Category Archives: Legal Updates

By: T.H. Lyda, Esq.

The U.S. Environmental Protection Agency (EPA) said that drinking water is safe to consume in Dimock, Pa., a town that has attracted national attention after residents complained about hydraulic fracturing allegedly leading to contaminated water. EPA released the final set of data on May 11 and found no reason for further action.

The EPA completed testing water at 61 homes in Dimock where residents have complained since 2009 of cloudy, foul-smelling water after Cabot Oil & Gas Corp drilled for gas nearby.

“This set of sampling did not show levels of contaminants that would give EPA reason to take further action,” Roy Seneca, a spokesman for the regional EPA office said in a story written on May 11 by the Associated Press about the final set of data released Friday. The agency released data for only 59 of the homes, as they could not contact residents at two of them.

Dimock became ground zero for the debate about fracking after Josh Fox, the director of the controversial 2010 documentary called “Gasland,” visited the town and met residents who feared their water was contaminated by the drilling. Fox has been criticized for the approach taken during the film and not relying upon sound science. The film arguably mischaracterizes drilling and hydrofracking and glosses over facts that contradict Fox’s view of the alleged dangers of the activity.

Environmental and health groups, however, say that some fracking operations near homes and schools pollute land and water although the evidence suggests that this long-time practice is safe and a key to America’s energy independence. Techniques including fracking have revolutionized the U.S. natural gas industry by giving companies access to vast new reserves that could supply the country’s demand for 100 years.

The EPA reported it will re-sample four wells where previous Cabot and state data showed levels of contaminants, but where EPA’s first round of testing did not find levels that would require action, Seneca said in the story.

The agency found one well in the last batch of data that contained methane, a main component of natural gas.

Seneca would not say what the agency thought the source of that methane was, but said the agency will conduct a review of the data.

Residents have complained that methane could be from fracking, but methane frequently occurs naturally in wells in energy-rich areas and can come from many sources.

Over the course of the EPA tests that have been released since mid-March, contaminants were found in some wells but the EPA said those levels were safe. In the first set of tests, for example, six of 11 homes showed concentrations of sodium, methane, chromium or bacteria. Arsenic was also found at two homes, but, again, levels were deemed safe.

Contaminants found in the tests are more likely indicative of naturally occurring background levels or from other non-fracking activities. Arsenic is frequently found in well water all over the United States and naturally occurs when soils and ores weather and decompose.

The United States Environmental Protection Agency (“EPA”) just released its first comprehensive draft report examining whether the process of hydraulic fracturing contaminates drinking water supplies. The report, which is now open for a brief period of public comment, will form a key piece of scientific evidence in the debate over natural gas extraction’s impact on water supplies once finalized. Although the science behind the report is complex, and greatly impacted by facts particular to the Pavillion, Wyoming area which has a large volume of gas production wells and certain unique geologic features, the EPA reached several tentative conclusions that will frame the local debate on the environmental impact of hydraulic fracturing for the next several years.

First, the EPA concludes that detection of high concentrations of BTEX components (benzene, toluene, ethylbenzene and xylene), gasoline and diesel range organics, and total purgeable hydrocarbons in ground water samples from shallow monitoring and drinking wells indicate that lecheate from local surface pits used by the gas industry have adversely impacted drinking water supplies. The EPA notes that, at this site, aromatic solvents typically comprised of various BTEX mixtures were used in a breaker as part of the gas production process.

Additionally, the EPA detected elevated levels of potassium, chloride, synthetic organic compounds, and BTEX components in its deep water monitoring wells. With regard to those findings, the EPA noted that hydraulic fracturing fluids typically used at the Pavillion Wyoming site contained 6% potassium chloride, as well as potassium metaborate and potassium hydroxide as a crosslinker and solvent.

