Introduction
Energy law is a complex and multifaceted field that encompasses a variety of industries. A vital and vibrant industry in Texas, oil and gas companies, oil field services providers, and law firms doing energy work offer a multitude of career opportunities for South Texas College of Law Houston students to pursue.
The oil and gas industry is loosely divided into three components: upstream, midstream, and downstream. Major integrated companies focus on all three components, while independent companies tend to focus on one or two of the components. Upstream activities involve the search and exploration for crude oil and natural gas. It encompasses the use of various techniques to locate potential sources of hydrocarbons, the drilling and operation of wells to produce crude oil and natural gas, and the sale of such produced crude oil and natural gas.
Midstream processes include the transportation, processing, and storage of crude oil and natural gas products, as well as other petroleum products. Downstream activities cover the process of refining crude oil and the subsequent distribution and sale of these refined products to consumers.
Attorneys practicing in this field must develop a firm understanding of the oil and gas industry. Depending on the type of oil and gas law attorneys choose to practice, they also need to acquire, to varying degrees, a background in corporate, finance, and business law; transactional drafting and negotiation skills; dispute resolution skills both in and out of court; and an understanding of the regulatory environment.
While this subject overview and the accompanying pathway focus on the oil and gas industry, many other established and burgeoning energy sectors exist, including electricity, coal, nuclear, biodiesel, and renewables such as solar, wind, and hydropower.
Students interested in the oil and gas sector should also consult the Environmental Law Subject Overview because lawyers practicing oil and gas law regularly confront issues pertaining to pollution and natural resources. For instance, state and federal water laws can impact exploration decisions, and environmental regulations affect the means by which companies can explore, develop, produce, and transport natural resources. The most relevant environmental courses for students interested in the oil and gas industry are Environmental Law, Natural Resource Management Law, and Water Law.
For all career options in the oil and gas industry, students would benefit from taking Oil, Gas & Mineral Law; Domestic Petroleum Transactions; and Domestic Energy Law. The utility of additional coursework is then largely derived from the type of energy law practice students wish to pursue. The following overview of the main fields of practice in the industry will list additional relevant coursework where applicable.
Oil and Gas Property Acquisition and Management
Two popular career options in oil and gas property acquisition and management are title attorney and landman. In addition to general oil and gas courses, relevant subject matter for these career paths is covered in Texas Oil, Gas, & Land Title Examination. Students interested in these career paths would also benefit from taking Contract Negotiations & Drafting or Contract Building Blocks.
Title Attorney
When companies want to explore for natural resources, they first need to determine who owns the mineral estate in the area of interest—that is, the area below ground that may or may not be owned by the same person or entity that owns the surface estate. The company must then obtain an oil and gas lease from the owners of the mineral estate.
Title attorneys help to identify the owners of the mineral estate. They search relevant records and chains of title to determine who owns the mineral estate in the property in question. Sometimes title attorneys assist in determining from whom an oil and gas lease is taken. In all instances, because of the significant costs of drilling a well, a title attorney is engaged to prepare a title opinion on a planned well site and on other tracts. A title opinion is a report on the ownership of the mineral estate in a specified property that includes any gaps, exceptions, and deficiencies.
Title attorneys may work in-house for oil and gas companies, or they may choose to work in small or mid-size firms or as solo practitioners. Students who want to become title attorneys should consider STCL Houston’s Law Office Management course if they plan to start their own firm or join a small firm.
Landman
Landman is the title of a professional—which can be a man or woman—in the oil and gas industry who is responsible for interfacing between the owners of mineral rights and the oil and gas companies interested in exploring and developing that mineral estate for natural resources. Among other responsibilities, they negotiate the acquisition of oil and gas leases and other mineral rights, examine title issues and seek to cure title defects, close deals, and address any resulting complaints from the owners of the mineral rights or the surface landowners after exploration and development commences. In this respect, they interact with land and mineral rights owners more frequently than any other oil and gas industry representative, including title attorneys.
One does not need to obtain a J.D. to become a landman. Many of the key skills needed to be a successful landman, however, are skills that come with a J.D., including an understanding of oil and gas property rights and skills in drafting and negotiating contracts.
Landmen typically work for companies, including in-house for oil and gas companies or land brokerage companies, or as independent solo practitioners. Some law firms may also embed landmen in-house to assist with title corrective work and other commercial functions.
Internationally, companies entrust the commercial/business functions of obtaining oil and gas rights to professionals who are known as business developers or commercial negotiators. These professionals perform many of the same tasks that the landman performs in the domestic U.S. oil and gas industry. A J.D. can be advantageous in this field as well.
General Oil and Gas Transactional Work
Transactional legal work in the oil and gas industry requires that attorneys develop a firm understanding of the industry. The potential types of work in which an oil and gas transactional attorney may be involved encompasses many of the categories reviewed in the Business & Corporate Law Subject Overview, such as commercial, corporate, and finance. In this context, however, these particular subjects and practice areas are based on oil and gas transactions.
