax, so why not also impose such a tax on wind? A closer look, however, shows that the comparison is clearly strained.

Presently, the state’s gross production tax, or severance tax, as state law interchangeably refers to it, applies to the production of mineral resources. Such activities are extracting, or severing, non-renewable mineral resources. However, wind is not severed from the land. Theoretically, Oklahoma can benefit from wind energy for as long as the wind blows.

Also, Oklahoma’s gross production tax on mineral production is imposed in lieu of ad valorem taxes. Wind energy is presently subject to ad valorem taxes, which represent a major source of funding for local governments and schools. Oklahoma State University researchers have estimated that, when considering past and forecasted payments for planned projects, the wind industry will pay more than $1 billion in ad valorem taxes to local communities. If a production tax is levied on wind energy in lieu of ad valorem taxes, this could reallocate that revenue away from local communities.

If a production tax were imposed in addition to ad valorem taxes, it would amount to a double-tax on wind energy. This could discourage further capital investment and raise electricity bills for Oklahomans.

Tax policy is not easy. However, imposing this tax on wind energy because others in the energy industry pay a gross production tax is the wrong approach.

C. Eric Davis is an attorney with Phillips Murrah. His practice focuses on clean energy as well as government relations and compliance.

Roth: The next generation utility here in Oklahoma

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on May 22, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The next generation utility here in Oklahoma

If you have ever played the board game Monopoly, you know that utility spaces are supposed to be safer landing places than say Boardwalk, or even a developed Marvin Gardens. As a kid, I didn’t know what a monopoly was, but I understood the risk and reward of landing on spaces in the make-believe economy that hopefully cost your opponents and spared oneself. And if you were lucky enough to own the Water Works or the Electric Company, you knew they were good investments that would pay for themselves, but that they didn’t offer the same kind of explosive growth possible of other properties.

The same is true today for most of America’s utilities, as they are a steady-as-she-goes investment, usually promising a decent return but a return proportional to the risk. But today’s utilities no longer have the luxury of complacency in an ever-changing world. In Monopoly, each of the two utilities cost $150 each and the rent was 4 times the dice roll if one utility is owned, or 10 times the dice value if both are owned.

Similarly, many of America’s utilities have been acquiring each other and creating shareholder value through size and footprint, but some observers worry these larger monolithic utilities may becoming too big to adjust as needed when the world of energy and electricity are changing so quickly. Some corporate cultures are agile and can be on the front end of an evolving industry and some cannot.

Here in Oklahoma, some of the most agile utilities are proving to be our electric cooperatives, whose nimbleness, local service focus and innovative drive are creating great business incubators for movement into the energy future. I recently learned of one such great example, serving central Oklahoma and based in Stillwater in Payne County. Central Rural Electric Cooperative provides electric distribution cooperative service to more than 20,000 meters through more than 4,000 miles of electrical line in seven central Oklahoma counties. They refer to themselves as “the next generation utility” and describe their mission as:

Central Rural Electric Cooperative is filled with energy-industry game changers, collaborators, risk takers, mountain movers, dream weavers and history makers. We are not afraid to bring ideas to life and inspire those around us….We understand it is our responsibility to embrace our energy future and empower our members to change the world by sacrificing self-interests to achieve the best results.

And they are walking the walk, which is important because they are also serving an area of Oklahoma with significant oil and gas activity ramping up and expecting reliable service. Central has instituted new demand monitoring technologies that provide modern operations in real-time to reduce costs and increase reliability for the local oil and gas activities.

Central has also constructed a new business park and micro-community called Innovation Pointe, which shares new technologies to improve system operations. They’ve even deployed self-healing grid technologies to increase reliability and decrease outages to keep their customers safe.

Central has added new renewable energy in the form of Ten K Solar panels and battery storage technologies (which help to mitigate the intermittency of solar energy) to power the Innovation Pointe campus. The solar power plant, with the help of the Tesla Powerpack battery products, exports extra renewable energy to the whole grid and the system is managed from inside the new building, which achieved LEED Gold status from the U.S. Green Building Council.

This forward-thinking and more importantly forward-moving utility is proof that some monopoly spaces are worth landing on, because their embrace of the future is a sure win for every customer.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Oklahoma Department of Labor offers free, confidential safety consultations

Are you concerned about your company’s OSHA compliance? Do you have concerns for the safety of your employees?

Safety consultants can be expensive, and during a time of tight financial resources, safety can take a back seat to other company priorities. However, in Oklahoma we have a cost-free option – the ODOL Safety Consultation program offered by the Oklahoma Department of Labor.

The goal of these inspections is compliance, not to levy fines. The ODOL will assess safety, evaluate the work site, and assist with training and compliance with the OSHA. Most importantly, if a concern is identified by the ODOL safety inspector, he or she will provide your company with suggestions about how to how to improve safety and obtain compliance with OSHA.

The company must agree to correct all hazards identified as serious within the established time frame. The consultations are not reported to OSHA. However, if an OSHA inspection should occur, there are requirements about company reporting regarding certain types of testing performed by the ODOL safety inspector.

Every company that is concerned with employee safety should consider these free, confidential, safety inspections. Identifying and correcting a problem can prevent workplace injuries and accidents, and can save the company penalties and fines in the future.

Learn more about these safety consultations by viewing the Oklahoma Department of Labor’s informational video: Workplace Safety Pays in Oklahoma

Disclaimer: Consultations are not a replacement for legal advice. If you have questions or need legal assistance for safety issues, please contact the law firm of Phillips Murrah at (405) 235-4100.

 

Roth: Supply and demand for the Oklahoma energy future

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on May 15, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Supply and demand for the Oklahoma energy future

We Oklahomans are proud producers of products our country and the world needs. We help supply many of the demands of others in the form of our exported wheat, oil, natural gas and clean energy.

More and more, corporate America is showing increased demand for renewable energy and our state’s abundant supply should be attractive for investment and growth for years to come. That is, so long as our state policies do not hurt our potential.

Imagine if we were competing against Kansas for wheat customers around the globe (as we are by the way) and Oklahoma opted to end all of its wheat incentives, while Kansas did not. Kansas would have a market advantage as demand for cheaper supply proves out for Kansas’ cheaper wheat than Oklahoma’s.

