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The Courts Just Struck Down These Critical Shale Lawsuits

The Courts Just Struck Down These Critical Shale Lawsuits

Big news for U.S. oil and gas firms yesterday. They will be free to frack in one contentious part of the country.

That's the state of Ohio. Where it had been looking like fracking might be hindered by local politics.

Municipalities in Ohio have been trying to use zoning ordinances to prohibit fracking. Such as in the suburbs of the city of Akron, where city officials had sued in state courts to overturn a drilling permit issued to Beck Energy Corp.

Local officials challenged the state's ability to decide on such permits. Saying that municipal lawmakers should also have a say. Related: OPEC Won’t Regain Strength Until US Shale Production Slows In 2030s

The issue reached the Supreme Court of Ohio. Where judges yesterday sided with the state -- ruling that the larger government body has the sole authority to issue drilling permits.

Judges noted that city ordinances may have a place alongside state permitting, in helping to regulate drilling activity. But the decision was a firm victory for the oil and gas industry -- in that it will prevent municipalities from single-handedly blocking drilling activity.

Such decisions are also important precedents for the U.S. as a whole. With a number of similar challenges to municipal fracking bans working their way through the court system around the country. