Articles Posted in Energy and the Environment

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During my vacation I read The Quartet: Orchestrating the Second American Revolution, 1783-1789, by Joseph J. Ellis. Ellis tells the story of the writing and passage of the US Constitution, orchestrated, he asserts, by George Washington, Alexander Hamilton, John Jay and James Madison (the quartet).

Before the adoption of the Constitution, the thirteen states were essentially independent countries who had won their independence but failed to found a new country. The “United States” were always referred to in the plural. The genius of the quartet, says Ellis, was the compromise they crafted in the Constitution in the debate over federal vs. state power. States were understandably reluctant to relinquish their sovereignty, but the quartet knew that the new nation, to survive, had to have federal power – to levy taxes, provide for common defense, and regulate commerce among the states. The Constitution enumerates the powers of the federal government. The Bill of Rights – the first ten amendments to the Constitution, passed simultaneously — enumerates the rights retained by the states and the people, limitations on federal power. The tenth amendment provides: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The contours of this compromise are still being debated in courts across the land. “States rights” were fighting words in the civil war, and today are the battle cry of states seeking to curb the federal government’s regulation of health care, water quality, voting rights, and abortion.

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In January, the El Paso Court of Appeals decided the appeal of Lazy R. Ranch, LP, et al. vs. ExxonMobil Corporation. The court reversed a summary judgment in favor of Exxon and remanded the case to the trial court for a trial on the merits. Exxon has asked the Texas Supreme Court to review the El Paso Court’s decision. Exxon argues that it has conclusively proven that Lazy R’s claims are barred by limitations.

The Lazy R Ranch is 20,000 acres in Ector, Crane, Ward and Winkler Counties. Exxon had operations on the ranch for many years. In 2009, the Ranch hired an environmental firm to investigate several sites on the property for oil-related contamination. The environmental firm found substantial hydrocarbon contamination at five sites, and found that at one of the sites the contamination had percolated down into the groundwater and that contamination at the other sites also posed a risk of leaching down into the groundwater. Lazy R sued Exxon for an injunction to require Exxon to take sufficient steps to prevent further spread of the contamination into the subsurface and groundwater.

The trial court ruled that the Ranch had waited too long to sue and dismissed its claims. The El Paso Court of Appeals reversed, holding that the statute of limitations does not apply because the Ranch is only suing for an injunction to require Exxon to abate a continuing nuisance, the spread of hydrocarbon contamination into the subsurface.

Both parties have now filed their briefs in the Texas Supreme Court, which has not yet decided whether to hear the case.

Groundwater contamination from older oil and gas operations, especially from tank batteries and compressor stations, is a big issue in Texas and has been for a long time. Once hydrocarbons, particularly condensate, leach into groundwater they are practically impossible to clean it up.

The agency in Texas responsible for enforcing cleanup of sites contaminated by oil and gas production operations is the Texas Railroad Commission. Companies found to have contaminated groundwater must obtain approval from the RRC of a “remediation plan” to remediate the property. For groundwater contamination, this usually involves taking steps to stop the spread of the contamination and then leave it to natural processes for the hydrocarbons in the groundwater to gradually degrade over time, called “natural attenuation.” That may take tens or even hundreds of years. In the meantime, the company responsible must obtain agreement from the landowner not to use the contaminated groundwater – a restrictive covenant that is binding on the property in perpetuity.

Landowners have a private cause of action for damages to the land resulting from contamination. The problem with such claims has been that the statute of limitations to bring the claims is either two or four years, depending on the claim. The landowner may not realize that the contamination, although evident on the surface of the property, has seeped into the groundwater until years after the contamination began. By then it’s too late to sue for damages.

The Lazy R Ranch has proposed a different remedy that, as far as I know, no Texas court has addressed — suing for an injunction to require the company to remediate the contamination, to prevent it from spreading further. This typically requires removal of the contaminated soil, which may be hugely expensive. Witness Exxon’s pleas to the Texas Supreme Court to dismiss Lazy R’s claims.

Exxon argues that, under established Texas precedent, the measure of damages for “permanent” damage to land is the diminution in the value of the property. It argues that the land contaminated on the Lazy R Ranch is only 1.2 acres, worth only $50/acre, but it would cost it millions of dollars to clean up the contamination. Exxon argues that Lazy R’s effort to use an injunction as a remedy is an “attempt at an end-run around the law,” which is really only a request for remediation damages that violate the measure of damages for permanent damage to land.