Finally, the EPA concluded that dissolved methane levels in domestic water wells generally increased in those wells in direct proportion to their proximity to production wells. One methane blowout actually occurred during a recent well installation. Based on these collective findings, the EPA ultimately concluded that “… the data indicates likely impact to ground water that can be explained by hydraulic fracturing.”

The attorneys at Burns White who focus their practices on the oil and gas industry, environmental matters, and toxic exposure defense understand that this EPA draft report will immediately impact the Pennsylvania gas industry – from the development of local ordinances to the recently delayed vote on the contentious new Article 7 of the Delaware River Basin Commission’s Water Quality Regulations. It will also be immediately cited by Plaintiffs’ counsel in water well contamination lawsuits. With an interdisciplinary approach to staffing matters using lawyers with both technical backgrounds and sophisticated, yet practical problem solving skills, Burns White welcomes an opportunity to assist in preparing comments for submission to the EPA, or to speak with you more generally about these issues.

T.H. Lyda, Chad Wissinger, Jeff Roberts and Stephie-Anna Ramaley co-authored this summary, and can be reached at (412) 995-3000. Mr. Lyda, a member of the firm’s Executive Committee, focuses his practice on defending toxic tort exposure cases. Mr. Wissinger chairs the firm’s Environmental Practice Group, and has a background in environmental studies and geology. Mr. Roberts chairs the firm’s Oil and Gas Group, and has worked for years drafting leases and resolving real estate matters associated with the acquisition and sale of oil and gas rights. Ms. Ramaley is a senior associate in the Environmental Practice Group, and has an undergraduate degree in chemistry and a master’s degree in forensics.

By: T.H. Lyda, Esq. and Jeffery D. Roberts, Esq.

September 7, 2011 – The Pennsylvania Superior Court issued a decision that reverberated through the natural gas industry by putting long standing precedent, as well as thousands of gas leases, in doubt. The court issued its decision in Butler v. Charles Powers Estate. The case involves a deed recorded in 1881 in which the grantor, Charles Powers, conveyed 244 acres of land in Apolacon Township, but reserved “one half the minerals and Petroleum Oils” for himself and his heirs. The Butlers, who own the land, filed a complaint to quiet title in the natural gas naming the defendants as Charles Powers’ estate, and the estate’s heirs and assigns. The heirs of Mr. Powers filed for a declaratory judgment, arguing that they owned the natural gas by virtue of the reservation of minerals in the deed. The Butlers responded by filing preliminary objections, claiming that reservation of minerals did not include the natural gas. The Butlers relied on the “Dunham Rule,” which developed from the Pennsylvania Supreme Court’s opinion in Dunam v. Kirkpatrick, 101 Pa. 36 (1882) and can be stated as:

[I]f, in connection with a conveyance of land, there is a reservation or an exception of “minerals” without any specific mention of natural gas or oil, a presumption, rebuttable in nature, arises that the word “minerals” was not intended by the parties to include natural gas or oil.

Highland v. Commonwealth, 400 Pa. 261, 276-77 (1960). The trial court agreed with the Butlers and granted their preliminary objections, holding that the Dunham Rule controlled the issue because the reservation did not specifically include natural gas. The heirs of Charles Powers appealed to the Superior Court.

On appeal, the heirs of Charles Powers argued that: 1) Marcellus shale is a mineral consistent with the reservation of rights in the deed; 2) Marcellus gas is different from free flowing wild conventional gas; and 3) similar to coal bed methane gas where the owner of the coal owns the gas, the owner of the shale owns the Marcellus gas. The Superior Court found merit in these arguments, and reversed the trial court’s decision and remanded the case for further proceedings to determine whether: 1) Marcellus shale constitutes a “mineral”; 2) shale gas constitutes the type of natural gas contemplated by the Dunham Rule; and 3) Marcellus shale is similar to coal to the extent that whoever owns the shale, owns the shale gas.

If it is ultimately decided that Marcellus shale constitutes a mineral, dozens of energy companies could lose the right to drill for shale gas.