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The History of Grayson County - Part 3

High above Grayson County flies the blue, red, and gold colors of its flag. The county was established in 1846 and, as alluded to in our last post on Grayson’s history, it was a rough and rugged path that led to the peace and stability that we can enjoy today. After John Hart staked his land near the northern border of present-day Grayson County and was  killed by Colville in 1841, Abel Warren put up a trading post, which is now considered the second official settlement in the area and one of the region’s most important.

Soon after the community began to enjoy some permanency (having begun to organize the new county with the founding of the Board of Land Commissioners), the Warren settlement became a catalyst for conflict between the new settlers and the Indians. The Choctaws and Chickasaw Tribes arrived in the county just before the pioneers did, having been moved into new homes by order of the Federal Government.

The Indians took exception to the Whites killing wild turkeys and retaliated by killing the settlers’ cattle. The skirmish escalated until the county seat was removed from Warren and peace was brought to the region; as Landrum notes, there was “less and less reason why the little town should be the center of the community”.

Nevertheless, it was at Warren that Grayson County’s institutions were started. The first civil government was there; the first school was there; the first religious services were held at Warren, too. John Denton preached the first sermon and the settlement was the site for the first Methodist camp meeting in 1847. Warren, Landrum maintains, “unquestionably had great significance in the development of Grayson County, Texas”.

The peace and stability created in the late 1840s lapsed momentarily during the Sherman Riot of 1930. On May 9 1930, Grayson County’s 1876 courthouse was burned to the ground by arsonists during the trial of an African American man by the name of George Hughes.

Texas Ranger Frank Hamer was in Grayson during the riot and reported the situation to Texas Governor Dan Moody; the governor sent the National Guard to Grayson on May 9 and 10 to suppress the riot. A new courthouse was erected in 1936 and still stands as Grayson County’s official jurisdiction for legal matters. Moreover, The Bridge War, was yet another conflict fought over the county’s land. In 1931, the U.S. states of Oklahoma and Texas disputed over an existing toll bridge and a new free bridge crossing the Red River between Grayson County and Byran County, Oklahoma.

Other notable modern-day structures in Grayson County are the Red River dam, built in 1938 and authorized by the U.S. Congress; the Perrin Air Force Base, constructed in 1941; the Eisenhower Birthplace State Historic Site, which is the birthplace of Dwight D. Eisenhower acquired and restored in 1952. The Red River dam was completed in part by the use of labour provided by German prisoners of war held in Cooke County, Texas during World War II; the structure is now officially known as Denison Dam.

The air force base was closed in 1971, although the availability of labor from the base contributed to the opening of industrial plants in Grayson County. The base was converted to a civilian airport we know today as North Texas Regional Airport. And, finally, the Eisenhower Birthplace Historic Site is still intact but is no longer maintained by the state because of budget cuts; instead, it’s run by a private non-profit.

Today, Grayson County, Texas is 169 years old and is a bustling area charted by four U.S. highways and six State highways. The region’s population has increased from 2,008 in 1850 to 123,534 in 2014; the Hart and Warren settlements have expanded to nearly 43,000 households. The County’s land has survived the shifting, cracking, and erosion of prehistoric formation, a revolutionary war and violent disputes over its acreage, Indian wars, a riot, and a civil battle over a one of its bridge crossings.

As nineteenth-century western and south-western America passed by like dust and gun smoke in the wind, Grayson County’s renowned landscape has truly stood the test of time and has emerged as one of many vibrant communities in the northern part of our great state of Texas.


Grayson's Early Settlers - The History of Grayson County (Part 2)

Part 1 of our series entitled “The History of Grayson County, Texas” surveyed the county’s land. We looked at early prehistoric formations of the terrain and why, today, ancient layers of strata beneath Grayson County are ideally suitable for oil extraction. Part 2 will consider the pre-twentieth-century anthropological history of the region and more specifically, will visit recorded information concerning Grayson's early settlers.

 

The land of the area known today as Grayson County is not only conducive to oil production but to agricultural production as well. Caddo Indian Native groups including the Kichai, Ionis, and Tonkawa Tribes found the soils of this part of the Americas fit for their lifestyle; they are the earliest known inhabitants of the county’s region. Having established a sustainable way of life, the natives were in a position to trade with the Spanish and the French who moved up the Red River during the eighteenth century in order to establish trading posts.

The famed Cherokee tribe, one of the most renowned tribes in the South, settled near the Red River in the early 1800s and lived right along the border of modern-day Grayson County. When European settlers began to flock in, the Cherokees moved further south into Texas. They did not trust these pioneers, and as a result—and in hopes of obtaining legal rights to their land—they allied with Mexico.

During the Texas Revolution (touched on briefly during Part 1) the Cherokee nation remained neutral between Mexico and Texas. Eventually, however, the Cherokee went to war against Texas when Mirabeau B. Lamar took office. Lamar sought to marginalize all natives and relocate them on reservations away from white society.

In his book An Illustrated History of Grayson County, Texas, Graham Landrum argues that it was common people who established Grayson County in the 1800s and not the wild men who “swaggered in with a rifle, a pistol, and a Bowie knife” only to leave in a few years to “seek Eldorado somewhere beyond the horizon”. And he claims the county’s “real” history begins no earlier than 1836 or 1837. Prior to that time, the Indian, Frenchman, and Spaniard traversed the county but the place was “without permanent distinguishing feature”.

The first settler on record is John Hart. Hart was an English-speaking “white man”  who was renowned as a trapper and indian trader who also served in the Texas Revolution; when his service ended, he was determined to stake his claim and in 1837, with brothers James S. and William R. Baker as partners, finally returned and cleared and fenced seventeen acres.

The settlement was at Preston Bend, which is located on the northern peninsula of Grayson County that juts into Lake Texoma along the Red River. The property changed hands a few times when Hart leased the land to John F. Moody. When Moody’s lease expired, the gentleman Holland Coffee took over the premises.

This brief anthropological history of Grayson County is in no way comprehensive; however, Hart’s story does give us a sense of the hard work and determination that built up the northern region of Texas.  What makes Landrum’s account trustworthy is that he attempts to relate the history without omitting its less than flattering areas; his purpose, and the purpose of this series, is to present as  authentic a historic background as possible. In part three, we will consider the recent history of Grayson County to fully understand its current economic and social landscape. 

Land Before Time :: The History of Grayson County (Part 1)

Early American history was a time of great adventure and conflict. After engaging in a revolution that affected the eastern seaboard and a war that dismantled the north and south, the west then emerged with a lawless spirit embodied by money-mongering business men, adventurous cowboys and wild Indians that ripped through the west. 

Or so the story goes. Our Puritan roots leave little room for magic, the Civil War was all too real for romance, and so the expansionism of the west and southwestern regions were granted enough enchantment for all of nineteenth-century America. 

