It appears like 99% of North American judges are dirty when it comes to the oil and gas and frac industry. Are they worried about losing their pensions, savings and investments in frac’ing’s uneconomical, massive debt-laden deceptions, so they have to give the industry everything? This ruling is just another piece of evidence proving how corrupt law is in North America.
Pennsylvania Supreme Court Considering Whether Rule of Capture Applies to Hydraulic Fracturing
Pennsylvania Superior Court Fractures Long-Standing Rule of Capture; Appeals court rejects frac company’s appeal Whose Milkshake is Whose?
Pa. Supreme Court preserves ‘rule of capture’ for fracking by Laura Legere, Jan 23, 2020, Pittsburgh Post-Gazette
A century-old legal principle that allows drillers to drain oil and gas from neighboring properties without paying for it still applies in the modern era of fracking, the Pennsylvania Supreme Court ruled on Wednesday.
The high court overturned a 2018 decision by the lower Superior Court that had said the “rule of capture” does not cover companies when they use fracking to free gas from surrounding rocks underground.
Under the rule of capture, oil and gas in deep reservoirs belongs to whoever pulls it from a well on his own property first — even if some of it flowed out from under a neighbor’s land. It has been applied since at least 1889 in Pennsylvania and throughout the United States.
The decision to overturn the lower court’s order is a relief to the oil and gas industry, which said in court briefs that without the rule of capture it would be subject to a welter of trespass lawsuits that could cripple shale gas development in Pennsylvania.
But the Supreme Court left open the idea that a company could still be subject to claims of trespassing if its fracturing operations physically cross a property boundary without permission.
… The Supreme Court said the Superior Court was wrong to claim that fracking is somehow different from past oil and gas extraction technologies so that the rule of capture no longer applies.
The high court also said it would be wrong to assume that if gas is drained from a neighboring property by fracking that must mean man-made fractures physically trespassed over the boundary. Gas can be drained through existing cracks, the majority wrote, or move from a place of high pressure to low pressure when fracking occurs nearby.
“The parties to the appeal are in agreement — and we concur as well — that the rule of capture remains extant in Pennsylvania, and developers who use hydraulic fracturing may rely on pressure differentials to drain oil and gas from under another’s property, at least in the absence of a physical invasion,” Chief Justice Thomas Saylor wrote for the majority, which was unanimous on that point.
Justices Kevin Dougherty and Christine Donohue dissented in part over which lower court should now review the case.
The case was brought against Texas-based Southwestern Energy Co. by the Briggs family in Susquehanna County. The Supreme Court said it is up to the Superior Court to determine if the Briggs family can now proceed with a claim that Southwestern Energy’s fracking physically trespassed on their land.
Southwestern Energy said in a statement that it is pleased with the court’s decision, which it said “affirmed the time-honored rule of capture, rejected as a matter of law the notion that the rule is inapplicable to drilling in unconventional reservoirs, and left unchanged the long-standing requirement that the plaintiff bears the burden of proving” a physical trespass and any damages.
“This is an important outcome for Pennsylvania and the tens of thousands of its citizens who depend on the energy industry for power, for jobs, and for royalty payments.”
Attorney Robert Burnett, who filed a friend-of-the-court brief in the case on behalf of the Pennsylvania chapter of the National Association of Royalty Owners, said the ruling has “good news for landowners.”
“The court left the door wide open that if the plaintiff can prove there was an actual, physical intrusion as part of the hydraulic fracturing operations then the rule of capture will not insulate the driller,” he said.
While proving such a case would be technically challenging for a landowner, “it is not impossible,” he said. [perhaps, if the landowner had millions of dollars to sacrifice]
Ross Pifer, director of the Center for Agricultural and Shale Law at Penn State, said there had been two “fundamental misconceptions” in the earlier Superior Court decision: that hydraulic fracturing is unique to shale development and that shale gas does not migrate.
“The Supreme Court opinion corrects these misconceptions and makes it clear that the rule of capture will apply in the same manner to both shale development and conventional gas development,” he said.
A few comments:
Larry Schweiger
Since frackers use horizontal drilling often extending several miles under neighbor’s property, this is an dramatic expansion of a century-old legal decision that allowed drillers to capture oil and gas from unleased neighboring properties without paying for it.
Applying this to horizontal drilling is a radical extension of a bad decision. This is a takings without compensation.
Bob D17
What a bad joke… no one is ever going to be able to prove their gas was stolen when these frac stages take place over 1-mile below the surface. Since these fractures can extend 500-feet or more from the well bore, that’s hardly “rule of capture” — more like “rule of fracture.” Bad decision SC justices, but who are you to stand in the way of the almighty fracking industry.
