BakerHostetler Shale Symposium
Transcript of BakerHostetler Shale Symposium
BakerHostetler
Shale Symposium
The Utica Shale Play: Working in and
with the State of Ohio
June 6, 2013
Martin T. Booher, Partner
The Regulation of Natural Gas and
Liquids Pipelines and Related
Infrastructure in Ohio:
Who, What, When, Where and
How?
Why Are Pipelines and Related
Infrastructure Important in Ohio
• The Utica can provide (as can other historically produced
areas using new drilling techniques) significant oil, natural
gas and natural gas liquids
• But unless there are markets (e.g., ethane) and the product
can be processed and then moved to the markets, the oil,
natural gas and natural gas liquids are going to stay in the
ground
• Gathering lines, processing facilities, fractionation facilities
and pipelines are needed and, as noted, several proposals
are pending
4
Regulation of Natural Gas Pipelines
and Related Infrastructure
• Several Layers of Potentially Overlapping Jurisdiction – Federal
– State
– Local
• Depends on the Type of Pipeline/Project – Natural Gas Vs. Oil/Natural Gas Liquids
– Interstate
– Intrastate
– Gathering Line, Processing Facility, Transmission Pipeline, Distribution Pipeline
5
Federal Jurisdiction
• Natural Gas Act
– Grants Jurisdiction to the Federal Energy
Regulatory Commission (“FERC”) over Interstate
Natural Gas Pipelines (associated compressor
stations), Storage Facilities and LNG Terminals
(Interstate Commerce)
– State Law Preemption
– Right of Eminent Domain
– Rigorous Licensing Process (National
Environmental Policy Act)
6
Federal Jurisdiction
• What is Not Regulated
– Oil and Natural Gas Liquids Pipelines
(Licensing/Construction)
– Intrastate Pipelines
– Production and gathering pipelines
– Distribution pipelines (i.e., local gas utilities)
7
Ohio Jurisdiction
• Ohio Regulatory Agencies still play critical role
in FERC-jurisdictional pipelines through the
implementation of various federal
environmental laws
• SB 315 changed/clarified a number of
jurisdictional issues in Ohio as it relates to
“non FERC-jurisdictional” pipelines (e.g.,
intrastate pipelines, production and gathering
pipelines and intrastate distribution pipelines)
8
Ohio Regulatory Agencies
Key Ohio Regulatory Agencies Regulating Natural
Gas Pipelines and Related Infrastructure in Ohio
• ODNR
• OPSB
• PUCO
• OEPA/US Army Corps of Engineers
• Resource Agencies
9
ODNR
• Critical O&G agency in Ohio
• Regulates Drilling and Pad, Production
Pipelines
• Deep Injection Wells
• No meaningful, direct regulatory oversight over
natural gas pipelines/related infrastructure
(beyond production site)
10
OPSB
• Pre-S.B. 315 controversy over definition of gas pipelines
• Kinder Morgan 2010 application to OPSB filed under protest (for natural gas liquids pipeline)
• S.B. 315 limited OPSB’s regulatory authority over natural gas and liquids pipelines/related infrastructure
• OPSB still a key player: Issues certificates (through an adjudicatory proceeding) for natural gas pipelines (and associated facilities) which are: (1) > 500 feet in length; (2) > 9 inches in outside diameter; and (3) designed for transporting gas at MAOP in excess of 125 psi
• Excluded from OPSB certification requirements: gathering lines, gas gathering pipelines, processing plant gas stub pipelines, gas processing plants, natural gas liquids finished product pipelines, pipelines from gas processing plants to interstate or intrastate gas pipelines or to any natural gas liquids fractionation plant, an oil, gas or other production operated regulated by the Ohio, including pipelines upstream of any gathering lines and certain compressor stations.
11
PUCO
• Primarily Responsible for Pipeline Safety
• No Direct Licensing/Siting Authority
– Requires pipelines transporting gas from horizontal wells constructed on or after September 10, 2012 to comply with applicable federal design standards
– 21 Day Preconstruction Notice
– Submission of as-builts (60 days)
• No authority exercised over liquid pipelines (rests with PHMSA)
12
OEPA/Resource Agencies
• Air Quality
– PTI/PTO
– Title V
– No General Air Permit for Compressors
– GHGs
• Water Quality
– NPDES • General Stormwater Permit
• General Hydrostatic Testing Permit
– Wetlands • 401/404 Permits/NWP 12 (U.S. Army Corps of Engineers
Involvement)
• Resource agencies (endangered species, cultural resources,
fisheries, etc.)