The captivity stories of Mary Rowlandson and their contemporary Wild West folk tales about Billy the Kid and Jesse James shroud the Frontier in mystery, but what hasn’t been fictionalized are documented descriptions of the lives of freewheeling outlaws, iron-willed natives, courageous soldiers and the solid ground they stood upon.

As nineteenth-century western and southwestern America grit its teeth and rode through dust and gun smoke to glory, what were the features of its population and its renowned landscape? During this three-part series entitled “The History of Grayson County, Texas,” we discuss this region of our great southwestern state in light of its rich and vibrant geological and anthropological history.

During the 1800s, Texas itself was a beauty ravaged by war. Around 1821, Mexico established its independence from Spain and claimed colonies between Texas and California. Caravans traveled through New Mexico in order to transport American goods across the border. Once American pioneers settled in Texas—upon invitation from both the Spanish and Mexican governments—there was a climate for rebellion and a vision for independence. Battles such as the Alamo led to a decisive victory for Texan loyalists (Calore). The Texas Revolution lasted one year from 1835 to 1836 (Calore), and its blood was spilt on an equally devastating landscape. 

Prehistoric structural formation created a formidable Texan terrain. During Paleozoic time, the area of Grayson County was a large sedimentary basin full of marine deposits. Eventually, structural deformation formed lesser troughs and arches within the basin, which now gives this landscape a riddled and rugged appearance. Parts of the basin subsequently were deepened and faulted, and the basin received several thousand feet of sediments which produced its current, flat terrain. 

During late Mesozoic time, sea water invaded the area and deposited hundreds of feet of sediment in Grayson County—prehistoric layers that are now represented by about 3,600 feet of sand, shale, marl, chalk, and limestone. The seas gradually withdrew; erosion began and probably continued during Quaternary and Tertiary time. Many present-day topographic features, including stream terraces high above Grayson County valley flood plains, were formed during Pleistocene time.   

In more recent historical accounts of the county’s geology, certain geological and geographical features have played a particularly significant role. Most visible is Red River, which, together with Lake Texoma since the 1940s, forms the northern boundary; most useful is the Preston Anticline, which is an unusually interesting geological feature that grants the availability of Grayson County’s mineral resources.

Among these resources are the much sought-after oil and gas found in the anticlinal portions that have been subject to warping or folding by natural forces; folded or warped earth such as the Preston Anticline presents the pockets that will later facilitate the oil extraction that would greatly define and affect the regions in the distant future. The geology of Grayson County reflects the rough and tumble American history discussed earlier and to be expounded upon later in this series.

The Little Oil Well that Could

The Civil War wouldn’t start for another 2 years when a former railroad conductor named Edwin Drake began a new era by successfully drilling for oil. Towns and Cities soon began to grow around the site; In one of the drilling areas about 70 miles north of Pittsburg lies the McClintock No. 1. At an age of 153 years, the McClintock is the oldest producing oil well in the world, producing 1/10th of a barrel of oil per day. It has ticked steadily along through a Civil War, 2 Great World Wars, a Great Depression, and MUCH recently, the latest price shakiness in the Oil Industry.

The American Oil Industry itself has been no stranger to “Shakiness.” Originally used to fuel lanterns, the oil industry seemed doomed to become obsolete due to the invention of the light bulb not long after the McClintock was built.

It wasn’t until Ford’s automobile that oil took on its current significance and mass drilling then began. From the Civil War to the Great War, America saw no need to acquire oil abroad, but when the US government was faced with a possible meltdown during the war, it pressured oil companies to buy oil internationally.

During the Great Depression, the price of oil withered down to ten cents a barrel. Despite the upheaval, our little Oil Well that Could was still producing oil day after day. At those prices, it would have been making about a penny per day with its current production rate. It wasn’t until World War II that the Oil industry was reborn.

Despite its ups and downs, the American oil industry has grown tremendously. Since the McClintock No. 1 was built and put into production, the US has been the industry’s global forerunner. McClintock No. 1 was a small part of this exponential growth. According to Historical Marker (explorepshistory.com), after Clubertson McClintock died, his wife leased a portion of his farmland for drilling and spurred what is now considered the Pennsylvania equivalent of the California gold rush. By 1862, the McClintock farm became the epicenter of the oil region, located twelve miles from where Drake made history. In this day and age, the crude oil from the well is now sold to a small fuel company (Doan) that manufactures motor oil.It seems McClintock’s well, tucked away at the end of a Pennsylvanian country road, is of little importance compared with the politicized complications of our modern oil world.

This week, USA Today reported a “collapse in oil prices,” noting that crude companies such as West Texas Intermediate have fallen 4.6% to $46.22 a barrel, while Brent dropped 2% to $47.67. Experts claim that the main reason for this decline is US mainland’s ramping up of production. Due to this increase in production, the new supply of crude has flooded the market and, therefore, has lowered prices.

This fluctuation in market and at-the-pump prices since the 40s is just one of the many changes and challenges McClintock No. 1 has survived. Some argue that the current production rate of “No. 1” is not economically viable, but, given the unreliable nature of the oil industry, its value might lay in its old-fashioned, American-made durability rather than modern, global practicality.

As this little oil well continues to pump, it serves as a symbol that the American Oil Industry can and will withstand any economic challenge that might come its way.

Payson Petroleum Lawsuit - Information - Lawsuit Education

What is a Legacy Lawsuit? 

A legacy lawsuit refers to a lawsuit by a landowner claiming that oil and gas operations, often many years ago, caused his property to become polluted and contaminated.   These suits typically name every operator who ever worked at the site as defendants, often going back decades.  Legislation was enacted to balance the rights of landowners with the requirement to clean up sites.  However, it has been circumvented by a handful of plaintiff lawyers who file outrageous claims while not allowing for cleanup at the site.  This results in companies- often many years removed from exploration activities- facing numerous lawsuits and being forced to choose between extreme settlement demands or going through a lengthy trial without having the opportunity to address the clean up.

 

This does not relate to any Payson Petroleum Lawsuit information, it is for informational purposes only. 

PAYSON PETROLEUM TASTES SWEET SUCCESS IN TEXAS OIL PRODUCTION

Payson Petroleum currently holds 880 net mineral acres in Grayson County, Texas. Grayson has been the highest oil-producing county in all of Texas, which says a lot since Texas currently holds 843 oil and natural gas drilling rigs. This is 26% of all drilling rigs that are operating in the entire world!

  • When first testing Brown #1, Payson pulled over 500 barrels of oil in just 25 hours.
  • With over 4,652 drilled wells, Grayson produces 201 barrels of oil each day.
  • In January of 2014, Grayson County produced 96,022 BBL and 148,230 MCF of gas.
  • Each barrel of oil is equivalent to 42 gallons of oil. In January alone, Grayson County produced enough oil to fuel, on average, 268,861 automobiles with 15-gallon gas tanks.
  • 92% success rate is still proven to be accurate when pulling oil in this region.

