When It Rains, Litigation Pours: Oil and Gas Firms and Their Contractors at Risk for Future Flooding Lawsuits in Connection with Well Pad Construction and Preparation

A fellow West Virginia lawyer representing a coal operator in flood litigation ongoing in southern West Virginia once quipped to me that as long as coal was mined in West Virginia and God kept making it rain, he would never be unemployed.  With the recent boom in oil and gas exploration of the Marcellus Shale formation in West Virginia, lawyers representing the oil and gas industry may be able to make a similar claim.

Anyone who has lived in West Virginia for any period of time knows all too well that the State has a love-hate relationship with energy production.  On the one hand, most West Virginians appreciate that the energy industry, primarily coal mining, creates a large number of well-paying jobs in rural parts of the State where decent jobs are a commodity as precious as gold.  On the other hand, some believe that energy production damages land and property, negatively alters the topography of the State, and has adverse health consequences for residents.  Many of these alleged negative consequences have been litigated in the courts, including a series of recent lawsuits arising from several instances of widespread flooding in southern West Virginia.

Perhaps one of the largest flooding events in recent state history occurred in July of 2001 when floodwaters swept through my home county of McDowell, as well as several other southern West Virginia counties.  Radar estimates of between four and six inches of rain were recorded over parts of a six county area on July 8, 2001.  A report commissioned by the West Virginia Division of forestry (http://www.wvforestry.com/Forests%20and%20Floods.pdf) cites a rain gage in Mullens, West Virginia that recorded 5.7 inches of rain that day.  Two subsequent rain events of July 26^th and July 29^th further increased the flooding.  When all was said and done, the 2001 flood was catastrophic, causing hundreds of millions of dollars in damage and spawning a massive lawsuit primarily targeting large landowners and the timbering and coal industries.  Despite the three unusually large rain events, the lawsuits argued that the activities of the coal and timber industries altered the topography of several watersheds in such a way that they were no longer able to properly drain run-off from the storms. 

Several large-scale flooding events have occurred since the July 2001 floods, which have spawned similar lawsuits.  The most recent large-scale flooding event to result in litigation occurred in Mingo County in May of 2009.  Meteorological data collected by one of the Defendants in the Mingo County litigation allegedly revealed that over seven inches of rain had fallen in parts of Mingo County the week of the May 2009 floods, with over four and one-half inches falling from late in the night on May 8 to the early morning hours of May 9.  (http://dailymail.com/News/201106280826).  Nevertheless, hundreds of Plaintiffs filed lawsuits claiming that the floods were caused by alterations in the topography primarily in connection with highway construction (with incidental coal removal) and coal mining.  While the coal mining/highway construction Defendants were the primary targets, one gas company was named as a Defendant in connection with several traditional gas wells. The Mingo County litigation is still ongoing.

Construction and preparation of Marcellus Shale drill pads, which typically contain multiple well heads, involves large scale excavation and forest clearing.  First, an area of up to several acres must be cleared, leveled, and graded for the actual well pad.  Access roads and pipeline rights-of-way must also be cleared, leveled, and graded.  Massive wastewater impoundments must also be excavated.  Additionally, the production and marketing of natural gas and Natural Gas Liquids (NGLs) involves the construction of other ancillary facilities in the mountains, such as compressor stations, that will often involve the same types of activities.  When (not if) a large rain event causes flooding in a West Virginia watershed where oil and gas exploration of the Marcellus Shale is on-going, these activities are almost sure to make primary, deep pocket targets of the involved oil and gas firms, engineering and geological consulting firms, construction contractors, pipeline contractors, and any others who have any involvement in the design, preparation, construction, or reclamation of Marcellus Shale drilling sites in the affected watersheds.  Accordingly, these firms would be well advised to strictly adhere to their duties under state, local, and federal permits, particularly those involving the control or discharge of wastewater or storm water run-off.  It may also behoove these firms to work together to implement a “good neighbor” policy designed to quickly respond to complaints and offer, within reason, prompt assistance to remedy the concerns of nearby landowners.