The most fundamental concept in economics, and the foundation of any market-based economy, suggests that demand and supply will allocate resources in the most efficient way possible, usually dictated by price. In the wheat example above, Oklahoma losing a competitive advantage to Kansas may leave us with the proverbial chaff, that husky part surrounding the wheat, while the grain remains in Kansas’ economy.

Such may be the case with Oklahoma’s renewable energy future, now that state leaders have acted to eliminate the last incentive for wind energy, while neighboring Kansas and Texas, with similarly strong wind resources, have not. In fact, both Kansas and Texas offer a number of remaining incentives, even though Kansas is facing a similar budget dilemma as Oklahoma.

What is worse, some anti-wind special interests are now even pushing for a new tax on wind energy, which would further harm Oklahoma’s energy potential, worsen our “competitiveness for investment” and would raise every Oklahoman’s monthly utility bill. All the while, America’s corporate leaders are looking for more renewable energy now more than ever. Will they look to Oklahoma and bring their dollars here, or will they follow the law of economics and go where the supply is cheaper?

Here is the coming market. More American companies than ever are directly buying or building their own renewable energy projects. From Facebook and Apple to General Motors and Ford, America’s largest corporations are building their brands around the clean energy future. While some may have philosophical reasons for clean green energy, most companies are still profit-focused with their energy choices and they see the green of renewable power as the cost savings from today’s cheapest form of power. That cheapness will drive their business investment and decisions to other states if Oklahoma allows other anti-wind policies to destroy our cost-competitiveness and future energy potential. That would mean less direct funding to schools that wind pays through property taxes. That would mean less direct payments to Oklahoma farmers and ranchers for leasing their land. And it would mean less jobs in a steady energy industry free of the boom and bust cycles that has whip-sawed our history.

So, my fellow Oklahomans, please watch closely the next two weeks as our Legislature makes choices for or against our future energy potential. These two weeks may very well lay the reality for Oklahoma’s economy and energy vitality for many years to come.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Oil flash crash?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on May 8, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Oil flash crash?

We just had what some energy analysts called a flash crash in oil prices these past few days.

For those of us Oklahomans who are hoping for a strong, robust recovery for the oil and natural gas industries, this past week may have renewed some doubts. And for those Oklahoma legislators who are working on a new budget and praying their revenue estimates are met with a big recovery, they might need to plan for a less certain economic picture in the months ahead.

Friday saw a new five-month low for oil prices, after a 4-percent drop on Thursday and a larger than 3-percent additional drop overnight for U.S. West Texas Intermediate crude oil futures. Brent crude prices were similarly down on the global market on worries that rising U.S. output and Libyan crude returning to the market would extend the oversupply picture that has dominated the industry for the last year plus.

In addition, these lows were back to those levels that occurred prior to OPEC’s Nov. 30 announcement to curtail production levels for six months among its members by 1.2 million barrels per day and other major producers like Russia by another 600,000 barrels a day. On May 25, they will meet again to discuss renewing this agreement for another six months.

Other than the idea that a new agreement in Libya may calm that country’s production troubles and return as much as 1.5 million barrels a day later in 2017, the market impact seems to be borne by American production. On Wednesday, our government data showed that our inventories did not drop as much as expected and that American crude production continued to increase, creating a double-whammy to the supply picture. Similar supply news was reported by the Energy Information Administration for natural gas futures, which extended skeptics’ views on its cost recovery.

So what does it all mean? Well, your guess is as good as mine, but we can begin to see the signs that American producers may hold the key to their own industry’s fate more than ever in the last 40 years. Our unprecedented production success over the last decade is how we ended up in this current commodity recession gripping our industries and our state. Moreover, even as OPEC, which used to own the market swings by its own policies and production, works to stabilize the market with supply cuts, similar restraint may not exist here at home.

Thankfully, U.S. economic data is looking more positive than negative, although inertia seems to exist in several areas, and we might be able to power our own economic growth. Perhaps the test for us going forward is whether we can establish long-term stability in supply and demand to strengthen this weakened industry at home or whether we will rush to produce all that we can only to see the low commodity prices negate any economic upswing desperately needed by our producers and the state of Oklahoma’s budget.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Department of Defense and its drive toward renewable energies continues

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on May 1, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Department of Defense and its drive toward renewable energies continues

America’s largest consumer of electricity is actually the Department of Defense with thousands of facilities and millions of employees.

It’s also the largest employer in the world with over 1.3 million active duty servicemen and women, more than 800,000 members of the National Guard and reservists and more than 750,000 civilians supporting their vital missions here and abroad. And more often than not, their preferred choice of energy is coming from renewable resources.

Now this isn’t something driven by a political or environmental agenda or even a president, it is much more important than that; it’s about enhancing national security pure and simple.

While it’s also been a big economic savings to the military, their statements on the subject remain firmed focused on mission readiness and security. And to that end, newly created teams within the Air Force and other branches are even going after contracts for on-site distributed generation and smart micro-grids, so the military installation can control its own energy destiny in the event a cyberattack takes down the nation’s electric grid.

In addition, this past week saw a new milestone in DOD’s ongoing march toward its reliance upon clean energy, as a first-of-its-kind hybrid complex of wind and solar began commercial operations at U.S. Garrison Fort Hood in Killeen, Texas. This, the nation’s largest single renewable energy project, began officially generating its renewable power on April 27, providing more than 50 percent of the annual electric load at this base.

Apex Clean Energy, a Charlottesville, Virginia, clean energy company, which has years of experiencing developing projects in Oklahoma and throughout our region, has partnered with Northleaf Capital Partners to develop, build and own the energy complex comprised of the 50.4 megawatt Cotton Plains Wind facility and the 151.2 megawatt Old Settlers Wind facility, both in Floyd County, Texas, with the Phantom Solar project on-site at Fort Hood.

