NewsFlash: Oil and Gas Price Tumbling

NewsFlash: Oil and Gas Prices Dropping

Unless you've been living under a rock for the past year or so, you've probably noticed something happening at the pumps. Every week those numbers lit up on the signs seem to be ticking ever downward. Why is that? What does it mean for you and me? What does it mean for energy in the future?

Tumbling Prices

Since late in 2014 prices of crude oil around the world has been dropping steadily, and at times erratically fast. If you talked to those in the lower-level oil and gas jobs in 2014 you would have heard that "this will go on forever." The belief was supported by the people steering the ships, though the writing was certainly on the wall well before fall 2014. 

Anyone who has worked in oil and gas for many years will be able to tell you one things about the market: Enjoy the boom times, because there will be a bust. Though this seems to many of us too young to remember the 1970's, the oil and gas market is anything but secure when you consider that this is the fourth oil price crash in the last century. This may be based upon our age but also because of the general economic panic that has been present in the lives of those, myself included, who came of age during the 2008 world decline. Today, we see the same emotive sentiments reflected in the massive cost cutting, job cuts, and pullbacks in investment for oil and gas operations nationwide. 

While these trends are certainly frightening for oil and gas employees and welcoming at the pumps, it's also shaping how energy in this country is produced in the future. It's a household idea that when prices for gas go up the average person buys smaller cars, drives less, and generally makes choices with this consideration in mind. Now that prices are falling, one would think that in the converse we would all start guzzling gas and slip back to our general mindset of endless oil. While there may be truth to these trends on the level of the individual consumer, this time around the energy industry itself may not be offering up the same business as usual. 

Make Room For the Alternatives

Despite the drop in prices last year, this country saw a record amount of energy being generated through solar and renewable sources generally. Reports are being published all the time showing a marked decline in the use of older energy sources like coal due to the continual rise of renewables, but the same drivers aren't at work in this context. Aside from the electric vehicle market, renewable source generators are largely separate from the forces that are pushing down oil prices. Still, many within the alternative energies industry are waiting out the weather of the energy price decline as well, but they're banking on increased share of the market when investment starts flowing back in. For the time being though they are happily taking those jumping from traditional oil and gas positions. At this point we can take it as a good sign that renewable sources are still maintaining and increasing in prevalence throughout this time, because when investment does start to tick back up they will be well poised both financially and in the minds of those of us who will be adopting their use. 

Land Title: Basic Types Of Land Interests

Types of Property Interests

Last time in this series on real estate and oil and gas, I spoke generally about some common types of documents that a landowner or company might come across in an abstract of their land title. Today I’d like to go over very briefly just some of the different types of arrangements that parties might choose to create when they convey an interest in real property. Generally we refer to these different types of arrangements as interests or estates. When a person is conveying land, for example, they may do so by any of the conveyance instruments we talked about last time. These might include a Deed, a Will, or a probated estate.

In each type of conveyance of real estate there are a few key points that must be determined prior to putting everything into writing. There are the most obvious elements of any sale including the exact size and shape, otherwise known as metes and bounds, the amount of interest being given or withheld from the conveyance, and the amount of money to be exchanged for the property. From there you have the basic information needed for the deed, excepting one key piece of information.

In real estate law, which varies by state, there are specific ways in which parties can create a structure for the ownership of property when it is conveyed. In the law we refer to these concepts as the creation of different types of Estates. Each estate is designed to structure the relationship between new owners of property to determine how the property is used and later conveyed upon their deaths. Below I've briefly outlined some of the basic estates and the key considerations to be balanced prior to their creation in a land conveyance. 

Types of Estates:

            
1. Fee Simple

Definition: A fee simple interest is the whole enchilada. When you buy a piece of land outright, and no one owns any interests in it but you, then you own it in fee simple.

Benefits: The benefits of owning a fee simple interest are right there in the name: it's simple. You don't have to worry about other owners, tenants, or what's going to happen after you die. You have the ability to do whatever you'd like with the interest and you are the king of your domain.

Example of language: Deeds or other conveyance documents are made in fee simple when they state the transfer in phrases such as, "A to B, and his heirs forever."  

