American Oil and Gas Reporter - February 2020 - 20

IndustryDigest
Central California to oil drilling and
fracturing stimulation are under attack.
Several anti-development groups,
including the Center for Biological
Diversity and Natural Resources
Defense Council, are suing the
reopening of the leases because, they
say, the Bureau of Land Management
failed to consider fracturing's possible
impacts on public health and the
environment.
In Center for Biological Diversity v.
U.S. Bureau of Land Management, filed
in the U.S. District Court for the Central
District of California, Western Division,
the groups challenge the final
supplemental environmental impact
statement adopted by BLM's
Bakersfield Field Office on Dec. 12,
2019 (See "BLM Analysis Opens
California Acreage To Hydraulic
Fracturing," AOGR, January 2020).
According to the court filling, the SEIS
supports a resource management plan
adopted in 2014 that encompasses
400,000 acres of federal lands and 1.2
million acres of federal mineral estate
across eight California counties.
The lawsuit says BLM's final EIS,
written in 2012, fails to analyze the
impacts of fracturing on the "diverse
and already vulnerable public resources
in Central California, including air
quality, water and wildlife."
The Center for Biological Diversity
and Los Padres ForestWatch challenged
the 2014 RMP, and a court ruled BLM
failed to comply with the National
Environmental Policy Act because its
RMP failed to adequately analyze
fracturing's environmental impacts,
court documents say. The bureau agreed
not to hold any oil or gas lease sales
within the Bakersfield planning area
until it completed a supplemental NEPA
analysis to address those deficiencies.
The plaintiffs allege the new SEIS
fails to consider the impacts of
fracturing, unlawfully minimizes the
number of wells to be fractured on new
leases and fails to evaluate the health
effects on local communities. They
want the court to set aside the SEIS and
enjoin BLM from moving ahead with
any oil or gas leasing until it complies
with NEPA and related federal
regulations.
Rock Zierman, chief executive
officer of the California Independent
Petroleum Association, says the antidevelopment groups care more about
20 THE AMERICAN OIL & GAS REPORTER

grandstanding than the environment,
and should be promoting more in-state
oil and gas production.
"Our members are investing in new
technologies to lower the carbon
footprint of production to potentially
make it carbon negative and offset
greenhouse gas emissions from other
sources," he says. The groups involved
in this lawsuit "want us to increase our
reliance on imported oil from the
Middle East, which isn't produced
under our tough environmental rules
and must be tankered to our ports." ❒

Pennsylvania's Top Court
Upholds 'Rule of Capture,'
But New Questions Arise
HARRISBURG, PA.-Pennsylvania's
high court has affirmed the long-held
principle of "rule of capture" as it
applies to hydraulically fractured shale
wells. However, the Supreme Court's
Jan. 22 decision in Briggs v.
Southwestern Energy Production Co.
also provides an opening for
landowners to argue that trespassing
occurred because of fractures caused by
stimulation of a well on a neighboring
property, the Pennsylvania Independent
Oil & Gas Association reports.
According to PIOGA, as an accepted
oil and gas legal principle dating back
to the late 1800s, the rule of capture
means that any oil or natural gas
produced from a well located on
property a producer controls belongs to
that producer, even if it potentially
originated from a neighboring property
not under the producer's control.
In Briggs, PIOGA explains, a
Susquehanna County family accused
Southwestern of removing natural gas
from its 11-acre parcel with a well on a
neighboring property. The plaintiffs
argued the rule of capture did not apply to
shale wells because oil and gas could not
move through a shale formation without
stimulation. The Pennsylvania Superior
Court agreed in an April 2018 decision.
But the Pennsylvania Supreme Court
unanimously vacated the Superior
Court's decision, finding no difference
between methods used to recover oil
and gas in traditional and
unconventional formations, PIOGA
reports.
"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," the court said in a 5-2
majority opinion. "There is no reason
why this precept should apply any
differently to hydraulic fracturing
conducted solely within the driller's
property."
PIOGA notes that the Supreme
Court unequivocally rejected the
Superior Court's blanket denial of the
application of the rule of capture to
hydraulic fracturing, holding that the
rule would continue to apply only "so
long as no physical invasion of the
plaintiff's land occurs." The court
concluded, however, the plaintiffs
failed to allege any physical intrusion
into their subsurface property.
"A plaintiff alleging trespass by
invasion of property must aver
something more than mere drainage of
minerals from the subject property,
which by itself implicates the rule of
capture," the court wrote. "This holds
true even where the defendant has
completed its wells using hydraulic
fracturing."
The Supreme Court majority
remanded the case to the Superior Court
to determine whether the claims could
move forward in view of what justices
said were the Briggs' "pleading
deficiencies," PIOGA notes.
An attorney who filed an amicus
brief on behalf of the Pennsylvania
chapter of the National Association of
Royalty Owners described the ruling as
"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," Robert Burnett told a
Pittsburgh newspaper. While proving
such a case would be technically
challenging for a landowner, "it is not
impossible," he added.
PIOGA says the case's significance
prompted it to support Southwestern as
an amicus. ❒

Bone Spring Formation
Production Up, EIA Says
WASHINGTON-Wells targeting the
Bone Spring Formation underlying the
American Oil and Gas Reporter - February 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2020