The idea of marrying these two renewable energy resources is a great one for round-the-clock support to our always-ready military. With solar power often strongest during “the peak” and most expensive parts of the day, and wind power which is available at all times and overnight, the 24/7 nature of our military has a good fit. For us citizen taxpayers, who are footing the bill, we can take solace in knowing we will be made safer and save critical tax dollars all at the same time.

These win-wins should spread across Oklahoma’s many bases, where wind, solar and natural gas are in abundance and where our communities, who support the bases, should also enjoy some local benefits from the large energy investments made within their town and county limits in and around these vital bases.

In the words of the United States Army, “This We’ll Defend.”

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Energy cybersecurity

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 24, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Energy cybersecurity

This past week was the 22nd anniversary of the Murrah Federal Building bombing on April 19 and as is the solemn custom each year Oklahomans gathered and memorialized those lives lost and those lives changed forever.

In addition, for the third year, the Judge Alfred P. Murrah Center for Homeland Security Law & Policy at the Oklahoma City University School of Law gathered people to study and examine the threats in our world today. As the center says in describing the tragic events of April 19, 1995, “It opened our eyes to the reality that terrorism could strike anywhere, at any time.”

This sad reality has required that we Americans keep our eyes wide open and with the help of experts at the Murrah Center and around the country, vigilance, insight and knowledge are necessary constants today.

At this year’s conference, the issues of cybersecurity in banking, gaming and energy, with the helpful sponsorship from the law firm of Crowe & Dunlevy, brought into focus for a reality check of the threats around us. And in the event you aren’t aware of how often attacks are actually occurring here and abroad, be sure to check out Norse Corp.’s real-time visibility into global cyberattacks website and you too might be shocked at the frequency: map.norsecorp.com/#/.

Like a modern-day version of Missile Command, this site shows and live tracks the attack origins, the attack types, attack targets and countries involved in real time. And it is very freaky, because cyber risks and attacks do not sleep, they do not take weekends off and they certainly don’t quit.

In the energy sector, much is being done to safeguard every step, from production to midstream delivery, to customer consumption and engagement, as every link is a vulnerability. At last week’s seminar, experts from Devon Energy, Continental Resources and Oklahoma Gas & Electric described their own real-world efforts and safeguards in what appears to be a constant evolution of learning, reacting and working to stay safe and a step ahead of these risks.

The U.S. Department of Energy is the pre-eminent national guide for cybersecurity for critical energy infrastructure and energy delivery systems. As DOE says: “…the nation’s security, economic prosperity, and the well-being of our citizens depend on reliable energy infrastructure.” And they work to accomplish these needs through three key areas:

• Strengthening energy sector cybersecurity preparedness.

• Coordinating cyber incident response and recovery.

• Accelerating research, development and demonstration of game-changing and resilient energy delivery systems.

Oklahoma is certainly an energy state, with blessings above and below our red dirt. Our production and delivery of these resources now include once-unimaginable threats of attack from sophisticated computer hackers and attacks from nation-states and rogue actors looking to create havoc in our economy and across the world. Our energy companies are helping to keep our energy systems safe and they need our vigilance too.

So the next time you get a strange email offering you riches from a never-known dead relative in a foreign country, please do not click on the link or forward it to others to check it out, as it may just be the attack that takes out your town’s electricity or the oil and gas well nearby.

As my mother used to say, “if it sounds too good to be true, it probably is.” In today’s world of cyber risks, the new mantra may need to be “If it sounds too good to be true, it’s probably a malicious malware virus launched from an anonymous attacker to bring down your household or country.”

But then again, it could just be “a guy sitting on their bed who weighs 400 pounds,” as a candidate for president once scoffed. Either way, it’s past time to take it serious, especially for the energy sector in America.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Commercial lease covers it all – right?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on April 20, 2017.


Jennifer Ivester Berry is a member of the firm’s Transactional Practice Group as an Of Counsel attorney. Jennifer represents individuals, privately-held and public companies in connection with a wide range of commercial real property matters.

By Phillips Murrah Of Counsel Attorney Jennifer Ivester Berry

For those involved in leasing commercial real estate – whether new to leasing or a seasoned industry pro – signing a lease can be a daunting endeavor.

The devil is in the details, and, more often than not, many standard forms omit critical considerations. Accordingly, a close examination of the terms is essential for a quality commercial lease.

Below are five important points to consider when leasing commercial property. These items are not intended to be exhaustive, but rather a starting point for the purposes of evaluation.

• Experience – Knowing the background and temperament of the other party is important. Is leasing commercial property the landlord’s primary business? Will a management company operate the property? Is the tenant established or just starting out? A knowledgeable, cooperative working relationship is imperative for a successful commercial lease.

• Type of lease – Details of what costs are covered and how they are apportioned should be carefully reviewed. For example, leases often described as triple net, meaning that the tenant is responsible for all costs associated with the leased premises other than structural repairs, can actually be a blend of two types of leases, triple net and gross. A gross lease splits the structural repairs and operation expenses between the landlord and tenant.

• Identification of leased premises – Often the outline of the space and delineation of its parameters is an attachment that does not make it into the lease until the end of the negotiations. It is important to verify up front that what is provided meets both parties’ expectations.

• Costs – Payments under a commercial lease can be categorized in several different ways, including rent, common area maintenance, assessments and dues. Awareness that a lower rental rate might be counterbalanced by a monthly fee for maintenance of the property, which is set to automatically increase each year, is essential. The ultimate focus should be on the full monthly cost, regardless of what it is called under the lease.

• Insurance – Insurance coverage requirements will vary based on lease type. It is important to identify two things: what the lease requires and whether such coverage is available, and whether the cost associated therewith is factored into the overall lease costs.

Jennifer Ivester Berry is an attorney at Phillips Murrah who specializes in commercial real estate property and energy-related matters.

Director Jim Roth sourced in article on Oklahoma’s solar energy potential

Jim A. Roth, Phillips Murrah

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth, Phillips Murrah Director and Chair of the Firm’s Clean Energy Practice, was quoted in an Oklahoma Gazette article by Laura Eastes regarding solar energy technology and Oklahoma’s potential as a leader in the solar industry.

