Tuesday, August 29, 2017

Harvey's Hit on Energy

Prognosticators are starting to talk about the effect of Harvey on Houston's oil and gas business which accounts for about a third of Houston's economy.  To understand the potential impact,of Harvey on the US energy sector it's important to distinguish between oil production and oil refinery capacity.

Based on the latest reports from Energy Information Administration, about 17% of total US crude oil production and 5% of domestic dry natural gas comes out of the Gulf of Mexico region.  48% of US crude oil production in 2016 came from "tight oil resources" where oil is extracted from rock formations like shale.  About a decade ago, oil production from the Gulf accounted for about 30% of total US output.  The shale revolution reduced Houston's importance in oil production, and the resulting impact of Harvey on the nation's oil production capacity.

Houston remains an important center for oil refinery operations, both for petroleum and natural gas processing.  Oil refineries in the Gulf of Mexico have a capacity of 8.6 million barrels of oil per day, about 45% of the nation's refining capacity.  Harvey is responsible for taking about 2.2 million barrels per day of capacity offline.

The expansion of tight oil production makes the US oil supply less vulnerable to hurricanes.  But, hasn't changed our vulnerability to flooding and accompanying refinery shut downs in the Gulf region.  On Monday, gasoline futures were up nearly 5%, likely in anticipation of gas shortages and gas price hikes.

The US Energy Information Administration has the latest data and a cool interactive map showing Gulf area energy infrastructure with real time storm information.

Friday, August 25, 2017

Student Wins Due Process Suit Against PSU

A Penn State student accused of sexual misconduct, found responsible, and suspended under Penn State’s Code of Student Conduct Title IX procedures won a case against Penn State to enjoin enforcement of his suspension.   The student, identified in the court proceeding as John Doe, argued that Penn State deprived him of his constitutional right to due process of law by failing in several instances to follow its own procedures and denying him a meaningful opportunity to be heard.  He asked the court for an order preventing Penn State from suspending him from classes in Fall 2017 pending trial on the merits.  The court granted the motion, holding that he showed a likelihood of success on his denial of due process claim, that imposition of the suspension would cause him irreparable harm, and that the balance of harms weighed in favor of injunctive relief. 

Another Penn State student, identified in the case as Jane Roe, reported to her residence hall coordinator that Doe had attempted to kiss her, touched her with his hands under her clothes, and digitally penetrated her vagina, all without her consent. The university Title IX Compliance Specialist responsible for investigating the incident,  informed Doe that he was being charged with “nonconsensual digital penetration based solely on the residence hall coordinator’s report of Roe’s statements.”  Doe disputed Roe’s account of the incident, claiming instead that it was Roe who had attempted to kiss him and that he had rejected her advances.  Roe never provided the investigator a written statement.

Roe reported orally to the investigator that she had a medical examination one week after the incident and that she had provided blood stained clothing to University Police.  The investigator included a summary of this conversation with Roe in the Investigative Report.  Doe submitted a written response to the Report in which he asserted among other things that: 1) one of the witnesses whose statement was recounted in the report told him that Roe had pursued a physical relationship with Doe;  2) another witness contradicted Roe’s statements to University Police about her feelings for Doe; and 3) Roe’s statements about the incident were inconsistent.  The investigator redacted all of these statements from Doe’s written response.

Penn State Title IX procedure  does not permit either the accused or complaining student with a right to cross examine the other.  It permits questioning of witnesses“only through the hearing authority.”  Questions that ask for “new information” at the hearing are not permitted unless the information was: (1) not available during the investigation; and (2) is relevant to establishing whether or not the Respondent is responsible for misconduct.” 

Doe submitted 22 questions for Roe at the hearing most of which challenged the credibility of Roe’s statement that she had a medical examination after the incident.  The hearing chair refused to ask Roe 18 of the questions on grounds that questions about the post-event medical examination would present “new information” and were not relevant on the issue of Roe’s consent.  

The court found that Penn State made “significant and unfair deviations from policy” during the investigation and hearing.   The hearing chair's exclusion of 18 of Doe’s questions was an unfair deviation because information about Roe’s alleged post-incident medical examination was part of the Investigative Report and not “new information.” Nor were the questions irrelevant on the issue of Doe's responsibility for the misconduct.  Although questions regarding the medical examination were not relevant to the issue of whether Roe consented to the alleged sexual conduct, they were relevant to the question of Roe’s credibility. 

Similarly, the court found that the investigator’s redaction of Doe’s written response to the Investigative was an unfair deviation from Penn State's procedures.  Penn State argued that redaction was appropriate because the investigator concluded that under Penn State procedure, Doe’s challenge to Roe’s credibility was irrelevant to the question of his responsibility for the misconduct.   The court “view[ed] with skepticism” the role of the investigator as the arbiter of the relevance of evidence, a role Penn State’s procedure gives to the Title IX hearing panel.  The investigator’s unilateral decision to redact Doe's responsive statement on relevance grounds has a “funneling effect.” It narrows the evidence that comes before the hearing panel, and limits the information the hearing panel may consider.    

This case is important for several reasons.  The court called into question as a matter of constitutionally required due process the conflicting roles of the investigator as both a neutral fact reporter and arbiter of the relevance of evidence.  The court rejected Penn State’s position that a challenge to the credibility of the complaining student is not relevant to a determination of the accused student’s responsibility for the misconduct.  In a sexual misconduct case where the two eyewitnesses’ testimony conflicts, the adjudicators’ decision about the responsibility of the accused student turns entirely on its assessment of the credibility of the witnesses.  Unlike a defendant in a criminal case, an accused student in disciplinary hearing does not have a constitutional right to challenge by cross-examination the credibility of a witness supporting the charge against him.  However, when the outcome of a disciplinary case depends entirely on witness credibility, the accused student is entitled to some ability to challenge his accuser’s credibility.      

The case is John Doe v. The Pennsylvania State University,  (M.D. Pa. August 18, 2017).