2. Life Estate

Definition: A life estate is simply a conveyance where you're the owner of the land as long as you're alive, and then it goes to whoever is listed next in line. This second person is known as the remainderman and they essentially are the owner until the moment of the interest-holder's life. Typically life estates are used to make sure that a piece of property stays in the family for at least a couple of generations.

Benefits: You become the king of the castle for as long as you live (It's good to be the king). The person who is conveying the interest also gets to know what happens to the property before they sell it, or they die in most cases.

Example of language: "A to B for life, and then to C and her heirs."

3. Tenancy In-Common

Define: This is the general way by which two or more people own a single property. If there's not language other than a basic conveyance in these situations, then it's automatically a tenancy in-common.

Benefits: This allows each owner a lot of freedom to sell or do with the property what they'd like. It's not all cut and dry that either tenant can do with the property what they'd like, but the freedom is worth it in most cases.

Examples of language: "From A to B and C" or "From A to B and C, as tenants in-common"

4. Joint Tenancy

Definition: A joint tenancy is a form of ownership where two or more people all own the entire property, but when they die their share goes to the remaining living owners. For instance, you have three brothers who own the family farm through a joint tenancy. Because all three brothers own the property completely, none of them can sell it without the others. When the first brother dies, his 1/3 ownership of the property goes to the other two brothers automatically and they now own 50% each.

Benefits: This keeps the property's ownership extremely predictable until the owners all agree on some alternative sale or type of ownership. It also makes the conveyance after the deaths of any owner extremely predictable.

Example of language: "From A to B and C, as joint tenants with the right of survivorship."

5. Tenancy By The Entireties

Define: An entireties tenancy is a unique form of ownership whereby a husband and wife own a property that acts automatically as a joint tenancy. This is the default ownership that occurs, regardless of deed language, when conveyed to husbands and wives in marriages that aren't deemed legally separated. Check your State law to determine if this is automatic or even allowed in your state.

Benefits: The tenancy allows husbands and wives some predictability in how their property is transferred when they die.

Examples of language: "From A to B and C, as husband and wife"

Conclusion:

When you are considering what type of ownership is right for your conveyance look into the laws of your state and talk to a property attorney. Though I've made these interests seem simple, the effects of a few simple words on a deed can be the difference between security and risk.

Water Quality: Aren't They All Waters Of The United States?

Clean Water,  Messy Language

Welcome back everyone, after a short July break I am ready to get back to it and continue the discussion. As promised, we are starting on a series that will give us a platform from which we can discuss topics of water quality, environmental protection, and governmental intervention in business. 

A great starting point for a discussion about modern water quality, begins in the 1970's. It was the age of Nixon, Viet Nam, and the beginning of the Environmental Protection Agency. The modern day environmental movement was already alive and thriving, thanks in large part to our own native Pittsburgher Rachel Carson. Carson had published her book Silent Spring in 1962, amid a fierce outcry from pesticide manufacturers who were directly in the crosshairs of the book. The effect of the book's central demand for ecological awareness and protection still rings out today on a variety of environmental campaigns. The tone of change across the country, and the political need to update the existing structure of environmental protection laws lead to the creation of a suite of statutes. These laws address distinct problems including air pollution, water quality, toxic chemicals restrictions, and clean-up of contaminated lands across the country. 

Of course I'd be overjoyed to talk about all of them, but sadly today I'll have to narrow it down to just the Clean Water Act.  

Clean Water Act

To set the stage for future conversations, lets begin with a quick and dirty outline of the most essential bits of this large body of law. In just 3 simple sentences, the Clean Water Act makes a whole lot of activity illegal, and then turns around and tells us how we can get around being considered a criminal. Section 301 of the act breaks down to prohibit the (1) discharge of a (2) pollutant (3) from a point source (4) into a navigable water as unlawful activity, unless done within certain limitations. Sections 402(k) and 404(p) then compliments section 301(a) by establishing that these activities can be made legal under authority of a permit issued by an appropriate governmental agency. In these 3 simple sentences we have the statutory basis for the Environmental Protection Agency's (EPA) entire water quality scheme, as well as every state and regional program to regulate water quality.  