Oil is a crucial substance in the lives of Americans. Oil is beneficial for many other products besides solely fueling your vehicle. It is now used in rubber, synthetic fibers, heating oil, and many household items. By moving oil production into the United States and into oil-rich Grayson County, Texas, this will help lower the costs of production and boost the American economy. Because wells in Grayson County have produced over 350,000 barrels of oil and a billion cubic feet of gas, it is safe to say that this area is beyond successful in oil production.

Here at Payson Petroleum, we want to do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

Interesting Read on Lawsuits in Oil and Gas Industry

After 18 years of working as an inspector, Greg McGeary took his first job in oil and gas last winter inspecting pipelines in the Marcellus Shale for a Florida-based startup.

It was a predictably tough gig — walking a pipeline in all types of weather and driving three hours a day to and from remote locations. That’s why the pay, what would amount to $150,800 a year for a typical work week, was high. But in oil and gas, there may not be such a thing as a typical work week.

This was Mr. McGeary’s first experience with a dayrate — $580 a day in his case — a common practice in the industry that many firms now are changing under mounting pressure from government regulators and civil lawsuits. 

Lawyers involved in these types of suits say they are, in part, a symptom of the boom and bust culture in the oilfield: the boom brings in industry novices and exposes workers to long, hectic hours and the bust sends some looking for compensation they feel they couldn’t reap during peak time.

“I was told that the job was six days a week, 10 hours a day,” he said. But when he worked more than that, his pay remained the same.

Mr. McGeary’s job was to follow welders and check their work. Where pipelines crossed streams or other bodies of water, the workers had 24 hours to restore the sites to their original condition, which sometimes meant working well past his promised schedule. 

Many days he didn’t know “when or if” he’d be returning home.

“I put my family through hell,” Mr. McGeary said. “I have a little girl who plays softball and I’d tell her, ‘I’ll take you to your game at night.’ I’m supposed to be done at 4 o’clock. And 4 o’clock rolls around and they say, ‘Oh, no,’” extending his shift for another eight hours.

The day rate was blind to the twists and turns of the job.

When Mr. McGeary bought his concerns to the company, “I was just told that I agreed to a 10-hour day and it didn’t matter that we sometimes had to work more — that’s all that they could pay me. In one particular instance, I worked 30 straight hours and I was told I could only get paid for 10,” he said. The company, North American Pipeline Inspection, denies that Mr. McGeary worked that long.

After five months on the job, Mr. McGeary quit and went to work for another pipeline firm, returning to an hourly wage. Two months later, in July, he filed a collective action lawsuit against North American Pipeline Inspection, on behalf of all of its employees in a similar predicament. About 30 other former workers have joined the lawsuit.

North American Pipeline Inspection is down to six employees and none work more than 40 hours a week, according to the company’s attorney J. Kenneth Hardin II, partner at Hardin Thompson, PC. Their shrunken work schedules are the result of both the downturn in oil and gas activity over the past year and a reaction to the lawsuit, though the company believes Mr. McGeary and other plaintiffs were not entitled to overtime because they qualify under an exemption in the Fair Labor Standards Act.

According to Mr. Hardin, the company’s pipeline inspectors are highly-paid professionals with discretion and decision-making authority — something that exempts them from the requirement that employees working more than 40 hours a week receive time-and-a-half pay.

“These aren’t blue collar laborers as they want to say that they are,” Mr. Hardin said. “These are highly skilled, highly compensated” professionals.

While most such lawsuits end up in settlements, and Mr. Hardin doesn’t exclude the possibility, North American Pipeline Inspection believes it has done nothing wrong.

Lawsuits on the rise

Across the shale plays, overtime lawsuits, the result of a tangle of market and government factors, are on the rise.

Last month, attorneys at Babst Calland in Pittsburgh warned that such cases “have flooded the Pennsylvania and Ohio dockets” in the past year. There are at least 25 such suits in western and central Pennsylvania, they calculated, and urged oil and gas companies to review their employment practices.

“It’s not just the oil and gas industry,” said John McCreary, a Babst Calland attorney who wrote the bulletin. “Many employers just don’t understand what the law requires.”

The Fair Labor Standards Law has been on the books for more than eight decades, he said, but “there’s a common misconception in the country that as long as I pay someone a salary, they’re exempt (from overtime). And while it’s true that all exempt employees are salaried, not all salaried employees are exempt.”

At least some of the recent attention to overtime practices is due to a U.S. Department of Labor initiative targeting companies in the oil and gas industry that may be misclassifying workers as independent contractors or as exempt from overtime. The enforcement blitz, begun in 2012, yielded at least $4.5 million in back wages for 5,300 oil and gas industry workers, the department announced in December.

It’s a typical arc, said Rodney Bean, an attorney with Steptoe & Johnson in Morgantown: the Department of Labor identifies a potentially wide-spread problem within an industry, alerts those involved that it will be paying more attention to and, “then plaintiff attorneys go around doing their part.”

There are Youtube videos and LinkedIn offers soliciting plaintiffs for overtime lawsuits against oil and gas firms.

A Facebook post, written in capital letters, from January from the Weirton, W.Va law office of P. Zachary Stewart begins “Attention oil and gas workers: You may be owed money.” It has been shared 37 times with workers at companies such as National Oilwell Varco, Halliburton and Horizontal Wireline, highlighting that large, multinational corporations aren’t immune from these charges.

Nearly all such lawsuits are brought as collective actions, similar to a class action, ballooning the potential liability for companies.

In April, Texas-based ROC Water Services agreed to a $1.35 million settlement.

Mr. Bean, who represents companies, has been urging his clients to correct their pay practices to comply with the law. Some listen, he said, but “not as much as I would like to see.”

These kinds of lawsuits tend to be more common during a downturn, he said, as laid off employees look for recourse and are no longer afraid of losing their jobs by ruffling the company.  

A different kind of work

Just as Mr. Bean has yet to find a company that knew it was doing anything wrong by not paying overtime wages, so Joseph Chivers, a plaintiff’s attorney at the Downtown-based Employment Rights Group who has brought at least 15 such cases, has never met an employee who knew he/she was entitled to it at the onset.

“They don’t find out until after they’ve been working themselves to the bone,” he said.

“An average work week is 100 hours. That’s incredible. Compensation — a lot of them, if they’re being paid a salary — is $3,600 a month. When you take it all together and add it up, what would appear to be a very, very good job and high pay turns out to be not so high.”

The human toll is substantial as well, Mr. Chivers aid. Many oilfield workers spend weeks away from their families. They travel long distances and sleep in campers or tents.

