On December 6, members of Akin Gump’s global energy industry team hosted a briefing for members of the media that included a forward-looking discussion of energy matters in the United States and globally.
The panel comprised partners Henry Terhune of the public law and policy practice; global project finance practice co-head Adam Umanoff and Stephen Davis of the energy and global transactions practice; Moscow partner in charge Sebastian Rice; and Gen. James L. Jones (Ret.), former U.S. national security advisor and head of Jones Group International. The briefing was moderated by Julia Sullivan, co-head of the firm’s energy regulatory practice.
Mr. Terhune discussed implications for U.S. energy policy as a result of the 2012 U.S. elections, noting that, with few changes in the executive and legislative branches, no dramatic shifts are expected initially. He also discussed evolving energy policy issues, from action on “tax extenders” by the end of 2012 to longer-term issues, including administration action on the Keystone XL Pipeline and the implications of U.S. energy self-sufficiency.
Mr. Umanoff spoke on prospects for renewable energy incentives as well as the U.S. solar energy boom, discussing the current possibilities for renewal of the wind production tax credit among prospects for other key tax benefits and discussing the drivers for growth in the solar energy industry.
Mr. Davis reviewed U.S. natural gas opportunities and funding mechanisms for the oil and gas industry and noted that U.S. natural gas production is up, thanks to shale gas production, which opens the door for a number of possibilities, including LNG and natural gas liquids exports to emerging economies. He also discussed master limited partnerships, IPOs, asset-backed lending and other sources of funding for the industry.
Mr. Rice discussed M&A trends in the global oil and gas industry, mentioning that, while there have been fewer M&A transactions in 2012 than in 2011, the deals are larger in size. He also noted that there is currently an abundance of targets for cash-rich purchasers in the form of reserve-rich companies with reduced access to external funding due to uncertainties in the market.
Gen. Jones described the implications for global security of China’s rapidly increasing demand for oil as well as the implications of the U.S. natural gas renaissance for U.S. energy security in the transportation sector. Regarding China, he noted that its energy demands have driven it around the world to lock up oil contracts, including in Africa and the Middle East, with a follow-on expansion of its military footprint and capabilities. This expansion has serious implications for energy prices, the global environment and international security, along with U.S. energy and national security policy. He also discussed the domestic and international consequences for the U.S. transportation sector of its reliance on imported oil as well as the benefits and challenges of natural gas in the transportation sector.
The session concluded with questions submitted by the media on the call on topics ranging from Committee on Foreign Investment in the United States review of Chinese national oil company CNOOC’s bid for Canadian oil and gas company Nexen Inc. to the state of Iraq’s oil industry to the value of a one-year extension of the production tax credit for wind.
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Akin Gump scored a decisive victory on behalf of the American Beverage Association (ABA) before the U.S. Court of Appeals for the Sixth Circuit. In a unanimous ruling, the court decided in favor of the ABA that the “unique mark” requirement of Michigan’s so-called “Bottle Bill” is unconstitutional.
Michigan, like several other states, requires consumers to pay a small deposit when purchasing certain beverages in cans and bottles that is eligible for refund upon redemption with a state retailer. Over time, the state perceived a fraudulent redemption problem with consumers purchasing bottles elsewhere and then attempting to redeem them within the state, thereby reducing the money flowing to Michigan’s treasury. To remedy this problem, the Bottle Bill was amended to require that every bottle sold within Michigan have a mark “unique to the state,” such that the bottles could not be sold in any other states that did not have a “substantially similar” law.
On behalf of the ABA – a nonprofit association of manufacturers, marketers, distributors and bottlers of virtually every nonalcoholic beverage sold in the United States – Akin Gump filed suit in February 2011 challenging the law and its “unique mark” requirement, arguing that the amended law amounted to an unconstitutional infringement of interstate commerce.
On November 29, the Sixth Circuit held the Bottle Bill’s “unique mark” requirement to be an unconstitutional violation of the dormant Commerce Clause in that it “impermissibly regulat[ed] interstate commerce by controlling conduct beyond the state of Michigan.”
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Akin Gump has been selected by Financial Times as an innovative law firm in the area of corporate law in the 2012 U.S. Innovative Lawyers Report. Firms selected for recognition in this report represent those that “are bringing fresh thinking and practices to solving business problems in America.”
The firm was chosen for devising “a legal structure combining non-profit services and for-profit management approaches to provide affordable healthcare in Texas” on behalf of its client, the Texas Association of Community Health Centers (TACHC).
Akin Gump corporate partner Terry Schpok led the team that advised TACHC in connection with the formation of a unique accountable care organization (ACO). The ACO is a collaboration between Federally Qualified Health Centers, with more than 80 locations across Texas, and Collaborative Health Systems, LLC, a subsidiary of the publicly traded Universal American Corp.