Of course it seems far too good to be true that we can boil down water quality protection into 3 simple sentences. If there's one thing that lawyers love to take advantage of it's the inherent ambiguity in simple sentences of law. Each of the 4 points, or elements as attorneys would refer to them, I've numbered from Section 301 has its own legal ambiguity that has been exploded out into years of court battles. Following each court ruling, revisions by the EPA are released to illustrate how the agency interprets the language in making decisions. Lets take a quick look at one recent interpretation of just a single element from Section 301(a). 

Waters of the United States

On June 29, 2015 the EPA published in the Federal Register a rule more commonly known as The Clean Water Rule: Definition of "Waters of the United States." This rule establishes the EPA's position on the definition of the phrase "Waters of the United States" for the dual purposes of making the Clean Water Act (CWA) more effective, and to help interested parties more easily understand the CWA's effect on their activity. Why is it necessary to explicitly define such a phrase that seems fairly simple, you ask. Leave it to the ambiguity of language to start some interesting legal battles. 

To understand the confusion, we have to step back two steps to get to this point. The predecessor to the CWA, known as The Rivers and Harbors Act, was the first environmental protection statute passed by Congress. The statute outlawed obstruction or pollution of navigable waters or tributaries. Of course, legal battles established a means to define "navigable waters," and we ended up with the "Daniel Ball" test.  Essentially the test states that a water is "navigable" if it can be used for normal commercial shipping purposes, if it is actually navigable, or if it is connected to commercial activity in some way. This created some obvious holes in waters that were not covered by the pollution protections. Along comes the environmental movement and the CWA.

The CWA was meant to compliment other statutes like the Rivers and Harbors act in what it protects and how it defines terms like this. In it's definitions section, the CWA defines "navigable waters" as "waters of the United States, including the territorial seas." Quite the helpful drafting by Congress on that one; that really makes everything totally clear. For the average person the response to "What is a Water of the United States" might seem fairly simple: any water body in the United States. Of course, the simple answer isn't always the correct one. In the decades that followed, a whole series of cases were decided on the question of defining those simple words. Most recently, the whole question was thrown for a loop with the U.S. Supreme Court decision in U.S. v. Rapanos. This case asked the question of whether wetlands not connected to surface waters or commercial activity can be considered "Waters of the United States." The Court's decision was not conclusive and left environmental organizations, corporations, and the attorneys they hire with several ways to define the word depending on which judge you listened to. The Clean Water Rule is designed to simplify the whole mess of definitions and tests, without changing any of the exclusions from the rule that already exist (such as agricultural runoff). I'll spare you the details it takes to explain the full rule, but if you're interested in understanding how terms like this are interpreted, check out the EPA's website on the rule.

For the average person, none of this has much effect on your life or how you spend your time by the river. For those organizations who focus on environmental protection and the businesses they monitor, it is an essential component of their work and risk management. For all involved, regardless of their interest, the Clean Water Rule adds a higher degree of dependability to the decision-making process.

Social Justice Moments: Same-Sex Marriage

I know at the end of my last post I said we would be jumping into an ongoing series on water law and water quality, but I’m going to put that on hold until next time, and discuss something a little more timely. This will be the first post in a series I’ll call “Social Justice Moments,” where I’ll take a brief break from environmental law and discuss an important and timely social justice legal story. This is also also as an opportunity to discuss the work that the talented attorneys in my law firm do every day, and how we are reacting to this decision. I’m aware that this doesn’t quite fit the theme of environmental law either, but this is also a forum to discuss social justice and commerce more generally. Therefore, if you’re coming purely for the environmental law discussions, you should check back next time.

Obergefell v. Hodges

On Friday June 26, 2015, the United States Supreme Court released its decision in the case of Obergefell et al. v. Hodges, Director, Ohio Department of Health, et al. In the controversial ruling, the Court found that the right to marry in the United States is a fundamental right protected for all people by the Constitution. Let’s unpack very quickly what the Court is actually saying here and why this is an important principle for commerce law in the U.S.

