Natural gas pipeline accidents do happen!

From an Article by Eric Billingsley, New Mexico Business Weekly, Albuquerque, September 16, 2002

Two years after one of the deadliest natural gas pipeline explosions in New Mexico’s history, Houston-based El Paso Corporation has reached the last in a series of out-of-court settlements with family members of the victims.

On August 31, El Paso reached an undisclosed settlement with Martha Chapman and Jerry Rackley, who lost five family members on August 19, 2000 when a natural gas pipeline owned by the company exploded near Carlsbad, New Mexico killing 12 people. They were camped next to the Pecos River near the path of the pipeline when the explosion occurred.

Chapman and Rackley filed suit in the District Court of Eddy County in February 2000 charging El Paso with five counts of wrongful death. The case was set to go to trial on October 1 in the Fifth Judicial District Court in Chaves County. Claims for the other seven people killed were filed as separate lawsuits, and have been settled out of court for undisclosed amounts since 2000. The only amount disclosed was a $14 million settlement for one of the victims.

“The settlement resolves all outstanding civil litigation in the state of New Mexico associated with the rupture,” says El Paso spokesperson Mel Scott.

“Hopefully an important lesson has been learned by El Paso and the natural gas industry in general so this kind of tragedy can never again occur,” says Bob Schuster, attorney for Chapman and Rackley.

The Carlsbad explosion is still being investigated by the National Transportation Safety Board (NTSB) and the U.S. Department of Transportation (DOT) Office of Pipeline Safety (OPS) to determine whether there was negligence on the part of El Paso.

Shortly after the blast, NTSB Chairman Jim Hall issued a statement saying that investigators determined the section of pipe that failed had not been inspected internally since the 1950s. A series of reports issued by the NTSB in June said “severe corrosion damage” was found on the bottom of the pipeline near the explosion site, according to a recent article in Natural Gas Intelligence, an industry trade publication. NTSB is responsible for determining the cause of the explosion.

The DOT is seeking a $2.52 million civil penalty from El Paso for safety violations including: failing to ensure qualified personnel performed corrosion control procedures; transporting corrosive gas on numerous occasions without taking proper and mitigative steps; failing to follow procedures for surveillance of its facilities; failure to take action to reduce the possibility of pipeline failure following a similar incident in 1996; and not having an accurate elevation map for lines involved in the Carlsbad incident, which would have shown where liquid could accumulate and corrosion could occur.

The penalty is considered the largest civil penalty proposed against a gas transmission pipeline operator in the history of the federal pipeline safety program, according to DOT officials.

El Paso has been issued several compliance actions from the OPS since 1984 that address maintenance procedures, timeliness in performing safety inspections, inadequate training of personnel on preventing corrosion, gas vent locations and valve security. The OPS also notes that on “more than one occasion” El Paso has failed to promptly restore and maintain protections against external corrosion on its system.

One year prior to the Carlsbad explosion, a liquid gasoline pipeline owned by Olympic Pipe Line Co. (which has since been purchased by Shell) leaked and exploded, killing two children in Bellingham, Washington.

The families of the two children sued Olympic, Houston-based Equilon Pipeline, Los Angeles-based Atlantic Richfield Co. which owned the petroleum products being transported in the line, and IMCO General Construction Co. which had apparently dented the pipeline a few years prior to the accident. That case was also settled out of court in April for $75 million, less than a month before going to trial.

Rough roads ahead for landowners

From the Article by David Beard, Morgantown Dominion Post, December 2, 2013

A Wetzel County couple lost their appeal of a Marcellus gas well case in federal court.

Dewey and Gay Teel sued Chesapeake Appalachia for common law trespass regarding drill cuttings pits on their property.

In October, a three-judge panel in the U.S. Court of Appeals for the Fourth Circuit upheld the decision in Chesapeake’s favor previously issued by the U.S. District Court for the Northern District of West Virginia. The mandate making the judgment effective was issued this month.

According to the original complaint, the Teels own 104 acres on Blake Ridge. The mineral rights were severed in 1959. In 2009, during gas well operations, Chesapeake created and left pits containing drilling mud, drill cuttings and chemicals. The pits had their liners removed and were covered. At other drilling sites, Chesapeake hauled such waste to landfills, rather than leaving it on the property.