“These are not normal work conditions. I think a lot of the guys getting into this, they don’t think it through,” he said. “I’ve never seen anything like it.”

Neither had Matt Cox. The Aliquippa native was working in retail in Texas when his cousin, who had a connection to the Texas-based Killion & Sons Well Services, hooked him up with a job as a night pumper in the Marcellus Shale play. It was his first oil and gas gig.

Mr. Cox worked 12-hour shifts, checking equipment at a dozen well sites each night between April and September 2014.

He earned $225 a day and worked, on average, 25 days a month. Mr. Cox claims the company created “bogus” time sheets with inflated work hours split into regular hourly wages and overtime in order to retrofit his actual pay into a payment schedule that appears to comply with the law.

Jeremy Killion, one of the company’s owners, said Mr. Cox was never paid a dayrate at all and had always been an hourly employee. This is the second overtime lawsuit brought against the company, he said. The first one cost the company $500,000. The company settled with Mr. Cox for more than he was owed in overtime, he said.

That ended Mr. Cox’s stint in the industry and he returned to retail.

This does not relate to any Payson Petroleum Lawsuit information, it is for informational purposes only. 

OIL INDUSTRY SHARES JOB GROWTH WITH GENERAL ECONOMY

The use of new oil and gas technology is creating over four times the amount of job opportunities than that of any other industry. Because the introduction of hydraulic fracturing has increased the production of reliable and affordable petroleum, it is creating a copious amount of jobs in sectors inside and outside the oil industry.

Petroleum is used for many products other than gasoline. It is used for jet fuel and bunker fuel that is all used to fuel transportation vehicles for business and luxury. Petroleum is used to make materials such as asphalt to pave roads; synthetic rubber for car tires and shoes and synthetic fibers for curtains, carpets and clothing. Petroleum is also essential for heating oil to fuel household and company furnaces. Even instances where you least expect Petroleum to be used, it is present. Items such as medicine, makeup, detergent, fertilizers, film, paint and candles all contain some amount of Petroleum.

Because oil is a critical factor in the lives of Americans, creating more efficient and affordable ways of obtaining it creates jobs within professional, scientific and technical services; oil and gas; computer and electronic product manufacturing; and retail trade.

According to a study by Regional Economic Models Inc. (REMI)  for Common Sense Policy Roundtable (CSPR), “the addition of 5,000 oil and gas jobs would result in a net increase of 19,048 jobs in the general economy.” Not only will this open up new job opportunities within our own markets, foreign companies are relocating their businesses and bringing them to the United States.

According to Robert D. Hormats, U.S. Under Secretary of State for Economic Growth, “The increasing availability of U.S. energy at low prices has made many companies rethink their strategies of locating abroad, and others to return to this country…this is having an impact on U.S. reindustrialization.” Creating more jobs creates more countrywide revenue and disposable income per household, which results in economic growth for our country.

Here at Payson Petroleum, we want to do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

WHY DID PAYSON CHOOSE GRAYSON COUNTY?

About 60 miles north of Dallas is a region of Texas called Grayson County. Aside from being the birthplace of President Eisenhower, Grayson County is recognized for it's generous oil reserves. Today, the oil is still flowing- in fact, of the over 4,652 wells that have been drilled in the area, over half of the original wells are still producing today.

After successful operations in Oklahoma and Kansas, Payson Petroleum was attracted to Grayson County and decided to shop for acreage.

When looking for a new production site within Grayson County, Payson was drawn to the North Perrin Air Force Base Field. Of the 4,652 wells that have been drilled in Grayson County, 3,200 of them have been drilled in this specific area. Considering the fact that nearby wells have produced over 350,000 barrels of oil and a billion cubic feet of gas, it’s no wonder that Payson chose the Perrin Field.

The first test was performed on Brown #1, which flowed over 500 barrels of oil in just 25 hours. Success has only increased as Payson just finished drilling the first of 20+ wells in the Grayson County, TX acreage.

The track record for Grayson County has remained steady for Payson Petroleum. With a 92% success rate, Payson is confident in the region for continued prosperity. For example, 97,232 barrels of oil were recently produced in Grayson County in just one month (November 2013). Ripe with oil, Grayson continues to increase energy and economic independence for Texas, making Payson proud to call this region home.

Here at Payson Petroleum, we want to do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

ENERGY EXECUTIVES ADDRESS FRACKING CONCERNS

Why this change? As fracking has grown, thousands of new wells have been made possible. Many of these new wells are located near highly populated areas. Energy executives are now more aware than ever of the importance of maintaining a positive relationship with the community.

“There is a better appreciation for the need to take seriously the need to protect the public and reassure the public shale boom can be done safely.”

Whether answering questions, discussing techniques or listening to suggestions; energy executives want to reassure the public that the shale boom can continue safely.

Today, many are wondering what the long-term effects of fracking will be. According to former Shell Chairman, Mark Moody-Stuart, “I believe that the issue with fracking is not what goes on down the hole and in the reservoir, provided the regulatory control over the standards is good. The problems are often to do with land usage, the continuous drilling operations needed to support production and the use of water in water-short areas.”

While many are hopeful of expanding the fracking industry to Europe, some are not optimistic about the possibility of this becoming a reality. Until the rest of the world adopts more public-friendly property-rights and royalty-payment plans, the thought is basically this, “Why would you be in favor of drilling on your property if you don’t stand to gain anything from it?” This is true in circumstances where mineral rights are controlled by governments as opposed to being controlled by the individual. Concerns that have had to be addressed vary from increased truck traffic, polluted drinking water and even the possibility of climate change.

At Payson Petroleum, we pride ourselves on transparency with our partners. To us, you are not just another number on our balance sheet. When you work with us, you become a member of our family.

KEY BEHAVIORS THAT BENEFIT THE OIL INDUSTRY

The oil and gas industry is creating millions of jobs in the United States. In fact, employment has increased by 40% in the oil and gas fields since 2007.

But who is filling these positions? Competent workers.

It does not matter if the job title is Driller, Production Operator or Geologist. The worker is not qualified as competent by merely satisfying the basic job requirements.

The knowledge gained from experience in the field or related fields, combined with competency in specific behaviors, are the most important tools when it comes to productivity in the oil industry. The worker needs to be able to use acquired knowledge to react to unexpected situations in a safe and efficient manner.

Lexonis, a competency management company, identifies the key behaviors for oil industry workers to be competent in:

•Accountability

•Problem Solving

•Decision-making

•Attention to Detail

•Safety Leadership

Shale Energy Insider says, “A well-rounded training program is one that prepares its participants to apply integrated knowledge in a practical and job-related manner.”