Everyone learns in high school social studies classes that the Constitution consists of two distinct parts. The first is the general body of the Constitution, which consists of seven “Articles”. Among the functions of the Articles is to outline the basic format and function of the 3 branches of government, and how they should interact with and restrain each other. The other portion of the Constitution is what we know as the Bill of Rights, being the first 10 amendments to the Constitution, and then all of the amendments made subsequent to 1787. The rights that are discussed in the Bill of Rights and its amendments are not rights given by the Constitution, but are rights that the government acknowledges that it cannot take away from the people.

This is an important legal principle because it puts the responsibility on the people to argue what the bounds of those protected “fundamental” rights are. A whole area of Supreme Court precedent deals with interpretation of the 14th Amendment. The 14th Amendment is seen as legally protecting these fundamental due process rights for all U.S. citizens. Among the fundamental rights that have been successfully recognized through the language of the Constitution are the right to travel between states, the right to use contraception, and the right to marry persons of other races. If it’s becoming clear how the Court found in Obergefell that such a fundamental right also exists for same-sex couples, then a gold star for you; you’re practically a Constitutional law scholar.

Perhaps one of the most famous recognitions of marriage as a fundamental right by the U.S. Supreme Court came in the case of Loving v. Virginia. In Loving, the Court was asked to rule on the Constitutionality of a Virginia ban on interracial marriages. The mere fact that a white man married a black woman placed the two in danger of a one-year jail sentence, which was reduced to a Court-Ordered exile from Virginia for 25 years. The Court reiterated earlier case law that found marriage to be one of the “basic civil rights of man,” and found that the “freedom to marry, or not marry, a person of another race resides within the individual.” The modern Supreme Court used these same principles as applied to interracial marriage bans, and found that same-sex couples are no less protected in their fundamental right to marry and have their unions recognized under the law. Of course there are those who criticize the decision on and off the Supreme Court, but that is the nature of our democratic system. At each phase of our national development there has been a series of cases which, when the decisions are released, polarize and divide the country. Each time the parties sympathetic to the dissent complain and protest. But, each time the smoke clears and the nation continues moving forward stronger and more united than before. I don’t foresee this time being any different. If anything, I think that this decision will be more of a minor hiccup, in it’s negative backlash, compared to some of the other major decisions of the past 100 years.

Beyond my mere support for the decision, I would like to point out how this type of decision will come to affect the populations of people who can now validly marry, or simply have their valid marriages recognized at home. When a couple marries there are many implications for their finances, property, and respective futures. Married couples in this country are given many benefits simply for this status, including the ability to cover spouses on health insurance, recognition of inheritance, and in some states, the automatic co-ownership of property. In Pennsylvania for instance, all property acquired during the course of a marriage is automatically transferred into the ownership of both spouses, unless they both show an intention to keep the property separate. This implication is important if the couple chooses to divorce or if one of them dies without a valid will in place. This is just one example where legal planning for your future would be an important consideration for all couples, regardless of gender or sexual orientation.

At the Commerce Law Group, LLC, we are proud of the decision of SCOTUS, and continue to support clients past, current, and future, regardless of sexual orientation. I for one am excited to work with same-sex couples through any of the legal issues discussed above and to work to ensure that the rights of all people are protected and recognized under the laws of this great country.

Basic Land Title Documents

Basics of Title

Welcome back and a happy Monday to all of you reading this in a timely fashion, as you should be. Last time I discussed the two major players in land title research, the landman and the title attorney. We are going to jump in today and talk about some of the general types of legal documents that you might see in a landman’s abstract of a parcel and some things to think about when looking at transfer of ownership for any sort of real property.

The basic types of documents you'll find in an abstract can first be broken down into the two categories: conveyances; and encumbrances. Conveyances include all of the basic instruments used to buy or sell land. The most basic type of document that you'll see is a Deed. A deed can come in many forms depending on the time period and specific jurisdictions in which the land being sold is located. This means sometimes, in the title of these documents, you'll see the added words "warranty" or "general warranty." The warranties that are being referred to are just fancy ways for the seller to guarantee that: they did in fact own the land they're selling, they're selling it as advertised without any surprises, and that they've disclosed any encumbrances (which we'll discuss in a moment). These are terms that were more prevalent in older deeds in times when it wasn't quite as established that these warranties are basic concepts that are implicit in any deed for land or property today. 

