Drilling water wells is
one way to foil the frackers
October
13, 2013 12:21 am
My thoughts - Personally this is a bad approach.
" It's been called the
"water well gambit" -- the 11th-hour drilling of a private water well on the
very spot a company has staked for commercial gas
production. Sometimes the tactic
used by landowners as a way to stop, or at least delay, gas development works.
Sometimes it doesn't. Pittsburgh-based EQT
Corp. is hoping it's the latter case as the company battles landowners for the
bounty that's found underneath their properties.
The oil and gas company
is involved in two lawsuits with landowners in West Virginia who, the company
insists, acted with "unclean hands" by sinking water wells in an area where EQT
wanted to tap the Marcellus Shale. The blocking strategy
has been used in West Virginia for years, according to David McMahon, a West
Virginia attorney who co-runs a website counseling landowners on matters such as
how to stop unwanted gas activity.
In a battle with oil and
gas companies, "You don't have much on your side," he
said.
"They've got the money,
they've got the experience, they've got the lawyers, and the element of
surprise. And so one of the ways you can stand up for your rights, to have some
reasonable use of your surface, is to drill a water well," he said. "Some gas
companies may think that's not fair. We don't think fairness has ever been the
standard on what gas companies can do to surface owners."
Mr. McMahon's website,
the West Virginia Surface Owners' Rights Organization, offers tip sheets with
titles such as, "You probably can refuse (or maybe block) a horizontal well on
your land."
Frequently, the
landowners who take his advice don't own the mineral rights under their
property. So-called severed estates -- where land, coal, and oil and gas may
each belong to different entities -- are common in Western Pennsylvania and in
West Virginia. In both states, the interests of the surface owners are
subservient to those of the mineral owners, which means gas companies can use
land they don't own in order to extract the gas below it. But landowners who don't
stand to benefit financially from gas development also don't want the land
damage and nuisance that come along with it.
Some may not be entirely
opposed to gas wells but they want more control over the placement of a 10-acre
well pad that roars for months during construction, drilling and fracking
operations.
Such is the case in
EQT's most recent lawsuit, involving a 937-acre farm in West Union, W.Va., where
the company wants to drill five Marcellus wells. The landowners -- three related
families -- want to build a log cabin on a hill there. This summer, they drilled
two water wells to serve the planned cabin.
In a lawsuit filed this
month in the U.S. District Court of the Northern District of West Virginia, EQT
claimed the families drilled the water wells "solely for the purpose of
attempting to prevent EQT from rightfully drilling gas wells" there, since West
Virginia law prohibits gas wells within 250 feet of existing water
wells.
EQT says the landowners
acted with "malice aforethought" and asked the court to order the water wells be
plugged, to direct the landowners not to build a cabin there, and to award the
company punitive damages.
EQT spokeswoman Linda
Robertson said the company wouldn't comment on the lawsuit but offered a general
statement that said, "From time to time, natural gas producers encounter
situations, such as this, where landowners do not own the oil and gas rights
beneath their property.
"Regrettably, we must
rely on the court to provide a decision in this particular
matter." Legal result has been
mixed
EQT has been through
this before and may be emboldened by its experience with a similar problem last
year. Another set of West
Virginia landowners drilled a water well within days of the start of the
company's operations on their land, and EQT sued using nearly identical language
to its current complaint.
"They snuck in there and
drilled a water well solely to keep us from drilling our gas well, period.
That's the only reason they drilled it," EQT's attorney David Hendrickson told a
federal judge during a hearing April 2012. Meanwhile, the company had already
shelled out more than $280,000 in preparation to drill.
William Thurman, a West
Virginia lawyer who represented the defendants at the time, was having none of
it.
First, landowners don't
sneak onto their own properties, he argued. And second, "The reason for the
lawful well is not relevant." In other words, the motive doesn't
matter.
It's an argument he made
successfully in a 2010 case when landowners drilled several water wells on empty
property to prevent Diversified Resources, a West Virginia-based company, from
drilling a Marcellus well on their land. The state court judge in that case
ruled it makes no difference that the landowners intentionally tried to block
gas development. They drilled a legal water well, and it would
stand.
But the federal court
judge handling EQT's case last year didn't see it that way. The defendants were
ordered to plug their water well so that EQT could proceed with its gas
well.
Mr. Thurman said he's
handled more than half a dozen such cases where landowners drilled water wells
or erected structures within 200 feet of a proposed gas well to stop the
drilling.
Some clients came to him
having gotten the idea from Mr. Mahon's website. Some came in search of a
solution and Mr. Thurman supplied the idea.
These days, though, he
said drilling water wells to stop gas development "probably won't work," because
of a 2011 West Virginia law that spells out exactly when existing features must
be in place before drilling begins. A similar provision is included in
Pennsylvania's Act 13 legislation. Only water wells and
structures in place at the time that the gas company submits its permit
application to the Department of Environmental Protection and the landowner
count toward the setbacks.
The Pennsylvania
experience
In 2011, the Baron
Group, a Pittsburgh-based oil and gas company, applied for permits to drill
wells on a 136-acre parcel of land in South Huntingdon, Westmoreland
County.
The landowner, who
doesn't own the mineral rights below the land, objected to the
permit.
When the gas company
revealed the location of the proposed well, the landowner moved a trailer into
the area. The company adapted and got a permit for another location, outside of
the required setback for the trailer.
But just before gas
drilling was scheduled to begin, the landowner hired a water well driller and
sunk a well in the new location. With less than 200 feet between the water well
and the proposed gas well, the landowner thought the gas company would be
prohibited from drilling.
"What struck me in that
case is that the surface owner readily admitted that they drilled the well for
the sole purpose of defeating the oil and gas well and their argument was it did
not matter what their motives were, the statute said what the statute said,"
said Steve Silverman, an attorney with Babst Calland who represented the Baron
Group before the state Environmental Hearing Board.
Perhaps more striking
was that the landowner in that case was Tenaska, a Nebraska-based energy company
that drills for oil and gas and had plans for a natural gas-fired power plant in
South Huntingdon.
The Environmental
Hearing Board judge didn't address the issue of motive. Instead, because the
Baron Group drilled its oil and gas well before Tenaska had a chance to connect
its water well to the trailer, the Baron Group got the legal advantage. Tenaska
was ordered to plug its water well.
This was the first and
only time that a case involving the water well gambit had come before the state
Environmental Hearing Board, according to its chief justice. The issue isn't as
developed in Pennsylvania courts as in West Virginia, but it's starting to show
up in other legal documents across the Marcellus
footprint.
About six months ago,
Steve Townsend, a Pittsburgh-based landowners' attorney, began to notice a new
clause in leases proposed to his clients. It was a promise that the landowner
wouldn't build anything within 200 feet of what's already on the
property.
"Anytime that something
is bad for the industry, they just remedy it by putting it into the lease," Mr.
Townsend said.
My take
1. Shows the need for surface owners rights.
2. This approach is bad for all.
3. In PA - I have seen this done with water wells and septic systems.
4. This will cause a backlash that will permit giving and getting more waivers to the industry.
