Happy Birthday Magna Carta

No, Magna Carta is not the melted rock that comes out of volcanoes, but it is a bedrock of Western society and a major ingredient in the documents that formed the foundation of the United States of America. If you don’t know what Magna Carta is, or even if you do know what it is, then go here and read. This year is its 800th birthday. It wouldn’t be a bad time to also read the documents our founding fathers crafted to form this nation (you know – Declaration of Independence, Constitution, Bill of Rights), and to ponder whether, and how far, our government has strayed from the guarantees they vested in the citizens of this nation. These documents are supposed to protect us from a government that has become too powerful for our own good. That rumbling you’ve been hearing in the background is our Founding Fathers spinning in their graves wondering when we’re going to notice. Liberals, of course, would be quick to point out that it wasn’t the citizens who made the King sign Magna Carta for the benefit the lower and middle classes but, rather, the barons for the benefit of the rich folks.

What the Frack?

It was 1976, the bicentennial birthday of the United States of America. It was also the year Jimmy Carter and I were elected to public office. It wasn’t his first election, but it was mine. He beat a Republican. I beat a Democrat. In 1981, Ronald Reagan’s first year as president, I got a Christmas card from the White House. When I was sworn in, I’d never heard of fracking, or hydraulic fracturing; nor had anyone else outside the oil patch. By the time I left office four years later I was familiar with it. My public office (County Attorney) was, officially, only a part-time position with a part-time salary. So, 1976 was also the year I launched my private practice of law. As County Attorney, I prosecuted robbers, rapists, arsonists, drug dealers, drunk drivers and other perpetrators of offenses against the peace and dignity of the State of Kansas. As a general practitioner of civil law, I helped husbands and wives sever the bonds of matrimony, helped entrepreneurs launch their corporations, partnerships and limited liability companies, wrote contracts to further trade and commerce by individuals and companies, helped newlyweds buy their first homes, and helped farmers buy and sell quarter-sections of land.

Strangely, the private practice of civil law wasn’t where I first encountered an oil and gas lease. A number of people in a number of states who claimed they’d been ripped off in an oil investment scheme had been calling the police and sheriff’s offices which had no idea what to do so they advised these folks to call the County Attorney. I actually had my own investigator, and we proceeded to educate ourselves about oil and gas leases and how wells got drilled and, before long, I was prosecuting “white collar crime” in the form of a promoter who was selling 1/32 fractional interests in a drilling program; sold 35 of them, as I recall. Looked to me like a violation of the Kansas Securities Act. It wasn’t long before I heard from the Kansas Securities Commissioner whose toes I had unknowingly stepped on. “Violations of the Kansas Securities Act are prosecuted by the Kansas Securities Commissioner,” I was informed. Well, um, I thought I was the “chief law enforcement officer” in my county. I offered to show them several official opinions released by the Kansas Attorney General that said so. They went back to Topeka and I promised to keep them informed as the case proceeded. It proceeded to a conviction (the perp pleaded guilty, or maybe no contest – I don’t remember for sure now), following which he filed an ethics complaint against me for violating his constitutional rights. Somehow in my Constitutional Law class at law school I missed the one that says “shall not be deprived of the right to defraud fellow citizens”. The complaint was deemed without merit and dismissed by the Disciplinary Administrator. Now that I’m older and wiser, though, I understand better why that class was referred to as “Con Law”. Defrauding the citizenry does seem to be a protected right of certain institutions such as the Congress, the White House, IRS, EPA, and certain large corporations, particularly, cable media and telecommunications, and insurance. Health insurance is an especially nefarious industry, moreso than ever thanks to Obamacare. But, I digress.

Interesting, you might say, but what does it have to do with fracking? Patience, my friends; good things come to those who wait.

The case was front page news in the local paper which was read by, among others, a farmer who’d been approached by a company from Oklahoma that wanted to lease his farm and drill oil wells on it. He phoned me in my capacity as a private attorney, not public prosecutor. Representatives of the company were coming up in a couple days to visit him at home and get his signature on an oil lease. Could I be there and look it over for him? I was obliged to inform him that I’d never actually represented anybody in oil lease negotiations and probably every other lawyer in town had much more experience than I did. “I understand,” he said, “but I still want you.” So, I went to his house at the appointed time, met him and the Oklahoma fellows, and we hammered out my first oil and gas lease.

My new client’s house had been the area’s elementary school for many years. He’d bought it and converted it to a home. Interestingly, the house where I grew up, in St. Louis County, Missouri (no oil wells there!), had previously been a school which my parents bought a couple years before I was born and converted it to a home. Even more interesting, I later discovered that for several years circa 1907 (before my father was born) my grandfather was the Baptist minister in the city I moved to and made my home in 1976. When I moved there, I didn’t even know he’d ever lived in Kansas!

What a coincidence, you might say, but what about fracking? Bear with me, I’m getting there, but this just popped into my head (really, just this moment as I typed the comma after “bear with me”): a scene in a bar where a guy goes up to a gal and his pick-up line is, “Bare with me.”

Okay, we’re getting close to fracking. A week later, the guys from Oklahoma called and asked if they could hire me as their attorney. They were planning to lease a lot more land in the area and would like to have me working for them. I was obliged to inform them that I’d only handled one oil lease negotiation and probably every other lawyer in town had much more experience than I did. “We understand,” they said, “but we still want you.” Thus were planted the seeds of what would become a legal career focused almost exclusively on oil, gas and mineral law. As for fracking, I soon got acquainted with how it worked and had been working, for several decades before I knew what it was, without causing, contributing to, or otherwise suggesting any relationship with, earthquakes.

Wait, you might say, is that it? Well, for now it is. If anyone is really interested, let me know and I’ll consider a fracking supplement.

 

No Black and White in the Oil Patch

When somebody asks me an oil and gas law question, one of my frequent responses (besides the lawyer’s classic “it depends”) is “nothing’s ever black and white in the oil patch except maybe crude and snow”.

I was recently asked how many feet an oil well has to be from a property line. The person asking thought his neighbor’s oil wells might be too close to the line. Here in Kansas, state regulations specify an offset of either 165 feet or 330 feet, depending on the county. Sounds fairly black and white, eh? But I asked, have you looked up the oil lease?

Turned out the property line at issue was between two quarter sections which at one time were covered by the same lease. So, it could be important how one quarter came to be released from the lease. Maybe there was a written agreement with the landowners at the time that waived the offset requirement. It might matter when the wells were drilled, whether before or after the one quarter was released.

It also turned out there’s neither a fence line between the quarters, nor has either quarter been surveyed. A survey might establish the property line several feet from where the landowner thinks it is. Even if there was a fence, it might not be on the boundary line, either by accident or by design and agreement of the respective landowners. If a survey showed a fence was not on the boundary, then there may be an issue as to how long the fence has been where it is and whether “adverse possession” has established a different boundary line than what a survey might show.

I could keep going with this, but I think you get the picture. I just thought this made a good example of how something that looks likes a simple question with a simple answer, isn’t really so simple, in the oil patch. Of course, this isn’t limited to the oil patch; it applies to virtually all areas of law practice. As for whether or not it applies in your case, well, it just depends. :-)