• Indiana Bats and Inadvertent Discharges
13
Other Ohio-Specific Siting
Observations
• Board of Building Standards Regulations eliminate
local jurisdiction over the construction of
buildings/structures associated with the operation of
natural gas liquids fractionation or processing facilities.
• ODNR requirements supplant local jurisdiction
• OPSB requirements supplant local jurisdiction
• PUCO requirements supplant local jurisdiction
• Eminent domain for siting of pipelines and related
facilities is available
• Acceptance by local communities remains critical
14
BakerHostetler
Shale Symposium
The Utica Shale Play: Working in and
with the State of Ohio
June 6, 2013
Radioactive Materials
• The land formations that contain oil and gas deposits also contain radioactive materials.
• The drilling process may expose these materials to the surface.
• Such radioactive materials include: – Uranium
– Thorium
– Radium
– Lead-210
17
NORM & TENORM
• The radioactive materials associated with the
drilling process are commonly classified into two
categories:
– Naturally Occurring Radioactive Materials (NORM)
– Technologically Enhanced Naturally Occurring
Radioactive Materials (TENORM)
• The most recent version of Ohio’s proposed
budget contains the following definitions of
NORM and TENORM:
18
NORM
• NORM: material that contains any nuclide that
is radioactive in its natural physical state
– Does not include source material, byproduct
material, or special nuclear material
19
TENORM
• TENORM: naturally occurring radioactive material with radionuclide concentrations that are increased by or as a result of past or present human activities
– Does not include drill cuttings, natural background radiation, byproduct material, or source material
• Drilling creates TENORM by concentrating the naturally occurring radionuclides and exposing them to the surface environment and human contact.
20
Ohio Senate’s Proposed Budget
• The Ohio Senate’s proposed budget includes
several provisions regulating the disposal of
NORM and TENORM.
• The provisions are similar in some ways to
NORM/TENORM provisions that the Ohio
House stripped out of Governor John Kasich’s
proposed budget.
21
Key Provisions
• Under the Senate’s proposed budget:
1) Well operators generally must sample any wastes
potentially containing TENORM for radium prior to
shipping wastes off-site.
2) Well operators do not, however, have to sample
wastes for radium if:
a) The material is reused in a horizontal well
b) The material is disposed of at an injection well for which a
permit has been issued under Ohio law
c) The material is used in a method of enhanced recovery
for which a permit has been issued under Ohio law
d) The material is transported out of Ohio for lawful disposal
22
Key Provisions
• Under the Senate’s proposed budget:
3) If materials other than TENORM come in contact
with a refined oil-based substance, then the well
operator must either: a) Dispose of the materials at a solid waste facility authorized to accept such
material under Ohio law;
b) Beneficially use the material in accordance with Department of Environmental
Protection rules; OR
c) Recycle or reuse the material with the approval of the Chief of the Division of Oil
and Gas Management.
4) Solid waste landfills are prohibited from receiving
TENORM if the material contains radium-226 or
radium-228 equal to or greater than 5 picocuries per
gram above natural radiation levels. 23
Key Provisions
• Under the Senate’s proposed budget:
5) Solid waste landfills may accept TENORM containing
radium-226 or radium-228 above acceptable levels
for “purposes other than transfer or disposal,” so long
as the landfill operator maintains all necessary
authorizations.
6) Solid waste facilities may not receive or dispose of
TENORM from drilling operations without first
receiving representative testing results to determine
compliance with Ohio law.
24
Key Provisions
• Under the Senate’s proposed budget: 7) The Director of Environmental Protection may adopt
rules governing the handling and disposal of radioactive materials by solid waste facilities.
8) The Director of Environmental Protection may establish the definition of “beneficially use” as it applies to non-TENORM materials from horizontal wells that have come in contact with refined oil-based substances.
9) The Director of the Department of Health must promulgate rules governing TENORM, and the rules must not apply to NORM.
25
Brine Disposal
• The Senate’s proposed budget also includes
provisions governing the disposal of brine and
other fluids associated with the drilling process.
