This article is the first in a series of five posts.
Hydraulic fracturing activities continue to rise, and are at the center of much debate and litigation focusing on the potential health risks associated with the process. But an emerging issue with fracturing activities, and one that only the Texas courts has addressed with any significance, is whether hydraulic fracturing activities can, or should, lead to actionable subsurface trespass claims.
The Texas Supreme Court has decided a handful of cases dealing with subsurface trespass claims over the years, but only one of those cases, Coastal Oil v. Garza, 268 S.W.3d 1 (Tex. 2006), presents subsurface trespass as it relates specifically to hydraulic fracturing.
However, the Texas Supreme Court’s opinions in the other subsurface trespass cases provide valuable insight to the competing interests involved in the issue, and help to inform the Garza decision.
In 1962, the Texas Supreme Court considered subsurface trespass in the context of a secondary recovery operation in Railroad Comm’n v. Manziel, 361 S.W.2d 560 (Tex. 1962).
The plaintiff landowners claimed that the subsurface injection of water into an adjoining tract was a trespass that would result in premature flooding of their subsurface and damage their producing wells. The plaintiffs filed suit against the Texas Railroad Commission (RRC), the state’s regulatory agency for oil and gas, which had issued an order permitting the defendants to drill and inject water in their well as part of secondary recovery efforts.
The trial court sided with the plaintiffs, cancelling the RRC’s order and enjoining the injection of the water. The judgment was appealed directly to the Texas Supreme Court.
The Texas Supreme Court examined cases “covering almost every aspect of the oil and gas industry” where the plaintiff claimed damage to or encroachment on a subsurface estate and found only one situation in which an injunction was granted on a trespass theory: when there is a continuing, physical invasion by drilling across lease lines. Id. at 567.
The Court then considered the impact and importance of hydraulic fracturing activities and stated that secondary recovery operations should be encouraged.
The Court reversed the trial court’s judgment, dissolving the injunction and holding that when the RRC “authorizes secondary recovery projects, a trespass does not occur when the injected, secondary recovery forces move across lease lines, and the operations are not subject to an injunction on that basis.” Id. at 568.
This article will be continued tomorrow.
Prepared by Fulbright Fracking Blog Contributing Editor and energy partner Barclay Nicholson and Fulbright energy attorney Brian Albrecht.