On January 22, the PA Supreme Court issued an opinion overturning the April 2018 PA Superior Court ruling finding Southwestern Energy drilling company trespassed on the property of Susquehanna County landowners by taking natural gas from an adjacent property without permission through its unconventional drilling operations.
Southwestern Energy argued, and a lower court agreed, there was no trespass because of the “rule of capture.”
Rule of capture means the first person to capture a natural resources owns that resource under English common law. It can be applied to groundwater or natural resources like oil and gas. Click Here for a Penn State Law presentation on the issue.
The PA Superior Court ruled prior cases involving the rule of capture do not apply to unconventional natural gas drilling because hydraulic fracturing is not the same as oil and natural gas freely migrating from a reservoir and across property lines.
The PA Supreme Court said, however, “...(W)e reject as a matter of law the concept that the rule of capture is inapplicable to drilling and hydraulic fracturing that occurs entirely within the developer’s property solely because drainage of natural resources takes place as the direct or indirect result of hydraulic fracturing, or that such drainage stems from less “natural” means than conventional drainage.
“On the state of the present record, this alone does not establish that a physical intrusion into a neighboring property is necessary for such action to result in drainage from that property.
“The Superior Court panel appears to have assumed, if implicitly, that such
occurrences were impossible – but, again, there is no basis in the record for such an assumption.
“Thus, to the extent this lawsuit goes forward on Plaintiffs’ new, physical-intrusion theory, Plaintiffs will bear the burden of demonstrating that such an intrusion took place.
“In summary, the parties to the appeal are in agreement – and we concur as well – that the rule of capture remains extant in Pennsylvania, and developers who use hydraulic fracturing may rely on pressure differentials to drain oil and gas from under another’s property, at least in the absence of a physical invasion.
“The Superior Court panel erred to the extent it assumed that either (a) the use of hydraulic fracturing alters this rule, or (b) where hydraulic fracturing is utilized, such physical invasion is a necessary precondition in all cases for drainage to occur from underneath another property.
“More broadly, insofar as the panel’s decision may be construed to suggest that a natural-versus-artificially-induced-flow litmus should be employed to determine whether the rule of capture applies in a given situation, that standard rests on a false distinction and is disapproved.
Related Article:
[Posted: January 22, 2010] PA Environment Digest
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