United States energy law is a function of the federal government, states, and local governments. At the federal level, it is regulated extensively through the United States Department of Energy. Every state, the federal government, and the District of Columbia collect some motor vehicle excise taxes.Motor Fuel Excise Tax Rates as of January 1, 2008 from the Federation of Tax Administrators website. Retrieved February 24, 2009. Specifically, these are excise taxes on gasoline, diesel fuel, and gasohol. While many western states rely a great deal on severance taxes on oil, gas, and mineral production for revenue, most states get a relatively small amount of their revenue from such sources.2007 State Tax Collection by Source from the Federation of Tax Administrators website . Retrieved February 24, 2009.
The practice of energy law has been the domain of law firms working on behalf of utility companies, rather than legal scholars or other legal actors (such as private lawyers and paralegals), especially in Texas, but this is changing. Some officials from energy agencies may take jobs in the utilities or other companies they regulate, such as the former FERC chairman did in 2008."Former FERC Chairman Joins Husch Blackwell Sanders", August 4, 2008, found at Marketwatch story. Retrieved August 21, 2008.
The American Bar Association (ABA) has a Section of Environment, Energy, and Resources, which is a "forum for lawyers working in areas related to environmental law, natural resources law, and energy law."Section of Environment, Energy, and Resources of the American Bar Association website. Retrieved August 22, 2008. The Section houses several substantive committees on environmental and energy law that release current information on topics of interest to practitioners and news of committee activities. The ABA recognized 'environmental and energy law' as one of the practice areas where legal work may be found in 2009.Deborah L. Cohen and Julie Kay, "Where the Work IS," ABA Journal, August 2009, pp. 58-61, at 59.
The United States' oil production peaked in February 2020, at about 18,826,000 barrels per day.
Common law Under the common law, persons who owned real property owned "from the depths to the heavens".Thomas Merrill, Establishing Ownership: First Possession versus Accession, p. 14, fn. 22-23, Law and Economics Workshop (University of California, Berkeley 2007 Paper 3), found at CDLib website. Retrieved September 17, 2008.Written as cjus est solum, ejus est usque ad coelum et ad inferos. This has been translated as "To whomever the soil belongs, he owns also to the sky and the depths." Black's Law Dictionary (6th ed. 1990). From Merrill, fn. 22, q.v.. Therefore, real estate traditionally has included all rights to water, oil, gas, and other minerals underground. The United States Supreme Court has held that as far as air rights, "this doctrine has no place in the modern world,"United States v. Causby, 328 U.S. 256, 261 (1942), see . From Merrill, fn. 23, q.v.. but it remains as a source of law to this day, or "fundamental to property rights in land."
An easement or license to drill for oil, gas, or minerals generally runs with the land, and thus is an appurtenant easement. However, a utility easement generally runs with the owner of the easement, rather than running with the land, and as such, is an example of an easement in gross.
The West digest system, used in WestLaw, has allocated several topics in energy law: 114 – Customs duties 145 – Electricity 190 – Gas 371 – Taxation.
There are many library research resources available about American oil and gas law."OIL AND GAS LAW: A Selective Research Guide," from the Cooley Law School website. Retrieved July 28, 2010.
Supreme Court cases
The Supreme Court of the United States rarely rules on energy law, but they do so when the Circuits are split, or in other particular circumstances. In the vast majority of cases, the rule of four requires that at least four Justices agree to issue a writ of certiorari.
On July 18, 2025, the Supreme Court held in Nuclear Regulatory Commission v. Texas that only a party who has been directly harmed in a licensing proceeding before the Nuclear Regulatory Commission can seek judicial review of such a licensing decision. The State of Texas and a company sought judicial review of the NRC's decision to issue a license to a company that applied for license to deal with nuclear material. Texas and the other company filed comments in the proceeding and opposed issuance of the license. They sought judicial review and the 5th Circuit, usually eager to oblige the government of Texas, vacated the license, and NRC petitioned the court." Kavanaugh's majority decision was not joined by all conservatives, but was joined by Chief Justice Roberts and the three liberal justices; Gorsuch wrote a minority opinion dissenting with Thomas and Alito.
Federal laws
Under the Stock-Raising Homestead Act, the surface and below-surface rights are divided, known as split estates.Split EstatePrivate Surface / Public Minerals: What Does it Mean to You? , a 2006 Bureau of Land Management presentation
Previous to the 1920s, the role of the federal government in energy was restricted to the disposition of oil, gas, and coal on federal lands. The Mineral Leasing Act of 1920 et seq. is the major federal law that authorizes and governs leasing of public lands for developing deposits of hydrocarbons and other minerals. Previous to the act, these materials were subject to mining claims under the General Mining Act of 1872. In BP America Production Co. v. Burton, 549 U.S. 84 (2006), the Supreme Court held that a statute of limitations does not apply to government actions for contract claims for an agency to recover royalties on such leases.
Concerned that a predicted imminent shortage of petroleum would not leave enough fuel for naval vessels, President William Howard Taft established the first Naval Petroleum Reserve by withdrawing federal land over the Elk Hills Oil Field in California from being claimed and drilled by private companies. A number of additional Naval Petroleum Reserves and Naval Oil Shale Reserves were established by Taft and his successor, Woodrow Wilson.