I have written before about my view of the inadequacy of established legal remedies in Texas for contamination like that allegedly caused by Exxon to the Lazy R Ranch.  In 2009, I filed an amicus brief (Senn v. Premrose Amicus) for the Texas Land and Mineral Owners’ Association in Primrose Operating Co. v. Senn, 161 S.W.3d 258 (Tex.App.-Eastland 2005, Pet. denied), asking the Texas Supreme Court to address the issue. That case applied the “permanent damage” measure of damages advocated by Exxon to contamination of the Senns’ ranch. The court of appeals held that the Senns’ property had not been damaged by the admittedly substantial contamination because the value of the property had actually increased from the time it discovered the contamination to the time of trial. Because the damages were “permanent,” and because there was no diminution in the value of the land resulting from the contamination, the Senns had not been harmed.

So this case may have important implications for landowners in areas of the state contaminated by legacy oil and gas operations.

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Big news this week about the Environmental Protection Agency’s new proposed regulations to limit emissions of methane and volatile organic compounds (VOCs) from oil and gas drilling, operating, compression and processing facilities. EPA’s proposed new rules can be viewed here. Among other things, the proposed regs would require operators to use “green completion” technology in drilling and completing wells, to reduce emissions of natural gas during those operations. The proposed rules would apply only to “new sources” of emissions, not existing facilities.

Representative Lamar Smith, R-San Antonio, called the proposed rules “yet another example of the Obama administration’s war on American energy jobs.”  Barry Russell, CEO of the Independent Petroleum Association of America, said the proposed rules would cause “unnecessary costs and added uncertainty” that would “inflict more pain on the men and women who work in the oil and gas industry at a time when market forces are already creating economic challenges.” Environmentalists praised the proposed regulations, but said that EPA needs to begin regulating emissions from existing facilities.

VOCs are carbon-based molecules that evaporate at ordinary temperatures and pressures, and are emitted into the air during oil and gas production, gathering, transportation and processing activities. They include  benzene, ethylbenzene, and n-hexane, which are harmful to human health. VOCs and methane are also powerful greenhouse gases, contributing to global warming according to scientific consensus.

Meanwhile, a study was published this week in Environmental Science and Technology, led by Colorado State University and sponsored by the Environmental Defense Fund and based on a comprehensive review of methane emissions in oil and gas facilities. It found that emissions from natural gas pipelines and processing facilities are much higher than estimated by EPA or the Energy Information Administration. The study concludes that the methane escaping from natural gas pipelines and processing facilities could to power more than 3 million homes.

It appears that most emissions of methane from production and processing facilities result from poor oversight, monitoring and maintenance. Good operating practices would greatly reduce such emissions. Other emissions can be reduced only by installing new or different equipment that does not emit methane as part of normal operations. If the industry wants to limit the intrusiveness of EPA regulations on its operations, it needs to clean up its own house by identifying bad actors and encouraging compliance with good industry standards, by increased monitoring of emissions and fixing problems when they occur,  and by cooperating with EPA in crafting regulations that allow the industry to address the problem in its own way.

The Cynthia and George Mitchell Foundation has endorsed the proposed rules. George Mitchell, now deceased, is the father of the modern method of hydraulic fracturing that has transformed the US energy industry.

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The EPA this week published a “proposed framework” for a new voluntary program for the oil and gas sector to reduce methane emissions – the “Natural Gas STAR Methane Challenge Program.” It is part of the administration’s continuing effort to reduce emissions of methane, a powerful greenhouse gas. The proposal can be found here.

I’m no expert on air emissions standards. As a citizen reading the proposal, I was struck by the increasing intensity of efforts to address emissions of methane and volatile organic compounds in the oil and gas sector.

In 1993, EPA created its Natural Gas STAR Program, a voluntary program in which oil and gas companies could commit to identify opportunities in their companies to reduce methane emissions and report on their progress. According to the EPA, Gas STAR partner companies have reported methane emission reductions of more than one trillion cubic feet through 2013.

In 2012, the EPA issued New Source Performance Standards for the oil and gas industry to achieve reductions in methane and VOC emissions.

In March 2014, the administration release its Strategy to Reduce Methane Emissions as part of its Climate Action Plan.

In 2014, the industry founded the One Future program, in which member companies make commitments to achieve methane emission targets.

A good summary of EPA efforts related to methane emissions can be seen here.

In the EPA’s new Methane Challenge, participating companies would enter into a memorandum of understanding with EPA committing to specific emission reduction goals and a plan to achieve those goals, and would commit to annual reporting on their progress.

EPA is asking for comments on its proposed framework.

I have had increasing complaints and concerns voiced by clients about air emissions from oil and gas production facilities. Landowners are more frequently demanding that their lessees take steps to limit emissions and capture gas for sale that is being vented or flared. The Environmental Defense Fund has begun a series of studies to identify methane emission sources and available technology to reduce methane emissions. If the industry wants to tout natural gas as more environmentally friendly than coal, it would do well to take steps to reduce its emissions.