• In general, the provisions:
– Require that the Chief of the Division of Oil and Gas
Resources Management adopt rules governing
brine disposal
– Prohibit the storing or processing of brine without
the required permits
– Establish rules governing impoundments
26
On the Horizon
• Industry and environmentalists have not had an
opportunity to comment on the Senate’s
NORM/TENORM provisions, as they were just
released on June 4.
• Similar provisions in the Governor’s proposed
budget, however, faced strong opposition from
both industry and environmentalists.
27
On the Horizon
• According to industry, the provisions are
unnecessary because Ohio’s current regulatory
approach to TENORM is adequate.
– They also note that testing at Utica well sites
indicates low radiation levels.
• Environmentalists recommend that radioactive
materials instead be shipped to landfills licensed
to handle radioactive waste.
28
BakerHostetler
Shale Symposium
The Utica Shale Play: Working in and
with the State of Ohio
June 6, 2013
2013 Strategic Focus
31
Retention & Expansion
o 2,000 companies for R&E calls
Attraction
o Target select geographies and industries where Ohio has a comparative advantage
Marketing
o Robust communications activity, including more editorial outreach, public events, and
increased communication with internal audience and stakeholders
Revitalization Program
o Work with Ohio Development Services Agency, Ohio EPA, and stakeholders to identify and
prioritize potential sites
o Provide a more streamlined, responsive, and flexible program
Ohio River Strategy
o Develop comprehensive catalog of available properties
Workforce
o Promote Governor Kasich’s workforce development initiatives and coordinate with his Office of
Workforce Transformation
o Work with colleges and universities to develop curriculum and certification programs that
address industry needs
Ohio’s Robust Oil and Gas Supply Chain
33
V&M Star, Youngstown – steel tubing
Miller Supply, Inc., Wooster – oilfield supply and services
Pioneer Group, Marietta – midstream fabrication and construction
Timken, Canton – manufacturer and supplier of bearings
Ariel Corporation, Mt. Vernon – gas compressors
Gorman-Rupp, Mansfield – pumps used in oilfield operations
Kelchner, Springboro – construction
DBA Mutual Tool, Tipp City – fabricating
Exterran, Youngstown – oilfield equipment
Pipeline & Midstream Projects: Ohio Utica Shale
34
Company Location Operations Estimated
Investments
MarkWest Harrison & Noble
counties
G, P, & F $1.5 Billion
M3
Midstream
Partnership
Columbiana & Harrison
counties
G, P, & F $1.2 Billion
NiSource
Eastern Ohio G&P $390 Million
Dominion/C
aiman*
Eastern Ohio G&P $800 Million
Spectra* Northern & Eastern
Ohio
Natural Gas
Pipeline
$430 Million - plus
Enterprise* Eastern, Central,
& Southwestern Ohio
Ethane Pipeline $1 Billion-plus
*Announced
Gathering – Processing – Fractionation
Polymers & Chemicals
36
• Global polymer industry leader
• World class university-based research
and strong engineering programs
• Four refineries in Ohio
• Utica shale provides low-cost and
reliable supply of natural gas and natural
gas liquids
• Possible links to specialty chemicals
Polymers & Chemicals
37
• Focus on opportunities that build on our existing strengths of
adding value to base chemicals and polymers. Link to other
sectors such as automotive and aviation.
• Recruit companies that add value to gas streams. Target major
chemical and products companies.
• Pursue bio-based products, especially non-edible agricultural
products converted to high value products.
Polymers & Chemicals
38
Natural Gas Liquids
Ethane/Propane/Butane
Ethylene/Propylene/Butadiene
Plastics/Synthetic Rubber
Workforce
39
• Recognizing the value of a strong workforce system, Governor
Kasich created the Office of Workforce Transformation to prioritize
the work of reforming the system.
• OWT’s goal is to create a unified workforce system that supports
business in meeting its workforce needs.