Until the 1920s, "the federal government did not play an active role in the energy industries," sometimes explained as due to "the widespread belief in the unlimited supply of energy."Cornell Law School website. Retrieved August 6, 2008. The first US law was the Federal Power Act of 1920 (later amended in 1935 and 1986).Federal Energy Law Summaries online.Federal Power laws online.Federal Power Act Amendments Act of 2003 at The Orator website . The Manhattan Project of the 1940s "initiated the era of nuclear regulation." In 1946, the Atomic Energy Act was passed.Pub.L. 1946, ch. 724, 60 Stat. 755, . Atomic Energy Act of 1954 amended it,Pub.L, ch. 83, 83-703, 68 Stat. 919 . and has been the subject of at least seven Supreme Court cases.
The Price-Anderson Nuclear Industries Indemnity Act was first enacted in 1957, and has been renewed periodically, which governs a no-fault insurance regime for nuclear accidents.Pub.L. 1957, 85 Stat. 257, , codified at 42 U.S. ch. 23. The statute was upheld as constitutional in Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59 (1978).Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59 (1978).
In response to the OPEC oil embargo, Congress passed the Energy Reorganization Act of 1974 and the Energy Policy and Conservation Act in 1975. After natural gas shortages in 1976-1977, Congress passed the Natural Gas Policy Act of 1978.
The Department of Energy and its constituent Federal Energy Regulatory Commission (FERC) were created in 1977, through the Department of Energy Organization Act.Pub.L. 95-238, 92 Stat. 47, . The stated purposes of these "federal energy laws and regulations is to provide affordable energy by sustaining competitive markets, while protecting the economic, environmental, and security interests of the United States." The U.S. Nuclear Regulatory Commission (NRC) regulates the use of nuclear power and its uses as a defense weaponry.
Other statutes are the Public Utility Regulatory Policies Act,PURPA, at the Energy Security Act,. the Price-Anderson Nuclear Industries Indemnity Act, and the Energy Policy Act of 1992 Most of these laws are codified at U.S. Code, Title 16, Chapter 12 – Federal regulation and development of power. The Commodity Futures Modernization Act of 2000 also affects energy trading companies. The Oil Pollution Act of 1973 and Oil Pollution Act of 1990 affect the transportation of oil on the high seas.
As of January 1, 2008, the federal excise tax was 18.3 cents per gallon on gasoline, 24.3 cents per gallon on diesel, and 13 cents per gallon on gasohol, all of which goes into the Highway Trust Fund.
Energy Policy Act of 2005
One major law is the Energy Policy Act of 2005, an attempt to combat growing energy problems, which changed the energy policy of the United States by providing tax incentives and loan guarantees for energy production of various types. (). There were various criticisms of the Act.Grunwald, Michael and Juliet Eilperin. "Energy Bill Raises Fears About Pollution, Fraud Critics Point to Perks for Industry." Washington Post. July 30, 2005."Bush signs $12.3 billion energy bill into law." MSNBC. Aug. 8, 2005. One of the most controversial provisions of that Act was to change daylight saving time by four to five weeks, depending upon the year; some scholars have questioned whether daylight saving results in a net energy savings. It also directs a study for the development of oil shale and tar sands resources on public lands especially in Colorado, Utah, and Wyoming. The Act further sets Federal reliability standards regulating the electrical grid (done in response to the Blackout of 2003),Report, Energy and Commerce Committee, "Blackout 2003: How Did It Happen and Why? Full Committee on Energy and Commerce, September 4, 2003, found at Energy and Commerce Committee website. Retrieved August 27, 2008. including allowing the DOE to designate National Interest Electric Transmission Corridors in low-capacity areas. There was also criticism of what was not included: the bill did not include provisions for drilling in the Arctic National Wildlife Refuge (ANWR) even though some Republicans claim "access to the abundant oil reserves in ANWR would strengthen America's energy independence without harming the environment."Knight, Peyton. "Small Group of House Republicans Derails ANWR Drilling ." Washington, DC: The National Center for Public Policy Research. November 10, 2005. There are a number of tax credits in the Act, including the Nonbusiness Energy Property Tax Credit.
Developments 2007 to present
Two federal laws passed in 2007 were the Energy Independence and Security Act of 2007,Pub.L. 110-140, 121 Stat. 1492.Summary of the Energy Independence and Security Act of 2007, "New Energy Law Raises CAFE Standards," December 19, 2007, found at Environment BLR website. Retrieved February 17, 2009. and the Food and Energy Security Act of 2007.("2007 Farm Bill"), Pub.L. 110-234, 122 Stat. 923 .
The Biomass Research and Development Board was expected to release a report in late 2008 about biomass as fuel.
In August 2008, it was revealed that oil speculators had increased the volatility of the price of oil; Congressman John Dingell criticized the Commodity Futures Trading Commission for failing to scrutinize oil futures traders, in particular the Swiss company Vitol.David Cho, "Sway of oil speculators revealed", Washington Post, August 21, 2008, synidated at the Albany Times Union, found at Albany Times Union website. Retrieved August 27, 2008. On June 22, 2008, Obama proposed the repeal of the Enron loophole as a means to curb speculation on skyrocketing oil prices.