Good News for Drillers: Pa. Supreme Court Says Rule of Capture Applies to Fracking In an apparent case of first impression that drew heavy amicus interest from natural gas industry organizations, the Pennsylvania Supreme Court has determined that the rule of capture, which precludes trespass liability for drillers where oil and gas drains from surrounding lands in the course of conventional extraction from an underground pool, applies where shale gas is extracted through hydraulic fracturing by Zack Needles, January 23, 2020, law.com
In an apparent case of first impression that drew heavy amicus interest from natural gas industry organizations, the Pennsylvania Supreme Court has determined that the rule of capture, which precludes trespass liability for drillers where oil and gas drains from surrounding lands in the course of conventional extraction from an underground pool, applies where shale gas is extracted through hydraulic fracturing.
The high court’s Jan. 22 decision in Briggs v. Southwestern Energy Production unanimously vacated an April 2018 ruling by a two-judge panel of the state Superior Court, which had itself reversed a Susquehanna County trial judge’s decision granting summary judgment to defendant Southwestern Energy Production Co. on claims of trespass and conversion by a group of property owners.
In Briggs, property owners Adam, Paula, Joshua and Sarah Briggs alleged that Southwestern had unlawfully extracted gas from beneath their property while drilling on an adjoining property.
While Southwestern invoked the rule of capture in its defense, the Superior Court said the rule was inapplicable to hydraulic fracturing (also known as fracking), a process by which high-pressure liquid is used to forcibly extract natural gas from shale.
“In light of the distinctions between hydraulic fracturing and conventional gas drilling, we conclude that the rule of capture does not preclude liability for trespass due to hydraulic fracturing,” Senior Judge John L. Musmanno Jr. wrote for the panel. “Therefore, hydraulic fracturing may constitute an actionable trespass where subsurface fractures, fracturing fluid and proppant cross boundary lines and extend into the subsurface estate of an adjoining property for which the operator does not have a mineral lease, resulting in the extraction of natural gas from beneath the adjoining landowner’s property.”
Musmanno was joined by President Judge Susan Peikes Gantman. Judge Mary Murray was also listed as a member of the panel but the opinion said she did not participate in the consideration or decision of the case.
Musmanno also said the fundamental difference between fracking and conventional oil and gas production, which the rule of capture was originally intended to cover.
“Unlike oil and gas originating in a common reservoir, natural gas, when trapped in a shale formation, is non-migratory in nature,” he said. “Shale gas does not merely ‘escape’ to adjoining land absent the application of an external force. Instead, the shale must be fractured through the process of hydraulic fracturing; only then may the natural gas contained in the shale move freely through the ‘artificially created channel[s].’”
But Chief Justice Thomas Saylor, writing for the Supreme Court majority, said, “At least part of the Superior Court’s opinion can reasonably be construed as setting forth a per se rule foreclosing application of the rule of capture in hydraulic fracturing scenarios, and that rule rests on faulty assumptions.”
Saylor took particular issue with the Superior Court’s reliance on whether oil and gas drainage occurs naturally or by some form of artificial stimulation as a test for the applicability of the rule of capture.
“This court has held that the rule of capture applies although the driller uses further artificial means, such as a pump, to enhance production from a source common to it and the plaintiff—so long as no physical invasion of the plaintiff’s land occurs,” Saylor said. “There is no reason why this precept should apply any differently to hydraulic fracturing conducted solely within the driller’s property.” [What a frac’ing shit show this court ruling is. It reads like industry lawyers wrote it.]
Turning to the Superior Court’s determination that any time fracking causes natural gas to migrate across property lines it constitutes a physical intrusion on the plaintiff’s property, Saylor said that was not a question of law, but rather a factual one for the Superior Court to decide on remand.
“By design, hydraulic fracturing creates fissures in rock strata which store hydrocarbons within their porous structure,” Saylor said. ”On the state of the present record, this alone does not establish that a physical intrusion into a neighboring property is necessary for such action to result in drainage from that property. We cannot rule out, for example, that a fissure created through the injection of hydraulic fluid entirely within the developer’s property may create a sufficient pressure gradient to induce the drainage of hydrocarbons from the relevant stratum of rock underneath an adjacent parcel even absent physical intrusion. Nor can we discount the possibility that a fissure created within the developer’s property may communicate with other, pre-existing fissures that reach across property lines. Whether these, or any other non-invasive means of drainage occasioned by hydraulic fracturing, are physically possible in a given case is a factual question to be established through expert evidence.”
Saylor was unanimously joined in the majority in all aspects but one: the decision to remand the case to the Superior Court, rather than the trial court.
Justice Kevin Dougherty, in a concurring and dissenting opinion joined by Justice Christine Donohue, said that, “given the state of the record, which was apparently not complete at the time the trial court erroneously entered summary judgment, I would remand the matter to that court for further proceedings, including the completion of discovery on the factual question of physical invasion, and trial thereon as necessary.” [How many millions will that cost Briggs?]
Southwestern was represented by Robert Byer of Duane Morris in Pittsburgh. A spokesperson for Southwestern did not return a request for comment.
Counsel for the plaintiffs, Laurence Kelly of Kelly Law Office in Montrose, reached Jan. 23, said he was still reviewing the opinion and was unable to comment at the time.