[Refer first to:
2012 11 28: Power of Attorney Calgary managing partner for Osler Hoskin Harcourt, Maureen Killoran, lawyer representing Encana in the Ernst vs Encana lawsuit:
And, to be perfectly frank, when you do energy law, as I do, or corporate litigation, you’re not dealing with life and death situations and people whose lives have been turned upside down, plaintiffs who are weeping. It’s just about money. [Emphasis added]
How do you like your steak? Marinated in Encana’s Secret Frac Sauce or au naturel?
A dead zone is visible on June 1, 2015 around an EnCana frackng well blowout that occurred May 19, 2015 in a rural area near Karnes City, Texas.
Is the Eagle Ford oil boom making people sick? Encana well blowout in the Eagle Ford Shale leads family to question life in the oil patch by Jennifer Hiller, August 7, 2016, San Antonio Express-News
KENEDY — Lonjino Lara suffers from a long list of mysterious maladies.
There’s no clear explanation for the vague symptoms: headaches, nosebleeds, red eyes, rashes. Also flu-like symptoms that aren’t the flu, like body aches, severe cramps in his stomach, legs and on the sides of his body.
To Lara, this is the cost of geography, of living in what used to be the middle of nowhere, but is now a green space between an industrial plant and oil wells.
The Eagle Ford Shale oil field sprouted around his country home. It happened quickly, like wildflowers opening after rain: the third-fastest field ever to pump 1 billion barrels of crude oil. Only the Alaska North Slope and Saudi Arabia’s Ghawar field have done it faster.
LEFT: The Laras’ property in 2008, before the Encana plant was built. RIGHT: The property in 2016, with the Encana plant and a water storage pond near their home. …
Lara and his wife Raquel live in Karnes County, at the heart of the 26-county Eagle Ford, next to a plant that processes around 9,000 barrels of oil per day and may release each hour, according to its permit application, as much as 183 pounds of volatile organic compounds.
So-called VOCs easily become vapors or gases, may have adverse health effects and are included in things such as paint and cleaning solvents. Last year, a well accident across the road from the Laras’ released hundreds of thousands of pounds of air contaminants.
The Laras believe Lonjino’s plummeting health is caused by breathing noxious odors. Proving that and recovering anything in the Texas court system, though, would take them into what has been called “the law’s garbage can” – a place where few landowners find success.
A few years ago, Lara spent more time outdoors. He tended goats and liked to host big family barbecues even though he was on disability because of an old back injury. Now his wife Raquel, a sliver of his size, has to help him walk from the kitchen to the bedroom. He is 51.
“This is who I am right now,” Lonjino Lara said, his voice rough as the sound of boots on gravel. “It was like they took everything away from me.”
Other family members have health problems too, including nosebleeds, dizziness and body aches. One daughter miscarried in 2013.
One evening in late January, the glow from a flare at the neighboring production facility lit their property like a large torch, throwing long shadows and revealing green pasture.
“It lights up everything here at night,” Raquel Lara said, pointing around the property. “The grass is green. See how you can see the grass.”
A flare burns gases from an oil and gas site near the Laras’ home just outside Kenedy. The Laras, especially Lonjino, say they’ve suffered a variety of health problems and that they didn’t immediately realize there may be a link between the ailments and the oil facilities.
The Laras’ home is surrounded by oil and gas sites. Fifteen months ago, they watched as an oil well blew out on a neighboring ranch, sending a cloud of spray rolling across the prairie.
The Laras said they were slow to think that there might be link between oil field facilities and their health.
When an oil well blew out on a neighboring ranch 15 months ago, watching the cloud of oil spray across rolling prairie helped throw everything into focus for the couple.
“I saw it shooting straight up, white and then it turned to black,” Lonjino Lara said. “It was shooting very high. Everybody was scrambling to get out of here.”
They left so fast they didn’t bring extra clothes.
A well-maintenance crew had been at work on the Dromgoole B 8H well on May 19, 2015, putting production pipe into the hole. The Encana Corp. well, across a farm-to-market road from the Laras’, had already been drilled and hydraulically fractured, the process of pumping millions of gallons of water, chemicals and sand into the well to crack open tight shale, allowing oil and gas to escape the rock.
