Hydraulic Fracturing And Strict Liability

Well, I'm back.

After something of a hiatus over the summer and early fall due to work and personal commitments, I am back to blogging about water. And first up is an issue much in the press here in Pennsylvania - hydraulic fracturing, or as it is sometimes known hydrofracking or just fracking.

Just for the benefit of anyone not familiar with the term, hydraulic fracturing is a technique used to extract natural gas from shale formations. In much of the Northeast, it has become a matter of public debate due to technological developments that now allow hydraulic fracturing of the Marcellus Shale, a particularly deep and large shale formation which underlies much of New York, Pennsylvania, Ohio, and West Virginia.

The debate over hydraulic fracturing has been intense. On the one hand, the Marcellus Shale represents a massive reserve of natural gas - a far cleaner energy source than oil. And thus represents an enormous potential economic benefit to the various states the Marcellus Shale underlies. On the other hand, many have raised concerns, particularly in a post gulf oil spill world, over the potential for environmental contamination due to hydraulic fracturing. A number of stories about contaminated drinking and ground water have spurred these fears to the point that both New York and Pennsylvania have enacted moratoriums on hydraulic fracturing (though there is speculation that Pennsylvania's new governor may repeal Pennsylvania's limited moratorium).

Well, the foes of hydraulic fracturing have just won a minor victory in a recent federal court decision coming out of the Middle District of Pennsylvania. In Fiorentino v. Cabot Oil & Gas Corp., No. 09-cv-2284 (M.D. Pa. November 15, 2010) Judge John Jones refused to dismiss a suit against Cabot arising out of allegations that Cabot's hydraulic fracturing operations contaminated the plaintiffs’ property and water with methane, natural gas, and other toxins. The decision is significant because one of the questions before the court was whether a claim of strict liability can be brought against a hydraulic fracturing operation.

For the non-lawyers among my readers, certain types of activities – the most common example being blasting – are considered so intrinsically hazardous that someone engaged in those activities will be liable for any harm they cause, even though they have taken every possible precaution against such harm. This enormously reduces the evidentiary burden on plaintiffs, who only need to prove that the defendant was engaged in the activity, and that the activity caused the harm complained of.

In Fiorentino the plaintiffs asserted, among others, a claim for strict liability. Cabot sought dismissal of that claim, arguing that while Pennsylvania courts have never directly addressed this issue in the context of hydraulic fracturing, the Pennsylvania Supreme Court has consistently held that other oil and gas related activities are not sufficiently hazardous to invoke strict liability. The court, though not finding that Cabot’s drilling activities were subject to strict liability, ruled that a detailed factual record needs to be developed before such a decision can be made.

If the Fiorentino case does not settle first, there is the potential for a determination that gas exploration, and hydraulic fracturing in particular, could be found to be an abnormally hazardous activity subject to strict liability. That could have a profound effect on the exploration of the Marcellus Shale in Pennsylvania.

This is one to watch.

What Do You Think Lawyers Should Be Thinking About

I have recently joined the planning committee for the 2011 American Bar Association Water Law Conference which will be taking place in San Diego next February. And we are currently in the process of determining the themes and panels for the conference.

In thinking about discussion topics for the conference, it occurred to me that it would be interesting to hear what you think we should be talking about. The American Bar Association is almost certainly the largest organization of attorneys in the United States. And this conference will pull together attorneys involved in water issues from across the country, including lawyers from both the private sector and government agencies.

So…What do you think the lawyers should be talking about?

In the hopes that this becomes a discussion, please post any thoughts in the comments section as opposed to e-mailing me directly. Also, the more specific the idea/issue, the more useful it will be. While I welcome anyone’s opinions on this subject, I am particularly interested to hear what non-legal practitioners have to say. What are the issues/problems you worry about? What do you encounter in your day-to-day activities that you feel need to be discussed, or discussed more than they are. Obviously to the extent there is a clear legal dimension to the issue, the more appealing it will be for this group.

Great Article On Water Scarcity At The Economist

I have long been a fan of the Economist. The writing is excellent, well thought-out, and often reports on stories ignored or buried by other news sources here in the U.S.

