Houston attorney Mark Thibodeaux, Deputy Practice Leader of the Cybersecurity and Privacy team for Sutherland Asbill & Brennan, was quoted by Law360 in an article exploring liability risks from cyberattacks on energy companies.
“The biggest security risk for the energy industry is these cyber-physical attacks, it’s not just data being stolen and moved around. The big liability risk is a power grid shutdown, or an overpressured pipeline, or a drilling rig in the Gulf of Mexico that is attacked and causes a major oil spill,” Mr. Thibodeaux said in an article headlined “5 Ways Energy Cos. Can Limit Legal Fallout From Attacks” (subscription required).
The article notes that the U.S. Department of Homeland Security and the Federal Energy Regulatory Commission are just two of the regulatory agencies putting pressure on oil and gas and power companies to make every effort to protect their increasingly automated layers of industrial controls. And while energy infrastructure companies are heavily insured, damages or losses from cyberattacks may be excluded, or greatly limited by insurance policies.
A Lloyd’s of London report estimated that a cyberattack that shuts down significant portions of the U.S. electric grid could have a $1 trillion impact on the U.S. economy, with insurers paying out more than $70 billion in claims.
“There’s not enough insurance in the world to cover a major event affecting a large portion of the grid,” Mr. Thibodeaux said.
He noted that energy companies also need to protect against contractors accidentally compromising their cybersecurity protections and should explore this question: “Does your contractor have deep enough pockets to protect you?”
Houston commercial litigator Jack Massey, who is on the Sutherland Asbill & Brennan crisis response team, outlined what goes on behind the scenes of a major disaster in an article for Texas Lawyer newspaper.
Headlined “The Aftermath of Deepwater Horizon: Responding to a Catastrophe,” the article’s publication coincided with the recent release of the movie, “Deepwater Horizon.” As a member of the legal team in Houston that represented the drilling contractor in the real Deepwater Horizon disaster of 2010, Mr. Massey wrote: “By my count, what happened on the rig was litigated at least five times,” counting the regulatory hearings, a presidential oil spill commission, the assessment of investigative reports, the BP employee prosecutions and finally the federal multidistrict litigation. In addition, there were the demands from the media, state governments, Congress, shareholders, employees and other regulators.
“Books could be written about the particulars of these actions, but they share one overarching characteristic: Each was greatly influenced by how the parties reacted in the days and months following the blowout. Practically speaking, the successes (and failures) of the parties’ crisis responses drew battle lines, framed issues, and materially affected liability,” Mr. Massey wrote.
He listed the major steps essential for dealing with such a crisis: coordination, control, mobilization of the best experts, and finally, playing the long game, which is aided by people who have been through big crises before.
His conclusion: “Dwight Eisenhower said that plans are nothing, but planning is everything. That’s the essence of crisis response — knowing the risks and opportunities so well that any exigency can be handled.”
Sutherland Asbill & Brennan’s addition of more energy lawyers in Texas made news in several publications. The Houston Chronicle quoted Houston Partner in Charge Daniel Johnson, who described the firm’s new additions as part of an effort to represent clients facing the consequences of falling oil prices.
In an article headlined, “Sign of the times: Law firm adds energy bankruptcy partner in Houston,” the Chronicle also quoted Mr. Johnson as saying he expects to do more energy-related hiring.
The article pointed to Mark Sherrill, who moved from Sutherland’s Washington, D.C., office to Houston to focus on complex energy bankruptcy matters. The addition of John Zerwas Jr., the former policy adviser in the Texas governor’s Budget and Policy Division, to Sutherland’s Austin office also was noted, along with update that three other energy lawyers joined the firm in the state’s capital last year.
The Chronicle also reported that Daniel LeFort, a former in-house counsel for Shell and Exxon Mobil, had joined the Houston office as counsel.
Texas Lawbook also reported on Sutherland’s expansion in a story headlined, “Sutherland Expands Energy Capabilities in Texas” (subscription only). “Sutherland Asbill & Brennan is expanding its energy practice in response to turbulence in the oil and gas industry,” the online publication said.
Daniel Johnson, Partner in Charge of the Houston office of Sutherland Asbill & Brennan LLP, was selected among the Bayou City’s most influential energy leaders by the Houston Business Journal, which recently published its 2015 Who’s Who in Energy list.
This year’s rankings were among the most selective in recent years with only 38 local lawyers chosen among the leaders in various sectors of energy and the firms that service energy companies. The honorees were chosen by the publication’s journalists based on nominations.
Mr. Johnson has focused his practice on energy litigation since the beginning of his legal career more than a decade ago. He was deeply involved in the successful representation of an international drilling contractor in high-profile litigation after the 2010 Gulf of Mexico oil spill. Mr. Johnson also advises energy clients on regulatory investigations and compliance issues, contractual liability exposure and risk shifting provisions, and incident response and crisis management.
With colleagues in New York, London, Washington D.C., Austin, Atlanta, and Geneva, Sutherland’s Houston office continues to forge the firm’s strong reputation as a trusted legal adviser in the energy space. Daniel’s selection to the Houston Business Journal’s energy leaders list is continued confirmation of Sutherland’s reputation in the Houston energy market in the areas of crisis management, project development, maritime law and commercial litigation.
