HYDRAULIC FRACTURING LITIGATION: THE CASE OF JESSICA ERNST & THE PROBLEM OF FACTUAL CAUSATION.

• Author: Hutchison, Oliver
• Position: Proceedings of the 41st Annual Canada-United States Law Institute Conference on the State of Our Nations; The Canada-United States Relationship: Canada-United States Perspectives on Law, Policy and Politics in Tumultuous Times

TABLE OF CONTENTS I. Introduction II. Hydraulic Fracturing A. A Brief History of Hydraulic Fracturing B. Controversy III. Hydraulic Fracturing Litigation IV. Case Study: Ernst v EnCana Corp A. Background B. Proceedings to Date C. Analysis of Negligence Claim: An Issue of Cause-in-Fact V. The Defects of Tort: Common Law Remedies Are Not the Answer A. Tort Law Deficiencies B. The Need for Strict Regulation VI. Conclusion I. INTRODUCTION

Hydraulic Fracturing (or 'tracking') litigation is on the rise. (1) In the United States, it is now common for plaintiffs to allege that hydraulic fracturing processes have contaminated groundwater sources. (2) The primary purpose of this paper is to examine the common law remedies available to plaintiffs in these cases. I argue that the common law, because of the requirement of factual causation, is inadequately equipped to provide redress to plaintiffs in these cases. A more proactive approach, through strict regulation, is necessary to protect people and the environment in the face of presently uncertain geological effects of hydraulic fracturing.

In Part II, I will briefly outline the historical origins of hydraulic fracturing, its modern day uses, and the controversy surrounding the practice. In Part III, 1 will survey contemporary fracking cases and suggest that as a practical matter, plaintiffs will have more success in holding oil and gas companies to account when groundwater contamination is not at issue. In Part IV, I will analyze the pioneering Canadian case of Ernst v. EnCana Corp. and argue that the plaintiff, Jessica Ernst, faces a near insurmountable task in establishing the requirement of factual causation in her pending action against the EnCana Corporation. Finally, in Part V, I will argue that, because of the element of factual causation, tort law is ineffective and cannot achieve its functions (compensation, vindication, punishment, and deterrence) in hydraulic fracturing groundwater contamination cases. A strict regulatory system that imposes a presumption of liability in cases of hydraulic fracking is required.

2. HYDRAULIC FRACTURING

   1. A Brief History of Hydraulic Fracturing

      Hydraulic fracturing is a technique used to increase oil and gas production from underground oil or gas-bearing rock formations through the injection of high-pressure fracking fluid that fractures reservoir rock, thus releasing trapped natural gas or oil. (3) The fracturing fluid is comprised of water, chemicals, and propping agents such as sand. (4) The propping agents are used to ensure that the fractures created remain propped open after the pressurized injection of the fracturing fluid stops, thus allowing hydrocarbons (e.g., crude oil or natural gas) to flow to production wells. (5) Today, fracking is a very common well-stimulation technique. In the United States, the jurisdiction that first made use of this technology, some 80,000 wells have been drilled as of 2005, (6) and it is estimated that "over 90 percent of all oil and gas wells ... are hydraulically fractured." (7) In more appreciable terms, it is estimated that more than fifteen million Americans now live within one mile of a fracking operation. (8)

      While hydraulic fracturing is a relatively novel process (having its origins in the 1948 Kansas oil fields), (9) the process of fracturing subsurface rock formations to stimulate underground resource production began as early as the late 1800s, (10) emerging shortly after the beginning of the United States oil boom. (11) Around this time, oil producers were keen to find a solution to the problem of anemic oil wells. (12) Colonel Edward Roberts, a Civil War veteran, developed what would come to be known as the 'Roberts Petroleum Torpedo': the first fracturing technology. The process at that time involved lowering an explosive device (collection of nitroglycerin-filled canisters) into the base of a well and then detonating it to fracture the rock and allow the oil to flow more easily. (13) Roberts claims to have come up with the idea while serving in the Army of the Potomac at the Battle of Fredericksburg, (14) where, in the midst of battle, he observed cannonballs (fired underwater) shatter and break up stone canals. (15) Roberts' subsequently developed 'torpedoes', and though these were met with initial skepticism by well operators, they were ultimately adopted by industry. The technology was demonstrated to have the potential to more than quadruple a well's daily production of oil. (16) This process was colloquially termed 'well-shooting', and despite its associated dangers, was largely successful in breaking up oil-bearing formations to stimulate well production and to increase total resource recovery. (17) While this technology allowed operators to extend the production life of a well, the unrefined technology left much to be desired in terms of truly maximizing a well's productive capacity. (18)

