Southwestern Energy Co. plans to go to the Pennsylvania Supreme Court to reverse an appeals court ruling on property rights that an industry group said has the potential to upend shale drilling in the second-largest gas-producing state in the U.S.
Drillers would be "trespassing" and liable for any gas taken from beneath unleased lands neighboring their hydraulically fractured wells if an April decision by a two-judge panel of the state's Superior Court stands. The Superior Court ruled that the long-standing "rule of capture" does not apply to hydraulically fractured wells, reversing an earlier trial court decision.
Holding shale gas drillers liable for trespassing on their neighbors' property because of the uncontrollable direction and length of the fractures they induce would upend Pennsylvania's shale gas industry, Southwestern told the court. The court denied Southwestern's appeal for a rehearing in front of a seven-judge panel June 8.
"We believe the trial court correctly applied established law that has stood for over a century, and plan to petition the Pennsylvania Supreme Court to hear this important issue," Southwestern Director of Communications Jan Sieving said. "This law encourages responsible use of Pennsylvania's natural resources and is helping establish U.S. energy independence while creating jobs."
Under the rule of capture, drillers are not liable for hydrocarbons that may seep into their wells from other properties. The Superior Court's initial April ruling held that because hydraulic fracturing releases trapped gas by fracturing rock, drillers could trespass on neighboring properties as the fractures spread underground. The release of trapped gas by fracking makes the process fundamentally different from conventional drilling, in which a vertical well is drilled into a reservoir of gas or liquids, the appeals court ruled.
Allowing the Superior Court's ruling to stand would bury shale gas drillers in lawsuits and bring the 16-Bcf/d industry to a halt, business groups warned. "The risk of complex litigation may lead to a vast reduction of development activities throughout the commonwealth," the Marcellus Shale Coalition said in its April brief to the appeals court.
The Superior Court decision reversed the trial court, which had ruled that the "rule of capture" protected Southwestern from any potential damages. In the initial suit, the Briggs family of property owners claimed that Southwestern's drilling operations next door took an unknown quantity of gas from under their 11-acre Susquehanna County farm. (Superior Court of Pennsylvania No. 1351 MDA 2017)
The Superior Court is one of Pennsylvania's two intermediate appeals courts between local trial courts and the state Supreme Court.
