Jury Awards $3 Million in Fracking Nuisance Case

Yesterday, a six-member jury in Dallas County awarded Robert and Lisa Parr close to $3 million in their case against Aruba Petroleum. The case, filed in March 2010, claimed that Aruba Petroleum "intentionally created a private nuisance" in drilling and fracking 21 gas wells near their home in Wise County.


Lisa began feeling ill - rashes, nausea, oozing welts and lumps, and breathing difficulties. She  sought treatment from numerous doctors but they couldn't tell her what was causing her sickness. Finally, one specialist suggested it might be environmental, and a later visit to a doctor who specialized in environmental medicine confirmed that she had  neurotoxins in her blood - the same chemicals used in gas drilling and production.

The environmental pollution - and health impacts - got so bad that the family had to leave their house.  You can read about the Parr case in Flowback: The Dark Side of the Boom, by Texas Oil & Gas Accountability Project and a more recent article here.

"Texas Sharon" has done a wonderful job documenting the oil and gas atrocities in Texas and has included links to a wealth of data. Read her article on the Parr's case, and their neighbors Tim & Christine Ruggiero here. If you want to know more about the specifics of the award, the Parr's lawyer posted an update on his firm's blog. He also shared their petition to the court. Of course, the oil & gas company has already said they plan to appeal, so stay tuned.

Does a Lease give Gas Company the Right to Keep Friends off your Property?

When a gas company leases land, exactly what do they "own"? It's understood that they've got the right to extract gas from under the surface - and if they've leased surface rights, they can build access roads and other structures.

But does a lease give the company the right to dictate who comes on the surface - even for properties where the company has no active drilling operation? What about properties for which the company only has subsurface rights?

Cabot Oil & Gas Corporation thinks so - and they have gone to great lengths to keep an individual from stepping foot on property they don't even own. Last fall a judge ruled in Cabot's favor, giving them an injunction that bars local resident and citizen-journalist Vera Scroggins from Cabot-owned properties. That injunction also bars her from any property in the county where Cabot only has a lease to extract gas from under the surface, with no surface rights. Those properties include: the grocery store where Scroggins does most of her shopping, her bank, the recycling center, the hospital, and many friends.

What sort of dastardly act has Scroggins committed to deserve such a ruling? The retired nurse aid and grandmother happens to be one of the more vocal opponents to gas drilling in her town. For the past few years she has acted as a citizen-journalist, documenting the activities of gas companies operating in the area, and giving tours to visitors to show them what industrialized gas drilling looks like. She has testified before state regulatory officials, and asked questions of gas company employees - too many questions, apparently. Her "crime": attempting to hold the gas drillers accountable for their activity.

In response, Cabot hit her with a lawsuit and then obtained this outlandish injunction that bars her from driving on local roads, spending money in local shops, or taking a casserole to a sick friend. To say that this injunction is "overbroad" is an understatement. It violates her constitutional rights and the rights of any other individual - including journalists - who might stop on a public road to take a photo of gaswell activity.

This ridiculous injunction should also give landowners pause: just what rights are they losing when they sign a gas lease? Even if they only allow subsurface rights (gas company has no rights to any surface activity) are landowners signing away their freedom to invite who they want onto their land? And in a state like NY, where compulsory integration allows landowners to be forced into drilling units against their wishes, does that mean gas companies can dictate who they can invite to hunt on their property?

As for Scroggins, Cabot did not give her a map of all the leased land in her home town. It is up to her to determine which roads she is allowed to drive down, how close she can get to the public school, whether she can deposit a check (no) or buy a candy bar (no) or get her car fixed at the local garage (no) or go to the emergency room (no) ... heck, even the local jail is off limits should she accidentally step onto leased property! And should a friend knowingly invite her over for lunch , they could both end up in the hoosegow. (clarification: Vera says she can drive down any road; she just can't stop and "alight on the properties" that are leased)

A hearing to vacate the injunction is scheduled for Monday, March 24 in Montrose, PA. Fortunately, public interest attorneys are going to bat for Scroggins, and you can read their "Brief in Support of Motion to Vacate Preliminary Injunction" here.