In its mid-October opinion, the panel noted that this case was essentially identical to that of another Wetzel couple, Martin and Lisa Whiteman. The Whitemans lost their appeal in the same court in September.

The panel said trespass exists if a party’s entry onto another’s land, or leaving something upon the land, is without lawful authority. In the case of a severed estate, where the mineral owner has the right to enter and burden the surface to do what is reasonably necessary to exploit the minerals, the burden falls to the surface owner to show lack of reasonable necessity.

The court determined that neither the Whitemans nor the Teels demonstrated that.

Among other things, they failed to show that Chesapeake’s closed-loop system, which was being tried in other states at the time of the Teel work, was the norm in West Virginia at the time. In fact, Chesapeake was still using open disposal pits in West Virginia. “The Teels have also failed to muster evidence plausibly suggesting that Chesapeake’s operations impose a substantial burden on their property.”

The opinion is considered “unpublished” and does not set a binding precedent in the 4th Circuit. The panel echoes a point highlighted in the Whiteman case: That analyzing reasonable necessity is fact specific, and “what is necessary is a fluid concept that must be determined on a case-by-case basis.”

Following on the heels of the Whiteman case, this one resolved itself more quickly. The Whiteman appeal case ran from June 2012 through September. The Teel case ran from November 2012 to early this month.

The Dominion Post reached Teel attorney Joseph Lovett on Wednesday, but he wasn’t free to speak, and asked to call him back Friday. He did not reply to calls or an email sent Friday. Co-counsel Isak Howell did not respond to a voice mail. Chesapeake declined to comment.

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Judge dismisses most of Preston gas lease lawsuit

From an  article at the WV Gazette on December 2, 2013

MORGANTOWN, W.Va. — More than half of the counts and more than a dozen defendants in a West Virginia oil and gas lease lawsuit have been dismissed.

The lawsuit combines 68 cases filed by 121 mineral owners in Preston County who allege that Traverse City, Mich.-based Magnum Land Services and Belmont Resources LLC fraudulently persuaded them to sign gas leases below their true value.

Defendants also include Canada-based Enerplus Resources and 19 employees of Magnum and Belmont. The lawsuit said the leases were transferred in 2010 to Enerplus. The company was excluded from two counts associated with notarizing the leases.

The companies have denied the allegations.

U.S. District Judge Irene Keeley dismissed the 19 employees from the lawsuit, saying in two separate orders that they weren’t served papers in a timely manner, The Dominion Post reported Monday.

Keeley also dismissed five of the lawsuit’s nine counts, including slander of title, one fraud count, leases void because of disqualifying interest, misconduct of notary public against Magnum and Belmont, and tort of outrage, which means inducing the plaintiffs to sign lowball leases was unconscionable.

Part of a conspiracy count relating to the employees also was dismissed. A portion of the count alleging conspiracy between Magnum and Belmont was retained.

The other remaining counts include fraud in the inducement of the leases, unconscionability relative to plaintiffs’ inadequacy in bargaining power, and declaratory relief to nullify and renegotiate the leases.

The case originally was filed in Preston County Circuit Court in November 2012 and was transferred to federal court in February. The residents are demanding unspecified compensatory and punitive damages.

A trial is set for Oct. 27, 2014.

Gas-drilling case settled

XTO offer taken after 2-year suit

From the Article by David Beard, Morgantown Dominion Post, November 29, 2013

A Marion County landowner’s federal lawsuit to throw a gas-drilling company off his land has been settled out of court.

Richard Cain sued XTO Energy — an Exxon subsidiary — about horizontal gas wells on his land that also drain gas from neighboring tracts. Cain said XTO had no right to use his only drawing gas from neighboring mineral tracts.

Cain’s complaint said XTO planned for a total of three well pads with 18 horizontal gas wells. Those wells would drain the minerals under him and up to 3,000 acres of mineral tracts around him. But all the surface burdens would be his.

“I got involved in this case,” McMahon said in a release issued after The Dominion Post called his office, “to try to set a precedent in the West Virginia Supreme Court. Mr. Cain really wanted to protect not only this piece of recreational property, but also other properties, including his home property and the properties of others in the state, where the drillers were headed next.”

But the case, begun in June 2011, dragged on too long, McMahon said. Cain suffered some financial difficulties, “and the company finally made him an offer he was not in a position to turn down. We appreciate that he hung in as long as he did.”