On Friday, the Economist published an article on water scarcity. The article provides an expansive overview of the problem. While the breadth of the article understandably limits the depth with which it covers various issues, the article is an excellent introduction for anyone who wants to learn about water scarcity.

I highly recommend you check it out.

Senate Climate Bill Sees Light Of Day

Senators John Kerry and Josef Lieberman unveiled their long awaited climate bill, “The American Power Act,” today (The bill, along with some explanatory documents can be found here). Weighing in at almost 1000 pages, the bill tries to provide a little bit of something for just about everyone. Though primarily aimed at curbing greenhouse gas emissions and promoting various energy initiatives, there are some provisions which should be of interest to people involved with water related issues.

Though I am still parsing through the bill myself, Title VI of the bill – addressing adaptation to climate change – has jumped out at me as being particularly relevant to the water community. That part of the bill creates a new “Natural Resources Climate Change Adaptation Panel.” The Panel (easier than saying NRCCAP), will be made up of the heads (or their delegates) of essentially every federal agency that has anything to do with natural resources or the environment. And the Panel is tasked, within a year of its formation, of formulating a comprehensive national strategy:

(1) to protect, restore, and conserve natural resources so that natural
resources become more resilient, adapt to, and withstand the ongoing and
expected impacts of climate change; and
(2) to identify opportunities to mitigate the ongoing and expected impacts of climate change.

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Once formulated, this Strategy will be rolled out to all of the various agencies and organizations represented on the Panel who then have to formulate plans of their own to implement the Strategy.

Water management and conservation are mentioned relatively prominently throughout the bill, considering its focus on energy and GHG emissions. And from a number of the provisions it appears that the bill will provide at least some new federal funding for water management and conservation efforts.

Of course, this bill is in its infancy. And there is no guarantee that it will pass in its current form, or at all. And at the end of the day, where the rubber meets the road here is less with the terms of the bill, and more with the regulations and rules that come out of it.

A Human Right To Water

I have written a couple of times on the issue of whether there is, or should be, a human right to water. I was recently contacted by Isobel Foulsham, an MA student in human rights at the Institute of Commonwealth Studies in London. Isobel created a short video advocating the existence of a human right to water.

The video is only three minutes, but is actually very well done – in particular I like the style of animation that was used. From a more substantive perspective it also imparts important information about the dire straits much of the world is in when it comes to access to potable water.

I agree with Isobel’s positions on the nature of the problem, the problems with bottled water, and the need to make better use of municipal water supplies. I am not quite as against the commoditization of water as Isobel appears to be, though my concept of commoditization doesn’t really apply to water used for personal uses (i.e. drinking, bathing, washing etc.), which is the thrust of the video.

Given the inherent limitations of a three minute treatment of a complex issue, I think Isobel did a very good job encapsulating many of the issues associated with a human right to water. I highly recommend you check it out.

When Does Efficiency Not Lead To Conservation?

It is a hallmark of current thinking among conservationists that one of the greatest tools in our arsenal to promote the conservation of natural resources is increasing the efficiency of our use of those resources. The entirely logical line of reasoning being that if we get more bang for our buck, then we need less bucks – or water, coal, oil, electricity etc. This is a bedrock principle of modern water management. But recently I have been called on to look at “efficiency” a little more closely.

A couple of months ago I wrote a post about a recent report issued by the Pacific Water Institute on the great strides that can and have been made to increase the water efficiency of agriculture in California. In particular was one example I cited from the report of a farm that reported increasing its water efficiency by 20% (which can be found on p. 33 of the report).

I just received an extensive comment to the post asking about that particular 20% number. Wayne Bossert, manager of the Northwest Kansas Groundwater Management District No. 4, asked whether the 20% increase in efficiency represented a decrease in “consumptive use” or a decrease in water “diverted and applied.” Mr. Bossert explained the question as follows:

In any hydrologic system where the water supply and the water sink (where non-consumptive water uses go) are the same, increasing irrigation application efficiency just eliminates the sink supply and provides a higher percentage of the applied water to consumptive use crop production. You can pump less water with the higher efficient irrigation system, but you can also actually consume more water.