HOUSTON – Sutherland Asbill & Brennan LLP partners Rachel Giesber Clingman and Steven L. Roberts are being recognized among the Top 100 leaders in the Houston energy market in the 2013 edition of “Who’s Who in Energy.”
This is the second time both were named among the top influencers in the energy industry based on his selection by the editors of the Houston Business Journal. The “Who’s Who in Energy” list accompanies similar rankings compiled by editors at American City Business Journal publications in Austin, Dallas, Denver, Pittsburgh, San Antonio, St. Louis, and Columbus, Ohio. The full list was published Nov. 15.
Ms. Clingman, partner in charge of the Houston office, is nationally recognized as a litigator who delivers success as defined by the client. She regularly represents energy, chemical, and transportation companies in government, regulatory, and internal investigations. She was selected for Benchmark Litigation’s inaugural list of “Top 250 U.S. Women Litigators;” The American Lawyer’s “45 Under 45” list; and honored with BTI Consulting Group’s Client Service Award for delivering unsurpassed client service.
Mr. Roberts has more than 35 years of courtroom experience, litigating energy, commercial, international insurance, maritime and professional services matters. Recognized nationally for his litigation, insurance and maritime knowledge, he was named to Chambers USA: Guide to Leading Business Lawyers in the area of insurance law; selected as a Texas Local Litigation Star by Benchmark Litigation; and repeatedly named to The Best Lawyers in America in the areas of admiralty & maritime law and personal injury litigation.
Sutherland’s attorneys in Austin and Houston represent clients in Texas and around the world in litigation, energy, transactional, regulatory, environmental and intellectual property matters.
The regulatory landscape for midstream gas processing and storage could change significantly, Sutherland’s pipeline attorneys say, thanks to plans by the federal pipeline safety agency, PHMSA, to expand its oversight.
Recently, the Pipeline and Hazardous Materials Safety Administration (PHMSA) indicated it would require midstream natural gas processors and storage operators to abide by the same rules applied to pipelines that transport natural gas liquids. These midstream facilities traditionally have been regulated by OSHA, not PHMSA.
This expansion would obligate companies to reassess their operations and create new compliance programs, says Rachel Giesber Clingman, partner in the Houston office. It also may cause confusion over which specific regulatory rules or standards will be applied to midstream facilities.
The prospect of simultaneous regulation by PHMSA and OSHA is sure to increase operational uncertainty and compliance costs. In at least one case, PHMSA has fined one operator $800,000 and ordered extensive remedial action after finding its midstream process safety management program didn’t comply with the pipeline agency’s regulations.
The full analysis by Sutherland attorneys can be read here. In addition to Ms. Clingman, other Sutherland attorneys familiar with this issue are Jacob Dweck, Paul F. Forshay, Sean D. Jordan, Susan G. Lafferty, Jack Massey and Mark Thibodeaux.
Sutherland partner Steven L. Roberts was quoted recently in the Houston Business Journal in an article about the challenges for energy companies dealing with the legal system in Mexico.
The energy industry is anxiously waiting to see what types of reforms Mexico’s new president might support. Roberts notes that country’s legal system has some significant differences that must be navigated.
“It’s almost required to have a Mexican national agent,” Roberts told the HBJ. Also key is writing arbitration into the contract.
While some might think the U.S. system is a free-for-all at times, it’s a rule-driven methodical process compared to litigation in Mexico, says Roberts. “You want to be in the arbitration situation when at all possible.”
The legal system in Mexico isn’t based on common law practices as it is in the U.S. That can mean that a case that might be a simple commercial dispute in this country could wind up in criminal territory in Mexico, he says.
The full article, “Complex Mexican legal system can challenge foreign energy companies,” is here (subscription required):
http://www.bizjournals.com/houston/blog/drilling-down/2013/09/complex-mexican-legal-system-can.html
Daniel Johnson recently discussed with the Houston Business Journal the decision by Black Elk Energy Offshore Operations LLC to commission its own investigation into the cause of a deadly platform accident that killed three workers last year.
The report by an outside consultant said the explosion that occurred was due to poor training of workers who were hired by a contractor in violation of Black Elk’s contract. Such a report could be most effective with the investment community, Johnson says, because it suggests Black Elk is taking a deep look at the incident with the idea of preventing future disasters.
The company’s report doesn’t absolve the oil company from fault with federal regulators, Johnson told the HBJ, although they may take it into account as they do their own investigation.
The full article, “Black Elk explosion report could boost company profile,” is available here (subscription required): http://www.bizjournals.com/houston/blog/drilling-down/2013/08/black-elk-report-could-boost-company.html?s=print
In the wake of the Deepwater Horizon trial, oil spill liability and compensation issues are being re-examined throughout the world. Sutherland partners David Baay and Peter Rodgers will speak on a panel at the upcoming ACC Energy Practice Group luncheon on Tuesday, May 7, 2013. The title of their presentation is, “Oil Spill Liability in the U.S. and Abroad.” They will discuss such topics as:
For more information on the event, visit the ACC Houston Chapter website.