1. Foundations of Tort Liability
E&P Mechanics and
Foundations of Tort Liability
Prof. Tracy Hester
September 6, 2017

2. Announcements and Mechanics
Revising syllabus to reflect loss of last week’s classes. Class recordings and participation via Zoom.
Final exam – take home
Field trip to Weatherford drilling rig
Guest speakers –
Dr. John Nielsen-Gammon
Dr. Gavin Clarkson
Next class – after reviewing drilling and production fundamentals and typical contamination issues today, will pick up tort issues in depth

3. Intro to Oil & Gas Law Fundamentals

4. E&P Site Animation http://www.efdvirtualsite.org
Terms to understand: drilling rig, casing, mud, drill bit, cementing, perforating, fracking

5. Key Points of Oilfield Operations (from an Environmental Perspective)
Separate and distinct segments of the production chain: upstream, midstream, refining, marketing.
Economic interests of stakeholders can quickly and drastically diverge, especially with older fields and transferred rights
Intrusions from fracking operations
Flaring
Low-yields = low (or no) royalties
Abandoned wells

6. Common Environmental Issues at Oil & Gas Sites?

7. Common Environmental Issues from Oil & Gas Operations
Air emissions
Spills (chemicals, oil, mud, salt water, fracking materials)
Leaking well-bores
oil and water
during drilling, production, abandonment
Leaking pits
Leaking tanks
Closed pit contents
Naturally Occurring Radioactive Material (NORM)
Mercury & Lead
Light, noise, vibration

8. Possible Tort Actions?

9. Environmental Law of First Resort: Tort Claims
Nuisance
Negligence (including negligence per se)
Trespass
Unjust Enrichment
Emotional Distress
Strict Liability – Ultrahazardous Activity
Exotic claims (business torts, civil conspiracy)

10. Why Use Torts Instead of Regulatory Enforcement Action?
vs.

11. Why Use Torts Instead of Regulatory Enforcement Action?
Cleanup versus Cash (injunctive relief)
Federal (appointed) v. state (elected) judges
Force government involvement
Barred from federal contracts
Trust funds for damage awards?
Punitive damages (gross negligence)

12. Next class
Deeper dive on torts, with emphasis on Keffer’s article and scope of damages.
Think about:
What recovery is right, especially when cleanup costs more than the property’s full value?
What statute of limitations should apply, and how?
Who should make the decision on cleanup – the court, or the agency with jurisdiction?
How clean is clean?

13. Thoughts, Suggestions or Questions?
Professor Tracy Hester
University of Houston Law Center
(office)