Down the Rabbit Hole: Injection Wells and Subsurface "Trespass"

Posted on March 29, 2019 by G. Alan Perkins

When an oil and gas operator obtains all proper permits for a saltwater disposal well and responsibly injects fluids into the approved deep subsurface formation, and some of the injected fluid ultimately migrates laterally within the permitted injection formation beneath the lands of another, has the operator committed an actionable trespass?  And if so, what should the measure of damages be?  Despite widespread use of injection wells under strict state and federal regulation, the law concerning subsurface “trespass” by fluids injected into disposal wells is spotty.  Many states have yet to directly address the issue.  Perhaps due to the proliferation of oil and gas production in regions of the country not accustomed to petroleum production, such cases are becoming more frequent.

Nearly all formations that contain oil or natural gas also contain saltwater.  So, it should come as no surprise that the process of producing oil and gas also produces saltwater – a lot of saltwater.  In 2007, the estimated volume of produced water from U.S. onshore oil and gas production was 21 billion barrels, or about 2.4 billion gallons per day.  Produced water that cannot be reused or recycled must be disposed of in a safe and effective manner.

Injection wells (often called “disposal wells” or “saltwater disposal wells”) that inject fluids associated with oil and gas production are considered “Class II” injection wells in the Underground Injection Control program.  Disposal wells typically inject produced water into zones depleted of oil and natural gas and that also naturally contain saltwater similar to the fluids being injected.  Such wells have been common in oil and gas producing states since the 1930s.  U.S. EPA reports that approximately 180,000 Class II injection wells operate in the United States. 

The industry, along with state and federal regulators, determined decades ago that the safest and most environmentally responsible way to dispose of produced water was through the proper use of injection wells.  Injection wells dispose of produced water in deep geological formations, isolated from underground sources of drinking water, to prevent soil and water contamination.  U.S. EPA regulates injection wells in accordance with stringent regulations pursuant to the federal Safe Drinking Water Act, and 33 states have delegated authority to be the primary enforcer (with a few others having joint authority with EPA).

Common law trespass can be described generally as “any entry on land that is in the peaceable possession of another, regardless of the willfulness of the entry, the degree of force used, the duration of the intruding presence, and the absence of damage to the land.”  Under the common law, an invasion alone was sufficient to sustain a trespass action, regardless of whether any damages could be proven.  This formulation may be adequate when applied to a pasture, home, or driveway.  But troublesome issues immediately arise when the focus turns to fluids moving unseen through geological formations thousands of feet below the ground surface.  Simply confirming whether the fluids in question are present in the deep subsurface of a particular tract of land is problematic, much less discovering how much is there and how long it has been there.

The common law cause of action for trespass was created before significant technological advances existed, such as the advent of aircraft and deep subsurface injection wells. Common law trespass typically involves the disturbance of the “peaceable possession” of property by another.  Surely, injecting produced water into a confined deep formation that already contains saltwater does not, in reality, disturb a landowner’s “peaceable possession” of his “property,” and thus should not give rise to an actionable trespass.  Just as a landowner does not “possess” the heavens, so neither should a property owner be considered to “possess” the deep subsurface unless he or she has at a minimum drilled a well or opened a mine to exploit it.

Over 70 years ago, in the well-known case of United States v. Causby, 328 U.S. 256 (1946), the common law yielded to societal needs to accommodate modern air travel so long as the use is regulated and does not unreasonably intrude on the owner’s use and enjoyment of the surface.  Class II commercial disposal wells are also highly regulated and serve an important societal purpose – the necessary, safe and environmentally protective disposal of vast amounts of produced water. The Ohio Supreme Court explicitly adopted this reasoning in expressing the law in Ohio with regard to migration of injected fluids from a disposal well, stating:

[O]wnership rights in today’s world are not as clear-cut as they were before the advent of airplanes and injection wells.  Consequently, we do not accept appellants’ assertion of absolute ownership of everything below the surface of their properties.  Just as a property owner must accept some limitations on the ownership rights extending above the surface of the property, we find that there are also limitations on the property owners’ subsurface rights.

Chance v. BP Chems., Inc., 670 N.E.2d 985, 992 (Ohio 1996).

Disposal of produced water is an essential part of the production of oil and gas, and it is impossible to accurately predict or restrict the movement of injected fluid through the injection zone.  Of course, some might advocate simply eliminating oil and gas production as a happy solution.  But realistically that is not going to happen anytime soon, and we should all agree that produced water should be handled in a safe and environmentally responsible manner.  Given the vital need for safe disposal of produced water, and the pervasive regulatory scheme governing such wells, the operator of a permitted injection well should not be subject to trespass liability for lateral movement through the permitted injection zone absent any damage.  Recognizing a per se trespass liability without any actual injury could impact many thousands of currently operating permitted injection wells, and essentially create a new strict liability tort.

