Americans are hungry—almost literally—for oil. We consume more oil and gas than any other country on the planet, and with the big oil booms of the last century vanishing, we’ve turned to alternative techniques, like hydraulic fracking: extracting oil and gas from shale rock, like the Eagle Ford Shale in Texas. And while it’s worked so far, there are some environmental issues that have been bubbling up and over into legal trouble, as San Antonio oil and gas attorneys have recently seen. The issues are big enough that investment advisors are warning investors to stay away from shale.
The reports that fracking damages the environment have long since been put forth by conservationists and harbingers of doom, but that doom may be closer at hand, at least legally, for some of the oil and gas companies in the fracking industry. Recently the small, privately owned company Aruba Petroleum was found to be guilty in a court of law for violating the property rights of a couple similar to this one near San Antonio, whose experience hasn’t yet led them into a lawsuit, but may in the future. The implications that can be drawn from the Aruba Petroleum case to potential cases in the future could negatively impact the shale industry, say San Antonio oil and gas attorneys like Mike Hancock. That Aruba Petroleum was ordered to pay more than $3 million in damages could spell trouble for the oil and gas companies.
Bu maybe not right away, attorneys acknowledge. For industry players like Apache Corp. and Exxon Mobil, whose “valuations are in the tens, if not hundreds of billions of dollars,” an award of $3 million could be more like pennies. But as “more citizens seek compensation for the pollution created by fracking companies,” and the potential for state and local “governments to enact legislation that penalizes,” regulates, or bans fracking, Apache might not be so lucky as time goes on. New York, for example, has enacted such legislation so far.
Texas is traditionally a hands-off state, as far as regulating business goes, and the Eagle Ford Shale hasn’t seen any limitations or bans on fracking yet, say San Antonio oil and gas attorneys like Hancock. But that doesn’t meant they won’t see increases in awards to property owners whose land has been irreparably damaged by the process. In fact, there’s so much an assumption that legal trouble for companies in the industry will keep on rising that Wall Street advisors clearly warn that “the easiest investment decision is to simply avoid fracking companies in your portfolio.”
Apache and Exxon Mobil probably aren’t depending on your portfolio to keep rolling in the big ones, and San Antonio oil and gas attorneys know that the American demand for oil will probably keep the government from regulating the industry too much, and it isn’t likely to get banned altogether. But the fact that there’s a sense of financial danger around fracking now, in addition to the environmental impacts, is something we should perhaps be mindful of the next time we spend $75 to fill up our Suburban.