Second edition of the Shale Gas Handbook released by Norton Rose Fulbright

On June 25, 2015, Norton Rose Fulbright released the second edition of the Shale Gas Handbook. Almost two years ago, Norton Rose Fulbright lawyers, realizing that the unconventional oil and gas phenomenon was having various results all around the world, came together to create the inaugural edition of the Shale Gas Handbook. The Shale Gas Handbook is a one of a kind, one-resource book that members of the oil and gas industry can turn to for questions about unconventional shale oil and gas drilling, production and hydraulic fracking. Since the launch of the first edition, there have been a number of exciting changes both in the United States and around the world. Continue reading

Supreme Court of Pennsylvania set to determine whether rule of capture applies to fracking

On November 20, 2018, the Supreme Court of Pennsylvania issued a one-page order agreeing to consider whether the rule of capture applies to hydraulic fracturing. The Supreme Court of Pennsylvania’s review comes after the Pennsylvania Superior Court overturned decades of precedent and decided the rule of capture did not apply to fracking wells.

The Pennsylvania Supreme Court will consider a single question on appeal: “[d]oes the rule of capture apply to oil and gas produced from wells that were completed using hydraulic fracturing and preclude trespass liability for allegedly draining oil or gas from under nearby property, where the well is drilled solely on and beneath the driller’s own property and the hydraulic fracturing fluids are injected solely on or beneath the driller’s own property?”

In 2015, the Briggs family brought suit in Susquehanna County Court alleging Southwestern Energy trespassed and converted gas from their 11-acre tract. The Briggs family claimed Southwestern Energy had used hydraulic fracturing to extract natural gas from under their property since 2011. The Briggs family’s claim was defeated on summary judgment.

In an opinion published on April 2, 2018, a two-judge panel of the Superior Court overturned decades of the state’s oil and gas law by holding hydraulic fracturing may constitute an actionable trespass. In reaching its decision, the Pennsylvania Superior Court noted the distinction between conventional reservoirs where the “gas can migrate freely within the reservoir and across property lines” compared with unconventional reservoirs where gas is trapped in tight shale formations and “nonmigratory in nature.”

In its brief, seeking the Pennsylvania Supreme Court’s intervention, Southwestern Energy argued the rule of capture had been the common law in Pennsylvania for centuries. In Southwestern Energy’s petition for appeal, the company pointed to Texas, the only state to take up the issue in the context of hydraulic fracturing, which held the rule of capture did apply. Southwestern Energy says the lower court’s ruling will throw “the law surrounding oil and gas rights into chaos.”

In response to the Pennsylvania Supreme Court’s allocatur grant, counsel for the Briggs family, Laurence Kelly, said “I’m just looking forward to presenting my client’s case in the Supreme Court.” A Southwestern Energy spokesman said “[w]e appreciate the court’s thoughtful decision to review this ruling, especially given the case’s potential to negatively impact Pennsylvanians who depend on natural gas for royalty payments, jobs, and affordable energy. Bringing legal clarity and certainty to this potential far-reaching matter—while avoiding pitting neighbor against neighbor in costly and speculative legal disputes that could unnecessarily overburden our courts—are top priorities for Southwestern Energy.”

No dates have been set for briefs or oral arguments before the Supreme Court.

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New study examines seismic activity in Oklahoma

A new study published in October purports to link seismic activity in Oklahoma to wastewater injection wells. Besides rates and pressures, Bridget Scanlon, hydrogeologist and lead author of the study, suggested injection depth may influence seismicity potentials. However, Scanlon limited her study to deep wastewater injection wells in Oklahoma.

The study examined the correlation between seismicity and wastewater injection wells in Oklahoma’s Arbuckle Formation—located adjacent to the basement. Additionally, the study noted seismic activity appeared to decrease in connection with reduced wastewater injection rates. According to the study, wastewater injection wells are the culprit of the increased seismic activity in Oklahoma, not hydraulic fracturing.

Similar studies on wastewater injection wells focused their research on regional areas, not exceptional study areas like the Arbuckle Formation. These studies revealed seismicity is rare considering the extensive injection activity that has occurred in close proximity to active faults. The USGS emphasized only a small fraction of wastewater disposal wells have induced seismicity. In fact, Thomas Goebel, researcher and lecturer at the University of California, emphasized the specific geologic setting and nearby faults makes some areas more susceptible to seismicity.

The National Research Council reiterated hydraulic fracturing “does not pose a high risk for inducing felt seismic events.” A combination of many factors including injection rate, total volume, the presence of faults, large stresses, and the pathway of the injected fluids are necessary for injection to induce felt earthquakes. In fact, Keith B. Hall, Director of the Mineral Law Institute, emphasized “[t]he vast majority of injection operations, including those associated with the oil and gas industry, do not trigger earthquakes.”

Although Scanlon noted the Oklahoma Corporation Commission reduced wastewater injection rates by 40 percent in the Arbuckle Formation in 2015, Oklahoma regulators are cognizant about cooperating with producers. When setting fracking and injection regulations, fracking proponents argue regulators need to keep in mind the benefits of fracking such as, access to an abundant source of domestic energy, fewer CO2 emissions than coal, and economic benefits like providing jobs, revenues, and taxes for local governments.