• OWT is focused on three specific priorities:
1) identifying business’s most urgent job needs;
2) aligning those job needs with educators and trainers, and;
3) reforming Ohio’s workforce delivery system
BakerHostetler
Shale Symposium
The Utica Shale Play: Working in and
with the State of Ohio
June 6, 2013
2012 Reported Shale
Mergers and Acquisitions
47
Bakken / Williston Shale Play
Announced
Date Buyers Sellers
12/31/2012 American Eagle Energy Corporation Undisclosed company(ies)
12/10/2012 Enerplus Corporation Undisclosed company(ies)
11/27/2012 Stratex Oil & Gas Holdings, Inc. Undisclosed company(ies)
11/26/2012 Magnum Hunter Resources Corp. Samson Resources Company
11/15/2012 Vanguard Natural Resources LLC Halliburton Energy Services
11/8/2012 Continental Resources, Inc. Samson Resources Company
11/2/2012 Magnolia Petroleum PLC Undisclosed company(ies)
10/22/2012 Halcon Resources Corporation Petro-Hunt Group
10/22/2012 PetroShale Inc. Undisclosed company(ies)
9/20/2012 Exxon Mobil Corporation; XTO Energy Incorporated Denbury Resources Incorporated
9/19/2012 Stratex Oil & Gas Holdings, Inc. Undisclosed company(ies)
9/12/2012 WellStar Energy Corp. Undisclosed company(ies)
8/23/2012 QEP Energy Company; QEP Resources, Inc. Black Hills Corporation; Helis Oil & Gas Company, LLC;
Sundance Energy Australia Ltd.; Undisclosed company(ies);
Unit Corporation
8/22/2012 Undisclosed company(ies) American Eagle Energy Corporation
7/10/2012 Emerald Oil, Inc. Emerald Oil & Gas NL
7/10/2012 Stratex Oil & Gas, Inc. Stratex Oil & Gas Holdings, Inc.
6/14/2012 Apache Corporation Undisclosed company(ies)
2012 Reported Shale
Mergers and Acquisitions
48
Bakken / Williston Shale Play
Announced
Date Buyers Sellers
6/8/2012 Undisclosed company(ies) U.S. Energy Corp.
5/25/2012 Noble Royalties Inc. Undisclosed company(ies)
5/10/2012 The X-Change Corporation Undisclosed company(ies)
5/1/2012 Legacy Reserves LP Undisclosed company(ies)
4/30/2012 Mountainview Energy Ltd. Undisclosed company(ies)
4/18/2012 Magnum Hunter Resources Corp. Baytex Energy Corp.
4/13/2012 The X-Change Corporation Undisclosed company(ies)
4/9/2012 The X-Change Corporation Undisclosed company(ies)
3/28/2012 Continental Resources, Inc. Wheatland Oil Inc.
3/26/2012 Emerald Oil & Gas NL Undisclosed private company(ies)
3/22/2012 Whiting Petroleum Corporation Undisclosed company(ies)
3/12/2012 Fidelity Exploration & Production Company;
MDU Resources Group, Inc.
Undisclosed company(ies)
2/29/2012 Undisclosed company(ies) Primary Petroleum Corp.
2/22/2012 Continental Resources, Inc. Undisclosed company(ies)
2/22/2012 Emerald Oil & Gas NL North Plains Energy, LLC
2/22/2012 Continental Resources, Inc. Undisclosed company(ies)
2/8/2012 The Blacksands Pacific Group, Inc. Undisclosed company(ies)
2012 Reported Shale
Mergers and Acquisitions
49
Eagle Ford Shale Play
Announced
Date Buyers Sellers
12/21/2012 Sundown Energy, Inc. Lucas Energy, Inc.
12/17/2012 NFR Energy LLC Undisclosed company(ies)
11/13/2012 Sundance Energy Australia Ltd. Texon Petroleum Ltd.
11/12/2012 Undisclosed company(ies) Abraxas Petroleum Corporation
10/24/2012 Marathon Oil Corporation Undisclosed company(ies)
10/22/2012 Amadeus Energy Limited Ecofin Energy Resources PLC; Lonestar Resources, Inc.
10/12/2012 Undisclosed company(ies) Forest Oil Corporation
10/3/2012 Penn Virginia Corporation Undisclosed company(ies)
10/2/2012 Milestone Energy LLC Lucas Energy, Inc.
