Will Texas Send Another Trend To The Bakken?
Texas often leads the way in American oil and gas law. Currently, the Texas Supreme Court is wrestling with a wastewater injection well case that may send precedential shockwaves across the nation. North Dakota (ND) maintains approximately 470 disposal wells. Oral argument on the Texas case was held in January. This is the second time the Texas Supreme Court has been asked to review the same case. FPL Farming Ltd. v. Envtl. Processing Sys., L.C. involves a landowner bringing a trespass claim concerning a wastewater injection well used to dispose of non oil and gas waste. The landowner alleges the well is causing the migration of the injected wastewater into the landowner’s property some 8,000 feet below the surface. The landowner also claims that migrating wastewater is damaging the quality of the aquifer. The wastewater well was dug about 400 feet from the landowner’s property.
Will this second bite at the Texas apple by the Texas Supreme Court affect the Bakken? I have some comments about such a possible outcome: 1.While not argued actively in the Texas court appeal briefs, the court record in that case shows a settlement payment made to, as well as a signed pre-well settlement agreement by, the landowner. A pre-well settlement was reached based on an objection filed by the landowner at the prior well permit application hearing. 2. ND has an established set of oil and gas regulations and water law that actively manages groundwater. ND law asserts public ownership of much of ND’s water resources including aquifers. By contrast Texas grants more private rights of ownership to subsurface water. 3. ND follows the heaven to hell ownership principal of land in which everything above and everything below the surface is owned by the surface owner. This rule of law is however not absolute. ND has addressed the concept of subsurface trespass in a hydrofracking context in the Farrar case. In that case the ND Court determined that state public policy in favor of the development of natural resources trumped a claim for trespass filed by a nonconsenting mineral rights holder. 4. The alleged harm to the landowner’s aquifer in the Texas case is based upon conjectural extrapolations, and is not in the nature of ‘hard evidence’ as we say on the street. At oral argument one of the judges stated, “I’m having a hard time wrapping my head around the issue of how much would be owed and when it would be owed.”
While ND courts have in the past looked at Texas oil and gas precedent, my comments suggest that ND may not be as eager to follow any new precedent coming out of the FPL case.
David Ganje of Ganje Law Offices practices natural resources, environmental and commercial law in North Dakota and South Dakota. Web: lexenergy.net