A couple of subsets also exist under these basic conveyance instruments, for things like quitclaim deeds and sheriff's deeds. A quitclaim deed is slightly different from a simple deed in that what is being conveyed is either an actual or potential interest in what the person conveying the interest, otherwise known as the grantor, actually holds. Basically, these are deeds which bar the grantor from ever coming back and claiming they hold some small interest in the property, and are owed some type of compensation for that interest. The other variation, known as a sheriff's deed, is a document executed by a sheriff to a buyer who acquired their interest in the land at a public auction, or sheriff's sale. These deeds typically follow the repossession of land to satisfy debts, unpaid taxes, or when there is no known party to whom the land interest can be conveyed when the previous owner died. 

That last point brings me to the next form of conveyances, which are those that occur following the death of the current owner. Typically, upon the death of a current owner the first place to look when determining how land will be conveyed is in the Last Will and Testament of the deceased. Wills are submitted into probate courts that verify the validity of the documents and oversee the administration of the estate through the Will's instructions. In an abstract in Pennsylvania, you'll not see any other documents of conveyance if there is a duly probated Will. The land will simply pass as per the instructions in the Will. However, in places like Ohio, you will see a little bit more. In Ohio, following probate of the Will the Court issues and records in the County Recorder's office a Certificate of Transfer. The certificate of transfer is just a reflection of what's actually in the Will, but makes it much easier for reviewers to see who was alive at the time of the Will being probated. Sometimes, in West Virginia especially, you'll see no conveyances and no Wills to indicate how the land was conveyed. These are instances where landmen have to dig deeper into documentation; to determine who was alive at the time and how many pieces the whole interest was broken into. 

The other major type of documents you will find in an abstract are referred to as encumbrances. Encumbrances are instruments which follow the conveyance of land, and may need to be satisfied and removed from the title in order to sell or lease the land. Typically, the types of encumbrances which need to be satisfied are instruments such as: mortgages, liens, tax burdens, and unreleased leases. For oil and gas purposes, the timing of when these documents were recorded is also quite important; and a topic for another discussion. In essence, when a party tries to sell land with a lien or mortgage on it, the buyer would have to either take on that mortgage themselves, pay the entire balance prior to the sale, or find some way to negotiate for the mortgage to remain in the interest of the seller. For oil and gas operators, the existence of debts and mortgages on land, when considering executing a lease, spells out potential complications later if someone comes to collect on debts that have gone unpaid for a period of time. An even bigger issue might arise if there is a lease on the land for oil and gas drilling which appears to be void because of low production. This situation might turn into a prolonged, costly court battle which could result in the loss of wells drilled on already leased land. 

For our purposes, the other major types of encumbrances are what could be considered more passive. Rights-of-way and easements are instruments which typically allow for the construction of infrastructure, for example: pipelines, telephone and electric systems, and highways. Easements, however, can take the form of whatever the parties wish to agree upon as being a required activity on the land. This might include something as simple as a walking path over someone's land for their children to cross after school, or something as major as a permanent roadway access across private land. For oil and gas activities, these are important when considering planning surface activities, placements of pipelines, and deciding whether to build new structures or simply acquire and utilize what's already in place. 

Of course these are not by any means all of the documents you might and will come across in an abstract. But these give you the basics about what each type of document can, and is doing when you look through that stack of papers. If you have any interest in learning more about this topic, continue following along, or consider picking up any number of publications from organizations like the AAPL. Next in this series we will be looking at the different types of interests that may be conveyed ,or created, in the conveyances of land title. In the mean time, look out for my next post, which will address a broader series of topics on water law and water quality topics. 

            

Introduction To Land Title In Oil and Gas

Happy beginning of summer to everyone. I know it's not the official beginning of summer yet but when children start getting ready to leave for their break I just start to feel like it's summer already.Today I'm going to begin a series on some very fundamental areas of oil and gas law that are taking place here in Pennsylvania. We're going to start with the property law related to oil and gas drilling, and acquisition, and then I'll use that as a platform to begin talking about some contract and transaction issues that might be relevant to landowners and companies alike.