Read Roth’s comments from the article below:

Row after row of solar panels, which rest perfectly aligned and angled to the west, fill an open field along NW 10th Street in western Oklahoma City. When OG&E’s 2.5-megawatt solar farm began harvesting energy from the sun less than two years ago, the company hawked the farm’s ability to power a one-stop-sign town.

As the sleek metal of the solar panels glistens in the blazing sun, the electric utility company’s aging natural gas plant stands in the background. When it comes to power stations, natural gas is king in Oklahoma, but indicators show solar has a bright and rising future.

“There is a tremendous amount of energy hitting the surface every day and we haven’t yet developed measures to capture it,” said Jim Roth, a director and chairman of Phillips Murrah law firm’s Clean Energy Practice Group and a former Oklahoma Corporation Commissioner. Roth represents solar and wind energy developers for the Oklahoma City business law firm.

“The technology is catching up,” he said. “Oklahoma is uniquely situated in that the best sun penetration happens at the time of day which is the most expensive time in the market. We not only have a lot of opportunity for local use, but we also have the ability to export at the height of the market each day.”

Across Oklahoma’s western border and into the Texas Panhandle are hints of a solar boom. Roth said the major Texas projects foreshadow Oklahoma’s future.

Within Oklahoma, solar energy has caught the attention of utility companies. It’s not limited to the OG&E solar farm in OKC. Public Services Company of Oklahoma’s (PSO), which services areas around Tulsa, McAlester and Lawton, recent long-term plan calls for the addition of solar resources. Additionally, rural electric cooperatives are diving into small-scale solar farms.

“The reality is the technology is there and solar is being implemented all around the country,” Roth said. “I really believe this is our greatest potential — we have such blessings with clean natural gas underground, such blessings with world-class wind and with solar opportunity. Few states, if any, have the trifecta. … Oklahoma is actually perfectly situated for the future which is unfolding.

Read the full article from the Oklahoma Gazette.

NewsOK Q&A: Laws allow for various contingencies in dealing with bankrupt companies

From NewsOK / by Paula Burkes
Published: April 18, 2017
Click to see full story – Laws allow for various contingencies in dealing with bankrupt companies

Click to see Gretchen Latham’s attorney profile

Gretchen M. Latham’s practice focuses on representing creditors in foreclosure, bankruptcy, collection and replevin cases. She offers these services to her clients on a statewide basis as well as in all three Bankruptcy and Federal Court Districts in Oklahoma.

Q: Can a lender still do business with a bankrupt company?

A: Most generally, yes. When a business files for bankruptcy, the type of case is most commonly a Chapter 11 case. In a Chapter 11, it’s possible for the company to remain in possession of its assets, including equipment and inventory, and continue to do business. This includes interacting with vendors and lenders on a regular basis. As a creditor, the safeguard in place for repayment of any loan made to a company operating under a Chapter 11 is that post-petition debts are given priority as an administrative claim. This helps to eliminate some of the risk, and provide assurances of repayment. However, if the type of case filed is a Chapter 7, the company will no longer be operating its business and all of its assets are scheduled for liquidation.

Q: Can goods that are shipped to a Chapter 11 debtor be recovered?

A: The Bankruptcy Code does allow for reclamation of recently shipped goods, pursuant to 11 U.S.C. Section 546. There’s a somewhat tight timeline for exercising the right of reclamation, which must be precipitated by making demand.

Q: How can I get paid by a Chapter 11 debtor?

A: An option for making a payment claim, which is not unique to a Chapter 11 case, is for a creditor to file a proof of claim. The proof of claim will set forth the balance due and payment terms. The deadline to get a claim on file will vary from court to court, and the required form is typically provided with notice of the filing. Payment on a proof of claim can take a while, so be prepared to wait for the case to come to completion.

Roth: Earth Day in action

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 17, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Earth Day in action

April is a busy time with significant holidays like Passover and Easter.

It’s also a time to celebrate the reawakening of the natural world around us as the spring equinox springs fauna and flora to life around us. And with Earth Day, April 22, approaching, it’s a great time to jump up, get out and put our lives in action for the world around us.

The first Earth Day on April 22, 1970, activated 20 million Americans from all walks of life and is widely credited with launching the modern environmental movement, although a growing consciousness had been building in America for decades. Soon the passage of landmark acts, such as the Clean Air Act, the Endangered Species Act and the Clean Water Act brought national prominence to these efforts. By the 1990s, Earth Day had spread across the Earth, activating more than 200 million people in over 140 countries and creating a true global awareness of the world we share in common.

So as we approach the 47th birthday of Earth Day in America, we can take great comfort in the tremendous progress that has actually been achieved here and abroad over these years and yet we have serious concerns that continue to mount and are causing grave, yes, grave consequences.

• Forests: Our planet is currently losing 56 acres of forests every minute, amounting to over 15 billion trees every year. These fading forests are necessary to combat climate change, de-carbonize our atmosphere, sustain important species and provide shelter and security to people across the globe. Former forested areas are now prone to massive erosion and displacement of cultures and animals worldwide.

• Species: Earth’s species are now going extinct faster than ever before and we have entered what credentialed scientists have described as a “sixth mass extinction brought on by global human activity.”

Whether you are motivated by faith, as many faithful people believe we have a calling to honor the world provided by the Creator, or whether you are motivated by a humanistic call to save lives from climate harm and disease brought on my droughts and famine, there are a few easy and obvious actions steps you can take to make a difference:

• Plant a tree or donate to plant a tree.

There are a number of national and world charities that do great work to reforest our planet and your modest donation can go a long way. Likewise, visit a local nursery and plant a new tree in your own yard, with your family’s help, and create a daily reminder of the tree of life out your own front door.

• Reduce your footprint.

There are many online tools to measure your ecological footprint to learn how to reduce your footprint on the planet. Here is a great link to get started: www.earthday.org/reduce-footprint-take-ecological-footprint-quiz.

• Stop using disposable plastic.

Make the decision today and simply stop. Carry your own bag into stores, insist on recycled paper bags or simply carry items in your arms the old-fashioned way, but however you stop using plastic, just stop. They are filling up landfills, polluting oceans and entangling and killing animals everywhere.

