Union Texas Petroleum Corp. v. Jackson

909 P.2d 131, 1995 WL 737445
CourtCourt of Civil Appeals of Oklahoma
DecidedApril 25, 1995
Docket80,972, 80,976, and 80,959
StatusPublished
Cited by21 cases

This text of 909 P.2d 131 (Union Texas Petroleum Corp. v. Jackson) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Union Texas Petroleum Corp. v. Jackson, 909 P.2d 131, 1995 WL 737445 (Okla. Ct. App. 1995).

Opinions

OPINION

HANSEN, Presiding Judge:

The Conservation Attorney for the Oklahoma Corporation Commission (Commission) filed this Application in the Corporation Commission on March 23, 1990.1 The Amended Application named Appellants Citation Oil & Gas Corporation (Citation), Mobil Oil Corporation (Mobil), and Raymond Punneo, Mayor óf the City of Cyril as Respondents. Appellant Union Texas Petroleum Corporation (Union), also described as UTP by the Commission, and American Exploration Company (American), also described as AEC by Commission, were allowed to intervene. Union intervened because it owned a working interest in the land covered by the Application until 1986.2 American intervened as Union’s successors in interest. In the Application, the Conservation Attorney requested an investigation and order from Commission regarding the extent, if any, of the source or continued contribution of alleged saltwater contamination of the subsurface waters which constitute the town of Cyril’s municipal water supply.

In 1960 Union acquired a leasehold interest in the Cement I unit (CIU) from Anderson-Prichard Oil Corporation. The CIU is larger than the Application area. Union operated producing wells and a saltwater disposal well in the CIU from 1960 to 1970. In 1986, Union sold its interests in the CIU to American. In 1970 the involved lands were unitized under 52 O.S.1991, § 287.1 et seq. to conduct secondary recovery operations. Mobil was a successor in interest to Magnolia Petroleum Co., which was an operator in the area. By March, 1978, Mobil owned a 51.52% interest in the CIU. The Commission determined Mobil was the largest pre-CIU owner/operator in the Application Area. Mobil was the Unit Operator of each of two secondary recovery waterflood units until 1989 when it sold its interests in the two units, the West Cement Unit and the CIU, to Citation.

The ALJ determined the contaminated zone of subsurface water included both the Rush Springs aquifer and the Marlow aquifer. The Application alleged the sources of pollution appeared to be wells and pits located in the two secondary recovery projects. Oil and gas production operations are the only source of saltwater in the area. The Conservation Attorney sought an order identifying the sources of contamination and the responsible parties. He asked the Commission to approve a plan of abatement of the pollution.

Commission chose to bifurcate the hearing. Phase I would cover the extent the aquifer was contaminated, the sources of the contamination, and who would be responsible for conducting an investigation into the remedia-bility of the contamination. The threshold issue was the jurisdictional power of Commission to order any of the named respondents, at their expense, to conduct the investigation.

[136]*136Phase II would then cover whether the alleged contaminated aquifer should or could feasibly be remediated, and the nature of any such remediation. The exact issues for Phase II would be determined at a prehear-ing conference conducted at the conclusion of the Phase I proceeding.

An administrative law judge (ALJ) for Commission conducted an evidentiary hearing which lasted 21 days on Phase I.3 The ALJ determined that no liability or responsibility would be imposed on any of the respondents unless the Applicant proved a violation of a statute relating to Commission’s jurisdiction or a violation of a Commission regulation, rule or order, causation and injury. The ALJ made extensive findings of fact.4 It found that both the Rush Springs aquifer and the Marlow aquifer had been contaminated by chloride from oil and gas operations within the area. He found , that assuming all sources of pollution had been cut off, it would take in excess of 50 years for the polluted groundwater to move beyond the area of Cyril’s water wells.

The ALJ stated the weight of the evidence showed there was no way to determine what amount of contamination came from any particular source. The three primary sources of contamination were land spreading of produced saltwater, the operation of unlined, saltwater evaporative pits and Mobil’s operation of the CIU utilizing excessive injection rates and pressures from 1972 to 1989. It was clear to the ALJ that the pits were primarily responsible for contaminating the municipal water supply during the period from 1948 or earlier, -until 1970 or 1971 (pre-CIU). The evidence established that in early 1972, the chloride content within the municipal water supply dramatically increased during Mobil’s operations of its injection wells in the CIU.

The evidence showed Anderson Prichard Oil Corporation operated producing wells, used saltwater evaporative pits and conducted land spreading during primary production which caused contamination of the water supply. In 1962, Union Texas purchased leasehold interests of Anderson Prichard and actively operated the leases until Mobil began its unitization operations in 1970. In 1986, Union Texas sold its working interest in the CIU to American Exploration Company (American).

Mobil operated producing wells and utilized saltwater evaporation pits in this area during primary production and became operator of the CIU in 1970. Citation purchased Mobil’s interest and became the successor operator of the CIU on August 2,1989.

The ALJ denied Mobil’s motion to dismiss finding Mobil violated statutes, orders, rules and regulations of Commission which has caused the pollution of the water supply. The ALJ recommended Union’s Motion to dismiss should also be denied because it violated Commission’s rules, regulations, order and statutes which cause and contributed to contamination of the aquifer. The ALJ recommended granting Citation’s motion to dismiss and also American’s motion to dismiss, finding neither could be held liable for the pollution. The ALJ recommended the responsible parties’ liability be joint and several and the costs of the investigation should be borne equally between Mobil and Union. This was based on his determination the proportionate amount of contribution to contamination from the different sources could not be determined. The ALJ recommended that an interim order issue requiring further investigation of the hydrologic unit to decide whether remediation was feasible.

Commission adopted the findings and recommendations of the ALJ except as modified in Order No. 372735.5 Commission denied [137]*137Union’s appeal to the initial report of the ALJ but contrary to the ALJ’s recommendation, it found Citation, as a successor in interest who has actively operated the CIU, was responsible for the actions of its predecessors in interest. It ordered that the costs of the investigative plan required by Order No. 372735 should be borne equally among Mobil, Union and Citation. It found the liability of current parties of record should not be re-litigated during Phase II.

Before this Court is the City of Cyril’s motion to withdraw from this appeal. The Mayor of Cyril was named as a Respondent in the Application before the Commission. Cyril has not appealed or cross-appealed the Commission’s order but filed answers to Appellants’ briefs. While proceedings were in progress before the Corporation Commission, Cyril filed an action in the District Court for the Western District of Oklahoma for damages for the loss of its water supply system against Mobil, Union and Citation. That action has been settled.

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Union Texas Petroleum Corp. v. Jackson
909 P.2d 131 (Court of Civil Appeals of Oklahoma, 1995)

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Bluebook (online)
909 P.2d 131, 1995 WL 737445, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-texas-petroleum-corp-v-jackson-oklacivapp-1995.