Oil and Gas Lawyer Blog

Published on: February 25, 2017

TAMU Energy Law Symposium

Texas A&M has asked that I post notice of its 2017 Energy Law Symposium on “The Future of Energy”. The symposium, scheduled for March 23–24, 2017, will convene industry experts, academic commentators and public officials to discuss a wide range of issues bearing on anticipated needs, policy challenges and proposed reforms in the U.S. and global energy markets. Panel, debate and keynote sessions will address legislative and regulatory priorities, power generation, allocation wells, trans-boundary resource management, environmental considerations, bankruptcy and much more. $50 Registration / $150 Registration + CLE (12.75 CLE credit hours pending approval). The agenda for the symposium can be viewed here: energy-symposium-agenda-2feb17(4)

Published on: February 25, 2017

Jack Pope, Former Chief Justice of Texas Supreme Court, Dies at age 103

By John McFarland

I served as a clerk for Justice Ross Doughty from 1975-1976, after graduating from UT Law School. Justice Pope was serving on the court at the time. Jack Pope served on the Supreme Court from 1964 until his retirement in 1985, and served as Chief Justice from 1982 to 1985, following the retirement of Chief Justice Joe Greenhill. There were many great jurists on the court in that era, including Greenhill, Steakley, Reavley, Walker, Norvell, and Johnson. They were truly servants of the law, and Justice Pope was among the best.

Requiscat in Pace.

Here is an obituary from Osler McCarthy’s Texas Supreme Court Advisory:

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Published on: February 20, 2017

Railroad Commission Enforcement Data Online

By John McFarland

Below is a press release from the Texas Railroad Commission about the “enhancement” of its website to provide reports of enforcement data related to oil and gas operations. The web page where the data can be viewed is here.

I have written before about the need for the RRC to put enforcement data online. At present it is not possible for landowners to track RRC actions in response to landowner complaints about operator activities. Compare the non-specific data provided on the RRC website to the specific online complaint-tracking process made available to Colorado residents by its Oil & Gas Conservation Commission, found here. The RRC wants you to know that it is doing its job, without disclosing details of any particular enforcement action. The Colorado Oil & Gas Commission provides useful information to landowners on how to make and track their complaints involving oil and gas activities.

Published on: February 9, 2017

High Tech to detect pipeline leaks

By John McFarland

Southwest Research Institute in San Antonio is developing smart technology to improve the industry’s ability to detect pipeline and industry facility emissions of hydrocarbons into the atmosphere. The system uses smart computer algorithms that learn to distinguish emissions from natural atmospheric conditions and report them to be repaired. Watch the story here. Great idea. Let’s hope the industry embraces it.

Published on: January 25, 2017

Texas Supreme Court Agrees to Hear Three Cases of Interest to Land and Mineral Owners

By John McFarland

Last week the Texas Supreme Court granted petitions to hear appeals of two cases that could significantly affect the rights of Texas land and mineral owners: Atmos Energy Corp v. Town of DISH, 15-0613, and Lightning Oil Co. v. Anadarko E&P Onshore LLC, 15-0910. Last month, the court agreed to hear Sabine Oil & Gas Corporation’s appeal in Forest Oil Corp. v. El Rucio Land and Cattle Company, 14-0979, a case in which the court had previously denied the petition for review. Oral argument in the Forest Oil case is set for February 8. Dates for oral argument in Atmos v. DISH and Lightning Oil v. Anadarko have not yet been set.

In Atmos v. DISH, the town of DISH and residents of the town are seeking damages for injuries they claim are caused by noise and emissions from defendants’ gathering and compression facilities located in and near the town. The trial court dismissed plaintiffs’ claims, but the Amarillo Court of Appeals held that the plaintiffs had stated causes of action and were entitled to trial. For a more detailed description of the case, read my post here. Among other arguments, the pipeline companies assert that plaintiffs’ claims are barred because their activites were authorized by governmental regulations and imposing liability for lawful activities would allow judicial regulation of activities sanctioned by statute and regulation. The Amarillo court disagreed: “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.”

Sabine Oil & Gas makes a similar argument in Forest Oil v. El Rucio. (My prior posts on this case can be found here and here.) Sabine (formerly known as Forest Oil) argues that Jimmy McAllen’s $20 million arbitration award for damages caused by pollution of his ranch should be reversed because the case interferes with the Railroad Commission’s jurisdiction over oil field contamination. The RRC has jurisdiction over cleanup of environmental contamination related to oil and gas activities and has an open proceeding relating to Sabine’s efforts to remediate contamination on McAllen’s ranch. The Corpus Christi Court of Appeals held that Texas law expressly grants a landowner a private cause of action for damages caused by violation of Texas conservation laws and that McAllen’s claims should not be barred or stayed by the ongoing remediation activities supervised by the RRC. The court made reference to sections 85.321 and 85.322 of Texas Natural Resources Code, the first of which expressly grants a private cause of action for damages for violation of Texas conservation laws, and the second of which provides that nothing in the law governing Railroad Commission jurisdiction “shall impair or abridge or delay a cause of action for damages or other relief that an owner of land …. may have or assert against any party violating any rule or order of the commission or any judgment under this chapter.”