This crew had been at work on the final stages of bringing the well into production when they lost control. A gas pressure kick pushed a pipe 20 feet above the rig floor where the roughnecks were standing.
Fluid started spraying out of the pipe.
It was one of 221 well blowouts in Texas since 2006, according to state records — not an unheard-of accident, but a rare one in a state with around 324,000 active wells.
In this accident, there was no fire or injuries — just water followed by oil blowing across the prairie.
Evacuees from 30 structures in a three-mile radius included the Laras, their three daughters, two sons-in-law and three grandchildren. They and their neighbors headed to nearby Karnes City, about an hour’s drive southeast of San Antonio.
Calgary-based well owner Encana Corp. put everyone up in a new hotel that had been built to capture business from transient oil field workers during the boom years of the Eagle Ford, the 400-mile oil field that swoops across South Texas and produces more than 1.1 million barrels a day of crude and the light oil condensate.
While residents fled to the hotel, the blowout shut down County Road 343 and parts of FM 792. Sheriff’s deputies and firefighters blocked the roads to stop landowners from checking on livestock and pets.
Sheriff Dwayne Villanueva’s phones were ringing off the hook. He kept telling people, “I understand, I love animals, too, but you cannot go back there.”
It took about 28 hours and a Houston company that specializes in such disasters to bring the well under control. Encana began soil cleanup and coordinated road repair with the state — the combination of hot sun and standing oil had melted the road surface of FM 792. The company also had to evacuate livestock from the area.
It’s not known how much oil escaped the well. Anywhere from 2,362 barrels of oil to 4,050 barrels — as much as 170,000 gallons of crude, according to estimates Encana gave to the state. There was also natural gas blowing from the well and production water, which also is trapped in deep rock and gets produced alongside oil and gas.
The well released more than 860,000 pounds of air contaminants — mostly oil, but also other compounds such as propane, iso-butane, n-butane and hexanes, according to a Texas Commission on Environmental Quality report on the accident.
Oil coated pastures and trees and created a brown, dead zone in its path.
The blowout was north of the oil boom town of Kenedy in a sparsely populated area of Karnes County, which became the state’s most prolific oil producer late in 2012. It wasn’t far from Helena, a ghost town that once housed the county courthouse and called itself the “toughest town on earth,” where horse thieves, cattle rustlers and brawls were part of the fabric of early Texas life.
At the time, Encana was one of the newer entrants into the Eagle Ford Shale. It spent $3.1 billion in a deal completed in June 2014 to buy Freeport McMoRan’s position in the field — 45,500 acres in Karnes, Wilson and Atascosa counties.
The oddly-named Railroad Commission of Texas — which has nothing to do with railroads — investigates well blowouts. The agency straddles twin goals: regulating oil and gas while also encouraging the production of the state’s mineral wealth, which provides billions of dollars in taxes and is an important economic engine for Texas.
It took almost a year for the Railroad Commission to level an administrative penalty against Encana for the well blowout. On May 3, the company agreed to pay $17,500 for the accident.
In the wake of the well blowout, it took almost a year for the Texas Railroad Commission to level an administrative penalty against Encana. On May 3, the firm agreed to pay $17,500 for the mishap.
Encana spokesman Doug Hock said the company, third-party environmental experts and the Texas Railroad Commission collaborated on environmental remediation.
“Encana has completed that work and submitted technical reports for review and approval by the Texas Railroad Commission,” Hock said. “As indicated in our formal submittal, the area potentially impacted by the incident now meets the applicable standards set by the State of Texas for the protection of human health and the environment.”
For the Laras, the well blowout created more questions. They stayed at the hotel for about three weeks and said they started swapping stories with other evacuees: strange odors, gas flares that burned black smoke, headaches that started when the smells grew strong.
Last spring, 30 of the Laras’ goats died. They had not shown any signs of illness, and as far as the Laras could tell, they died for no reason at all. Ten of their dogs also have died for no apparent reason. “We were hearing everybody’s stories,” Lonjino Lara said. “I was like, that’s what’s wrong with me.”
