Family Fights Resale of Gas Rights

Suit: Chesapeake can’t drill on property

Morgantown Dominion Post
1 May 2011
By David Beard

This presentation on Marcellus Shale is the part of a reoccurring series on the topic. An Ohio County couple is asking a judge to keep Marcellus gas drillers from their property.

Their civil suit is one of four Chesapeake Appalachia faces concerning its Marcellus gas operations in north-central West Virginia. The other three properties are in Wetzel County.

In all four cases, the surface owners filing the suits do not own the mineral rights beneath their properties.

The cases are filed in the U.S. District Court for the Northern District of West Virginia, and all are before Senior Judge Frederick P. Stamp Jr.

Martin and Lisa White, of Silver Hill, Wetzel County, and Dewey and Gay Teel, of Blake Ridge, Wetzel County, say in their suits that Chesapeake has permanently damaged and polluted a portion of their property by burying hazardous Marcellus gas well drilling waste on their land.

Their cases are similar to that of Larry and Jana Rine, of Silver Hill. The Dominion Post detailed the Rine case in a recent edition. All three couples are employing the same law firm, Bailey & Glasser of Charleston, to represent them. Chesapeake is using the same attorneys, John Meadows and Tim Miller, of Robinson & McElwee, Charleston, in all three.

In the fourth case, Melvin W. and Carol M. Kahle, of Ohio County, are seeking a declaratory judgment that Chesapeake does not have the right to drill on their land, contending the company doesn’t hold a valid lease. They are represented by the Schrader, Byrd & Companion firm of Wheeling. Chesapeake is defended by Kevin C. Abbott and Nicolle R. Snyder, both of Pittsburgh.

Chesapeake and attorneys for the plaintiffs declined to comment on ongoing litigation.

Kahle case

This was originally filed in Ohio County Circuit Court, and transferred to federal court in February.

The Kahles say:

They originally signed a lease in May 2006 with Range Resources-Appalachia, a subsidiary of Texas-based Range Resources. On Aug. 20, 2010, Range notified the Kahles, verbally and by letter, that it was terminating its lease.

Sometime after this, Chesapeake notified the Kahles that it had acquired their existing lease with Range, and on Oct. 18 issued a Notice of Entry to their land. Chesapeake, without notifying the Kahles, applied for a drilling permit on Dec. 17.

The 2006 lease does not grant Range authority to sell or assign it.

There was no existing lease, since Range had terminated it.

The plaintiffs want the judge to stop the defendants — which also include Chesapeake Energy, Chesapeake field representative Kevin Swiger and Delaware-based Statoil USA Onshore Properties — from entering or drilling on their land, to void the lease and award damages, fees and costs.

Chesapeake Energy and Swiger have filed to have the complaint against them dismissed because they’re not parties to the lease, and Chesapeake Appalachia and Statoil are the proper defendants. There has been no ruling on this yet, pending a challenge on remanding the case to federal court.

Chesapeake also contends it acquired the 2006 lease, valid through May 15, 2011, in July 2010. What Range had terminated was a separate April 2010 “top-lease.” The 2006 lease remained in effect.

The company seeks a judgment that the lease is still valid, it is the rightful successor to the lease, and — given the expiration date — the lease will be equitably extended to compensate for delays caused by the suit.

The scheduling order pretrial and settlement conferences for Oct. 31; jury selection and trial for Nov. 15.

Whiteman case

This case originated in Wetzel County and was removed to federal court in February.

The Whitemans own two parcels. They bought the first, 101 acres with their home, in 1992. The second, 112 acres, includes another house.

They say:

In 2007, Chesapeake began drilling on the second parcel. It graded 10-15 acres, which included the hay fields for the Whitemans’ 100 sheep, for gas wells. Chesapeake assured the Whitemans the gas operations wouldn’t harm the hayfields.

Chesapeake constructed two large, lined ponds for frack and drilling waste, which it filled. In 2007, it began new work at the first pond, trucking in material that it deposited into the pond, and into several unlined trenches on the site.

Chesapeake tore the pond liner, allowing water to run over bare ground and into the trenches. It placed a liner over the top of the pond remnants and buried the pond and trenches.

In 2009, Chesapeake repeated the process for the second pond. Each pond is about 1,000 feet from the house on that parcel.

The water remains and is spreading through the soil, ground water and surface water. The land is now either too steep or too swampy for hay production.