It’s the Infrastructure, Stupid

Posted on June 7, 2017 by Gregory Bibler

On May 23, 2017, President Trump issued his Fiscal 2018 budget proposal.  EPA’s press release, issued the same day, declared:  “EPA Budget Returns Focus to Core Statutory Mission.” https://www.epa.gov/newsreleases/epa-budget-returns-focus-core-statutory-mission  EPA made clear that “returning” to the “mission” means reducing the size of the agency.  EPA’s budget would be cut by 31 percent, compared to the Fiscal 2017 enacted budget, and its current workforce would be cut by 25 percent.  The President proposes to cut 600 more positions than indicated in his March 16 budget proposal (which was abandoned with surprisingly little fanfare when the President signed the Fiscal 2017 enacted budget on May 5). 

But there is at least one bright spot in the President’s new budget proposal.  Funding is to be preserved for programs “supporting the President’s focus on the nation’s infrastructure.”  “Infrastructure,” according to EPA, includes improvements to drinking water systems.  Toward that end, the budget includes $2.3 billion for State Revolving Funds and $20 million in additional appropriations for the Water Infrastructure Finance and Innovation Act program.

The President is sticking by his campaign promise to help communities like Flint, Michigan finance improvements needed to reduce lead in drinking water, particularly in homes and schools.  Providing funding for these particular programs stands in contrast to the overall tenor of the budget, and the campaign’s promise to eliminate “wasteful” EPA grants. 

Revelations in Flint triggered widespread and, as it turns out, legitimate concerns about the effectiveness of existing regulatory programs to protect against lead contamination in drinking water. http://www.goodwinlaw.com/-/media/files/publications/attorney-articles/2017/eba-winter-journal-2017flint-inspires-renewed-vigi.pdf It has been more than 30 years since Congress enacted the Safe Drinking Water Act, and more than 25 years since EPA adopted the Lead and Copper Rule (“LCR”).  After Flint, increased lead testing in schools, and greater scrutiny of data already being collected by public water systems, revealed that elevated lead levels continue to be a pervasive problem in U.S. cities and school buildings (including more than half of the 300 public school buildings tested in 2016 in Massachusetts).

In October 2016, in the waning days of the Obama administration, EPA issued a white paper that announced that the LCR and its implementation are in urgent need of overhaul.  The LCR is a protocol for testing and treatment, not a set of numerical standards.  EPA stated that more prescriptive requirements that are more effective and readily enforceable need to be adopted.  Notwithstanding the Trump administration’s current war on environmental regulation, EPA has stated that it intends to formulate more stringent and clear requirements.  Meanwhile, in December 2016, Congress actually succeeded in amending the Safe Drinking Water Act to replace the moribund school drinking water provision, which was declared unconstitutional in 1996, with a new provision that, among other things, established a voluntary school lead testing grant program.

It is apparent that, on the issue of safe drinking water at least, the Trump administration has accurately measured the political mood.  Despite draconian cuts proposed to almost all of EPA’s budget and staffing, the administration has recognized that improving the regulation, testing and treatment of drinking water in schools and public water systems is politically expedient, and may do more good than harm.  It is good policy and good politics.

EPA PROPOSES CO2 STORAGE RULES

Posted on July 22, 2008 by Rick Glick

On July 15, EPA announced new rules for underground injection of carbon dioxide (CO2). The rules are intended to provide a measure of regulatory certainty for carbon capture and storage (CCS) implementation.  CO2  STORAGE RULES. CCS is the technology for capturing CO2 as it is released from coal-fired power plants, oil refineries or other large scale sources of CO2 emissions, and then transporting the gas for injection into a suitable underground geologic formation. EPA estimates that CCS could account for as much as 30% of CO2 emissions by 2050, which has obvious implications for climate change.

NEW CLASS OF UIC WELLS

Under the Safe Drinking Water Act, EPA administers the Underground Injection Control (UIC) program. The program is designed to protect drinking water aquifers from industrial injection of fluids into deep geologic formations for purposes such as enhanced oil or gas recovery. CO2  storage presents special challenges as it is buoyant, can be corrosive and would be spread over a large area and held indefinitely. Therefore, EPA proposes a new Class VI well specific to storage. 

NO PRESCRIPTIVE STANDARDS

EPA proposes performance-based standards, as opposed to prescriptive requirements. In general, an injection and operations plan must be included with the application that demonstrates drinking water would be protected. Permit holder would have to monitor and periodically report back to EPA to ensure that model predictions as to the size of the CO2  plume and injection pressures prove true. Permittees would be required to demonstrate financial responsibility for post-injection site care for 50 years; that time period could be shorter or longer, depending on the residual risk to drinking water aquifers based on monitoring data.

PLENTY OF ROOM FOR STATE REGULATION

Note that the rules do not address the capture and transportation of CO2. Further, the new rules do not address property rights, liability or other siting regulatory concerns, so we can expect the states to assert jurisdiction. 

For more information, see full article here.