9/20/2012 Global Earth Energy, Inc. Local Partners
9/11/2012 Energy & Exploration Partners, LLC Chesapeake Energy Corporation
8/27/2012 Strata-X Ltd. Undisclosed company(ies)
8/23/2012 Lucas Energy, Inc. Dolphin Oil Partnership LP
8/10/2012 Japan Petroleum Exploration Co., Ltd. Marathon Oil Corporation
8/8/2012 Magnum Hunter Resources Corp. Undisclosed company(ies)
7/31/2012 Kohlberg Kravis Roberts & Co. L.P. Comstock Resources Incorporated
7/30/2012 Kohlberg Kravis Roberts & Co. L.P. Comstock Resources Incorporated
2012 Reported Shale
Mergers and Acquisitions
50
Eagle Ford Shale Play
Announced
Date Buyers Sellers
7/24/2012 TexStar Energy Corp. Undisclosed company(ies)
6/11/2012 Eagle Ford Oil & Gas Corp. Undisclosed company(ies)
6/11/2012 Hess Corporation ZaZa Energy Corporation
6/11/2012 Penn Virginia Corporation Undisclosed company(ies)
6/11/2012 ZaZa Energy Corporation Hess Corporation
5/15/2012 Aurora Oil and Gas Limited Individual Investor
5/9/2012 Marathon Oil Corporation EnCap Energy; Macquarie Bank Limited;
Paloma Resources II, LLC; Paloma Resources LLC
5/1/2012 Sun Resources NL Undisclosed company(ies)
4/30/2012 Aurora Oil and Gas Limited Eureka Energy Limited
3/29/2012 ZaZa Energy Corporation / Old Range Resources Corporation
2/29/2012 Undisclosed company(ies) Pioneer Natural Resources Company
2/24/2012 Access Industries; Apollo Global Management LLC;
Korea National Oil Corporation; Riverstone Holdings LLC;
Undisclosed company(ies)
EP Energy Global LLC;El Paso Corporation
1/6/2012 Marubeni Corporation Hunt Oil Company
1/6/2012 Marubeni Corporation Hunt Oil Company
1/4/2012 Lucas Energy, Inc. Hall Phoenix Energy, LLC
2012 Reported Shale
Mergers and Acquisitions
51
Utica Shale Play
Announced
Date Buyers Sellers
12/17/2012 Gulfport Energy Corporation Wexford Capital LP
10/15/2012 Undisclosed company(ies) Carrizo Oil & Gas Incorporated
10/15/2012 Carrizo Oil & Gas Incorporated Avista Capital Partners LLC
10/9/2012 1st NRG Corporation Undisclosed private company(ies)
9/12/2012 Undisclosed company(ies) Chesapeake Energy Corporation
7/9/2012 Hilcorp Energy Company NiSource Inc.
6/25/2012 Halcon Resources Corporation Undisclosed company(ies)
3/27/2012 BP plc Local Partners
2/17/2012 Magnum Hunter Resources Corp.;Triad Hunter, LLC Undisclosed company(ies)
2/11/2012 Antero Resources LLC Undisclosed company(ies)
1/3/2012 China Petrochemical Corporation; Devon Energy Corporation;
Sinopec International Petroleum Exploration & Production
Corporation
Undisclosed company(ies)
Unreported Mergers and
Acquisitions
• Merger of independents
• Sale and purchase of developed properties
• Sale and purchase of undeveloped properties
• Farmout of shale rights
53
Unique Issues Related to the
Purchase of Shale Properties
• Horizontal drilling provisions
• Issues related to ownership of limited
depths
• Issues related to farmouts
54
Financing of Major
Acquisitions
• Availability of funds
• Hedging requirements
• Syndication issues
• Borrowing base
56
BakerHostetler
Shale Symposium
The Utica Shale Play: Working in and
with the State of Ohio
June 6, 2013
W. Ray Whitman, Partner
Hydraulic Fracturing Litigation:
An Assessment and Analysis of Recent
Hydraulic Fracturing Litigation Trends
Rise of Hydraulic Fracturing Litigation
2009—Dramatic rise in fracturing litigation
• Increased use of hydraulic fracturing
• Public awareness
• Economic and environmental implications
Rise of Hydraulic Fracturing Litigation
• Anticipate Claims and Damages
• Steps to Manage Litigation
• Pre-litigation Preparation
Litigation to Anticipate
1. Contamination Claims
2. Challenges to State and Local Laws
3. Citizen and Environmental Group Enforcement
Actions