The Laras started to worry more about the production facility that they lived next to than the well blowout. Oil flows from nearby wells through a pipeline to the Patton Trust South Production Facility, where the oil and gas streams are separated in order to be sold. Briny water, which gets produced alongside oil and gas, is separated out too.
About 9,000 barrels of oil and 3,500 barrels of produced water come into the plant next to the Laras’ home every day, according to its most recent permit application.
The Texas Commission on Environmental Quality, the state’s environmental agency, oversees air permits and complaints about odors, and it has investigated the plant several times. There have been 15 air quality complaints about the site since 2012 and four written notices of violation.
In October 2012, when another company owned the facility, a TCEQ investigation noted that “a great potential for creation of nuisance odors exists at this site.”
In August 2014, the previous owner was fined $800 for air violations. It’s the only fine for that facility, though both the TCEQ and the Railroad Commission both have long-stated policies of letting companies bring facilities into compliance instead of leveling fines.
In mid-2014, just before the Encana purchase, the plant received a notice of violation for not meeting permit requirements because it was operating a sour gas facility too close to the Laras’ house.
Sour gas, or hydrogen sulfide, is poisonous and smells like rotten eggs. The plant had gone through the state’s permit-by-rule process, a speedier application for facilities that produce a trivial amount of air emissions. Permit-by-rule facilities are not allowed to operate within a quarter-mile, 1,320 feet, of a home or building that the company does not own or use exclusively.
Documents submitted to the state in 2012 said the Patton Trust South plant was 1,953.6 feet from the nearest home. TCEQ did not do a site visit.
More recent technical paperwork and permits show the plant is actually 800 feet from the Laras’ home, less than half the distance the original permit claimed — far short of the allowed quarter-mile.
But the quarter-mile rule for sour gas facilities no longer applies – the site now operates under a standard permit which allows facilities to be as close as 50 feet from a property line, according to the TCEQ.
Investigations at the site haven’t always found problems. Last August, investigators using infrared cameras found emissions from a relief valve and thief hatch of a condensate tank. An investigation concluded in April found visible emissions from a gas flare in December and January — a sign the flare was burning inefficiently and releasing air pollutants.
But the state in January did a separate downwind test for 84 volatile organic compounds, or VOCs. It didn’t detect anything that would be expected to cause short-term health problems.
Hock said the company has made improvements to the site since its purchase, and is focused on safety and minimizing its environmental impact.
“Extensive voluntary third-party testing of the Lara property indicates no environmental impacts from the incident or our ongoing operations. Nevertheless, we continue to engage in good faith discussions with the Lara family, seeking to address their concerns,” Hock said.
He said Encana has made substantial improvements to the Patton Trust South plant, and the company works hard to operate it in full compliance of environmental regulations.
Its latest permit application says the facility may emit pollutants that include as much as 218 tons of VOCs each year; 242 tons of carbon monoxide; 140 tons of nitrogen oxide, known as or NOx, which contributes to the production of smog; 7 tons of the gas formaldehyde, which can irritate the skin, eyes, nose and throat; and 5 tons of sulfur dioxide, which can cause breathing problems. It operates 24 hours a day, year round.
“The area surrounding the facility is relatively flat surrounded by county roads, vegetation, and other oil and gas facilities,” the company’s permit application says. It does not describe the Laras’ home next door.
Raquel Lara and her husband Lonjino Lara say they have been suffering from health problems, especially Lonjino, nosebleeds, muscle pain, breathing problems, just a few of their issues. They lived near Kenedy, TX across from where a blowout occurred at an Encana oil and gas site almost a year ago, but have moved to nearby Karnes City. Unable to help himself, Raguel helps her husband get ready for a nap.
The Laras have an attorney, but they haven’t filed a lawsuit and aren’t anxious to get into a court battle. Instead, attorneys for both sides have had meetings, and the Laras have appeared for some meetings to describe their health complaints.
Nuisance suits against oil and gas companies are rare, and families who file them face uphill odds against deep-pocketed opponents.
