Yesterday’s Austin American-Statesman has a feature article delving into the background of a pending Texas Supreme Court case — Exxon Corp. v. Emerald Oil & Gas Co., No. 05-0729 [docket sheet] and No. 05-1076 [docket sheet].
The Statesman article, titled “A Texas tale: Oil, business meet history, sabotage“, places this case against a larger backdrop of oil, land, and politics in Texas. It also gives a quick overview of the policy debate raging about who should bear these risks:
The bottom line, the one the state’s petroleum industry is focused on, is not whether Exxon sabotaged the wells. It’s whether Exxon was required to plug the wells in a way that minimized re-entry problems for the next operator.
Jerry Patterson, chairman of the Texas General Land Office, urged the Supreme Court to rule against Exxon, arguing that its method of plugging denied access to an essential natural resource and deprived the state of tax money.
Reopening old wells is the only economical way to extend the life of many Texas oil fields, Patterson said in a brief. If Exxon ‘is allowed with impunity to submit false reports to the Railroad Commission,’ companies may decline to reopen plugged wells for fear of incurring unexpected costs, he added.
But Exxon argued that existing law and court precedent require it to plug a well in ways that preserve the environment, not preserve access for other companies. It warned the Supreme Court that siding with Emerald could create a flood of lawsuits against oil field operators that file public records containing mistakes.
In addition to the Texas Land Commissioner, other amicus curiae briefs have been submitted by the Texas Alliance of Energy Producers, the Texas Land and Mineral Owners’ Association, the Texas Oil & Gas Association (which also submitted an amicus letter earlier in the case), the Texas and Southwestern Cattle Raisers Association
On February 13, 2007, the Court heard oral argument in two segments. ((The Court elected not to consolidate these related petitions for purposes of argument, instead permitting counsel for the various parties more latitude in advancing their divergent arguments. One would, however, expect the Court to consolidate the two cases for purposes of issuing a single global decision in the case.)) The oral argument in docket No. 05-0729 focuses on the common-law background rule and the governing substantive statute. [audio] The oral argument in docket No, 05-1076 focuses on Exxon’s statute-of-limitations defense and the fraud-related claims against Exxon. [audio]