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Published on: January 19, 2017

Permian Basin Deals

By John McFarland

This article appeared yesterday in the New York Times: Land Rush in Permian Basin, Where Oil Is Stacked Like a Layer Cake. Exxon announced a $6.6 billion deal to buy the Bass family’s position in the Permian. Noble Energy agreed to buy Clayton Williams Energy for $2.7 billion, acquiring Williams’ 120,000 acres in the Permian. Anadarko announced it is selling its Eagle Ford shale leases to Sanchez Energy and Blackstone Group for $2.3 billion so it can concentrate on developing its leases in the Permian. SM Energy and EOG Resources are also selling assets in other fields to acquire larger interests in the Permian. According to the Times, there have been more than $25 billion of mergers and acquisitions in the Permian since June last year. The frenzy to acquire assets has become known as “Permania.” Companies claim they can make money at as little as $40/bbl. The reason: multiple “stacked” zones in the Permian, principally the Spraberry and Wolfcamp formations, allow multiple wells at different depths on each property.

Published on: January 12, 2017

Russia Today

By John McFarland

I read an article today saying that Russia Today has been publishing articles critical of hydraulic fracturing in an effort to suppress U.S. shale production and help Russia regain its footing as the world’s largest gas producer. I had never heard of Russia Today, so I looked it up – on Wikipedia, of course. According to Wikipedia, Russia Today is a news TV and news network owned by the Russian government that operates stations out of Moscow and provides internet content in several languages, including Russian and English. It has been accused of being a propaganda outlet for the Russian government and spreading disinformation – now called “false news.” It has indeed published articles highlighting the alleged environmental dangers of hydraulic fracturing. Russia Today alleges that it has 70 million viewers.

In light of the recent news about Russian interference in the presidential election, it is interesting that the Russian government is also trying to influence U.S. public opinion for its benefit “in plain sight” with its news/propaganda TV and Internet presence.

Published on: January 9, 2017

Landowners Lose in Denbury v. Texas Rice Land Partners

By John McFarland

Last week the Texas Supreme Court wrote the final chapter in Texas Rice Land Partners’ efforts to prevent Denbury Green Pipeline-Texas, LLC from condemning an easement across its land for a CO2 pipeline. The court held in Denbury Green Pipeline-Texas, LLC, v. Texas Rice Land Partners, Ltd., et al., No. 15-0225, Denbury opinion, that Denbury had shown as a matter of law that its line would serve a “public use.” (Our firm represented Texas Rice Land Partners in this appeal.)

This fight began in 2007, when Texas Rice Land Partners denied Denbury permission to enter its property to survey for a CO2 pipeline. Under the law as then understood, Denbury had obtained the requisite permit from the Texas Railroad Commission to construct its line and under that authority asserted that it had the right to condemn an easement for the line and therefore the right to survey Texas Rice Land’s property to construct the easement. Texas Rice Land denied Denbury’s right to survey, asserting that Denbury’s use of the line would be only for its private purposes and not for a “public use.” The trial court denied Texas Rice Land’s effort to stop the surveying; Denbury surveyed the easement and constructed its line across Texas Rice Land’s property. But Texas Rice Land appealed the trial court’s ruling. The Beaumont court of appeals affirmed the trial court but, in 2012 the Texas Supreme Court reversed and remanded the case. Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas LLC (363 S.W.3d 192 (Tex. 2012) (Texas Rice I)

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Published on: December 30, 2016

Happy New Year

By John McFarland

Published on: December 28, 2016

Protest Camps in Reeves County?

By John McFarland

The protest movement over the Dakota Access pipeline in North Dakota has moved to West Texas. According to the Houston Chronicle, three camps are taking shape – two camps to protest the proposed Trans Pecos pipeline, near Alpine, and one camp in Toyahvale, home to the famous spring and pool at Balmorhea State Park, to protest Apache’s plan to develop its Alpine High discovery. Energy Transfer Partners, the owner of the Dakota Access line, is also the developer and owner of the Trans Pecos line. Some of the protesters who camped out in North Dakota are moving down to the camps in Reeves County. The segment of the Dakota Access line being protested in North Dakota has been at least temporarily halted by the Corps of Engineers, but efforts to block construction of the Trans Pecos line have so far been unsuccessful.

Efforts to protect the spring at Balmorhea State Park focus more on use of fresh groundwater for hydraulic fracturing than on risk of pollution of the springs. Apache claims it will not tap the spring’s aquifer but will use deeper brackish water for fracking. But protestors remember Clayton Williams’ use of unrestricted pumping rights from the aquifer that supplied Comanche Springs in Fort Stockton. In 1951, Clayton Williams Sr. drilled 52 irrigation wells into the aquifer that fed the springs, and within hours the spring flow slowed to a trickle, and has never recovered. The Texas Supreme Court held that, under Texas’ “rule of capture,” Williams had the right to pump as much water as he wanted and had no liability for drying up the springs.

More recently, Clayton Williams Jr. has sought to sell water from these same wells for municipal supply to the City of Midland, but so far the Middle Pecos Groundwater Conservation District has blocked his efforts. The case is now pending on appeal in the El Paso Court of Appeals, Cause No. 08-16-00382-CV, Fort Stockton Holdings, L.P. v. Middle Pecos Groundwater Conservation District.