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Drilling company cleared to drill more wells in Douglas County, despite claims that its leases have lapsed

November 7, 2017

— State regulators on Tuesday cleared the way for a Louisburg drilling company to drill even more oil wells than it already has in Douglas County, with virtually no setback requirements, despite claims by property owners that its mineral leases have long been expired.

R.T. Enterprises of Kansas Inc., which also operates a company called Drill Baby Drill LLC, has been the target of litigation in Douglas County since 2014. The company operates on what are known as the Pearson and Finnerty leases southeast of Baldwin City, leases that date back to the early 1900s.

In February 2014, the company filed an application for permits to drill 38 new oil wells on those leases, in addition to the 27 it already operates, and to place those wells closer to each other than would normally be allowed under Kansas regulations.

In the application, the company said the tighter spacing was needed to reduce waste, due to the relatively shallow depths of the wells and the physical characteristics of the oil being produced.

Several property owners, however, tried to block that permit by filing protests at the Kansas Corporation Commission and by filing a lawsuit in Douglas County District Court, arguing that the company's leases were invalid under Kansas law because virtually no production had occurred on them for more than 20 years.

The property owners have also complained that the existing wells have created eyesores on their property and are a constant source of noise pollution.

It was also around that time that some of the property owners, including Victoria Guerrero, Sara Yardley and Amy Adamson spoke out to the Journal-World about what they described as aggressive tactics by the company to fore their way onto property and start drilling without consulting with the surface owners about the placement of the wells.

In December 2015, however, after nearly two years of litigation, Douglas County District Judge James McCabria ruled against the property owners. That decision has been appealed to the Kansas Court of Appeals, which heard oral arguments in July and is expected to issue a ruling soon.

In the meantime, while that case was being heard in Douglas County, the Kansas Corporation Commission issued an order in October 2014 granting the company permission to drill wells spaced 330 feet apart, half the normal distance required in Kansas, but imposing a setback requirement that no wells could be drilled within 165 feet of an existing house or other structure.

R.T. Enterprises appealed that order to Shawnee County District Court, and in April 2016 Judge Teresa Watson ruled in the company's favor, saying the KCC had no factual basis to support the setback requirement, and remanding the case back to the agency to be reconsidered.

Last month, the commission issued an order allowing the new wells with no setback requirements.

The property owners then filed a motion for reconsideration, arguing that the validity of the leases is still being challenged in court.

But after a hearing that lasted less than 90 seconds Tuesday, the KCC issued an order denying that motion on a 2-0 vote. KCC Chairman Pat Apple, a resident of Louisburg, recused himself from the vote.

"This order finds that the petition for reconsideration raises issues that are not before the commission," KCC's deputy general counsel Dustin Kirk said, explaining the order. "Therefore, the commission concludes that no valid petition for reconsideration has been filed in the matter, and the time frame having run for such, that the matter shall be closed."

Keith Brock, an Ottawa attorney who represented R.T. Enterprises, was not immediately available for comment after the hearing.

John Hampton, a Lawrence attorney representing the property owners, said the battle against the oil wells is not yet over because the company still has to file notices of intent to start drilling on each new well. He said the property owners will continue objecting to each well, one at a time.

Meanwhile, state Sen. Tom Holland, D-Baldwin City, said the case raises concerns about the property rights of the people who own surface rights on oil fields.

"People own property, the surface property, and people need the ability to enjoy that property, and to have somebody come in willy-nilly and start drilling without regards to structures that are currently on that site is very concerning," Holland said in a phone interview.

"I also have concerns, as we look at the environmental impact of these drilling operations," he said. "For people that are on well systems and stuff like that, what does it mean to their drinking water?"

Holland has twice introduced bills in the Legislature to protect surface property owners by imposing a 500-foot setback requirement from existing structures, as well as a spacing rule that would allow only one well per 10-acre area.

Those bills were referred to the Senate Natural Resources Committee, which never held a hearing on either of them.

Originally published at: http://www2.ljworld.com/news/2017/nov/07/drilling-company-cleared-drill-more-wells-douglas-/