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Energy & the Law

The Accommodation Doctrine Gets Its Feet Wet

Posted in Contract Disputes, Land Titles, operations

gliderLet’s start with a little background: Under the Accommodation Doctrine an oil and gas lessee has an implied right to use the land as reasonably necessary to produce and remove the minerals, but must exercise the right with due regard for the landowner’s rights.

As a result of Kelly Lake Ranch v. City of Lubbock, the doctrine now applies between the landowner and the owner of an interest in the groundwater. You think this decision pertains to ranchers? I report it because as we know from Bernie, you oil people frack the earth, poison our babies, and spend undeserved riches that should go to the government on vast, water-starved ranches in West Texas.

How did we get here?

In 1953, the City bought the Ranch’s groundwater via a deed that had very detailed provisions regarding the City’s rights. The Ranch reserved water for certain specified uses. In 2012, the City announced plans to increase water extraction by drilling as many as 20 test wells and 60 additional wells. The Ranch objected and sued to enjoin the City from implementing its plan.

The Ranch argues … and honors the Lesser Prairie Chicken

  • The City has contractual and common law responsibility to use only that amount of the surface that is reasonably necessary for its operations and to conduct operations with due regard to the rights of the surface owner.
  • Mowing or removing vegetation would cause destructive wind erosion.
  • The City could drill only where the Ranch allows it as long as full access to groundwater is not impaired.
  • Elevated power lines would allow hawks to roost and prey on the Lesser Prairie Chicken, a threatened species. So bury them (the lines, not the chickens).

The City argues

  • The deed gives the City very broad rights to pursue its plan.
  • The City owes no duty to surface owners (as would mineral owners to accommodate surface owners).
  • The City can drill wherever it chooses, even if it could drill in places less damaging to the surface and still access the water.

The deed governs the City’s rights to use the Ranch land.  What is unsaid is whether the City has an “all but absolute” right to use the surface, heedless of avoidable injury, or only what is necessary or incidental to fully access the groundwater.

The Result

The deed alone did not determine the City’s right to use the Ranch.  There are sufficient similarities between mineral and groundwater estates and their conflicts with the surface estate to apply the Accommodation Doctrine.

See pages 10 through 12 for a history of the doctrine in Texas. See page 13 for the elements of a surface owner’s claim under the doctrine.

A concurring opinion pointed to the written agreement allowing the City to drill water wells at any time and location.  Thus, the doctrine should not apply.  It might apply to where and when the City could construct access roads, but not to where it may locate wells.  Access roads could be built only where “necessary or incidental,” which leaves substantial room for disagreement. To that, the concurring justices would apply a reasonableness standard.

This is a Supreme Court opinion, so treat it like it is a big deal.

A musical interlude.

Let’s not forget D- Day

Several years ago I commented about D-Day – which happened 72 years ago yesterday – and my uncle, who was there. It is worth reading again.