A 2013 lawsuit from one family in South Texas never made it to a jury trial – it was thrown out by a state district judge. In Karnes County, Michael and Myra Cerny’s complaint against two oil companies detailed a myriad of maladies: headaches, rashes, bone pain, numbness, nosebleeds, irregular heartbeats and bronchitis.
“Since the plaintiffs’ property is completely surrounded by the defendants’ wells and production facilities, no matter the wind direction, their property is always smelling of noxious odors,” the suit said.
In a summary judgment hearing in 2014, state District Judge Stella Saxon in Karnes County said the plaintiffs had a “real difficulty” in proving causation — that the two oil and gas companies and not something else in the air caused injury. “That’s a high hurdle that has to be jumped,” Saxon said.
The attorneys on both sides spent hours arguing the merits of various court cases that dealt with whether the Cernys needed expert testimony or epidemiological studies to prove their health problems were caused by hydrocarbons.
Ultimately, Saxon told the they could take it to the Court of Appeals in San Antonio. “Let them decide,” Saxon said. “If it comes back, it comes back.”
The family appealed, but the appeals court sided with the oil and gas companies last November.
In a partial dissent of that opinion, Judge Luz Elena Chapa said she agreed that expert testimony and studies were needed for anything that had to do with medical claims, but argued that, beyond health issues, there was enough evidence to give merit to nuisance complaints about foul odors that interfered with the use and enjoyment of the property.
The Cernys appealed to the Texas Supreme Court, which in June asked for the case file, though that doesn’t mean it will hear the case.
Two other families have nearly identical suits to the Cerny case in Karnes County, but those are on hold pending the Cernys’ outcome.
The most successful Texas suit against a shale driller for nuisance has been winding its way through the court system in North Texas. A Dallas County jury granted a couple $2.9 million for their 2011 claim against Plano-based Aruba Petroleum. Bob and Lisa Parr, who appeared in anti-fracking activist Josh Fox’s “Gasland II” movie, alleged spills and emissions from the company’s operations made them, their livestock and their pets sick, and forced them to evacuate their Wise County land.
Aruba has appealed the verdict, calling the award excessive, and it cites the Cerny case in its court filings. In both cases, companies argue that their industrial activities are not out of place in areas that have become large shale oil and gas fields.
Christopher Hamilton is a Dallas-area attorney representing a family injured in a North Texas water well that exploded with methane gas. Hamilton said it’s possible to successfully fight the industry, but the amounts in dispute and the damages someone could collect may not be enough to make it economically feasible to go to court.
Barring catastrophic injuries, chemical exposure cases require scientific evidence that’s too expensive for most regular people to gather, and expert testimony that’s pricey to procure.
“The third thing is just the general climate of belief, based on what’s happened in the appellate courts and within the regulatory system, that the oil and gas companies are untouchable in Texas,” [Same in Canada?] Hamilton said. “There are lot of these issues, including property contamination and the contamination of water and air and soil where the regulators really ought to be stepping in and taking care of those issues instead of forcing people to go to court.”
Laura Burney, an oil and gas attorney and law professor at St. Mary’s University, said that many of the disputes involve people who own the surface of the land but not the minerals, giving them all the hassle and none of the financial benefit of oil and gas production. The mineral estate trumps the surface estate in Texas, and absent a strong surface-use agreement between the landowner and producer, the rights of surface owners are limited. Energy firms may act as “reasonably prudent” operators to make oil and gas, and that includes basic things such as entering property as well as actions that may damage the surface such as adding new roads, storing equipment or building drilling pads. There’s a slew of Texas case law about cattle wandering near well sites and eating or drinking something that makes them sick. (Usually not considered the industry’s fault — companies don’t have to fence off wells to keep out cattle). “They get to do what’s reasonable for them to produce oil and gas,” Burney said. “A cow might die.”
Individuals with nuisance complaints sometimes win an award against an oil company in a jury trial, but that decision is often batted down by an appellate court. “Jury awards just do not stand up,” Burney said.
