Oil Companies Sued for Wasting Natural Gas

oil_companies_burning_wasting_natural_gasNorth Dakota landowners who lease property to energy companies have filed 10 class-action lawsuits over the burning of natural gas in the Bakken shale oil field. The suits seek millions of dollars in what the owners say are lost royalties.

The property owners charge that oil companies are deliberately burning off natural gas rather than building pipelines to transport it, thus depriving them of royalties, The New York Times reports. Roughly 1,500 gas fires burn in western North Dakota as companies burn off the cheap gas that bubbles to the surface along with sought-after oil. The companies flare the gas rather than transport it, wasting a clean, efficient fuel, the suits charge. Continental Resources, XTO Energy, SM Energy and Marathon Oil are among the companies being sued.

In the last two years, according to the Times, flared gas has nearly tripled in North Dakota. Almost 30 percent of the state’s gas output is burned at wells, producing emissions equivalent to more than two medium-size coal-fired power plants.

The flared gas is worth roughly $100 million a month and property owners who lease their lands to the oil companies believe they are losing money, despite their increased royalties from the rapid expansion of oil production in North Dakota. Oil output has risen by 100,000 barrels a day since May, according to the Times. Though flaring is less harmful environmentally than releasing raw natural gas, flared gas spews climate-warming carbon dioxide into the atmosphere.

North Dakota regulators allow exemptions for flaring as companies connect their wells to gas-gathering pipelines. But the lawsuits allege that the companies violate deadlines and other restrictions on flaring. With production of 850,000 barrels of oil a day, the Bakken shale oil field makes North Dakota the No. 2 oil producer in the country after Texas, the Times reports. Terry Kovacevich, a vice president of Marathon Oil, said that alternatives to flaring would “take significant investments of time and money” to develop.

This entry was posted in Class Action Lawsuits, Health Concerns, Legal News, Toxic Substances. Bookmark the permalink.

© 2005-2019 Parker Waichman LLP ®. All Rights Reserved.