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Here is an excellent article by Michael Levy, senior fellow for energy and the environment at the Council on Foreign Relations: “Fracking and the Climate Debate,” published in the journal Democracy. A well-reasoned and balanced summary of the debates over the role of natural gas in our energy future and its potential impact on our climate. Lengthy, but well worth reading.

Levy gives a good history of recent remarkable changes in the roles of coal and natural gas in US energy:

Between 1999 and 2005, the United States had added the equivalent of 200 nuclear power plants’ worth of natural gas-fueled electricity plants, even as U.S. coal-fired capacity actually fell. But by 2007, with natural gas prices rising, the U.S. government predicted a reversal: Over the next two decades, coal-fired power plants would be built at a furious pace, while natural gas would stagnate. This would be disastrous for U.S. greenhouse gas emissions: By 2030, it was predicted, the fleet of coal-fired power plants would belch three billion tons of carbon dioxide into the atmosphere each year, massively raising U.S. greenhouse gas emissions. …

But the EIA’s predictions were proven false by the shale gas revolution:

Between 2005 and 2014, annual U.S. natural gas production increased by 36 percent, with shale gas production rising even more than total U.S. natural gas output did (other sources of U.S. gas continued to decline). In large part as a result, from 2008 to 2012, the price of natural gas dropped by a whopping 62 percent. Since the dawn of electric power, coal has been the largest source of U.S. electricity, with natural gas coming in a distant second beginning around 1960. But by April 2012, with natural gas prices at rock bottom, gas-fired power came within a hair of topping coal.

American carbon dioxide emissions simultaneously plummeted. U.S. emissions had risen nearly every year for decades, and few expected the pattern to change. But in 2007, emissions peaked. By 2012, U.S. emissions were 13 percent below their 2007 high, and at their lowest level since 1994. Emissions rebounded slightly through 2014 but remained 9 percent below their high-water mark. …

In 2014, coal provided 39 percent of total U.S. electricity to natural gas’s 27 percent. The U.S. Energy Information Administration, an independent agency of the U.S. government, projects that without new policies, it will take until 2035 for natural gas to pass coal as the top source of U.S. electricity. It also projects that U.S. energy-related carbon dioxide emissions, instead of decreasing, will edge up by nearly 2 percent over the next decade.

The New York Times reported yesterday that, in fact,

Natural gas overtook coal as the top source of United States electric power generation for the first time ever this spring, a milestone that has been in the making for years as the price of gas slides and new regulations make coal riskier for power generators. About 31 percent of electric power generation in April came from natural gas, and 30 percent from coal, according to a recently released report from the research company SNL Energy, which used data from the Energy Department. Nuclear power came in third at 20 percent. A drilling boom that started in 2008 has increased United States natural gas production by 30 percent and made the United States the world’s biggest combined producer of oil and natural gas. Federal data shows that in April, the amount of electricity generated with natural gas climbed 21 percent compared with April 2014, and the amount generated with coal fell 19 percent. In April 2010, 44 percent of electric power generation came from coal and 22 percent from gas, according to SNL Energy.

This is a remarkable statistic: In April 2015, US generation of electricity from gas increased 21%, and electricity from coal fell 19%.

The debate over fracking will continue, but the world’s insatiable appetite for energy will not abate, and natural gas will continue to increase as a share of our energy supply. The industry would do well to consider Levy’s caution that it act responsibly by reducing emissions and pay attention to the environmental impacts caused by its activities.

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Residents of DISH, Texas were awarded a victory by the Amarillo Court of Appeals in their long-running fight with pipeline companies. Sciscoe et al. v. Enbridge Gathering (North Texas), L.P., et al., No. 07-13-00391-CV. In an opinion issued on June 1, the court held that the plaintiffs are entitled to a trial on their claims that the pipelines’ gathering and compression facilities caused damages to their properties from noise and emissions that constituted trespass and nuisance.

DISH residents have fought the pipeline companies for years. The companies constructed several compressors and a metering station just outside the town between 2005 and 2009. Residents began to complain of excessive noise and offensive odors and said they suffered adverse health effects. In 2008, the residents complained to the Texas Commission on Environmental Quality, which conducted monitoring in 2009 and 2010 and concluded that emissions from the compressors “would not be expected to cause short-term adverse health effects, adverse vegetative effects, or odors.” The Texas Department of State Health Services performed medical tests on 28 DISH residents for exposure to chemicals, and tested tap water; it found no evidence of exposure to chemicals. Those findings were contradicted by tests conducted by Plaintiffs’ expert, Wolf Eagle Environmental, which found that Plaintiffs were exposed to harmful emissions of benzene, xylene, ethyl benzene, toluene and other harmful chemicals.

Finally, 18  DISH residents sued the pipelines in 2001 for damages, alleging nuisance and trespass. The town of DISH also filed suit, seeking damages for the loss of tax revenue resulting from reduced property values caused by the compressor station.