• Believe in science and let your voice be known.

There are activities all around this country, including a March for Science on the National Mall on Earth Day to fight efforts to silence science and instead create community engagements and knowledge sharing. As my partner likes to say: “science doesn’t care if you believe it or not, it just is science.”

This Earth Day is a great time to engage with yourself, your children, your family, your church, community and neighbors to do deliberate acts of good to help save Mother Earth. She really needs our help.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

NewsOK Q&A: FBI warns against doctors, dentists using ‘anonymous mode’ computer servers

From NewsOK / by Paula Burkes
Published: April 12, 2017
Click to see full story – FBI warns against doctors, dentists using ‘anonymous mode’ computer servers

Click to see Mary Holloway Richard’s attorney profile

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Q: What attention has the FBI recently given to protect Protected Health Information (“PHI”) from cyber criminals?

A: Under a “Private Industry Notification” dated March 22, the FBI’s Cyber Division has provided guidance that’s applicable specifically to medical and dental providers and focuses on protection of sensitive, identifiable health information.

Q: What does the notice specifically recommend?

A: The notification recommends these health care providers request that their IT services personnel take steps to further secure the information from cyber threats by checking networks for File Transfer Protocol (“FTP”) servers running in anonymous mode. FTPs routinely are used to transport information between network hosts. This is the case, for example, when a covered entity such as a hospital or group practice transfers information to a business associate, such as a billing company or a third-party payer, for the purpose of submitting claims for services provided.

Q: What does “anonymous mode” mean and what threat does it represent?

A: “Anonymous mode” refers to the situation where an FTP server can be structured to permit users who are anonymous, doesn’t require a password to enter, and accepts common user names such as “anonymous” or “FTP.” The danger is that, in such circumstances, sensitive patient information stored on a server could be accessed with little or no security.

Q: Why does the FBI guidance focus specifically on health care?

A: Research conducted at the University of Michigan in 2015 resulted in a finding that more than one million FTP servers would allow such access. According to the FBI, some computer security researchers seek servers in anonymous mode as part of legitimate research, but others make such connections to facilitate nefarious activities such as launching cyber attacks, hacking, blackmailing, harassing and intimidating business owners. It’s the FBI’s purpose issuing this new guidance to both make health care business aware of the risks represented in their IT systems and to shore up weaknesses that pose cyber security risks. In addition to the precautions urged in the notice, the FBI has previously urged companies to buy and implement ransomware.

Q: Should additional actions be taken by medical and dental health care entities to provide additional protections against cyber crime?

A: The FBI encourages medical and dental health care entities to report suspicious or criminal activity to the local FBI field office (locate via www.fbi.gov/contact-us/field) or the FBI’s 24/7 Cyber Watch, CyWatch 855-292-3937 or CyWatch@ic.fbi.gov. Submitted reports must include available information regarding the date, time, location, type of activity, number of people and type of equipment used for the activity, the name and contact person for the entity submitting the report. Victim complaints can be filed with the internet Crime Complaint Center at www.ic3.gov.

 

Roth: Leading or following China on climate?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 10, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Leading or following China on climate?

Over the years, much has been made in American politics about whether America should do more to lead the world on solutions for combating climate change.

Now I am not talking about the “climate deniers” who are against the enormous consensus of actual scientists; those political scientists who try to score political points alleging there isn’t consensus. I am talking about that second group of politicians and prognosticators who say: “Why should we do something when China isn’t?”

But first, more about those actual scientists. According to NASA, yes that NASA, and its Global Climate Change website, climate.nasa.gov/scientific-consensus, “Multiple studies published in peer-reviewed scientific journals show that 97 percent or more of actively publishing climate scientists agree: Climate-warming trends over the past century are extremely likely due to human activities. In addition, most of the leading scientific organizations worldwide have issued public statements endorsing this position.”

The following is a partial list of these organizations:

• American Scientific Associations including American Association for the Advancement of Science, American Chemical Society; American Meteorological Society and the Geological Society of America.

• The United States National Academy of Sciences.

• The Intergovernmental Panel on Climate Change.

• 200+ worldwide scientific organizations that hold the position that climate change has been caused by human action.

So, once you accept that scientific evidence is or may be believable, you get to the “Why should we” crowd. It is this crowd I was wondering about as America’s president met with China’s president in Florida. That is a clear departure from past administrations pushing on China, and their enormous emerging economy, to move in a more committed path towards limiting human effects on climate and global warming.

Have we agreed to follow? Is it possible that America’s new directions on energy, coal, pollution and climate change will be eclipsed by a China that is actually doing more on climate action? Let us take a look.

At the end of 2016, China released its 13th Five Year Plan for Economic and Social Development, a guidebook that has become how the Communist Party maps out China’s direction. The plan has three sub-plans focused on controlling greenhouse gas emissions, environmental protection and development of the power sector.

Taken together, these renewed pathways build upon the previous steps and measures underway that have actually reduced their coal consumption three years in a row, helping reduce China’s carbon dioxide emissions by about 0.7 percent last year.

What’s more, the three sub-plans lay out a comprehensive set of policies to benchmark China’s goals for 2020, which will allow them to actually exceed their 2030 goals in the Paris Agreement. They have capped coal usage, they have pushed even tougher caps in areas of poorer air quality and they have redoubled efforts to develop low-carbon technologies and policies.

America seems to be moving in the opposite direction, when we could and should in fact lead the charge to solve one of the greatest, if not the greatest challenge we face in our lifetimes. Our country’s outstanding DNA and drive has made us a leader in innovation, economy and moral fortitude to move others to solve global challenges. We should not reverse course now and lose the chance to lead this enormous opportunity for our lives and our economy.

What’s more, for those who feel we should not lead because others may not follow, I would ask: When does America ask for a show of hands to determine if it does the right thing? We should continue to lead and we should realize other excuses may be vanishing as other countries do more. China included.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Oklahoma, Caveat Emptor?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 3, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Oklahoma, Caveat Emptor?

As travelers enter into Oklahoma on one of 11 major highways from other states, they are greeted by a beautiful red granite monument featuring the Oklahoma state seal and the word Oklahoma.

