Owners of land with substantial oil and gas resources have begun using the “takings” concept of property law to challenge local bans on fracking. “Takings claims,” which traditionally involve the seizure of some or all of private property without just compensation to the owner, are now being expanded by plaintiffs to encompass the idea that moratoria and bans on fracking deprive landowners of their mineral rights without compensating for the lost economic value of the oil and gas that could be produced.
In SWEPI LP v. Mora County, NM, the plaintiff landowner challenged a local ban on hydraulic fracturing and further alleged that the ban resulted in a regulatory taking. With respect to the regulatory taking, the plaintiff argued that “through its prohibition on corporations engaging in any activities related to the exploration for, or extraction of, hydrocarbons within Mora County, the Ordinance denies corporate owners, including Plaintiff, all economically beneficial or productive use of its mineral estates . . . . Such action constitutes a categorical regulatory taking.” The court decided that the taking claim was not ripe because the landowner had not sought compensation from the county, but overturned the fracking ban on several other grounds. A similar lawsuit has also been brought in Texas. Disagreement remains over whether takings lawsuits will be an effective mechanism for challenging fracking bans. Some question whether a taking of mineral rights has actually occurred, especially given the multitude of horizontal drilling and fracking techniques that allow different means of access to a deposit. Local governments may also be able to successfully defend their moratoria by arguing that the taking occurred as a result of an effort to protect health and safety.