"Litigation against unconventional gas producers; lessons from the US experience."
Richard M Lightfoot, Casconsult Pty Ltd
In North America, exploration and production of oil and gas from unconventional sources principally shale, but also tight sandstones and coal seams – is more developed than elsewhere in the world. The presence of large shale, tight gas, and coal seam gas reserves has led to exploration throughout the world.
In Australia, the unconventional gas industry is most developed in Queensland, is seeking to expand in New South Wales and South Australia, and is prospective in Western Australia the Northern Territory, and, to a much lesser extent Victoria.
In the light of the US experience, which has included claims of mechanical failures and inappropriate waste treatment and disposal, leading to groundwater contamination, induced seismicity and hazardous fugitive emissions, government and scientific agencies have produced thousands of studies of the perceived benefits and risks associated with the gas.
In each jurisdiction where unconventional gas extractions has been proposed, governments have been developing legislative regimes for resource allocation and for the managing of risks, through statutes, regulations, standard, and codes of practice.
In the USA, landowners and other citizens who believe that unconventional gas extraction has caused damage to land, water, human and animal health, have resorted to ligation seeking to recover damages, principally by bringing tortuous claims in negligence, nuisance and trespass. In some jurisdiction, actions have also been based on strict liability and legislated rebuttable presumptions of liability.
The paper summarises some cases brought in the USA, to identify the basis of the claims and to analyse their outcomes. In particular, claims brought in tort, and the potential for such claims brought in Australia must be considered.
All sections of the Unconventional Gas Industry need to become aware of their continuing responsibilities. Corporations require an intimate knowledge of the law, its interpretation and the need to minimise exposure to financial, environmental and health risks.