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Published on: May 22, 2023

Dr. Scott Tinker on the Future of Energy

Below is an article from Dr. Tinker, written in advance of his upcoming lecture at the International Energy Summit on June 1, used with permission.

When it comes to managing Energy, optionality is vital

Dr. Scott Tinker, Director, Bureau of Economic Geology, The University of Texas at Austin, talks about the challenges we face in addressing the multiple and varied needs of energy markets throughout the world and how we need to better understand all the vectors involved if we are going to succeed. He will be delivering the “Boulos Lecture Series” at the forthcoming International Energy Summit (IES) hosted by the AIEN in Miami from May 30 to June 1.

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Published on: May 12, 2023

A Great Resource for New Mexico Oil and Gas Law

By John McFarland

Thomas C. Turner, Jr. has written a great brief summary of oil and gas law in New Mexico. A great resource for anyone who owns minerals in New Mexico. You can buy it on Amazon.

Published on: March 10, 2023

World Energy Consumption by Source, 1900 to 2021

By John McFarland

Charted: Global Energy Consumption by Source, and Carbon Emissions (1900-2021)

Published on: March 3, 2023

RBN Energy Blog Square One Series: Excellent Tutorial on Exploration and Production

By John McFarland

I ran across this blog recently, which is producing a series of blog posts on modern techniques of exploration and production, from leasing through well production and plugging. Excellent tutorial for the lay person.

https://rbnenergy.com/blog-series/square-one

Published on: August 8, 2022

Ownership of Pore Space – North Dakota Supreme Court Opinion Protects Surface Owners’ Rights

By John McFarland

Last week the Supreme Court of North Dakota handed down its opinion in Northwest Landowners Association v. State of North Dakota, 2022 ND 150. The court struck down portions of a statute passed by the North Dakota Legislature, Senate Bill 2344, dealing with ownership rights to “pore space.” North Dakota law defines “pore space” as “a cavity or void, whether natural or artificially created, in a subsurface sedimentary stratum.” The purpose of the statute was to facilitate operators’ use of pore space for saltwater disposal and CO2 injection in tertiary recovery operations, and to deny landowners the right to compensation for such uses. But the language of the statute is much broader:

Notwithstanding any other provision of law, a person conducting unit operations for enhanced oil recovery, utilization of carbon dioxide for enhanced recovery of oil, gas, and other minerals, disposal operations, or any other operation authorized by the commission under this chapter may utilize subsurface geologic formations in the state for such operations or any other permissible purpose under this chapter. Any other provision of law may not be construed to entitle the owner of a subsurface geologic formation to prohibit or demand payment for the use of the subsurface geologic formation for unit operations for enhanced oil recovery, utilization of carbon dioxide for enhanced recovery of oil, gas, and other minerals, disposal operations, or any other operation conducted under this chapter. As used in this section, “subsurface geologic formation” means any cavity or void, whether natural or artificially created, in a subsurface sedimentary stratum.

North Dakota (unlike Texas) has a statute, the Damage Compensation Act, requiring that requiring a mineral developer to compensate the surface owner for “lost land value, lost use of and access to the surface owner’s land, and lost value of improvements caused by drilling operations.” N.D.C.C. sec. 38-11.1-04. Senate Bill 2344 amended the Damage Compensation Act to exclude “pore space” from its definition of “land.”

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Published on: November 2, 2021

Excellent OpEd by Dr. Scott Tinker on UN Climate Conference and Critique of IEA Report “Net Zero by 2050: A Roadmap for the Global Energy Sector”

By John McFarland

Scott Tinker says “The Road to Glasgow is Paved with Bad Assumptions.” No one knows more about the economics of climate change than Scott Tinker.

Published on: July 8, 2021

Bills Addressing Flaring in Texas Legislature

By John McFarland

The recently completed session of the Texas Legislature several bills were filed addressing flaring from oil and gas wells — none of which passed. The number and variety of bills does, however, indicate the increased level of interest and concern about unwarranted flaring of natural gas.

HB 1377: Revises the Tax Code to eliminate the exemption from severance tax for gas “produced from oil wells with oil and lawfully vented or flared.

SB 1293 and HB 1494: Revises the Tax Code to impose a severance tax of 25% on flared gas.

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Published on: April 23, 2021

Key Laws Texas Landowners Need to Know

By John McFarland

Here is link to an excellent publication by Tiffany Dowell Lashmet, Assistant Professor and Extension Specialist at Texas A&M AgriLife Extension. Print it out and save it.

Published on: March 18, 2021

Endeavor v. Energen: What does a court do if a lease retained acreage clause is ambiguous?

By John McFarland

A colleague recently pointed out to me that I had miss-read the Texas Supreme Court’s recent opinion in Endeavor Energy Resources v. Energen Resources Corporation. In my previous post on the case I said that the Court had concluded that the retained acreage clause being construed was ambiguous and had remanded the case for a trial on the meaning of the clause. Instead, the Court concluded that, because the clause was ambiguous, it should be construed in favor of the lessee, Endeavor.

The retained acreage clause in Endeavor’s lease allowed the lessee to retain all interest in the leased premises if, after the primary term, it drilled a new well every 150 days. The clause also allowed Endeavor to “accumulate unused days in any 150-day term … in order to extend the next allowed 150-day term between the completion of one well and the drilling of a subsequent well.” If and when the lessee failed to do so, the lease will terminate except as to specified acreage earned by wells then completed and producing. The dispute was over the meaning of the quoted language. Endeavor argued that the language allowed it to carry forward unused days across multiple 150-day terms; or alternatively, Endeavor argued that the language is ambiguous and that “the disputed language may not operate as a special limitation.” The Court concluded that the clause was indeed ambiguous and, because it operates as a “special limitation” on the lessee’s title, it should be construed in favor of the lessee.

[I]t has long been the rule that contractual language will not be held to automatically terminate the leasehold estate unless that “language … can be given no other reasonable construction than one which works such a result.” Knight, 188 S.W.2d at 566 (citing Decker, 216 S.W. 38). As explained above, the Lease’s description of the drilling schedule required to avoid termination is ambiguous under these circumstances. Courts should not treat an obligation so “lacking in definiteness and certainty as introducing” into a lease a “limitation[] leading to …termination of [a] vested estate[].” W.T. Waggoner Estate, 19 S.W.2d at 31. Because the disputed provision is ambiguous, it cannot operate as a special limitation under these circumstances.

In other words, the tie goes to the lessee. Continue reading →

Published on: March 3, 2021

What Happened to the Texas Electric Grid?

By John McFarland

Here is an excellent article in which engineers discuss the crisis that almost shut down Texas’ electric grid: Texas Electricity Crisis: Engineers Explain What Went Wrong.