While not every situation will be the same, a competent oilfield worker is taught to analyze the situation and decide on the best approach towards a favorable outcome. Sometimes, a quick decision must be made and the competent worker will have the ability to do so.

At Payson Petroleum, we take pride in our team’s experience and competence in the oil field. Rick Johnson, our operations manager and engineer, has participated in over 300 horizontal drilling projects. Mr. Johnson has contributed his talents to more than 1,000 wells coast to coast and has a track record of assembling some of the best teams in the business.

Here at Payson Petroleum, we want to help and do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

13 THINGS YOU DIDN’T KNOW COME FROM OIL AND GAS

While we all know that the exploration and production of oil and gas creates jobs, provides potential income for investors and companies involved in that production, oil and gas provides some other, lessor known things.

The amount of products that are made possible by the oil industry is truly remarkable. We have listed just a few of the ones that you might not know are associated with oil and gas.

1. Aspirin



Aspirin has proven itself one of the safest and most reliable medications over the past decades. People swallow billions of tablets per year for headaches, fever and as a preventative against heart conditions or stroke. The acetylsalicylic acid in aspirin (crystals of the compound shown here) shares the pain-relief properties of the chemical salicin in willow bark. Yet most aspirin manufacturing begins with benzene, a hydrocarbon that is typically derived from petroleum products.


2. Panty Hose



Call them leggings, hosiery, tights or whatever you like. Millions of modern women wear nylon pantyhose for both comfort and fashion, just as women decades ago latched on to the nylon stockings that became popular during World War II. They may not pause to consider that nylon represents a petroleum-derived thermoplastic invented in 1935 by Wallace Carothers, a chemist working at the DuPont company. Today, nylons help make products ranging from dish scrubbers to parachutes.


3. Crayons



Oil has helped make many fond childhood memories of drawing inside a classroom or a home. Each and every crayon in a child's Crayola box consists of paraffin wax, a waxy solid made from petroleum. Paraffin wax also happens to help make candles, and may even provide the polish on an apple or the glossiness of chocolate.

 

 


4. Gum



People who enjoy the snap and long-lasting texture of their chewing gum can give a nod of thanks to petroleum-derived polymers. Today's gum bases can consist of both natural latexes and petroleum products such as polyethylene and paraffin wax, which also means most gums are non-biodegradable. But the first chewing gums typically relied upon the natural latex known as chicle — still the gum base of choice for some upscale gum brands and certain regional markets.
(On a side note, gum-chewing may be more than a pastime, as research detailed in the October/November 2011 issue of the journal Appetite suggests chewing gum before a test may improve performance.)


5. Wrinkle-Resistant Clothes



Cotton may represent the fabric of our lives, but polyester pants, shirts and other clothing items bring the benefits of wrinkle resistance, durability and shrugging off stains. Those special properties come courtesy of polyester's origin at the oil refinery, where several petroleum products are created to eventually form the synthetic material that helps clothe millions of people. But that's not all bad, because polyester recycling can produce new, high-quality polyester fiber.


6. Solar Panels


Solar panels may help homeowners and businesses usher in renewable energy by harnessing the power of sunlight, but most panels still rely upon petroleum-based resins and plastic components in their photovoltaic cells. That could eventually change as companies have begun rolling out new bio-resins and bioplastics that could replace the petroleum-based components.


7. Lipstick

lipstick.jpg



Humans have applied natural cosmetics on their lips, eyes and faces for centuries, but most of today's lipsticks and eye liners derive their visually-pleasing magic from petroleum products or byproducts such as crylates, coal tar colorants, and propylene glycol. Given that foundation, it's little surprise that many women also turn to the petroleum product known as Vaseline (petroleum jelly) as a simple eyeliner remover or base for lipstick.


8. Golf Balls



If you’ve ever experienced being hit by a golf ball before, you would have a hard time believing that something so solid could have such an elastic rubber core. But that’s exactly what you would find if you were to cut one open. Many of the petrochemicals extracted during the oil refinement process end up in your local golf course fairways in the form of the polybutadiene that that makes up a golf ball’s core. The rubber interior provides the impact absorption and bounce that makes your strokes end up in water hazards rather than fairways more often than not! But rest assured, companies are no starting to produce golf balls that biodegrade within a few years so you won't have to worry about your mediocre round of golf negatively affecting the environment.


9. PVC Pipe



If the grass is always greener on the other side of the fence, chances are your neighbor is taking advantage of this petroleum made product: PVC pipes. The pipes that make up most underground sprinkler systems are named after POLY VINYL CHLORIDE, a product made 100% from petroleum. Interesting that a percentage of the petroleum extracted from the earth and processed above ground ends up back below the surface.


10. Asphalt



Oil is most easily associated with the gas that fuels the vehicles you drive to work every day. But did you know that petroleum was used to make the road you drive on as well? As early as the 13th century, Native Americans would collect the oily bitumen that would seep to the surface directly above underground petroleum deposits. While they used this to create adhesives, it is now the asphalt concrete that makes up our roads since at least 1870. Asphalt has also been used for flooring and waterproofing swimming pools during the 1800’s.


11. Glasses



The glasses that we use to correct our vision are rarely made out of real glass. Chances are, the lenses many of us read with are made with polycarbonate lenses. These require petroleum to be produced as do the contact lenses that typically replace them.


12. Furniture Padding



You might want to sit down for this one. Ok, perhaps nothing will surprise you at this point in the list, but did you know that the cushion in the furniture you are likely sitting on is padded by long lasting and durable fibers derived from petroleum? Many of the materials that the paddings are bound by are also made from refined petroleum.


13. Ink



While classic authors such as Hemingway and Mark Twain wrote their classic manuscripts using ink derived from vegetable oil, nowadays you will hardly fine similar types of ink. Oil from petroleum based solvents are more effective in holding and carrying the color pigments found in ink. These solvents also serve as a resin that enhances the gloss once the ink is on paper.

LIFTING THE BAN ON CRUDE OIL EXPORTS

“2014 is likely to be a year where we seriously talk about oil exports," said Kevin Book, managing director at ClearView Energy Partners LLC, a Washington, D.C., political advisory firm. Since the mid-1970s, crude oil has been banned from U.S. export while refined oil is allowed.

Oil industry leaders are pointing out that the reason for the ban was due to the energy crisis in the ‘70s, which is clearly no longer an issue. The U.S. has come a long way in crude oil production and now has more than enough. The low prices at home don’t provide much incentive to drillers, sometimes resulting in a decision between leaving the oil in the ground or losing profit.

“There are concerns that there may be too much, that there may be congestion, and that we may see much cheaper prices along the Gulf because of so much crude oil descending on the refining centers of the country,” says Tom Kloza, chief oil analyst with Gasbuddy.com.