The Plaintiffs’ suits were consolidated into one suit and the case was transferred from Denton to Fort Worth. The trial court then granted the pipelines’ motions for summary judgment and dismissed all claims. The Plaintiffs’ appeal was transferred to the Amarillo Court of Appeals.

The court of appeals held that the Plaintiffs had properly pleaded claims for nuisance and trespass and remanded the case to the trial court for trial.

The pipelines first argued that the migration of airborne chemicals from their facilities across Plaintiffs’ properties cannot constitute a nuisance, because nothing was “deposited” on Plaintiffs’ properties. The court of appeals disagreed: “the migration of airborne particulates can constitute an actionable trespass.” At trial, Plaintiffs “must establish causation, i.e., that the particulates emanated from the activities of Appellees and that Appellants sustained some compensable injury as a result thereof.”

The pipelines argued that their activities cannot constitute trespass or nuisance because they were conducted within governmental regulations, and imposing liability for lawful activities would allow judicial regulation of activities sanctioned by statute and regulation. The court disagreed. Plaintiffs are not seeking to alter or change emission standards, or to prohibit the plaintiffs’ conduct, but only damages caused by that conduct. “Just because Appellees are operating their natural gas compression facilities within the applicable regulatory guidelines does not mean that Appellants have not suffered compensable injuries as a result of those operations.” The court held, however, that Plaintiffs’ efforts to recover damages for any future diminution in the value of their properties or “damages” of $1,000 per day for trespass would be barred, because those claims “look more like a penalty than a claim for recovery of existing actual damages.

Finally, the pipelines argued that Plaintiffs’ claims were barred by limitations, because they knew or should have known of their claims more than two years prior to filing suit. Without any real analysis, the court held that the pipelines had failed to carry their burden of showing that Plaintiffs’ claims were barred by limitations.

Last year, two juries awarded damages against two operators based on nuisance claims. With more drilling and producing activities in populated areas, such claims are bound to continue.

Calvin Tillman, former mayor of DISH, has since set up his own environmental company, ShaleTest,, described on its website as “the only organization that provides free and certified environmental testing to those negatively impacted by natural gas development.” Tillman lists Josh Fox as one of the company’s “advisors.” Fox is infamous for his film Gasland, a much-criticized anti-industry documentary.

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Two recent articles brought to mind the trade-offs in the debate over hydraulic fracturing.

First, the Department of Environmental Conservation of New York State issued its Final Supplemental Generic Environmental Impact Statement, on the environmental impacts of allowing hydraulic fracturing in New York. New York has had a moratorium on fracking for the last several years, even though a substantial portion of the Marcellus formation underlies the state. It appears that New York is headed for a permanent ban on the practice.

I haven’t studied the EIS, which runs to several hundred pages. But it is a thorough catalogue and discussion of the environmental impacts of the drilling boom from fracking and horizontal drilling, most of which we know well by now: water use, surface spills, groundwater impacts, waste disposal, air quality, greenhouse gas emissions, health risks, visual impacts on the landscape, truck traffic, seismicity — all are discussed in great detail.

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Google has teamed up with the Environmental Defense Fund to detect leaks in gas lines in the Los Angeles Area, Boston, Indianapolis, Staten Island, Syracuse, and Burlington, Vermont. Google attached methane detectors to the cars it uses to create its street map images and has mapped the locations where it found levels of methane high enough to indicate pipeline methane leaks. A great use of new technology for a public purpose. View Google’s maps here.  EDF has teamed up with industry and scientists to attack methane emissions, part of EDF’s efforts to combat global warming.

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Christi Craddick, Chairman of the Texas Railroad Commission, testified in Washington yesterday before the House Science and Technology Committee, chaired by Lamar Smith, as part of a panel addressing environmental effects of hydraulic fracturing and wastewater disposal.  Introductory remarks and testimony can be viewed here.  The testimony reflects, I think, the political polarization in Washington. Because of recent reports about earthquakes in North Texas and Oklahoma, a lot of the testimony related to those issues, as well as the ability of local municipalities to regulate drilling in their jurisdictions – an issue now before the Texas Legislature.

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The Colorado Oil and Gas Conservation Commission now allows landowners with complaints against operators to file their complaint online. Go to and click on “Complaints” in the left-hand column.If you’re a surface owner with no mineral rights and you have objections to a proposed well location, you can also get the COGCC to inspect the site and consider your objections and require the operator to accommodate your concerns.

The online portal is very user-friendly and a real effort to make it easier for the public to participate in the process. The Texas Railroad Commission should take note.  The COGCC has also significantly increased its oversight staff, increased its collaboration with local governmental entities, sponsored studies on air and water impacts, and adopted policies on health and safety issues.

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