Exxon CEO doesn't want frack trucks in his backyard

Fracking traffic at a PA watering hole

File this under "Chickens Coming Home to Roost". According to a Wall Street Journal article earlier this week,Rex Tillerson doesn't want a water tower built next to his horse farm because it could potentially bring lots of fracking trucks into his neighborhood. And that, he says, would be a profound nuisance.

Tillerson, it turns out, is chairman and chief executive of Exxon Mobil Corp - the company that engages in ... fracking. The very same company that faces criminal charges over a 50,000-plus gallon fracking waste spill in Pennsylvania. And while he and his company support fracking elsewhere, he doesn't want the inconvenience - and unsightliness- of a water tower in his backyard.

Tillerson and his Bartonville, TX neighbors have filed a lawsuit to block construction of the water tower because it's illegal and it's a nuisance. The 160-foot tower is located adjacent to Tillerson's property and will take away from his enjoyment of the view- an allegation countered by the water corporation that claims he already has power lines running across that view, so what's one more thing?

Residents fear that the water company could provide excess water not needed by residents for use in hydro-fracking. "The construction of the water tower will create a constant and unbearable nuisance to those that live next to it," says the lawsuit (pdf, section 6.06).  The suit declares that... "A water tower will have lights on at all hours of the night, traffic to and from the tower at unknown and unreasonable hours, noise from the mechanical and electrical equipment needed to maintain and operate the water tower..." Furthermore, the residents fear that the water company will "...sell water to oil and gas explorers for fracking shale formations leading to traffic with heavy trucks on FM 407, creating a noise nuisance and traffic hazards."

And there's one other thing: the residents feel that the water utility has to obey local zoning ordinances and the rights of residents who relied on those ordinances and town laws when they purchased their property. Property which, by the way, runs into the multi-million dollar range. Which may explain why an oil company CEO is fighting the same battles as dairy farmers in the Marcellus: the town and people living in an area have a right to expect that corporations will follow their rules. Their Home Rule.

In comments to his Town Council at their November meeting, Tillerson expressed concern that allowing the water tower to be constructed would open the door to runaway development. He said, "I cannot stay in a place where I do not know who to count on and who not to count on."

Chesapeake Settles Over Royalty Dispute

Yesterday Chesapeake settled a class action lawsuit challenging the company for improperly deducting post-production and transport fees from gas royalties. According to the Daily Review, Chesapeake has agreed to fork over $7.5 million.

The lawsuit, filed electronically earlier in the day, named 14 plaintiffs from Pennsylvania and New York as representatives of the “class”. The plaintiffs claim that post-production fees were deducted from their royalty payments despite terms in their leases that precluded Chesapeake from deducting those costs, and that the fees were in excess of the actual costs. They also claim

that Chesapeake "breached its duty" by basing royalties on the market value of the gas prior to refining – at “below market” price.

However, the leaseholders won’t end up with all the royalties they’d hoped for. They’re still going to have to pay about 72 percent of post-production costs, and cover 100 percent of the costs related to transporting gas through the pipelines.

The settlement proposal still has to be reviewed by a federal judge before final approval.

Read more about this here and here. 

3rd NY Town Wins in Court over Frack Ban

Last week acting Supreme Court justice Robert Wiggins (Livingston County, NY) ruled in favor of the Town of Avon's fracking ban.  He cited Court of Appeals precedents and decisions in favor of local bans in the towns of Dryden and Middlefield. This makes the third NY town to win in a court case challenging a town's right to ban fracking.

Gas drilling company Lenape Resources sued the Town of Avon and the state Department of Environmental Conservation over the town's moratorium on drilling, saying the action threatened to put it out of business after having operated in the town for decades. Owner John Holko asked for $50 million in damages, and said he'd included DEC in the lawsuit because he felt the agency has a duty to stop towns from enacting local bans.

