A case involving the disposal of industrial wastewater pits two interests that are dear to many Texans against each other: oil and gas resources versus private property rights.
A decision by the state’s highest civil court could have major implications for both. The Texas Supreme Court is scheduled to hear arguments on Jan. 7 in a dispute between a company that operates injection wells in Liberty County and a nearby rice farm that says wastewater from those wells has migrated into a saltwater aquifer below its land. It calls the migration trespassing, for which it should be compensated.
Among several smaller questions, the court will weigh a broad one: Just how far below the earth’s surface do property lines extend?
“This is the classic battle between the two quintessential values that are in direct conflict with each other,” said Matthew J. Festa, a professor at the South Texas College of Law. “On a lot of different levels, this case could make some new law.”
This is not the first time oil and gas interests have clashed with landowners in Texas. State courts have weighed in on several such showdowns in recent years, including eminent domain cases involving land seized to build pipelines. The Supreme Court has considered the idea of underground trespassing, but in a different context.
In 2008, it ruled against a group of mineral owners who sued Coastal Oil & Gas for trespassing, saying that the company, which had lawfully drilled a nearby well, had drained some of the gas beneath the group’s adjacent property through the fracking process. The court said Texas’ “rule of capture” — a mineral owner’s nearly unfettered right to the oil and gas produced by wells on their property — barred neighboring mineral owners from recovering royalties on any gas they lost. Had fracking been found to damage the neighboring property in other ways (in that case, it had not), the court said the owners may be liable for trespass.
The latest dispute, which has reached the high court once before, has drawn the oil and gas industry’s attention.
The well in question is classified as Class I and used for nonhazardous industrial waste. It is not one of the 50,000 Class II waste wells that drillers typically use. But lower courts’ opinions have drawn no distinction between the wells, stirring concerns that a ruling in FPL Farming’s favor would harm production.
“Because the ability to produce oil and gas is inextricably tied to the availability of injection wells,” the Texas Oil and Gas Association says in a brief, “a new common law cause of action that threatens operation of injection wells likely threatens oil and gas production.”
In 1997, Environmental Processing Services finished drilling an injection well about 400 feet from FPL Farming’s land, which the farm contested early on. Since then, the company has injected more than 100 million gallons of wastewater.
Bob Kent, a former Texas environmental regulator and FPL Farming’s expert witness, testified that the waste plume had probably traveled across the property lines, basing those conclusions on a formula widely used by state and federal regulators.
Representatives of the farm say they worry that the waste, which includes the flammable liquid acetone, will contaminate its groundwater and erode the value of its property. Though the water is too salty to drink, those on the farm’s side contend that it is valuable because desalination technology could make it drinkable.
The well operator and its supporters say the waste will make the groundwater no more polluted than it naturally is. And in its brief, the Texas Oil and Gas Association calls it “impossible” for a well operator to “predict or control the precise path of migration within a formation that could span dozens of square miles.”
On top of that, the industry group argues those points are moot point because the subsurface trespassing argument is nearly unprecedented. The appellate court in Beaumont and the appellate court in Corpus Christi, whose decision was reversed in 2008, are the only major courts to have accepted it.
Common law holds that land ownership extends to the sky above and the earth’s center below, but courts have chipped away from that doctrine over the past decades as new technologies made parts of it impractical for the modern world. In a landmark 1946 case, for instance, the U.S. Supreme Court ruled that airplane operators could be held liable for flying over private property only if they caused damage by flying too close.
“The trend is kind of going away from [the doctrine], but it hasn’t been completely overruled,” Festa said.
The concept of underground property rights is still murky.
The injection well suit is flying under the radar of property rights advocates. No group has filed a brief in support of the rice farm, but the Texas Farm Bureau, which typically supports landowners in such disputes, said it was looking at the case after recently learning of its return to court.
The group supported FPL Farming the last time the case reached the Supreme Court. That was in 2011, when the justices remanded the case to the lower courts after considering various arguments.
“We think they own the property down to the center of the earth,” said Regan Beck, assistant general counsel for the Farm Bureau, adding, “You have a taking without compensation.”
Editor's Note: This story has been corrected to note a previous time the Texas Supreme Court considered an underground trespassing claim.
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