For example, transactions could involve the purchase, sale, or leasing of mineral real property, development rights, or equipment; the merger of two companies or acquisition of one by the other; joint ventures and joint operating agreements between energy companies; land leases; or agreements that concern pipeline and facilities usage and sharing.
Prospective attorneys looking to enter the oil and gas industry may simply develop a set of core transactional skills that are needed in the oil and gas industry, or they may already have a sense of the particular specialty in which they desire to practice.
For core transactional competence, students should strive to develop a basic understanding of how to negotiate deals and translate those negotiations into binding contracts. These skills are taught in Contract Building Blocks, Contract Negotiations & Drafting, and Transactional Skills–Energy. STCL Houston’s Negotiation course can also provide beneficial information, although negotiation skills are taught in the context of resolving disputes rather than negotiating deals.
Among others, areas of focus could include energy finance, mergers and acquisitions, or tax. Students should base their decisions on a combination of interest, experience, and prospective employment opportunities. To illustrate, a student might choose to focus on energy finance because he or she is interested in the oil and gas industry and has a background in banking. In such a case, relevant coursework would include basic oil and gas classes along with those listed on the pathway that cover finance in the corporate setting.
For international oil and gas transactional work, the same negotiation and transactional skills discussed above are at the heart of the practice—along with knowledge of other languages. Differences exist, however. Attorneys must understand how completing a deal with another culture impacts the manner by which negotiations should proceed and how the contract actually gets drafted. With growing energy exploration opportunities currently emerging in Mexico, Houston-based energy attorneys are well-positioned to take advantage, particularly those who speak and understand Spanish. Coursework in International Petroleum Transactions surveys much of the needed information, including common contract provisions and how to structure various types of oil and gas agreements.
Oil and Gas Litigation
Disputes in the energy sector can arise in an endless variety of different contexts, from disagreements about mineral ownership, to royalties and bonus payments, to divergent opinions about the parties responsible for damages caused by oil and gas operations, including cleaning up oil spills. While transactional attorneys do everything they can to anticipate potential problems and account for or mitigate them in the transactions they do and the contracts they help negotiate and draft, disputes still arise frequently and need to be formally resolved.
Litigation attorneys practicing in this field must become equipped to resolve these problems through the courts or, where applicable, using alternative forms of dispute resolution. Additionally, litigation attorneys are well served by having an understanding of the oil and gas industry and oil and gas law. While many cases are filed or transferred to federal court (or federal bankruptcy court specifically, where relevant), others remain in state courts.
In addition to basic oil and gas courses, central coursework would include classes that review applicable procedure, pretrial discovery, motions practice, and trial advocacy. Additionally, many contracts have clauses that mandate the use of arbitration—particularly international transactions; accordingly, STCL Houston’s Arbitration course is recommended as well. Please consult the Civil Litigation & ADR Subject Overview and Pathway for additional information.
Regulatory Matters in the Oil and Gas Industry
The energy industry is regulated by numerous state and federal administrative agencies. There are many career opportunities available in these agencies and in the energy industry to deal with these agencies. New attorneys can benefit tremendously from working at these agencies because they will acquire knowledge and skills that make them particularly appealing to private sector firms and companies should they choose to make a lateral career move after serving in the government.
Even for those who do not desire to work in an administrative agency, energy attorneys regularly interface with these agencies and would benefit from understanding how they operate and what companies must do to comply with regulatory obligations. For this reason, coursework in Administrative Law and State & Local Government is highly recommended. Additionally, through the Government Process Clinic/Academic Internship, students can seek to arrange internships with local, state, or federal government agencies that address energy-related matters.
In Texas, the Railroad Commission—a name with historical roots that masks its current role in regulating the oil and gas industry—is both enormous and powerful. Other relevant agencies include the Electric Reliability Council of Texas, the Texas Commission on Environmental Quality, and the Texas Water Development Board. Also relevant is the General Land Office, which leases the twenty-two million acres owned by the state.
At the federal level, a principal agency is the Federal Energy Regulatory Commission, which regulates the interstate transmission of electricity, natural gas, and oil. Many other agencies also have regulatory oversight in this industry sector in various capacities, including the Department of the Interior, the Department of Energy, the Environmental Protection Agency, and the Department of Transportation, which is involved in the oversight of pipelines. The Bureau of Ocean Energy Management plays a role in managing offshore energy resources in the Gulf of Mexico.
Energy Careers Where a Law Degree is Advantageous
Some opportunities may be available in companies’ legal departments for newly minted attorneys, but many upstream companies tend to hire attorneys in-house who have several years of experience. That being said, opportunities exist directly out of law school in positions where having a J.D. is not required but companies recognize that a legal education provides a distinct advantage. Examples of such departments include compliance, contract administration, procurement, and human resources. In addition to working within an oil and gas company, there are many service providers where law school graduates may find career opportunities, addressing issues that range from procurement and value chain management to environmental concerns and ethical obligations.
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