The Supreme Court of Pennsylvania heard oral arguments Sept. 12 in a “rule of capture” case that could profoundly impact hydraulic fracturing in the Marcellus Shale.

At issue in Briggs vs. Southwestern Energy Production Co. is a fracture that crossed a property line, releasing natural gas that moved back across the line to be captured at the wellbore. The plaintiffs in the case, the Briggs family, maintain that because Southwestern’s fracture extended to the subsurface of their property and allowed the extraction of natural gas on their property, the company had trespassed and the extraction of gas was unlawful.

In its defense, Southwestern asserted that it never entered or drilled on the plaintiffs’ property and that the rule of capture—developed from English common law and affirmed by the Pennsylvania in cases dating to 1889—made the extraction legal.

“The industry in this case takes the position that when you’re hydraulically fracturing rock, you don’t really know where the fractures are going to go,” Harry Weiss, practice leader of the Philadelphia-based Ballard Spahr law firm’s environment and natural resources group, told HartEnergy.com. “As such, because it’s too difficult to ascertain, the rule of capture should apply so any of the neighbor’s gas you might happen to pull … would be yours—you captured it and you would not owe the neighbor any compensation.”

The rule of capture is an exception to the law of trespass, Weiss said. It acknowledges that natural gas is free to move about on its own. A company extracting gas on its property or a property it leases is entitled to gas that may have migrated to its wellbore from a neighboring property. However, a company cannot drill from its property to a neighbor’s property and extract gas unless there is a lease or contract in place that allows it.

The decision in the Briggs case, which Weiss expects to take at least six months to be announced, will only affect the rule of capture in Pennsylvania, not any other gas-producing states such as Ohio, West Virginia, Oklahoma or Texas. However, if the decision favors the plaintiff, many in the industry worry that a host of lawsuits against producers could be the result. It could also discourage producers from drilling closer to the edge of their leased parcel, Weiss said, meaning that they would not be able to extract all of the gas on their property.

The Briggs family, owners of an 11-acre parcel of land in Susquehanna County, Pa., filed suit in November 2015. The property is adjacent to a parcel leased by Southwestern that has been used for gas production since 2011.

In August 2017, the trial court granted Southwestern’s motion for summary judgement, agreeing that the rule of capture precluded the request for punitive damages. The case was appealed to the Pennsylvania Superior court, which overturned the trial court and determined that “hydraulic fracturing is distinguishable from conventional methods of oil and gas extraction” and the rule of capture, therefore, did not apply.

In its decision, the court determined that natural gas in a shale formation is, by nature, non-migratory. It could only have moved from the Briggs property to the adjoining property leased by Southwestern by the application of an external force, or hydraulic fracturing. The court also rejected Southwestern’s contention that the difficulty in determining the occurrence of a subsurface trespass and the value of the gas meant that damages cannot be paid.

Southwestern appealed the Superior Court’s decision to the Commonwealth’s Supreme Court, which agreed to hear the case.

The justices on the court came prepared to hear arguments, Weiss said, and peppered both parties with questions. One raised the point that if technology is developed to clearly see underground, that could alter the determination of a trespass.

From inside the courtroom where he was joined by numerous oil and gas executives, Weiss said it was not clear which way the court was leaning.

“I’m thinking it’s a 4-3 decision but I can’t guess which way,” he said. “At least, from the oral argument, it was tough to tell.”

If the justices rule in favor of Southwestern, the court will have agreed that trespass cannot be proved in these cases and claims cannot be brought. If the court affirms the lower court decision then the case will likely return to trial court and the plaintiffs will try to prove their trespass case.

“This is a very fascinating case that has attracted the eyes of the nation,” Weiss said. “Everyone on the industry side thinks this is a high-stakes decision and I have to agree.” 

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