However, to be fair, and based upon recurring actions from our state leaders, truth in advertising may require we amend the signs to read “Oklahoma, Caveat Emptor.”

“Caveat emptor” is a Latin phrase meaning “let the buyer beware.” Similar to the phrase “sold as is,” this phrase suggests that the buyer assumes the risk that a product may fail to meet expectations or be defective. The phrase is actually shortened from a longer legal concept, which is: Caveat emptor, quia ignorare non debuit quod jus alienum emit, meaning “Let the purchaser beware, for he out not be ignorant of the nature of the property which he is buying from another party.”

Now we Oklahomans surely pride ourselves on being good people who will look you in the eye and bind ourselves through our word and a handshake. Moreover, we should not need Latin phrases to prove our trustworthiness, or more accurately excuse our lack thereof. But times they are changing if the actions around our floundering state budget continue to erode the confidence of our own citizens and those precious investment dollars we invite in to help grow our state. Simply put, our erratic debtor’s behavior is making us a risky place to do business, and whether our welcome signs declare it or not, our legislative actions are spreading the word beyond our borders.

Last year, numerous bills were introduced targeting existing tax credits and other incentives, causing investors and companies in energy and aerospace to purportedly remove Oklahoma as a place to grow, expand or invest. Then near the end of the session, and without much warning, quick action immediately eliminated a tax subsidy for oil and gas wells that had become unprofitable due to the massive and sudden downturn in energy prices. Yes, an argument can be made that the budget hole necessitated drastic action, but to that operator that kept employing Oklahomans it probably felt like being kicked while you were already down.

Now this year, similar sudden action has been taken by both the House and the Senate to rip an existing tax incentive away from projects that are actually under construction in Oklahoma with the wind energy industry. Oklahoma invited billions of dollars in and now claims we cannot keep our word even though changing our word has zero effect on this coming year’s budget.

Standard & Poor’s global ratings announced in March it has lowered our bond rating a notch stating: “The downgrade reflects our view that persistently weak revenue collections – leading to a declared revenues failure for the remainder of the fiscal year (2017) – have further compounded the state’s challenge to achieve structural balance in fiscal 2018.”

These are desperate times and as is said, desperate times call for desperate measures. Our failed funding of public education is a crisis, which reverberates through our lives and economy in multiple ways beyond dropout rates and low test scores. It means higher incarceration rates and socialized expenses. It means greater poverty rates, hunger and divorce. It is a crisis and must be solved. We need steady, structural change to create revenue for our state’s needs.

However, to be erratic toward investment dollars, which we desperately need to grow our state towards more stable times, is a risk that can forever impair our state’s fullest potential. If we have become a credit risk, lenders will deploy their capital in more reliable states and the downward spiral continues here through less financing, fewer company expansions, and higher costs of debt, fewer energy projects and fewer jobs.

While desperate times may in fact exist, we Oklahomans should not ever trade in our good name. Not for an annual budget hole, not for political pressure, not for anything.

Others are watching our words and actions and they may rewrite our welcome sign for us.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

SCOTUS overturns structured bankruptcy dismissal in favor of payment priority rules

“Chapter 11 permits some flexibility, but a court still cannot confirm a plan that contains priority-violating distributions over the objection of an impaired creditor class.” – U.S. Supreme Court Ruling in Czyzewski v. Jevic Holding Corp.

A landmark decision handed down last Wednesday from the U.S. Supreme Court reversed a bankruptcy court ruling that approved a “structured” Chapter 11 bankruptcy dismissal settlement for a collapsed trucking company. WSJ reported that, in the highly anticipated ruling, SCOTUS overturned a controversial payout plan that disregarded important bankruptcy rules.

In Czyzewski v. Jevic Holding Corp., the High Court ruled that the dismissal violates payment priority rules of the Bankruptcy Code as set out by Congress, which gives a special priority creditor status to employees who are owed unpaid wages. In the decision, SCOTUS sent the case back to bankruptcy court so that it may be properly adjudicated.

The Backstory

In 2006, private-equity firm Sun Capital Partners’ acquired Jevic Transportation, Inc. in a leveraged buyout, according to the Wall Street Journal. By the following year, the company had started experiencing financial difficulty. In 2008, Jevic Transportation filed its Chapter 11 petition.

A day prior to the bankruptcy filing, Jevic ceased operations and about 90 percent of its employees were abruptly terminated. A group of the company’s truck-driver force filed a multi-million dollar class-action lawsuit claiming that the layoffs violated the Worker Adjustment and Retraining Notification (WARN) Acts. According to Federal Regulation Title 20, Section 639.1(a), employers are required to give a 60-day notice of plant closings and mass layoffs.

The suit included over $8 million in employee priority wage claims under Section 507(a)(4) of the Bankruptcy Code. Jevic truck drivers were awarded a judgment against Jevic, entitling the workers to payment ahead of general unsecured claims against the Jevic estate.

Another lawsuit was brought by the official committee of Jevic’s unsecured creditors claiming fraudulent conveyance and equitable subordination against secured creditors, Sun Capital and CIT Group, which funded the LBO. During the course of Chapter 11 proceedings, Jevic stated that it had run out of money to fight the claims, which set into motion a settlement with the unsecured creditors’ committee representing Jevic’s unsecured creditors in the form of a structured dismissal. A Delaware bankruptcy judge approved a payout plan and dismissed the case.

The Controversy

Under the settlement negotiated by Sun, CIT, Jevic and the committee, no assets were to be distributed to the truck drivers despite the WARN Act class-action judgment. The settlement did, however, provide for distributions to general unsecured claims. The group of Jevic truck drivers appealed the bankruptcy court ruling to the U.S District Court for the District of Delaware and the Third U.S. Circuit Court of Appeals, but was the appeals were denied.

This past summer, the Supreme Court agreed to review the case. At that time, the Wall Street Journal wrote:

“The question of what to do about bankruptcy rules that get in the way of a settlement has divided courts of appeal across the country, with some courts rejecting settlements that don’t comply with the scheme set out by Congress for who gets paid first.”