You can read more here.
Read the court decision at  http://www.scribd.com/doc/131442865/Avon-HOME-RULE-Decision

Landowners Threaten to Sue NY if there's No Fracking

New York has done it again: missed another fracking deadline. And this time the Joint Landowners Coalition of NY (JLCNY) is putting its feet down; they're going to sue the state for not allowing fracking.

Why?Because, says JLCNY attorney Scott Kurkoski, "We've been denied all economic benefit to our property."
At issue is the delay of promulgating fracking regulations because, well, the Commissioner of Health is still working on a health study to determine whether - and how - highly industrialized unconventional drilling requiring high-volume horizontal hydraulic fracturing affects the public health. And the governor is waiting for him to complete the study before he decides whether or not to permit fracking.

This doesn't faze the JLCNY because.... well, because  apparently economic gain trumps health. The idea that the state might want to ensure that public health is not endangered is, to the JLCNY, a "takings". The fact that gas may not even be worth extracting doesn't seem to enter this equation.

Ensuring the health of the public now and for future generations apparently doesn't enter the equation either. Because, says JLCNY president Dan Fitzimmons, the "futures of our children, our communities and everything..." will be taken away if gas drilling isn't allowed.

Ironically, gas drilling IS allowed in NY. It's just one kind of gas drilling that isn't - and, by god, that's the kind JLCNY wants or it will sue. All they're lacking are the plaintiffs.


Meanwhile, other landowners who would prefer to breathe clean air, drink pure water, provide healthy pasture and forage for livestock, and grow nutritious food, wonder if drilling on their neighbor's land might not deny them "all economic benefit" to their property.

Federal Judge Tosses "Force Majeure" Out the Window

Just because you can’t “frack” doesn’t mean you can't drill. That’s what U.S. District Court Judge David Hurd told Chesapeake Appalachia the other day. In a decision posted November 15, Hurd rejects force majeure as a reason to hold onto expired leases. Leases, he explain, terminate at the end of their primary terms. His reasoning:

“… The purpose of the leases is to explore, drill, produce, and otherwise operate for oil and gas and their constituents.” And the fact that New York State is still reviewing regulations for high volume horizontal hydraulic fracturing (HVHF) does not stop oil and gas companies from exploring, drilling, producing and otherwise operating, says Hurd.

Even though the state does not allow fracking, “… drilling permits for conventional drilling methods have, and continue to be, issued in the area of plaintiffs’ lands,” wrote Hurd. He clarified that the leases signed by landowners did not limit Chesapeake’s right to drill to a specific type of drilling or a particular formation.

The whole force majeure argument was based on the illusion that the state was preventing the gas companies from drilling. But, notes Hurd, “While defendants submit evidence demonstrating that horizontal drilling combined with HVHF is the only commercially viable method of production in the Marcellus Shale and drilling using conventional methods is impractical,"[m]ere impracticality . . . is not enough to excuse performance." The gas companies “…contracted for access, exploration, and the right to drill for a set period of time.” Not for a specific technique or formation.

This decision brings a sigh of relief to more than 50 landowners in Broome and Tioga counties who were trapped in leases that should have expired years ago.

You can read Judge Hurd's decision here. Read previous posts about the force majeure cases here.

What is Act 13, Anyway?

Why is everyone in Pennsylvania so obsessed with "Act 13? What is it, anyway? 

You can find out - and learn more about the recent court decisions next week. On Thursday, August 9 Penn State Extension will be hosting a special webinar called “A Blow to Act 13?: The Impact of the Commonwealth Court’s Decision on Local Zoning and Natural Gas Development in Pennsylvania”. the webinar goes from 1 - 2 pm and us open to the public though, noted Penn State Ext, it will "be of special interest to municipal officials and attorneys".