Land Title: Basic Actors

So, as I said, today is just going to be part of laying a foundation so we'll start with some very basic concepts. I'm sure all of you know that in order for someone to drill for oil underneath land they have to either own that land, own the minerals, or have an agreement to drill under the land, otherwise known as a lease. A lease can be either done individually or can be done as part of what's called a pool or unit. Pools and units allow oil companies to make sure that no matter where they're pulling oil and gas from, or which direction they're putting a horizontal lateral in the case of Fracturing, they are able to legally collect as much oil and gas as possible. it also helps to ensure that they're paying the correct people their fair share for what is pulled out of the ground.

It is at this point you might be thinking "well if you have these large tracts of land owned by many people each with their own leases that sounds really complicated." Bonus points for you for looking ahead. Ownership and correct royalty payments is hugely important for oil and gas companies. That's why they hire typically independent contractors known as landmen to do a lot of the legwork, or due diligence, to ensure all the ducks are in a row. 

A landman is typically an independent contractor who is assigned a specific parcel or series of parcels of land by a company to research. The land man will use any resources at their disposal including online and in the courthouse resources to trace back title for a given area of land to ensure one of two things. There either trying to ensure that a mineral deed that is being executed is being signed by the correct mineral owner, or they're trying to ensure that royalties being paid under an executed lease are being paid to the correct owner in the correct proportion.

Who are landmen and title attorneys, and why do we need them?

The land title industry is wide and quite varied. Entities like banks, insurance companies, real estate agencies, and oil companies all need specialize employees who can decipher the often vast and confusing title documentation, and make sense of them. Being a landman doesn't typically require any kind of advanced degree beyond a high school diploma, though some advanced skills would certainly help because it can be quite complicated.

The role of the landman is to ensure that clear and accurate understandings of land ownership are known by parties to a land transaction. A mistake in ownership can cause massive headaches in the long run because companies may have to pay out twice on the same royalty values if they never paid the correct owner.

A landman's work product is what's known as an abstract. An abstract is, hopefully, a full and complete record of ownership, transfers, liens, taxes, out sales, and other other actions that may have affected a given piece of land over the last 160 years or so. One big thing to note is that an abstract IS NOT a legal opinion. Abstractors don't need to be attorneys, though attorneys can be abstractors. In either case, unless the abstract also contains a certified title opinion, it is not a legal opinion. This is significant because without a lawyer's signature the abstract is simply a set of records with a lay opinion as to ownership. That's not to say that landmen don't have professional standards for their work-product. The American Association of Professional Landmen (AAPL) is a trade group for landmen that provides a set of practice standards and ethics that its members are requested to adhere too. 

A title attorney, on the other hand, is a licensed legal professional who has expertise and knowledge of real estate law in a given geographic area. Title attorneys typically take abstracts done by independent landmen or brokerage firms, and derive their own opinion as to the correct ownership reflected in them. Title attorneys carry large malpractice insurance policies because they are putting their signature on the certified title opinion and may be sought if an error is eventually found in their evaluation of ownership. 

If you're a landowner, you'd most likely be interacting with a landman and not a title attorney. Title attorneys charge much higher fees and have much more value to large-scale companies who have a high volume of title research to be done. While the higher confidence of hiring a title attorney may seem like a positive trade-off for the money spent, a landowner with only a few parcels might do well to look for a landman who is also a licensed attorney. That way you can be confident not only in their skills as a landman and knowledge as an attorney, but you can also work on keeping the costs down by separating out legal opinions from legal research.

So that's a basic introduction to the land title terminology and what to look for if you're engaging in any kind of research with a land professional. Next time I'm going to cover a few of the basic types of agreements that a person might find in a title abstract and discuss the differences. That will lead us into looking at the different types of mineral agreements that you're likely to see and how they all make sense.

Induced Seismicity Part III: Standing on Stable Footing

Induced Seismicity Part III: Standing on Stable Footing

When I hear the word negligence the voice of my first year law school torts Professor comes in my head.  His simple phrase repeated again and again anytime he said the word negligence regardless of whose name he called out at any one moment you were to respond with the four elements "duty, breach, cause, harm." And of course this is obviously an oversimplification of what negligence means but it's a good way for anyone to think about whether they have what might be considered a negligence case under the law.

