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Energy company appeals Pennsylvania court decision on ‘rule of capture’ |

Energy company appeals Pennsylvania court decision on ‘rule of capture’

| Wednesday, April 18, 2018 3:42 p.m
The Poseidon well pad in Penn Township was the first fracking well to be undertaken by Huntley & Huntley Energy Exploration of Monroeville.

A Houston-based natural gas company plans to appeal a recent Pennsylvania Superior Court decision that said companies could be held liable for trespassing when unconventional wells release gas from unleased properties.

Southwestern Energy wants all 20 judges of the court to hear the case that originated out of Susquehanna County. A decision by two judges this month sent shock waves through the oil and gas industry over worries that the “rule of capture” will no longer apply to hydraulic fracturing, or fracking.

The legal principle comes from the fact that pools of oil and gas naturally migrate across property boundaries, making ownership difficult to determine.

The Briggs family, which filed the suit in 2015, argued that the principle shouldn’t apply to natural gas in the Marcellus Shale formation because it doesn’t migrate unless fracking is used to release it.

The Superior Court agreed and sent the case back to the county court.

In a 97-page motion filed Monday, Southwestern said the decision could have an adverse impact on oil and gas production nationwide, not just in Pennsylvania.

“Because hydrofracturing is the most economic and commonly used method of producing oil and gas across the country, and because Pennsylvania is the second-largest natural gas producing state, this court’s decision unsettles the legal landscape for the entire industry,” the motion said.

The Pittsburgh-based Marcellus Shale Coalition was one of several trade organizations filing briefs in support of Southwestern.

“The partial panel’s decision upends settled rules, contradicts policy and injects considerable uncertainty in the industry,” the coalition said in its amicus curiae (“friend of the court”) brief.

The coalition said the decision will hamper oil and gas production and upend property rights.

“If the decision stands, unleased landowners can prevent natural gas development on all surrounding properties to the detriment of all others who exercised their rights to develop their oil and gas interests,” the brief said.

The coalition noted that fracking is not a new technology that requires the application of new legal principles.

“The industry developed the more modernized form of hydraulic fracturing in the late 1940s. … The rule of capture does not change with the advancement of new technology,” the brief said.

Stephen Huba is a Tribune-Review staff writer. Reach him at 724-850-1280, or via Twitter @shuba_trib.

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