“The Bankruptcy Code contains a clearly-defined priority scheme for distributions to creditors of the bankruptcy estate, which is grounded on considerations of fairness to all creditors,” said Clayton D. Ketter, a Director at Phillips Murrah who specializes in financial restructurings and bankruptcy matters.

The negotiated structured dismissal did not include the consent of the group of Jevic truck drivers, the SCOTUS opinion stated, which allowed Jevic to evade its priority-creditor responsibility to the unpaid drivers. As long as priority creditors don’t consent to the deal, such settlements can’t be approved, the High Court said.

“In the case before us, a Bankruptcy Court dismissed a Chapter 11 bankruptcy. But the court did not simply restore the prepetition status quo. Instead, the court ordered a distribution of estate assets that gave money to high-priority secured creditors and to low-priority general unsecured creditors but which skipped certain dissenting mid-priority creditors. The skipped creditors would have been entitled to payment ahead of the general unsecured creditors in a Chapter 11 plan (or in a Chapter 7 liquidation). See §§507, 725, 726, 1129. The question before us is whether a bankruptcy court has the legal power to order this priority-skipping kind of distribution scheme in connection with a Chapter 11 dismissal.

In our view, a bankruptcy court does not have such a power. A distribution scheme ordered in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the primary mechanisms the Code establishes for final distributions of estate value in business bankruptcies,” wrote Justice Breyer.

“The Supreme Court’s ruling reinforces the enforceability of those priorities and clarifies that priority line jumping through a structured settlement will not be permitted,” Ketter said.

The Jevic case will now head back to bankruptcy court for more work.

The Takeaway

What are the implications of this decision, beyond the fairly narrow Supreme Court’s ruling? Will it affect the overall utilization of structured dismissals across the industry?

Ketter said that he has noticed a rise of structured dismissals in bankruptcy cases, which typically follow a sale of a substantial portion of the debtor’s assets.

“I don’t foresee the Jevic decision changing that,” he added. “The Supreme Court Justices did not say that structured dismissals are not allowed.  Rather, they said that structured dismissals that violate the bankruptcy code’s priority scheme are not allowed.  Thus, we are likely to continue to see structured dismissals used, so long as they do not impermissibly skip a class of creditors in making distributions.”

However, Ketter added that decision may have broader implications outside the realm of structured dismissals.

“For example, there are types of plans within a bankruptcy case where a priority class voluntarily gifts a portion of the recovery it would otherwise be due to a lower priority class,” he added. “Sometimes, those gifted distributions skip other classes sitting higher on the priority scheme.  The Jevic decision raises the question of whether such plans are permissible.”

 

Clayton D. Ketter is a Director and a litigator whose practice involves a wide range of business litigation in both federal and state court, including extensive experience in financial restructurings and bankruptcy matters.

Roth: OKC in top 10 U.S. cities for solar potential

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on March 27, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

OKC in top 10 U.S. cities for solar potential

Google’s “Project Sunroof” program just expanded into every state in America to ascertain which areas are most suitable for solar power and not surprisingly sunny Oklahoma, and specifically sunny Oklahoma City, came out in the top 10 cities across this great country. While Houston was ranked No. 1, Oklahoma City achieved the eighth-best spot, besting Dallas and Albuquerque to round out the top 10.

Overall, the expanded analysis concluded that 80 percent of all American rooftops assessed are suitable and can technically benefit from the installation of solar panels for energy generation. That is an astounding reality and speaks to the coming enormity of solar energy for our country’s future, especially as technology is improving fast and prices are dropping precipitously.

Curious about your own home’s potential? Please check out the project website and simply put in your ZIP code at: www.google.com/get/sunroof#p=0.

My own home was analyzed and shows the potential for at least $3,000 in estimated savings over 20 years due to:

• 1,695 hours of usable sunlight per year, based on day-to-day analysis of weather patterns.

• 352 square feet available for solar panels, based on 3-D modeling of my roof and nearby trees.

• Recommended solar installation size of a 4.75-kilowatt system that could provide more than 21 percent of my electricity consumption (in reality I would probably size it even larger to live freer from dirtier electricity).

All of this great analysis is free and provided using Google Earth and Google Maps technology to build specific 3-D models by assessing weather, trees and other factors that affect your roof’s potential to the sun’s exposure. It was fascinating to see it actually illustrate my own home’s roofs and the analysis specifics, based upon my electricity consumption.

And while it doesn’t yet speak to the local policy issues impacting these equations, such as the fact Oklahoma utilities aren’t yet required to pay homeowners “fair value” price for the energy that your rooftop system may “export” back to the grid for use by others, it does illuminate many of the basics that can get your analysis started. The website even lists solar providers in your area so you can take the next step to have industry experts visit your home and help calculate your system options, payback timelines and any local, state or federal incentives that might help.

In addition, as an aside, please know that the future is looking bright for Oklahomans to adopt more solar energy, as just last week the Oklahoma Corporation Commission voted to block a utility’s request to raise charges on rooftop solar customers. The case centered on the reality that when you study the economics, neighbors with rooftop solar energy are actually providing greater benefit to their neighbors through exported energy than those customers themselves cost the system to tie into the grid. That helps Oklahoma move from its current ranking of 48th in solar adoption toward the enormous potential we have as Oklahoma City ranked eighth suggests.

What are you waiting for? Chances are really good the sun will come up again tomorrow.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Pushing American ingenuity forward

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on March 20, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Pushing American ingenuity forward

Two cars leave Detroit at the exact same time, traveling 60 miles per hour, headed to drive through every state in the continental United States over the coming years.

Car A begins and maintains a steady 34-miles-per-gallon fuel efficiency during every year of its journey, while emitting 3 billion tons of carbon dioxide into the atmosphere over eight years. Car B begins year 2017 with 34-miles-per-gallon fuel efficiency and adjusts upward each year to a level of 54 miles per gallon by 2025, while emitting only 2 billion tons of carbon dioxide during the same eight-year period.

Now unlike those typical rate-time-distance math questions, this presents a more direct question for the American consumer: Which car would you want to own?

For me, and my family’s budget, the answer is Car B.

