PA Court Questions the Rule of Capture and Unconventional Shale Gas Development

Case could open the door for subsurface trespass liability.
PA Court Questions the Rule of Capture and Unconventional Shale Gas Development - News

Updated: September 7, 2018

PA Court Questions the Rule of Capture and Unconventional Shale Gas Development

Courtesy Penn State Extension

On April 2nd, the Pennsylvania Superior Court stated it is possible that hydraulic fracturing resulting in natural gas extraction from adjoining land may constitute a claim for trespass. In Briggs v. Southwestern Energy Production Company, a two-judge panel questioned the common understanding that the rule of capture applies to current shale drilling operations.

The defendant, Southwestern Energy, hydraulically fractured a well on land adjacent to the Briggs property, for which the company did not have a lease. The Plaintiff filed a complaint asserting claims of trespass and conversion. The trial court granted Southwestern’s motion, agreeing that the rule of capture applied.

The case was appealed to the Superior Court, with the Plaintiff stating there were significant differences between fracking and the conventional process of drilling into a reservoir of fluids, and gas in shale formations would be trapped if not forced out by hydraulic fracturing methods.

The rule of capture, a common law from England that was adapted by many U.S. jurisdictions, establishes a rule of non-liability and ownership for captured natural resources, including oil, gas, groundwater and game animals. Only two cases nationwide were found to address this issue by the Superior Court. In a 2008 case, the Texas Supreme court determined there was no actionable trespass caused by unconventional wells. In a 2013 case, the West Virginia Federal Court disagreed, stating that under the rule of capture for unconventional development, companies could tell the landowner to sign a lease on the company’s terms or the company could take the oil and gas by rule of capture without compensation. The case was settled out of court.

Based on these cases, the Superior Court held that, in Pennsylvania, “the rule of capture does not preclude liability for trespass due to hydraulic fracturing. Therefore, hydraulic fracturing may constitute an actionable trespass where subsurface fractures, fracturing fluid and proppant cross boundary lines and extend into the subsurface estate of an adjoining property for which the operator does not have a mineral lease, resulting in the extraction of natural gas from beneath the adjoining landowner’s property.”

The court reversed and remanded the case, to determine if the Defendant’s operations had in fact resulted in subsurface trespass, noting it could be difficult to prove.

Mr. Ross Pifer, Director of the Center for Agricultural and Shale Law, stated there are two critical flaws that will muddy the waters in the Superior Court’s decision. One is the court draws a distinction between hydraulic fracturing and conventional gas drilling, when basically all wells in the commonwealth, both conventional and unconventional, are hydraulically fractured. The court has called shale gas ‘non-migratory in nature’ when in fact shale gas does naturally escape and gather in shallower rock formations over eons of time. “I think this case could have an impact on shale development because it’s opening the door for trespass liability. There still would have to be proof of trespass, but this court is saying that it’s possible for a company to be held liable for trespass”.