Oil and Gas Monitor Guest Article: Things that Go Bump in the Night: Litigation Risks that Leave Oil and Gas CEOs Sleepless

10/06/2014

When oil executives turn in for the night, despite daily efforts to cross T’s and dot I’s, they know the road ahead is paved with legal risk. With the advent of innovative horizontal drilling and hydraulic fracturing technologies, exploration and production companies are actively engaged in a hot pursuit for oil from shale plays in an environment fraught with legal and regulatory uncertainty.

The recent influx of oil and gas activity into sleepy rural towns has been a call to action. Local municipalities, state legislatures and administrative bodies scramble to quickly implement new ordinances, regulation and laws. The media and concerned citizens raise new environmental issues related to hydraulic fracturing, including allegations of air emissions, soil or water contamination and even earthquakes. The need for enormous amounts of water necessary for hydraulic fracturing promotes increased regulation of water use, and generates new disputes over water rights. Fleets of trucks flood rural highways causing substantial wear and tear to roads ill-equipped to handle the uptick in traffic, which may lead to more accidents. New litigation and regulatory issues trail behind the wake of this fast-paced unconventional development. It is an environment bedeviled with risks that keep oil executives awake at night.

Excerpted from the Oil and Gas Monitor, October 6, 2014. To view full article, click here.

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