Now that the U.S. is capable of producing so much crude, drillers have the opportunity to generate even more for the economy through exports. In December 2013, we highlighted the fact that for the first time since 1995, the U.S. has managed to produce more oil than it needed to import, building U.S. economic stability and independence. Why not continue this growth by increasing exports?

If the ban is lifted and oil production companies are allowed to export crude oil without licenses, the U.S. economy will be able to fully reap the benefits of current oil production capabilities. “Crude oil exports could generate upward of $15 billion a year in revenue by 2017 at today's prices, according to industry estimates.”

Are you in favor of lifting the ban on crude oil exports?

Here at Payson Petroleum, we want to help and do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

The Oil Conundrum: Does ‘Fracking’ Cause Earthquakes?

We’ve seen activists tie themselves to trees, throw paint at celebrities, and go on hunger strikes. But the latest cause of resentment has people strapping themselves to oil drills in Ohio and shooting guns at well sites in Pennsylvania. The controversy has been created by the issue of  ‘fracking.’

During fracking, otherwise known as hydraulic fracturing, rock is broken up when a pressurized liquid composition of water, sand, and chemicals is injected into a wellbore (a hole used to locate and access natural resources); the process releases highly coveted natural oil and gas.

People aren’t necessarily incensed over the oil; the concern is based on the belief that this fracking process is responsible for recent seismic activity in areas of the country that haven't been historically exposed to earthquakes. Fracking isn’t exactly the earth’s best friend (but lets be honest here, neither is humanity in general), but is it actually the culprit? If it’s to blame for recent ruptures and property damage, then what’s can be done?

NPR’s reporting project ‘State Impact’ concludes that disposed drilling wastewater used in fracking is now “scientifically linked to earthquakes” (stateimpact.npr.org/texas). The science that links manmade seismic activity—like fracking-induced earthquakes—to the oil and gas industry isn’t anything new; years ago, researchers discovered they could turn quakes on and off by injecting liquid into the ground (stateimpact.npr.org/texas).

This underground fluid behaves like air pockets that can eventually shift the above rock. Although the disposal method for fracking (which includes injecting wastewater into underground disposal wells) is considered one of the safest techniques, the science, NPR’s report seems to suggest, still stands.

Furthermore, the report documents various areas within the United States that have been rattled due to fracking wastewater disposal. As far back as 2008, a year that, coincidentally, marked a boom in Texan oil and gas exploration, earthquakes have been rumbling through various Texas counties. South Texas experienced a magnitude 4.8 earthquake in 2011 near Eagle Ford Shale Play, and there have been other quakes linked to injection wells in the Dallas-Fort Worth area. There were no earthquakes before then (stateimpact.npr.org/texas). The most recent quake was 3.0 magnitude on January 22 outside the Dallas-Fort Worth airport.

Other U.S. hotspots for fracking-induced earthquakes include Ohio, Arkansas, Louisiana, Oklahoma, and Kansas. Fracking-induced earthquakes are an issue in Canada as well. Near Foxcreek, Alberta, a chain of 25 small quakes ranging from 2.5 to 3.5, between 2013 and 2014, corresponded “closely with hydraulic fracture treatments of oil and gas production wells in the immediate vicinity” (Nikiforuk). Those who believe there is a relationship between oil fracking and seismic activity claim “overwhelming” scientific evidence that shows the oil industry’s desire for wastewater disposal wells have promoted “man-made earthquakes”.

However, not all views are against the practice of fracking. According to a 2013 New York Times opinion article “local effects of drilling and fracking have gotten a lot of press but have caused few problems” (Brantley & Meyendorff). Of the tens of thousands of injection wells used in the U.S., only eight locations have experienced injection-induced earthquakes and most are too weak to cause any significant damage.

The amount of earthquakes reported by the state of Texas in the past year is 85; compare that to the San Andreas Fault region in California which reported 985 earthquakes in the past WEEK (http://scedc.caltech.edu/recent/). In the end, the commotion concerning fracking seems to be causing a larger impact on the Richter Scale than the actual earthquakes themselves.

The connection will most likely be decided in court, but not anytime soon. Just last month, the government of Alberta was ordered to present its Statement of Defense in the Ernst v. EnCana trial, which involves EnCana Co.’s gas and chemical contamination of an aquifer (a body of rock that transmits groundwater) used by a rural community. Although the case does not concern “manmade earthquakes” specifically—and, therefore, won’t decide whether or not hydraulic fracturing cause earthquakes—it does show how far-reaching the issue of fracking has become of late.

New Fracking Regulations Require Oklahoma Wells to Report all Chemicals Used

A new year means new rules for the Oklahoma fracking industry as recent regulations implemented in early January now require all drilling operators to report the chemicals they are using during the process of fracking. The hope of the new policy is that providing the information will educate the public, and in turn instill confidence that the fracking industry is not only doing its job, but also doing it well.

Chemicals must be reported either to FracFocus.org (the national hydraulic fracturing chemical registery) or to the Oklahoma Corporation Commission, which would then be added to FracFocus’ information database. While many have been voluntarily reporting information to FracFocus since 2011, tighter regulations mean consistency throughout the industry. Currently Oklahoma is the United States’ fifth largest producer of crude oil and as the industry has grown throughout the years, controversy regarding the topic has as well.

Regulations regarding the reporting of chemicals were first implemented in 2013 and applied only to wells that perform horizontal drilling. The idea behind this was to initially target the larger and more active wells in the industry. Nearly three quarters of the wells drilled in Oklahoma are through horizontal drilling. Beginning in 2014, however the policy extended to all wells. Dana Murphy, Corporation Commissioner claims, “it’s important to go ahead and treat all operators the same, but you have to focus where most of the activity is first.”

While fracking has been practiced in Oklahoma for over 60 years, the industry has recently grown and become more prevalent. Today, 25% of Oklahoma’s employment is somehow directly or indirectly related to the drilling industry. With the increased transparency into the workings of the industry, the public will be able to make informed and educated decisions regarding their stance on fracking.

Here at Payson Petroleum, we want to help to do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

A POTENTIAL SHIFT IN POWER FOR THE OIL INDUSTRY

Although Max Baucus has raised some eyebrows with his proposals regarding the oil industry’s tax breaks, his switch in position could have some serious benefits for the industry. “For more than two decades,” the president said, “Max Baucus has worked to deepen the relationship between the United States and China.”

President Obama has elected Baucus as ambassador to China which opens the possibility of replacing him with a strong ally for the oil industry in the Senate Finance Committee. The initial concern over Baucus’ position on a decrease in oil production deductions was that by decreasing/eliminating the breaks, financial hurdles would be presented to an industry that is only helping the U.S. economy.

“As an outspoken proponent of oil and gas production, Sen. Landrieu could provide a very different perspective as the nation rethinks its scarcity-based energy policy in age of adequacy, especially when it comes to energy exports,” said Kevin Book, managing director of Washington, D.C. analysis firm ClearView Energy.