4. Earthquake Claims
Contamination Claims
Hydraulic fracturing activities alleged to cause:
• Contamination to sources of ground water
• Gas explosions
• Surface spills and pollution
• Air pollution
Contamination Claims—
Anticipated Causes of Action
• Negligence
• Trespass
• Nuisance
• Negligence per se
• Res ipsa loquitur
• Gross negligence
• Premises liability
• Fraud/
Misrepresentation
• Strict liability
• Statutory violations
• Injunctive relief
• Deceptive trade
practices
Contamination Claims—
Class Actions
• 5 contamination based class action claims
• Class claims assert negligence, trespass,
nuisance, and strict liability claims
• Class action claims also made in
earthquake cases
Contamination Claims—
Common Damage Models
• Personal injury
• Property damage
• Loss of use and
enjoyment
• Diminished property
value
• Punitive damages
• Medical monitoring
• “Stigma”
• Injunction against
future operations
• Environmental
monitoring trust
Contamination Claims—Ohio
Mangan v. Landmark 4, LLC No. 1:12-cv-00613 Discovery
Boggs v. Landmark 4, LLC No. 1:12-cv-00614 Discovery
OH
Contamination Claims—
Pennsylvania
• 13 cases since 2009
• 8 cases—Middle District
• 2 cases—Western District
• 3 cases—Court of Common Pleas
PA
Contamination Claims—
Pennsylvania
Zimmermann v. Atlas America, LLC No. 2009-7564 Discovery
Fiorentino v. Cabot Oil & Gas Corp. No. 3:09-cv-02284 Settled
Berish v. Southwestern Energy Prod. Co. No. 3:10-cv-01981 Discovery
Armstrong v. Chesapeake Appalachia, LLC No. 10-cv-000681 Remanded to Court of Common Please
Otis v. Chesapeake Appalachia, LLC No. 3:11-cv-00115 Stayed Pending Arbitration
Bidlack v. Chesapeake Appalachia, LLC, No. 3:11-cv-00129 Stayed Pending Arbitration
Kamuck v. Shell Energy Holdings GP, LLC No. 4:11-cv-01425 Discovery
Dillon v. Antero Resources No. 2:11-cv-01038; Settled
Becka v. Antero Resources No. 2:11-cv-01040 Settled
Manning v. WPX Energy, Inc. No. 3:12-CV-00646 Motion Practice
Roth v. Cabot Oil & Gas Corp. No. 3:12-cv-00898 Discovery
Butts v. Southwestern Energy Prod. Co No. 3:12-cv-01330 Motion Practice
Haney v. Range Resources Appalachia, LLC No. 2012-3534 Motion Practice
Contamination Cases—
New York
NY
Maring v. Nalbone No. K12009001499 No Activity
Baker v. Anschutz Exploration No. 6:11-cv-06119 Discovery
Contamination Cases—
West Virginia
WV
Hagy v. Equitable Prod. Co. No. 2:10-cv-01372 On Appeal from Dismissal
Perna v. Reserve Oil & Gas, Inc. No. 11-c-2284 Discovery
Local Challenges—Ohio
• State ex rel Morrison v. Beck Energy Corp.
• In 2011, Beck Energy received drilling permits
from the Ohio Department of Natural Resources
• Beck did not obtain permits required by city
ordinances.
• City of Munroe Falls sued to enjoin Beck
• The Ninth District struck down the injunction
and held that many of the city’s ordinances
were preempted by Ohio’s oil and gas drilling
statutes
Local Challenges
• Municipal Attempts to Ban Hydraulic Fracturing in
New York and West Virginia
• Municipal Challenges to State Regulation in
Pennsylvania
Robinson Township v. Pennsylvania No. 284 M.D. 2012 Appealed 11/2012 to Pennsylvania Supreme Court
N.E. Natural Energy, LLC v. City of Morgantown
No. 11-C-411 Final Judgment
Anschutz Exploration Corp. v. Town of Dryden
2012 N.Y. Misc. LEXIS 687
Final Judgment
Citizen Suits
Ouachita Watch League v. U.S. Forest Service
No. 4:11-cv-425 E.D. Ark. Defs.’ 12(b) MTD Denied
New York v. U.S. Army Corps of Eng’rs; New York v. U.S. Army Corps of Eng’rs; Del. Riverkeeper Network v. U.S. Army Corps of Eng’rs
No. 1:11-cv-02599 No. 1:11-cv-03857 No. 1:11-cv-03780
E.D.N.Y. Dismissed for lack of subject matter jurisdiction; no appeal
Citizens for Pennsylvania’s Future v. Ultra Res., Inc.
