Co-author Stephen CooneyRecent legislation in Texas to promote the recycling of water produced from oil and gas operations are steps in the right direction but may create as many problems as they fix. As technology improves, our population continues to grow at an unprecedented pace, and our water supplies remain limited, recycling of water
The 2019 Texas legislature enacted a new Property Code Section 5.152 to protect mineral and royalty owners from a certain species of fraudulent transactions perpetrated on trusting and/or naïve and/or out of state mineral owners. Ethan Wood and I wrote about the scam when it made its way into the courthouse.
How the scam worked
The grifter, fronting for a company with a name similar to a reputable operator, would approach the owner with an oil and gas “lease” of minerals or royalty that were already subject to an existing lease. Except that the lease was actually the sale of the mineral or royalty interest at a bargain price. The scammers would then invoke arbitration provisions they had written into the conveyance, and relying on the confidential nature of the arbitration process, would stifle publicity of the inevitable dispute.
It’s still true, “Whiskey’s for drinkin’, water’s for fightin’.” Gray Reed lawyers Brock Niezgoda and Stephen Cooney spoke to TIPRO’s summer conference on the use, control and ownership of water in oil and gas operations. Here is their PowerPoint.
The takeaways:
Groundwater
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Co-author Niloufar HafiziAs mentioned last week, the 86th Legislature amended the Texas Citizens Participation Act, Texas’ Anti-SLAPP law and defendants’ go-to weapon of destruction in a diverse range of cases.
The TCPA was intended to prevent harassing lawsuits by plaintiffs seeking to quell constitutionally protected activity, in particular the exercise of free speech, the right to association, and the right to petition.but has been much-criticized for being overly broad and subject to abuse and misuse. The old TCPA was frequently applied in oil and gas litigation, which is why we are benefiting you with our observations.
Co-author Nilofaur HafiziThe answer depends on what part of “the oil business” you care about. The 86th Legislature produced a few, but not many, changes in laws affecting the business, (most going into effect on September 1). Here are some that passed and some that failed:
WINNERS
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Welcome to today’s grab-bag of unrelated topics.
The climate avengers are clever in the way they demonize the industry. They give zero credit for technological advancement. Truth is, the industry’s use of technology is constantly evolving, resulting in improved performance and, not secondarily, lessened environmental impact from operations.
One example: Scientists from The Ohio State University are working on a project to convert fossil fuels and biomass into useful products, including electricity, without emitting carbon dioxide into the atmosphere. The papers were published in the journal Energy & Environmental Science.
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Any semblance of objectivity on the subject of the day is expressly disclaimed. This post contains distressing words, such as “oil and gas”, “fracking” and “jobs” that could cause severe emotional reactions in sensitive readers. If this post is contrary to your firmly held beliefs, proceed promptly to your downward facing dog.
As a thoughtful reader you might ask, Why should I vote against Proposition 112? Here are a few reasons:
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Referred to as the Setback Requirement for Oil and Gas Development, here is what Colorado voters will be asked to consider on November 6:
Shall there be a change to the Colorado Revised Statutes concerning a statewide minimum distance requirement for new oil and gas development, and, in connection therewith, changing existing distance requirements to require that any new oil and gas development be located at least 2,500 feet from any occupied structure in any area designated for additional protection and authorizing a state or a local government to increase the minimum distance requirement?
“Any area designated for additional protection” has been described as “sensitive areas”, such as “streams, intermittent streams, canals, and open spaces”. Current setbacks are 500 feet from homes and 1,000 feet from schools.
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If you’ve ever tried to escape penalties for the operator/producer’s failure to comply with La. R.S §30:103.1 and §103.2, take comfort in XXI Oil & Gas, LLC v. Hilcorp Energy Company. You are not alone. No excuse has satisfied the courts, and there is none here.
The statutes (links above) require information
Co-author David LischCongress has passed the Defend Trade Secrets Act of 2016 and the president is expected to sign it into law. The DTSA allows suits in federal court for misappropriation of trade secrets. Before the DTSA, most litigants would sue in state court under the Uniform Trade Secrets Act (the UTSA), approved by