Chesapeake didn’t advise the Whitemans about the waste deposits. They learned of it through third parties.

The suit charges Chesapeake with nuisance, trespass, negligence, liability, recklessness or gross negligence and infliction of emotional distress. It seeks an injunction for Chesapeake to remove the waste and deposit no more, remediate contamination, detail the quantity, location and composition of the waste, and punitive, compensatory and special damages.

In response, Chesapeake denies all allegations and maintains it was lawfully engaged in work permitted by the Department of Environmental Protection.

“Chesapeake ... denies that the Whitemans’ permission was necessary. Chesapeake’s lease and common law property rights expressly gave them permission to use so much of the surface as was reasonably necessary for the drilling and production of minerals. ... Chesapeake admits that as mineral owner, it has a dominant estate and the right to use the surface.”

It denies constructing “ponds” and says no frack waste was deposited into pits on site.

The scheduling order sets pretrial and settlement conferences for April 16, 2012, and jury selection and trial for May 1, 2012.
   

Teel case

This also originated in Wetzel County and was moved to federal court in January.

The Teels moved onto their 104 acres in 2008. They say:

That same year, Chesapeake cleared and graded about 5 acres, and assured them the land would be suitable for home sites when work was complete.

Chesapeake built two large ponds; one was used for drilling and fracking waste. This site had been the Teels’ only suitable hay field.

In early 2009, Chesapeake began a new work at the site, brought in “foamy, foulsmelling material” and dumped it into the pond and into unlined trenches about 12-15 feet deep. Chesapeake also tore the pond liner, allowing waste liquid to run over bare ground and into the trenches.

Chesapeake covered the pond remnants with a liner, and buried the pond and trenches. The waste remains and is spreading through the soil and groundwater. The soil stinks; trees, grass and plants “grow weakly or not at all.”

At least two other times, Chesapeake has used something like a hose to deposit fluids on the surface, killing or weakening trees and other plants.

The suit also charges Chesapeake with nuisance, trespass, negligence, liability, recklessness or gross negligence and infliction of emotional distress. It seeks an injunction for Chesapeake to remove the waste and deposit no more, remediate contamination, detail the quantity, location and composition of the waste, and punitive, compensatory and special damages.

In response, Chesapeake similarly maintains it was lawfully engaged in work permitted by the Department of Environmental Protection. Its lease and common law property rights allowed it to use as much of the surface as was reasonably necessary for drilling and producing minerals, without the Teels’ permission. It denies constructing “ponds” and says no frack waste was deposited into pits on site.

The scheduling order sets pretrial and settlement conferences for March 26, 2012, and jury selection and trial for April 10, 2012.
   

Rine case update

The Rines contend that Chesapeake tore the liner protecting the pit containing what they call fracking waste — and what Chesapeake calls drill cuttings — and then buried the waste, allowing it to leach into the soil and groundwater.

Several Silver Hill residents said they witnessed DEP inspector, David Scranage, on the site during this time.

“I spoke to him and asked if this was legal,” one resident said. “His answer was, ‘Yes, they had a permit.’ They were using a track hoe to mix surrounding dirt in with the tailings pond, the liner was being ripped to shreds before our eyes, DEP inspector still on scene watching this. There was perforated pipe in the pit being buried also.”

Asked about this, DEP spokeswoman Kathy Cosco responded via email, “Inspector David Scranage was on site at some point during the pit closure. At that time, any pit containing drill cuttings was treated in a manner consistent with the common industry practice, which involved a removal of free liquids, then a stabilization process prior to filling/covering and reclamation. The stabilization process often included destruction of the liner. When Inspector Scranage was on site, he witnessed the operator reclaiming the pit in an acceptable manner. The only foreign matter the inspector observed in the pit was a piece of fencing, which he required to be removed.”

On Thursday, the Rines filed a motion to withdraw their motion for a preliminary injunction to stop Chesapeake’s excavation of the drill cuttings pit and the off-site transportation of the cuttings. A temporary restraining order on Chesapeake’s excavation had expired, they said, and the company had nearly completed the job. Stamp granted the motion the same day.

Also on Thursday, Stamp approved an agreement reached by attorneys for both sides and submitted Wednesday by Chesapeake’s attorneys. Chesapeake will provide the Rines advance notice of when the excavation will be complete, so the Rines’ can take soil samples from the pit.