It’s almost 2015; do you know where your arbitration clause is? In the past year, the International Centre for Dispute Resolution, the American Arbitration Association and other arbitration forums substantially revised their rules to streamline the process, limit discovery, expressly allowing for dispositive motions and make arbitration more efficient and economical.

Although arbitration itself is not new to the energy sector, the proliferation of shale plays due to horizontal drilling and hydraulic fracing, coupled with an increase in political and economic volatility, has spawned a surge in complex energy disputes that often cross jurisdictional boundaries. This trend will not end any time soon. Texas is the number one energy producer in the country. Almost half of all drilling rigs working in the United States are in Texas, and 70 percent of them are drilling horizontal wells, according to Baker Hughes oilfield service company. The U.S. Department of Energy cites 27 petroleum refineries in Texas, with a capacity of over 5.1 million barrels of crude oil per day (29 percent of all U.S. refining capacity, as of January 2013). There are currently over 300,000 employees in the Texas oil and gas sector, according to the Texas Petro Index (as of July 2014, representing a 7 percent jump from a year before, and the highest since the Texas Petro Index began in 1995).

Energy and Arbitration

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