Is hydraulic fracturing of unleased lands a trespass? The Superior Court of Pennsylvania recently tackled this tricky question in Briggs, et al. v. Southwestern Energy Production Company, (1351 MDA 2017).
In the complaint, the landowners claimed that Southwestern Energy was draining oil and gas from their lands through wells located on adjoining tracts. These wells were horizontal Marcellus wells that had been hydraulically fractured. The landowners asserted that the hydraulic fracturing into their property was a trespass. In their Motion for Summary Judgment, Southwestern argued and the trial court agreed that the claims of trespass and conversion were barred by The Rule of Capture. The landowners appealed to the Superior Court.
The Superior Court recognized that while The Rule of Capture has long applied to the situation where a conventional well is drilled into a common pool and oil and gas naturally migrates across property lines, hydraulic fracturing was found to be a less natural process. Southwestern’s own brief described hydraulic fracturing as a “mechanical method of increasing the permeability of rock, and thus, increasing the amount of oil or gas produced from it.”
The Superior Court relied heavily upon the dissenting opinion in Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W. 3d 1 (Tex. 2008). The first argument for finding that the Rule of Capture does not apply to modern fracturing methods is that such a finding would allow a driller to enter upon the land of another, without consent, and drain minerals by artificially created channels or devices.
The Superior Court further pointed out that landowners are not capable of drilling their own horizontal wells to offset drainage due to the high cost of drilling a horizontal well (which was a traditional remedy under the Rule of Capture). The Superior Court also worried that applying the Rule of Capture to hydraulic fracturing methods will cause oil and gas producers to stop trying to negotiate leases with small landowners.
Finally, the Superior Court concluded “that the Rule of Capture does not preclude liability for trespass due to hydraulic fracturing. 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.”
Briggs, et al. v. Southwestern Energy Production Company was remanded back to the trial court for further proceedings and the landowners must be allowed to fully develop their trespass and conversion claims.