      In 1949, hydraulic fracturing first emerged as a technology that could further maximize well production. (19) Stanolind Oil injected 1,000 gallons of naphthenicacid-and-palm-oil (napalm) thickened with gasoline down a wellbore to stimulate a gas-producing limestone formation 2,400 feet beneath the surface. (20) While the productive capacity of this particular well did not significantly improve, in the first year of widespread commercial hydraulic fracturing treatments, 332 wells were 'treated' and the average production increase was around 75%. (21) This marked a turning point in oil and gas extraction in that it allowed industry to target and extract resources from unconventional reservoirs. (22)

      Today, modern hydraulic fracturing technology and horizontal drilling have made it possible and profitable for oil and gas companies to extract natural gas from underground shale and coal formations that have historically been inaccessible. (23) Since 1950, in the province of Alberta alone, approximately 171,000 wells have been drilled for the purposes of hydraulic fracturing. (24) Horizontal drilling, in particular, has allowed producers to turn uneconomic reservoirs into economically viable ones. (25) The prevalence and use of this technology has enabled one horizontal well to produce natural gas at a rate of approximately twenty conventional vertical wells and at a fraction of the capital investment. (26) It comes as no surprise then, according to the Alberta Energy Regulator ("AER"), formerly known as the Energy Resources Conservation Board ("ERCB"), from 2008 to 2012 about 5,000 horizontal wells were drilled in Alberta. (27)

   2. Controversy

      Despite its technological achievements and economic efficiencies, hydraulic fracturing is not without controversy. A chief concern is the contamination of groundwater. Research has shown that fracking fluids (and the chemicals therein) can migrate or leak into underground fresh water sources. (28) Upwards of 600 chemicals have been identified in the various tracking fluids used by industry, including methanol, ethylene glycol, diesel fuel, and naphthalene. (29) Many of these chemicals are harmful to human health if consumed or exposed to in sufficient quantities. It is particularly noteworthy that some of these chemicals have the potential to affect the endocrine system, which is the "system of glands and hormones that regulates vital functions such as body growth, response to stress, sexual development, rate of metabolism, intelligence ..., and the ability to reproduce." (30) Additionally, there is the possibility that the natural gas (methane) contaminates groundwater sources through unintended migration from the fracture zone. (31) While dissolved methane in drinking water is not yet known to be a health hazard, "it is an asphyxiant in enclosed spaces and an explosion and fire hazard." (32)

      Despite the toxic and dangerous substances used in and released by hydraulic fracturing, many believe its risks and potential dangers are overstated. One group of researchers (with ties to the industry) believes that "hydraulic fracturing has, for decades, been safely conducted in the completion of thousands of wells in Western Canada [and] this suggests] there is no systemic or inherent risk associated with ... hydraulic fracturing." (33) Despite the above non sequitur, there is some research to suggest that the above statement may contain some truth; at least as far as methane contamination is concerned. (34) For example, a report published by the Center for Rural Pennsylvania (a bipartisan, bicameral legislative agency that serves as a resource for rural policy within the Pennsylvania General Assembly) sampled 233 wells in proximity to Marcellus shale gas wells in rural regions and found:

      When comparing dissolved methane concentrations in the 48 water wells that were sampled both before and after drilling (from Phase 1), the research found no statistically significant increases in methane levels after drilling and no significant correlation to distance from drilling. However, the researchers suggest that more intensive research on the occurrence and sources of methane in water wells is needed. (35) Even the Environmental Protection Agency ("EPA"), at one time, believed that the hydraulic fracturing posed "little or no threat to underground sources of drinking water." (36) However, the EPA has since changed its mind and now believes that "hydraulic fracturing activities can impact drinking water resources under certain circumstances." (37) While experts disagree as to the degree of environmental and health risks associated with hydraulic fracturing, the preponderance of evidence suggests that it can and has resulted in the contamination of underground drinking sources.

3. HYDRAULIC FRACTURING LITIGATION

   Seemingly in tandem with the increased public scrutiny of hydraulic fracturing, the number of civil cases involving hydraulic fracturing has risen. (38) However, this rise has only been observed in the United States, a jurisdiction where...