When Winter Storm Uri knocked out roughly a fifth of the nation's natural gas production in February 2021, it also set off years of litigation over who bears the risk when a seller cannot deliver the gas it promised. One of those disputes, MIECO L.L.C. v. Targa Gas Marketing L.L.C., has now taken an unusual turn that every company operating under a NAESB base contract should watch closely: on July 24, 2026, the U.S. Court of Appeals for the Fifth Circuit withdrew its own prior opinion in the case and certified the controlling question to the Texas Supreme Court.[1]
The facts will sound familiar to anyone who lived through Uri. MIECO and Targa bought and sold gas under a 2010 NAESB-form base contract, supplemented by two transaction confirmations. Under one, Targa agreed to sell MIECO 15,000 MMBtu per day at a fixed, first-of-month price; under the other, 30,000 MMBtu per day at a floating Gas Daily index price. For six days in February 2021, Targa delivered far less than the contracted volumes and invoked the contract's force majeure clause, citing both the weather event itself and force majeure declarations by its own affiliated suppliers.
Section 11 of the base contract excuses performance for causes "not reasonably within the control of the party claiming suspension," including weather events affecting an entire region. But it carves out an important exception: force majeure does not excuse "the loss or failure of Seller's gas supply," and economic hardship, including the ability to sell gas at a more advantageous price elsewhere, never qualifies as force majeure. The district court sided with Targa, holding that Uri was a force majeure event and that Targa had no obligation to buy replacement gas on the spot market to cover the shortfall.
The Fifth Circuit's now-withdrawn 2025 panel opinion disagreed, at least in part. The court reasoned that because Targa, a marketing company rather than a producer, had already been sourcing roughly 29 percent of its gas needs from the daily spot market before the storm, buying from 25 to 50 counterparties on a given day, that spot market was itself part of Targa's contractual "gas supply." If gas remained available there, even at dramatically inflated storm prices, force majeure did not automatically excuse Targa from continuing to buy from that market, subject to a "reasonable efforts" requirement the district court had never evaluated. The panel reversed and remanded for fact-finding on that issue.
Targa sought rehearing en banc, warning that the panel's reasoning could reshape pricing risk across the Texas gas industry during future force majeure events. No judge requested a full-court vote, so en banc rehearing was denied. But the panel granted rehearing on its own, withdrew its 2025 opinion, and, in a per curiam order, concluded the stakes were too high and the state-law question too unsettled for a federal court to resolve alone. It certified two questions to the Texas Supreme Court: whether the NAESB form contract's force majeure provisions require a non-producer seller to enter the spot market during a force majeure event if it had already been sourcing part of its supply there before the event, and, if so, how "reasonable efforts" to do so should be defined.
The upshot for now is uncertainty, not resolution. The Fifth Circuit's 2025 opinion is now withdrawn, and the rule that will ultimately govern force majeure and spot-market obligations under the standard NAESB form contract will come from Austin rather than New Orleans, on an uncertain timeline.
Companies that buy or sell gas under NAESB base contracts, particularly marketers who blend producer supply with spot-market purchases, should treat this as a live issue rather than settled law. That means revisiting how force majeure notices are drafted and documented and how "reasonable efforts" to secure replacement supply would be evidenced in real time during a weather event. Given the exposure in this one dispute, and how widely this form contract is used in Texas gas trading, the Texas Supreme Court's eventual answer is likely to matter well beyond these two parties.
[1] Mieco L.L.C. v. Targa Gas Mktg. L.L.C., No. 23-20567, 2026 WL 2145869, 2026 U.S. App. LEXIS 22116 (5th Cir. 2026).