McMahon said that settlement papers haven’t been signed and he wasn’t at liberty to discuss possible future activity on the Cain property at this time.

XTO referred questions to its parent, Exxon, which did not respond to a request for comment.

McMahon said in the release, “Our position is that the law is clear. A driller has no right to put a pipeline across your land from a well above, and producing gas from, a neighboring mineral tract. If there is no right to disturb your land for just a pipeline, then there certainly is no right to use your land to put one of these enormous, long lasting, property devaluing, and potentially dangerous Marcellus well pads on you with multiple horizontal wells that produce gas from neighboring mineral tracts. They have less need for your surface for horizontal drilling because they can drill to the minerals under you from a mile away.”

McMahon said SORO is again looking for the right test case to take to the state Supreme Court.

“We think the law is clear based on legal treatises and cases on coal mining, but there is no West Virginia Supreme Court case on this issue for horizontal gas we l l s, ” he said. “As a result, the companies get away with having their landmen tell surface owners that the company has a right to put these awful well pads on them, and maybe offering them what the land is worth to the surface owner, but not what the location is worth to the driller.

“Most people’s life savings are tied up in their home and land,” he said.

Charleston law firm sees increasing oil and gas injury suits

From an Article by Andrea Lannom, State Journal, August 30, 2013

Charleston lawyer Bobby Warner said his firm Warner Law Offices has seen more oil and gas-related injury cases while seeing fewer coal-related injury lawsuits. 

Warner said in the past two years, the firm has handled at least 10 cases involving explosion and fires and other cases involving injuries such as burns, broken bones and paralysis. A significant portion come from North-Central West Virginia, Warner said.

“We still handle a substantial amount of work with injury related to coal mining,” Warner said. “In the past two years, we have seen a decrease in those particular cases, though I’ve seen a substantial increase in oil and gas cases.” 

Some of the more recent cases his firm has handled involved nine people who sued NiSource and its subsidiary Columbia Gas over asserted damages sustained from last year’s gas pipeline explosion in Sissonville. All but one ended up settling their claims.

Filed July 29, the seven suits all listed the defendants as Columbia Gas Transmission LLC, NiSource Gas Transmission and Storage Company, NiSource Midstream Services LLC, NiSource Energy Ventures LLC, NiSource Corporate Services Company, William Christian, Jack Whitmire Jr., Mitchell Thomas, Daniel Herpin and John Does 1-10.

All suits alleged negligence to all defendants, willful, wanton, reckless conduct as to all defendants and negligent training, management and/or supervision.

Plaintiffs Tina White, Darell Sigmon, Lorie Estep, Dorma Harrison, Shelby McMillion and Amy McMillion and her two minor children have reached confidential settlements. 

The case brought by Margaret Johnson will go forward with litigation. In her case, Johnson said she was sitting in her Sissonville Drive home when the pipeline ruptured. 
In her suit, she said as soon as she saw flames around her home, she ran barefoot across her front deck to her car, sustaining burns and blisters in the process. When she got to her car, the suit continues, she reached out for the hot door handle but jerked her hand away from the heat, causing the tendons in her thumb to be injured, later requiring surgery.

After the filing of these suits, Columbia Gas released the following statement in response:

“Since the incident in Sissonville, W.VA., took place, Columbia Pipeline Group has settled with and provided compensation to over 40 families impacted. Our legal and insurance teams continue to work with families — and in some cases, their personal attorneys — to settle any remaining claims. As we have since the moment this incident occurred, we are committed to working with those families in a fair and reasonable manner. Columbia took immediate action following the incident in Sissonville to ensure that basic essentials, including temporary housing, food and transportation were provided to the affected community. 

In addition to attending to local families, in the hours, days and weeks after the incident, we partnered with the regional office of the Red Cross — to tap into their special expertise, to provide additional support for those in need. Again, our legal and insurance teams will continue to work with families to settle the remaining claims in a fair and reasonable manner.”

Warner’s firm also recently settled a Harrison County case against Frontier Drilling and Antero Resources. In this case, Joseph Davenport was working on one of the rig sites when a power tong struck him and knocked him off, causing him to have a severed spinal cord. Davenport alleged the reason this happened was because the drill was not working properly. 

The companies settled for $12 million, which Warner said is one of the largest single-plaintiff settlements this year in West Virginia.