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Colorado voters reject Proposition 112

On November 6, Proposition 112 failed 58 percent to 42 percent. The measure needed 50 percent to pass. After a contentious and expensive campaign, voters derailed the measure that posed drastic implications on future oil and gas development in the state.

Proposition 112 would have expanded existing setback requirements from 500 feet to 2,500 feet from homes, schools, hospitals, and “vulnerable areas.” If Proposition 112 passed, Colorado would have approved the country’s largest mandatory buffer zone between new wells and homes. Proposition 112 would have made future oil and gas development on nonfederal land within the state nearly impossible.

The groups in opposition of the measure like Protect Colorado, funded almost exclusively by the oil and gas industry, spent nearly 43 times more money than the groups backing the measure like Colorado Rising. Colorado Rising spokesperson Anne Lee Foster said the group was “excited that almost 800,000 Coloradans voted for a safer distance from drilling and fracking despite a massive opposition campaign.”

Dan Haley, president and CEO of the Colorado Oil and Gas Association, said “we’re grateful Coloradans saw this for what it was, which was an attempt to run oil and gas out of the state.” But, Haley reiterated he wants “every Coloradan to know we are committed to developing our resources in a responsible manner that protects our environment and keeps our employees and community healthy and safe.”

A Colorado Rising representative told the media it’s too soon to say whether the group will take the setback issue back to the ballot box. But, Foster told the media “this is not going away.” Colorado Rising added we have “momentum we will continue to build upon.”

Industry executives are aware this issue did not permanently go away when voters rejected Proposition 112. The executives do not want a replay in 2020 of this year’s ballot fight. In fact, industry executives said they are willing to talk to any reasonable group about proposals to resolve this issue.

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Survey of fracking ballot measures

Below is a survey of fracking ballot measures across the country. Colorado is the only state that has fracking measures on the upcoming November ballot. But, Florida has an offshore drilling prohibition that encompasses offshore fracking, and San Luis Obispo County, California also has a fracking ban on their ballot. Michigan and Columbus, Ohio were unsuccessful in their efforts to include fracking bans on their ballot. Continue reading

Colorado voters face opposing oil and gas measures at the ballot box this fall

On November 6, the Colorado ballot box will present voters with opposing oil and gas measures, Proposition 112 and Amendment 74. Both measures could have major conflicting implications on the state’s oil and gas development. Continue reading

High Court rejects legal bid to prevent fracking in Lancashire, UK

The High Court has refused to grant an interim injunction preventing Cuadrilla from carrying out hydraulic fracking operations at the Preston New Road site in Lancashire. The ruling means that Cuadrilla can resume fracking in the UK for the first time since 2011.

Mr Justice Supperstone also refused permission for judicial review of Lancashire County Council’s decision over the adequacy of the risk assessment and emergency planning procedures.

Continue reading

Ineos granted permission in UK Green Belt for exploratory shale gas drilling

Ineos has been granted planning permission on appeal for exploratory shale gas drilling in the Green Belt, near Rotherham.

In May 2017, petrochemical firm Ineos sought temporary permission for a period of five years for a shale gas well, access track and ancillary facilities at Common Lane, Harthill near Rotherham. Ineos claims that the site has been chosen because it is within an area of interest based on existing seismic data. Continue reading

PA Superior Court revives trespass claim against fracking company

Last Monday, a three-judge panel of the Pennsylvania Superior Court revived a trespass claim against a fracking company. The claim, which was previously defeated by summary judgment, could return to the trial court for determination of its merits.

In 2015, plaintiffs filed suit against the fracking company alleging trespass and conversion. Plaintiffs claim the company used hydraulic fracturing to extract natural gas beneath the plaintiffs’ property, where the company did not have a lease, from an adjacent tract on which it had a lease. Continue reading

Study observes possible links between hydraulic fracturing wastewater injection and seismic activity in Kansas

A new study published this month purports to link seismic activity in Kansas to wastewater disposal associated with hydraulic fracturing. Justin Rubinstein, the lead researcher, suggested that further research was needed to examine the effects of wastewater injections, stating that this study was “the tip of the iceberg as far as what we’re going to learn.”

The study examined ongoing seismicity in two counties in southern Kansas from 2013-2016, observing correlations between increases in seismic activity subsequent to increases in wastewater disposal via deep-injection wells. Additionally, seismic activity appeared to decreased at the same time as economic and regulatory forces reduced wastewater injection. Analyzing over 6,845 earthquakes, the study also identified six earthquakes of magnitude 4 or greater in Kansas since 2012, the first such earthquakes in the state. Continue reading

Controversial study attempts to link fracking to poor infant health

Last month, in an article published in the journal Science Advances, economics professors at Princeton University, the University of Chicago, and the University of California, Los Angeles attempted to link fracking to low birth weight. The study is controversial, and has been criticized since its publication.

Over the course of ten years, Janet Currie, Michael Greenstone, and Katherine Meckel, the authors of the study, analyzed 1.1 million births in Pennsylvania, where fracking is common. They concluded that living within 1 kilometer of a fracking well while pregnant increased the odds that one’s baby would be born with a low birth weight by 25%. Continue reading

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