No. 4:11-cv-01360 M.D. Pa. Discovery
San Juan Citizens Alliance v. Stiles 654 F.3d 1038 10th Cir. Final Judgment
Ozark Society v. U.S. Forest Service No. 4:11-cv-00782 E.D. Ark. Defs.’ MTD Denied
Ctr. for Biological Diversity v. Bureau of Land Mgmt.
No. CV-11-06174 N.D. Cal. Pre-Trial Motions
Powder River Basin Res. Council v. Bureau of Land Mgmt.
No. 1:12-cv-00996 D.C. Cross-MSJs Pending
Earthquake Events
• Series of 12 earthquakes reported in
northern Ohio on New Year’s Eve 2011
• On March 9, 2012, the Ohio Department of
Natural Resources (DNR) issued a
preliminary report
• Compelling argument that seismic events
induced by injection wells
Other Earthquake Claims
• Cases Statistics:
• Multiple class actions E.D. Arkansas
• Cases
Sheatsley v. Chesapeake Operating
No. 4:11-cv-00353 Dismissed Without Prejudice
Hearn v. BHP Billiton Petroleum No. 4:11-cv-00474 Discovery/Settlement Conference Set 6/19/13
Earthquake Claims—Causation
Universities and research organizations are
examining the relationship between hydraulic
fracturing and earthquakes:
• U.S. Geological Survey Report
• Oklahoma Geological Survey Report
• Cuadrilla Resources Ltd Report
• University of Texas Institute for Geophysics
Litigation Solutions—Traditional
Methods
• Motions to Dismiss
• Removal
• Summary Judgment
• Expert Challenges—Attack Causation
Litigation Solutions
• Anticipation of Litigation
• National Council
• Discovery
• Custodians
• Scope of Relevant Documents
• Protective Orders
• National Corporate Representative
• Seek Regulatory Action
• Case Management Plan/ Lone Pine Order
Litigation Solutions—
Lone Pine Order
• “Lone Pine Order” requires plaintiff to
address exposure and causation issues
before extensive discovery
• Lore v. Lone Pine Corp., 1986 WL 637507
(N.J. Sup. Ct. 1986).
• FRCP Rule 16 grants discretionary authority
for Lone Pine order
Litigation Solutions—
Lone Pine in Federal Court
Fifth, Ninth, Eighth, and Tenth Circuits generally
approve use of Lone Pine orders as a case
management tool:
• Acuna v. Root & Brown, Inc., 200 F.3d 335, 340 (5th Cir.
2000).
• Avila v. Willits Environmental Remediation Trust, 633 F.3d
828, 83334 (9th Cir. 2011).
• Schwan v. CHN America LLC, No. 4:04CV3384, 2007 WL
1345193, at *2 (D. Neb. Apr. 11, 2007). [Eighth Circuit]
• Wilcox v. Homestake Mining Co., No. CIV 04-534, 2008 WL
4697013, at *1 (D.N.M. Oct. 23, 2008). [Tenth Circuit]
Litigation Solutions—
Lone Pine in Federal Court
• Some courts have rejected the use of Lone Pine
orders on grounds that traditional procedural
devises adequately protect parties’ interests
• Hagy v. Equitable Prod. Co., No. 2:10-cv-01372, 2012
WL 713778 (S.D.W. Va. Mar. 5, 2012) (denying
defendant’s motion for Lone Pine order in case where
plaintiffs claim ground water contamination allegedly
caused by oil and gas production).
Litigation Solutions—
Lone Pine in State Courts
Authority among state courts to support Lone Pine orders:
• Schelske v. Creative Nail Design, 933 P.2d 799 (Mont. 1997) (affirming summary judgment in favor of defendants based upon plaintiff’s failure to comply with case management order).
• Schneider Nat. Carriers, Inc. v. Bates, 147 S.W.3d 264, 268 (Tex. 2004) (noting without disapproval that trial court signed Lone Pine order requiring residents to specify dates of exposure).
• Simone v. Girard City Bd. Of Educ., 872 N.E.2d 344 (Ohio Ct. App. 2007) (recognizing that Lone Pine order could be appropriate under certain circumstances).
Pre-Litigation Preparation
• Seismic monitoring and analysis of fracking
operations
• Pre- and Post-fracking sampling of water
and air
• Master Service Agreement
BakerHostetler
Shale Symposium
The Utica Shale Play: Working in and
with the State of Ohio
June 6, 2013