Moreover, perhaps the bigger question, the great unknown with the scenario above that is actually beginning to play out in national politics today, is: Which car will be available for you from an American manufacturer?

That answer seems more likely to be Car A, if “Detroit” gets its way.

The Corporate Average Fuel Economy, or CAFE standards are American regulations, first passed by Congress in 1975 in reaction to the 1973 Arab Oil Embargo. These regulations exist to improve the average fuel economy of cars and “light trucks,” including trucks, vans and SUVs, produced for sale in America. The calculations and mathematical formulas for setting the CAFE standards have evolved over time and since 2012, the standards are determined through an inverse-linear formula reflecting the footprint of various vehicles by fleet.

The National Highway Traffic Safety Administration regulates CAFE standards and the Environmental Protection Agency measures vehicle fuel efficiency. Congress specifies that CAFE standards must be set at the “maximum feasible level” given consideration for: technological feasibility; economic practicality; effect of other standards on fuel economy; and need of the nation to conserve energy.

I wish that Congress would actually include a fifth consideration for the “need for American consumers to save money” or at least “need for American ingenuity to be pushed forward.”

While it’s probably true that most American consumer behavior is driven by pure economics, it has also been true that Americans will buy big gas guzzlers unless and until they can’t afford the largesse of that vehicle’s gas consumption. And the same is true, that many Americans will search out cars in the market that meet their budget-conscious needs too, as has been evident in the past decades as Japanese imports with higher fuel economy, better safety records and less maintenance costs began a strong foothold into the American market. Meanwhile, most American car manufacturers fought innovation and regulation, including fighting early versions of electric cars. I’m old enough to remember that was the first time that Detroit needed a taxpayer bailout.

So please pay close attention to the “Detroit 3” asking the president to reopen the new 2016 “Midterm CAFE Standards” and whether their reasons are to benefit the consumer or themselves. And although the 2025 model year target of 54.5 miles per gallon may seem tough, there is no doubt that the increasing fuel efficiency standards are a direct benefit to your families’ bottom line, to our collective energy and national security and to the arc of American ingenuity.

Lets’ not take our foot off the accelerator now.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Storm clouds and a silver lining?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on March 13, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Storm clouds and a silver lining?

As Oklahoma’s oil and gas industry looks ahead, cautiously optimistic into 2017 and beyond, it seems there are reasons to be hopeful and still causes for worry. That dual reality has played out already in 2017 and especially within the past week.

As the Oklahoma state budget indicates, the oil and gas patch has been going through a very rough patch for the past few years. And as a country, American oil and gas production has remained steady, albeit more productive than the market can bear. Hence the oversupply and low-price reality exacerbating the industry these past few years.

Where have we been since the high of $110 per barrel of oil in 2014? Well it’s been a rocky road for sure. And 2016 can perfectly illustrate that bumpy journey.

At the beginning of 2016, the U.S. benchmark saw a nearly 13-year low with prices per barrel of oil falling below $27. Yes, that’s less than a quarter of the 2014 price high and no wonder many companies got slammed hard, including bankruptcies and reorganizations to survive. Then a rebound began, due in large part to optimism around production control announced by OPEC and its collaborators, as the rebound more than doubled the price of crude. 2016 saw the U.S. benchmark futures achieve the biggest annual gain in seven years, including an 8-percent gain in December alone.

And as the industry rolled into 2017, hope continued to build that the low commodity price storm clouds may be dissipating. Rig activity is building, some companies are announcing expanded capital programs and cautious smiles are beginning to reappear.

Volatility seemed to be leveling out, as oil traded within a $4 range over the past two months, creating the smoothest period for oil prices since 2014. But then a thunderhead popped up quickly and rained some doubt again for the industry, and prices tumbled for oil and for publicly traded companies directly involved.

Last Wednesday and Thursday saw oil futures fall over 7 percent in two days, sliding back under $50 per barrel as worries continue. Storage data revealed near record highs and suggestions that a rush to produce could further flood the market and continue downward pressure on prices. And an industry desperately in need of balance is being reminded that most factors impacting their industry are beyond their control.

What is more likely within the industry’s control, the cost of doing business, may be the silver lining in all of this stormy experience. Here’s what I mean.

Oklahoma producers have become all too familiar with feast and famine over the past decades. And the smartest amongst us seek out cost efficiencies through the drill bit at times such as these. Through deployed innovation and cost savings implemented structurally in the production processes, many Oklahoma producers are learning to create more with less. And as the industry picks up, with labor demands tightening, land lease prices increasing and energy service companies in growing demand, the exploration and production companies that have implemented price discipline in their own internal practices should weather any coming volatility. It is estimated that about one-third of a well’s costs are on the drilling side, with the remaining two-thirds being for the well’s completion costs. Oklahoma’s companies and Oklahoma’s SCOOP, STACK and the NW STACK plays are going to be laboratories for whether innovative producers can not only compete, but succeed in the new normal of external price pressures.

All of Oklahoma needs them to succeed.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Mary Holloway Richard sourced in article investigating hospital merger

Mary Holloway Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Mary Holloway Richard, Phillips Murrah Of Counsel Attorney and leader of the Firm’s Health Care Practice, was quoted in a Journal Record article by Sarah Terry-Cobo regarding an attempted merger by OU Medical System and how best to financially achieve that mission.

Read Richard’s comments from the article below:

OKLAHOMA CITY – When it comes to complicated relationships, sometimes it just takes the right partner. After a failed hospital merger was announced Monday, OU Medical System could still find its better half.

But making that match probably won’t be easy, said industry observers. Health care attorney Mary Holloway Richard said a potential partner needs the business expertise as well as the financial backing to purchase a large teaching hospital.

Richard said teaching hospitals have historically had higher costs than non-academic hospitals.

A potential partner has to evaluate the economic feasibility, regardless of whether parties are considering an outright acquisition or a joint venture, she said.

“Will it fit in with your overall business model?” Richard said. “(A teaching hospital) is a complex system, so how you incorporate that complex system into an existing system requires mastery of both the business model and the financial feasibility, as well as recognition of the compliance issues at play.”

Read the full article at the Journal Record.