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.