The 65% efficient irrigation system only makes 65% of the applied water available for crop production. The rest is non-consumptive use that returns (eventually) to the supply - at least in a traditional groundwater aquifer system. When a new 99%efficient drip system is installed, the producer pumps 75% of what he used to, but 99% of it is made available and consumed by crop production. My math tells me that 99% of 75% is more than 65% of 100%.

It is this extra water use that increases the yields so often reported when higher efficiency systems are converted to.

(Please read the rest of the comment here)

This comment struck me in two ways. First, I had always assumed that “efficiency” must be “good” in all circumstances – this comment has made me realize that “efficiency” is really a far more nuanced concept in water management. Second, as I have discussed in several different contexts, I believe that water management really needs to be looked at holistically, taking into consideration the entire hydrologic cycle. And that is exactly the point Mr. Bossert is making. In his example of the 65% efficient irrigation system, the other 35% of the water that does not go to the crops is not necessarily lost or destroyed. In fact, usually, that water simply returns to the natural hydrologic cycle. The same cycle that ultimately is the water supply.

To answer Mr. Bossert’s specific question, I have to say that the report doesn't provide a clear answer because as far as I can see it doesn’t squarely address the issue (though I admit I did not comb through all 75 pages). But my reading of it leads me to believe that the 20% increase in efficiency referred to a decrease in water “diverted and applied.” If the goal of water conservation is to reduce human use (i.e. consumption) of water, it seems we need to give greater thought to what it means to increase the efficiency of our water use.

This doesn’t mean that increased efficiency is a bad thing. Indeed, Mr. Bossert himself makes that point. And the Pacific Institute Report notes a number of non-consumption related environmental benefits associated with increasing irrigation efficiency. What it does mean is that increased efficiency may not be the ultimate solution for one of the largest water management challenges we face – dwindling supplies.

New EPA Construction Site Effluent Rule

Those who read this blog are aware of my coverage of new numerical standards for nutrient pollution the EPA is enacting in Florida. Well that is not the only place they are putting numerical criteria into effect. Below is a news alert from two attorneys at my firm, Ralph Ferrara and Jennifer Simon Lento. Ralph is the head of our construction law practice, and Jennifer is an associate in our environmental department (who also has an excellent blog on off-shore wind farms that you can find here). So without further ado:

On February 1, 2010, the U.S. Environmental Protection Agency (EPA) made effective a new final rule that imposes national monitoring requirements and enforceable numeric limitations on storm water discharges at all construction sites larger than one acre.

Under both the present and past regulatory schemes, all construction activities that could result in the discharge of pollutants into nearby bodies of water require the owner or operator to obtain permit coverage pursuant to the EPA’s National Pollutant Discharge Elimination System (NPDES) program or through a state administered analog program.

The new limitations, which include new effluent limitations guidelines (ELGs) and new source performance standards (NSPS), must be incorporated into all permits issued under EPA’s NPDES program or under analog programs administered by state agencies.

Compliance with the new rule will be staggered over the next four years. As of the effective date, construction site owners and operators that disturb one or more acres must use “best management practices” (BMP) to ensure that soil disturbed during construction activity does not pollute nearby water resources.

Specific numerical limitations will take effect in 2011 and 2014 for sites larger than 20 acres and 10 acres respectively. These sites must sample stormwater discharges, and meet a limitation of 280 NTU (nephelometric turbidity units). Sites larger than 20 acres must begin monitoring and sampling discharges to comply with the new limitations beginning on August 1, 2011. Sites larger than 10 acres will become subject to the same monitoring, sampling and compliance obligations on February 2, 2014.

These requirements will apply both to EPA’s Construction General Permit (CGP) and to individual permits issued by the states or by EPA. New Jersey, Pennsylvania and Delaware issue their own CGPs and individual permits. The new requirements must be incorporated into any new general permits issued after February 1, 2010. However, any CGP or individual permits issued by a state or by EPA prior to February 1, 2010 will remain valid until their expiration dates, and need not comply with the new final rule.

This rule is further evidence that the once sleeping EPA is now becoming active. And I believe we can expect this trend to continue into the foreseeable future.

ps. Please note that this is a brief summary of the new rule and there are other changes not discussed here which may impact specific situations. If you have a specific construction matter that you are concerned may be impacted by this new rule, please contact either Ralph or Jennifer to discuss it.