Rule of capture decision to be appealed

FRITZ MAYER
Posted 5/9/18

SUSQUEHANNA COUNTY, NY — The drilling company Southwestern Energy is going to ask that all 20 judges of the Pennsylvania Superior Court hear an appeal of a two-judge panel that ruled that oil …

This item is available in full to subscribers.

Please log in to continue

Log in

Rule of capture decision to be appealed

Posted

SUSQUEHANNA COUNTY, NY — The drilling company Southwestern Energy is going to ask that all 20 judges of the Pennsylvania Superior Court hear an appeal of a two-judge panel that ruled that oil and gas wells that make use of hydraulic fracturing are not covered by the “rule of capture.”

The rule of capture has existed for more than 100 years in Pennsylvania and other states, and says that because oil and gas exist in pools under the ground, and can flow from one part of the pool to another, whoever drills a well into the pool first is entitled to the entire pool of oil or gas. This is true even if the oil or gas exists under land owned by someone other than the drilling entity. The only remedy a property owner would have to protect their own oil or gas in such circumstances would be for the property owner to drill his or her own well.

Southwestern began drilling a well in Susquehanna County in 2011 on a property adjacent to land owned by the Briggs family, which had declined to lease their mineral rights to the company. In 2015, the Briggs family sued Southwestern, charging the company with trespass for taking the gas beneath their land, which amounts to about 11 acres.

Southwestern did not dispute the fact that they had taken the gas, but argued that they were protected by the rule of capture, and a lower court agreed.

The Briggs family appealed to the Superior Court, which reversed the ruling of the lower court on April 2. It wrote that unless hydraulic fracturing were employed, the gas beneath the Briggs land would remain in place forever, being tightly held in a shale formation. Judge Michael Musmanno also wrote that many people would not have the resources to mount their own hydraulic fracturing operations.

He wrote, “Hydraulic fracturing is a costly and highly specialized endeavor, and the traditional recourse to ‘go and do likewise’ is not necessarily readily available for an average landowner.”

He further wrote, “Precluding trespass liability based on the rule of capture would effectively allow a mineral lessee to expand its lease by locating a well near the lease’s boundary line and withdrawing natural gas from beneath the adjoining property, for which it does not have a lease … Such an allowance would nearly eradicate a mineral lessee’s incentive to negotiate mineral leases with small property owners, as the lessee could use hydraulic fracturing to create an artificial channel beneath an adjoining property, and withdraw natural gas from beneath the neighbor’s land without paying a royalty.”

The case was then sent back to the lower court to allow the Briggs family to pursue the trespass claim.

There are been more than 7,700 wells drilled in PA using hydraulic fracturing since 2008, and lawyers for Southwestern say the decision could lead to a large number of speculative lawsuits.

susquehanna county, energy

Comments

No comments on this item Please log in to comment by clicking here