Last week a Pennsylvania appellate court rejected the Pennsylvania legislature’s pre-emption of significant elements of local zoning under Act 13. The ruling has been appealed to the State Supreme Court, but municipal officials and others are uncertain about the immediate impact of the decision.  Attorney Steve Saunders with Saunders Law LLC in Scranton PA will look at traditional zoning in Pennsylvania and oil and gas development before and after Act 13, the legal arguments presented to the Commonwealth Court, and the Court’s rationale for its decision.  Possible outcomes and how local governments should react will be discussed.

To participate in the webinar, please log in to https://meeting.psu.edu/pscems/ .  No registration is necessary. If you have questions, please contact Carol Loveland at cal24@psu.edu or call (570) 433-3040.

Another Judge Upholds Second Town Ban on Fracking

For the second time in a week a NY Supreme court judge has determined that a town does have the right to ban fracking using zoning and land use law. This afternoon Justice Donald F. Cerio upheld the town of Middlefield, NY (Otsego County) ban on fracking within town boundaries.The town board passed the new zoning law at the end of June, 2011.

In September, dairy farmer and town resident Jennifer Huntington initiated a lawsuit against the town claiming that the new law is illegal and infringes on her private property rights to allow gas drilling on her land.


Judge Cerio disagrees. While the state has the power to regulate how the industry operates, the town has the right to determine where that industry may - or may not - operate. You can read the judge's decision here.

Will Corporate Interests Trump Local Land Use?

Who has the power to regulate land use in a town: the local government? The state? Or multinational energy corporations?

Given two lawsuits filed over the past ten days, it looks like New York will be ground zero for testing whether state regulation of gas drilling trumps local control of land use through zoning. Over the past year more than 15 municipalities and counties across NY have strengthened zoning ordinances or passed legislation to exclude gas drilling and other heavy industries from within their borders.

The gas companies don’t like it, and neither do some large landowners hoping to cash in on what they see as a lucrative gas rush. The real kicker: DEC has not finalized the environmental impact statement – the infamous SGEIS – that sets the basis for establishing rules and regulations for high-volume horizontal hydrofracking. And, once that’s finalized they still have to adopt drilling regulations.

Still, Denver-based Anschutz Exploration Corporation is concerned about its investment in the tiny town of Dryden, located in the Finger Lakes region. According to some press reports, the company has leased well over 20,000 acres. Now they’re concerned that the town’s revised zoning rules will stop them from drilling, and they want the state to strike down Dryden's “drilling ban”.

You see, last month the Dryden Town Board unanimously approved a change to its zoning laws – a change that expressly prohibits any gas exploration, extraction or storage in the town. Town supervisor Mary Ann Sumner told the press that the town had researched the legality of such a zoning ordinance. “DEC cannot preempt our ability to regulate land use,” she said. Dryden, like any other town in NY has the right to decide whether and how to allow industries to operate within the town. “Heavy industry,” she said, “is in conflict with our major industries.”

Anschutz begs to differ, and DEC has tossed this hot potato to the courts noting that the law is "open to interpretation".

But Assemblywoman Barbara Lifton, who represents the region, is not so waffly when it comes to local land use issues. She comes down firmly on the side of “home rule”. Changing local zoning does not regulate the gas industry, she insists. Deciding where industry can locate their facilities (zoning) is very different from telling them what kind of fracking chemicals they can use (regulating).

Meanwhile, over in Otsego county a group of landowners led by a farmer (who has leased her land to a gas company) has engaged a Binghamton law firm to go after the town of Middlefield.  In June the town passed a zoning law that, like Dryden’s, excludes drilling through wells or subsurface excavations for oil or gas.

The law firm, Levene Gouldin & Thompson told the press that only the state can regulate oil and gas activities. According to LG&T, state law regulating oil and gas would supersede local zoning ordinances regulating land use.