Here at Payson Petroleum, we want to help to do our part by finding new resources and drilling wells. If you’d like more information on this topic, or would like to get to know us further, please visit us at www.paysonpetro.com or email us at contact@paysonpetro.com.

Payson Petroleum Lawsuit - Interesting Read on Oklahoma Fracking

The Oklahoma Supreme Court ruled Tuesday that homeowners who have sustained injuries or property damage from rampant earthquakes they say are caused byoil and gas operations can sue for damages in state trial courts, rejecting efforts by the industry to block such lawsuits from being decided by juries and judges.

The case has been closely watched both by the energy industry and by fracking opponents across the United States, and the 7-to-0 ruling opens the door for homeowners in a state racked by earthquakes to pursue oil and gas companies for temblor-related damage.

It is the first time the court has specifically addressed whether plaintiffs could sue for damage that experts believe is typically caused by massive amounts of wastewater generated by oil and gas drilling — often involving hydraulic fracturing, or fracking — that are ultimately injected into underground disposal reservoirs near fault zones.

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RELATED COVERAGE

While such quakes rattle other places, Oklahoma, where oil and gas companies have outsize economic and political influence, has faced the brunt of them in recent years: In the past, the state typically had just one or two quakes of magnitude 3.0 or higher per year. But during a boom in fracking over the past decade, the number has steadily and sharply risen, to 585 last year, more than in any other state except Alaska.

This year, Oklahoma is on a pace for 1,100 quakes of magnitude 3.0 or higher.

Industry lawyers had argued that state law prevented trial courts from hearing lawsuits over wastewater-related quake damage, and that a state regulatory agency, the Corporation Commission, was the proper venue for such disputes.

But Scott Poynter, a Little Rock, Ark., lawyer for two Oklahoma homeowners who sustained severe quake damage in 2011, argued that the industry was just trying to keep their lawsuits from being decided by jurors who might award monetary damages.

Several of the worst quakes in the state’s history hit the tiny town of Prague in November 2011, including one that registered 5.7 and another that registered 5.0, which caused the tall chimney of Sandra Ladra’s home to crumble, sending down large pieces of stone that struck her as she sat in a recliner. Ms. Ladra suffered significant injuries to her knees and legs.

She filed suit against two companies that operate nearby wastewater disposal wells that she believed had caused the quakes. In October, however, lawyers for the well operators persuaded a state judge to dismiss the lawsuit, arguing that state law requires disputes to go before the Corporation Commission. Mr. Poynter, Ms. Ladra’s lawyer, appealed to the State Supreme Court, leading to Tuesday’s ruling.

Mr. Poynter said he had been investigating damage on behalf of clients in other areas of the state where “there has been a lot of shaking going on,” including Guthrie, Cushing and Stillwater. He believes Tuesday’s ruling may embolden more property owners to sue.

“People have been waiting on this decision,” he said, adding that he would proceed with Ms. Ladra’s lawsuit as well as with a separate class-action lawsuit related to the 2011 quakes.

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The State Supreme Court did not take a position on Ms. Ladra’s underlying argument that wastewater disposal wells caused the quake that injured her and damaged her home, though the justices did note the “dramatic increase in the frequency and severity of earthquakes” in the state.

Explaining their ruling, the justices cited “the long-held rule that district courts have exclusive jurisdiction over private tort actions when regulated oil and gas operations are at issue.”

Lawyers for the oil and gas companies sued by Ms. Ladra — the Spess Oil Company and New Dominion — did not return phone calls seeking comment on Tuesday. But during a court hearing in October, they warned a state judge that juries siding with plaintiffs in cases like this one would invite economic catastrophe.

If the companies are held liable at trial, “these wells will become economic and legal liability pariahs,” said Robert G. Gum, a lawyer for New Dominion. “They will be shut down.”

When the lawsuits were filed, top officials in Oklahoma were steadfastly insisting that the link between quakes and disposal wells was not clear.

But in April, state leaders did an unexpected about-face and embraced the scientific consensus. They even created a website that cited a determination by the state’s geological survey that “the majority of recent earthquakes in central and north-central Oklahoma are very likely triggered” by wastewater disposal wells.

Many in the industry, however, maintain that claims of a clear connection require more study.

According to Mr. Poynter, industry officials have been busy seeking protections from the Oklahoma Legislature, successfully winning passage of a law that restricts municipalities from regulating oil and gas wells within their jurisdiction.

He also said the industry had tried — but so far failed — to win passage of another law requiring a state-approved expert to first certify any lawsuits over wastewater-induced quakes.

“In other words, it was going to be the industry picking the experts,” Mr. Poynter said, calling it one of a number of proposals “designed to stymie our litigation or make it as difficult as possible for homeowners with earthquake damage to bring suit.”

This does not relate to any Payson Petroleum Lawsuit information, it is for informational purposes only. 

Industry News - What are the key issues in lawsuit against oil & gas companies for coastal loss?

Since the 1970s, researchers have that shown oil and gas activities are one of the major causes for the catastrophic loss of 2,000 square miles of coastal wetlands — a slow-moving disaster that has steadily moved the Gulf closer to New Orleans. Since then, some have asked the question: Why doesn’t someone sue those companies for the damage?

That’s why the lawsuit filed Wednesday in a New Orleans civil court, which does just that, could be called historic. It made national news and brought an outcry from the oil and gas industry’s friends in state government, starting with the governor.

People have many questions about the suit. Here are some answers.

To discuss these and any other questions you may have, come back at 12:30 p.m., when I’ll discuss these and other issues with readers.

What is this lawsuit about?

Decades of drilling and dredging by the oil and gas industry have contributed to the dramatic loss of wetlands in southeast Louisiana, which help reduce storm surges pushing against the region’s flood protection levees. About 2,000 square miles of land have disappeared in Louisiana; various studies say the oil and gas industry is responsible for anywhere from 16 to 50 percent of that.

The Southeast Louisiana Flood Protection Authority-East claims that the loss of wetlands in its jurisdiction means levees and floodwalls must be built higher, resulting in a dramatic increase in their costs for building and maintaining levees and floodwalls.

The agency wants 97 companies named in the lawsuit to repair the damage, and if that’s not possible, to help defray the cost of flood protection now and in the future.

What are the claims being made against the industry?

The suit makes three major claims.

First, most of the work was done under permits that required the companies to repair environmental damage. The board says that was never done.

Second, the suit claims that by turning marsh into open water, the projects put more stress on flood protection levees. The suit says that violates the federal Rivers and Harbors Act, which prohibits any activity that “impairs the effectiveness of a levee.”