Negligence

Let's look at each of these elements in a very basic way. What is it mean to have a duty? Essentially it means that you have a relationship with another person regardless of whether you know them or see them or have any connection to them in your mind, but you owe them some kind of responsibility. For instance, if you drive a car you owe duty to all the other drivers on the road not to wildly swerve over and smash into them. Now that's a pretty simple concept. You can look at most people and if they've hurt someone else you can find the duty that was owed to the other party not to harm them in that way. Now that brings us to the second element which is a breach of that duty. By breaching of duty it simply means you failed at that duty. Go back to my earlier example, if you are the driver who swings wildly between lanes and smashes every car you've broken the responsibility that you have to those other drivers to stay in your lane.

Now I'm going to skip to harm because that is simpler then cause. Harm is fairly obvious I think because we all know what it means to be harmed. Now in the context of a tort, harm can be a physical damage like being hit but it can also be an economic damage like loss of business or destruction of your reputation in the case of things like defamation. Causation or cause is a little more difficult for the average person to wrap their mind around. Cause can be looked at in several ways. We can look at it from what's called the but-for perspective, which means that were it not for you swinging the car to left the other driver would not of been hurt. Without your actions they would still be fine. The other perspective that we tend to look at is what's known as proximate causation. When think of proximate causation we think of whether your actions could be viewed in such a way as to say that it was conceivable when you did whatever the thing was that you would hurt another person. For example, you accidentally dumped nuclear waste into a river. Of course you're going to face some pretty hefty environmental regulatory sanctions and fines but you're also probably going to hurt some property and person. But at some point all the way down the line you're going to have to cut off where the law says that you're allowed to sue the person that dumped that waste. So if this happens to be a salmon breeding ground for instance and you live all the way across the country and you eat some of the salmon that was poisoned. You didn't know that when they caught the fish that you would catch some kind of minor radiation poisoning. If you find out where your salmon came from and realize it was poisoned by this toxic waste and you go to sue the person that dumped this wasting to the river, it's going to be difficult for you to win. In that case it was not reasonable for them to think at the time that they dumped that toxic waste into the river that they were going to harm you in this way. The law makes the cut off at some point so that each person can act in a way where they can expect who they have a duty to and avoid breaching it. Now let's apply this analysis to be induced seismicity.

The analysis will apply the same way going through the duty, the breach, the cause, and the harm. Beginning with the harm, because that's most clear, we can say that in any of these cases the harm will be whatever damage is done as a result of seismic activity in the form of these minor earthquakes. Then working backwards again one more step we can say that if there is a clear link as created through all the scientific evidence between the injection of the water in the ground and the earthquakes, then we have causation. But-for the injection of the water the heightened occurrence of earthquakes would not have led to destruction of property. Further, when we think of proximate cause in this case the arguments can be made on either side. If the science is so clear that one causes the other then to say that from now on anytime somebody injects water into the ground the assumption that there's going to be earthquakes in the nearby area which may cause damage doesn't seem so unreasonable. However the counter argument to that could be something like, it's hard to show directly that any one person injecting water into the ground actually created the disturbance that led to a particular earthquake. Of course then we can go back to the first two elements and argue that parties disposing of wastewater from oil and gas have a duty not to cause earthquakes the damage homes and by doing so they are breaching that duty.

In my opinion I think the hardest part about bringing any of these cases in the future under theory of negligence is going to be showing the element of causation. Despite having a fairly strong scientific correlation through the statistics related to increased activity both in injection and in seismic activity in these areas, it's a touch sticking point. It's hard at law to point directly from one person injecting water into the ground to one distinct earthquake. Only time will tell if these sorts of cases managed to proceed and succeed on the part of plaintiffs but I think for now the near future, based upon all of the circumstances, favor still lies with the companies that are injecting this water into the ground.

That does it for our look at the theories for litigation based upon induced seismicity.  Next time I will be starting a series on the basics of oil and gas leasing. From there we're going to look at different types of business entities and how the relationships between parties to a lease can affect how it's viewed under the law and some conflicts that might arise.