State Supreme Court to hear rule of capture appeal

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The Pennsylvania Supreme Court recently agreed to hear the appeal of the Superior Court’s decision in Briggs v. Southwestern Energy Production, which addresses the application of the principle of rule of capture to hydraulic fracturing.

In the case, a Susquehanna County family alleged that Southwestern Energy unlawfully extracted natural gas from beneath their unleased 11-acre parcel from an adjoining leased property.

A common pleas court judge granted summary judgment to Southwestern, but a two-judge Superior Court panel reversed the decision and remanded the case to the lower court to determine if the company committed trespass.

Southwestern’s defense relied on the well-established rule of capture, which essentially states that the owner of a tract of land acquires title to the oil and gas produced from wells drilled on that land by bringing that gas to the surface, including any oil and gas that may migrate from adjoining lands. In an April 2 decision, a two-judge Superior Court panel held that the rule did not apply to gas obtained as a result of hydraulic fracturing.

Southwestern then requested that the full Superior Court rehear the case. The petition was denied on June 8, and Southwestern then asked the Supreme Court to hear its appeal, which was approved.

“We appreciate the court’s thoughtful decision to review this ruling, especially given the case’s potential to negatively impact Pennsylvanians who depend on natural gas for royalty payments, jobs, and affordable energy,” Southwestern said in a statement. “Bringing legal clarity and certainty to this potentially far-reaching matter – while avoiding pitting neighbor against neighbor in costly and speculative legal disputes that could unnecessarily overburden our courts – are top priorities for Southwestern Energy.”

In granting Southwestern’s request, the Supreme Court rephrased the issue under the question, “Does the rule of capture apply to oil and gas produced from wells that were completed using hydraulic fracturing and preclude trespass liability for allegedly draining oil or gas from under nearby property, where the well is drilled solely on and beneath the driller’s own property and the hydraulic fracturing fluids are injected solely on or beneath the driller’s own property?”

The Pennsylvania Independent Oil and Gas Association (PIOGA) has said that it believes the Court stated the question on appeal in a way that is factually favorable to the industry’s position.

“PIOGA is pleased that our Supreme Court has decided to hear Southwestern Energy’s appeal of the two-judge Superior Court decision that refused to apply Pennsylvania precedent to resolve this dispute,” Kevin Moody, PIOGA General Counsel, said. “We look forward to participating in the appeal to help try to convince the Court that the Superior Court erred in putting Pennsylvania law at odds with most other states by relying upon dissenting positions in other states’ court decisions.”

During the Superior Court’s consideration of the case, PIOGA participated as an amicus. The association will continue to do so as the case is before the Supreme Court.