Third, by turning marsh to open water, the projects increased the amount of storm surge that moves into the metro area during tropical storms and hurricanes. The suit claims that violates a principle of civil law called “servitude of drainage,” which prohibits one person from increasing the flow of water onto someone else’s property. The properties do not have to be contiguous.

While most of the attention in this case centers around the loss of land at or above the surface, the filing also lists 10 other oil industry impacts, including road dumps, watercraft navigation and impoundments.

Is “servitude of drainage” a reach for the plaintiffs?

Not at all. This is a well-established point of civil law going back to Roman times; it’s been a regular issue in Louisiana courts since people started clearing low-lying coastal areas for development.

Of course, the key here is proving that the loss of wetlands increased the flow of water against the authority’s levees.

What is the Southeast Louisiana Flood Protection Authority-East, and what right does it have to sue?

The authority is an independent political subdivision created in the wake of Hurricane Katrina by a voter-passed amendment to the state constitution. It was set up that way to shield it from political influence, which was found to be a reason why some local levee boards had done a poor job before Katrina.

The authority is charged with providing flood protection for St. Bernard, Orleans and Jefferson parishes. That includes overseeing the local levee boards and maintaining the Hurricane and Storm Damage Risk Reduction System, the $14.5-billion chain of levees and floodwalls built by the U.S. Army Corps of Engineers after Hurricane Katrina.

The authority is overseen by nine unpaid board members, who serve four-year terms. Three seats come open each year.

Board members are nominated by a committee that includes the deans of engineering schools at LSU, Tulane, UNO and Southern universities, representatives from professional engineering organizations, and the Public Affairs Research Council.

Board nominees must have experience in engineering or other careers relevant to flood protection. For each open seat, the committee sends two names to the governor, who selects one for approval by the state Senate. Only one member can reside in the parishes in the board’s jurisdiction.

What is the key to a win for the Flood Protection Authority?

Their lawyers must convince a jury that any of this issues has increased the risk of flooding from storm surges in the Flood Authority’s jurisdiction – roughly the basins of lakes Borgne and Pontchartrain.

That isn’t a slam-dunk.

Storm surge modeling is a relatively new and complicated science. Scientists agree that the friction of marsh plants slows and reduces the surge of smaller storms. But when big storms bury the marsh under many feet of water, that friction effect is lost.

Some modelers think the difference that marsh loss makes in how much water hits levees in large storms is a matter of inches, not feet.

A more important factor could turn out to be the relationship between rising storm surges and increased subsidence of the coastal zone, in the estuaries as well as near shore.

Recent research by a scientist at the Louisiana Universities Marine Consortium shows that subsidence in an area increased as the rate of oil and gas extraction rose, and fell when the rate of extraction dropped. Subsidence is a well-known cause of wetlands loss.

This is one area where the believability of each side’s expert scientists will be crucial.

How can a state agency sue a company for work done under permits approved by the state?

First, the Flood Protection Authority is not a state agency. Headlines you may have read stating otherwise are inaccurate.

So, too, were comments by Gov. Bobby Jindal that the Flood Protection Authority was setting policy for the whole state. It can’t.

Second, the permits required the holder to “maintain and restore” the area of the project, which the suit claims was not done.

What if the companies involved were told by the government they had done enough?

A two-part answer: First, attorneys for the board said after spending months combing through U.S. Corps of Engineers records, they could find none indicating any of these 97 companies had received such approval, or that the permits had been closed.

Second, even if the companies were told by government agencies that they had abided by the terms of the permits, that doesn’t absolve them from injuring a third party – in this case, the Flood Protection Authority.

Some of the work blamed in the lawsuit took place years ago. Isn’t there a statute of limitations?

Another two-part answer.

First, the authority’s attorneys claim there is no statute of limitations on damage to a third party.

Second, since there is no documentation showing the permit-holders were released from the terms of the contract — again, according to the attorneys — the plaintiffs will claim those terms are still in effect.

Haven’t levees on the rivers caused much of the land loss in Louisiana?

Without question, those levees were a death sentence for the deltas because they blocked the flow of sediment from the rivers. However, researchers believe that loss would have occurred at a much slower rate — perhaps taking centuries to reach their current state — without the oil and gas industry’s canals and extraction.

John Barry, vice president of the board, said the authority doesn’t claim that the oil and gas industry is solely responsible for the damage. It asks only that the industry mitigate for the damage it caused.

Even if a jury agrees that oil and companies caused land loss, how can anyone tell how much was caused by each of those 97 firms?

The attorneys can devise a formula apportioning responsibility. But there is a feature in civil law, solidary liability, in such group cases, which gives the court flexibility.

What are the political risks for the Flood Protection Authority?

The swift and scathing condemnation of the suit by Gov. Bobby Jindal is likely only the first step in the pushback from the state’s political leaders. Most of them are longtime cheerleaders for the energy industry, which has poured millions into their campaign chests over the years. Remember, during the Deepwater Horizon spill many of them spent most of their time objecting to the drilling moratorium and opposing tighter regulations proposed for the industry.

However, the state constitutional amendment that created the board was written in such a way to remove the possibility of political intervention. Neither the governor nor the Legislature can fire board members, all of whom serve without pay.

Barry’s term expired in June (members continue to serve until replacements are approved), and his leadership role in the suit makes it unlikely he will be kept on the board. And because the vote was unanimous, the rest of the board could face resistance to re-nomination from the governor and the Senate.

Though the board itself is shielded from influence, the authority’s annual operating budget of about $500,000 comes through theCoastal Protection and Restoration Authority, whose chief, Garret Graves, has already voiced his disapproval of the suit in press statements and on Twitter.

Expect to see more than one bill filed in the next session of the Legislature targeting the suit. For example, attempts could be made to limit  or remove the liability of oil and gas companies, or prohibit the Flood Protection Authority from filing suits against them. Lawmakers could get pretty creative.

What can you tell us about the law firms representing the Flood Protection Authority?

The lead firm is Jones, Swanson, Huddell and Garrison of New Orleans, and the lead counsel is Gladstone “Glad” Jones. The firm has a track record of winning judgments against oil companies in so-called “legacy lawsuits,” for damages in coastal areas that were caused by operations years earlier.

Two other firms are involved: Veron, Bice, Palermo & Wilson of Lake Charles and Fishman Haygood Phelps Walmsley Willis & Swanson of New Orleans.

How much are they being paid?

If they win, the firms will get 32.5 percent of any money collected up to $300 million and 22.5 percent of any money above that amount; if they lose, nothing.

However, in recognition of the possibility of political interference, the contract has a clause that says if the Flood Protection Authority pulls out of the case, it is liable for all expenses incurred by the firms.

Jones estimates the firms already have spent about $300,000 in the six months they have been preparing the case.

 

This does not have anything to do with Payson Petroleum Lawsuit. This is for informational purposes only.