Former San Antonio mayor Phil Hardberger wrote a law journal paper in 1998 that became famous in the field, “Juries Under Siege,” when he was the chief justice of the Fourth Court of Appeals in San Antonio. It detailed the ways in which Texas swung from a place known for huge jury awards in the 1980s to a state where a more conservative Texas Supreme Court had restricted jury awards. “Although lip service is given to the importance of the jury, the decisions of the Court demonstrate that, in fact, the jury verdict does not mean much,” Hardberger wrote.
In a March opinion, the Texas Supreme Court wrote a new standard for nuisance law, referring to it as “the law’s garbage can” a phrase taken from a 1942 legal paper, and a nod to how confusing even experts find it to define the interference with the use and enjoyment of real property.
In order to win damages, the court opinion said a plaintiff must prove that the defendant intentionally or negligently caused the nuisance, or engaged in an abnormally dangerous activity — not merely that the defendant created a nuisance.
Andrew and Shannon Gardiner had won $2 million in a jury trial against a pipeline company that operated a noisy compressor station next to their land in Denton County. The decision sent the 2008 case back to district court for a new trial.
“It’s thorough,” Burney said of the new standard, “but it won’t make it easier.”
Because of their health problems, the Laras moved from their home just outside Kenedy to a work force housing trailer park in Karnes City.
Buyouts are rare in the oil and gas business, but county land records indicate that last May’s well blowout did result in a handful. Encana purchased the surface ownership from at least three owners near the accident. The three families sold to Encana in the months after the blowout, with all purchases backdated to May 18, 2015, the day before the accident.
Raquel Lara said she was told that their property was not hit by oil during the blowout and so the company would offer no settlement for that.
The Laras’ neighbor, Lucas Jasso, didn’t get a buyout offer either, but had a bull that was evacuated and died in Encana’s care. He opened his mailbox one day to find a check from the company.
He never cashed it, fearing that it would mean he might inadvertently accept some sort of legal settlement he didn’t understand.
He never got any paperwork from the veterinarian, though he had asked for medical records for his bull. “They did some fecal matter testing, but I didn’t get any medical reports,” Jasso said. “They didn’t do anything. It was to their advantage.”
Last year, the Laras started leaving their property when the odors grew too strong. Over the last several months, they have stayed away from their 32 acres almost entirely. Two of their daughters and sons-in-law moved to Kenedy.
Raquel and Lonjino and their youngest daughter have been living in a trailer at a mostly empty worker lodge on the edge of Kenedy, an arrangement being paid for by the Sisters of Charity of the Incarnate Word in San Antonio.
“It’s better than being out here,” said Sister Elizabeth Riebschlaeger, a nun with the Sisters of Charity, during a springtime visit to the Laras’ property. Riebschlaeger grew up in Cuero in DeWitt County, and has become the most visible environmental and health advocate in the region.
Zacariah Hildenbrand with Inform Environmental in Dallas has done air and soil sampling at the Laras’ property, and called the level of VOCs in the air “alarming.”
“You have a continuous source of these volatile organic compounds in the air from that facility,” he said. “It’s not even remotely suitable for living. The idea of living there seems insurmountable.”
Raquel Lara makes tamales to sell. “This whole thing has made it way harder on me,” she says of the couple’s financial situation. “It’s just stressful. I have the whole load.”
The Laras continue to pay the mortgage on their home. To help defray the cost of that, mounting medical bills and trips for Lonjino to see doctors in San Antonio, Raquel caters and makes and sells dozens of tamales every day. She recently started mowing the grass at the trailer park for extra money, and family members have helped her with that task.
The Laras don’t own the minerals on their land, though they did get some money from a pipeline easement a few years ago, which helped them to build a newer house on the property with enough bedrooms to accommodate the whole family. The thinking was that with Lonjino’s declining health, everyone living together would help with expenses and maintenance.
The area near their home remains a marriage of rolling coastal prairie with what has become one of the world’s biggest oil fields. Grasses and wildflowers have returned in the wake of the blowout, though some skeleton trees were left behind – oaks that have faded from green to gray. [Emphasis added]
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