On January 7, 2014, the Texas State Supreme Court heard arguments on a controversial case, the ramifications of which could have far reaching consequences for the state’s oil and gas industry. The issue at hand is what has become known as underground trespassing.
FPL Farming operates a rice farm in Liberty County, Texas just outside of Houston. In 1996, they protested the Class I Injection Well permit that had been approved for Environmental Processing Systems. Class I wells are used for the disposal of EPA-determined, non-hazardous liquid wastes thousands of feet underground. A year later EPS finished the well, a mere 400 feet away from the rice farm, and has since injected over 100 million gallons of wastewater. FPL Farming alleges that wastewater from the disposal well has seeped into the saltwater aquifer beneath their farm, and in 2006 filed suit against EPS. After initially losing that case, FPL won on appeal, which now brings the case before the state supreme court.
The primary focus of the case has been on how far underground property rights extend, but FPL argues that the case pertains to groundwater rights – which Texas courts have established belong to the surface owner regardless of depth. The farm’s concern is that the wastewater seepage could devalue their property, as desalination technology could eventually make the saltwater aquifer potable. In their defense, FPL’s expert witness, a former environmental regulator for the state, has provided his opinion that the wastewater has likely seeped into the saltwater aquifer. This opinion is based on a formula used by state and federal regulators to make such determinations.
EPS’s stance on the matter is that the composition of the injected wastewater is not any different than that of the saltwater aquifer, and states that FPL has not shown proof of pollution. This is where the concept of trespassing enters the matter. If FPL can persuade the court of the likelihood that the wastewater has migrated onto their property, they won’t actually need to provide proof of pollution. Trespassing can be prosecuted without the necessity of proving harm by establishing that one party crossed onto another party’s property without consent.
If FPS wins the case in the State Supreme Court, it would set a precedent that could potentially place significant costs on the oil and gas industry. Property owners statewide could file suit against neighboring wells, and well operators would be forced to purchase additional property rights. As the oil and gas industry as well as property rights are both hot topics in the Lone Star State, many will be anxiously awaiting the court’s ruling.
Read a more detailed account of the case history in this article by Charles Nixon, which appeared in the Texas Journal of Oil, Gas & Energy Law.
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