But David Clinton, Middlefield’s town attorney, sees the issue very differently. “Environmental Conservation Law says that a municipality may not regulate gas drilling,” he says. But the town is not regulating gas drilling. They are prohibiting it.

Who has control over the land? Those of us who live on the land, who grow food on the land, harvest timber, drink the water? Or lawmakers who, by their own admission, are heavily lobbied by corporations interested in extracting wealth for their stockholders?

Citizens Sue Village over Schlumberger Project

Since July, and throughout three public hearings, residents of Horseheads, NY and the surrounding area have been asking the village elders to conduct a more thorough environmental review of the proposed Schlumberger building project. 

Last winter Schlumberger Technology Corporation plunked down a chunk of change for 88 acres in the Horseheads Industrial Center. It is an area zoned for light industry and manufacturing and contains warehouses and distribution centers. There is also another gas field service industry on the site - a company that provides equipment needed for drilling.

Schlumberger hopes to construct a 400,000 square foot facility to store fracking chemicals and explosives needed for gas field development. And they claim that their facility will bring 300 to 400 jobs to the area.

But residents are concerned that local municipal officials have embraced potential economic gain at the cost of potential environmental contamination. During the public hearings they repeatedly expressed their concern to village board members that it seemed like the project was a “done deal”. They begged the town board to conduct a more complete environmental review.

In particular, residents raised questions about stormwater permits, air quality and the impact of increased truck traffic on adjacent schools and residential neighborhoods.

At one point the Horseheads Village board seemed to agree; during their review of Part I of the environmental assessment (at their September 30 meeting) they  determined that the Schlumberger facility could potentially impact ground and surface water quality, air quality, wildlife and public health and safety. Less than a week later, the Village determined that there was no need for further environmental review, and on October 15 they issued a “negative declaration.”

This decision cleared the way for site plan approval and outraged many local residents. Outraged them so much that on November 12 a group calling itself People for a Healthy Environment filed a lawsuit against the Village. They claim that approval of the Schlumberger project was “illegal, arbitrary and capricious” and ask that the project be halted until more a complete environmental review can be done.

Horseheads Village didn’t just give a deaf ear to the people. They – and Schlumberger –also ignored demands from the state Department of Environmental Conservation (DEC) to cease activity on the site until certain requirements had been met.

Since summer Schlumberger has been operating on the site, with permission of the Village. They have a temporary structure, chemical storage silos as well as trucks parked on the site. Still, Schlumberger insists that what they are doing is not "construction" and therefore requires no permits.

The NY Department of Environmental Conservation (DEC) is not amused. On September 30 the DEC issued a Notice of Violation to Schlumberger for failure to obtain proper permits for stormwater discharges. You see, stormwater from the Schlumberger site discharges into a NY state freshwater wetland and into Catherine Creek, which eventually spills into Seneca Lake – precisely the concern raised by residents at board meetings and public hearings.

DEC directed Schlumberger to: discontinue all chemical and material storage; discontinue all construction support, maintenance and storage operations; and discontinue all storage and maintenance for vehicles providing oil and gas field services.

Schlumberger’s response was to continue their activities at the site. Until recently. It took another letter from DEC, but according to Peter Lent, regional permit administrator for DEC, as of November 13 Schlumberger is honoring the cease work directive.

In the meantime they are trying to get a stormwater permit for their temporary site.

It won’t be easy. In an 8-page letter to Schlumberger, DEC listed a number of things Schlumberger needs to clarify before a permit will be issued. Schlumberger needs to make sure chemicals are stored correctly; an October 15 inspection revealed a tarpaulin roof leaking water onto chemicals stored on pallets. It also cited chemical and additives dust on the storage building floor.

DEC has also requested Schlumberger to be more forthcoming about the chemicals stored on site. Instead of lumping them together in a broad category, such as “dry additives” they will need to list the components of the mixture.

 As for the citizen lawsuit, the group expects a response from village officials sometime in December.

You can read about the October public hearing here . You can read more articles about Schlumberger here.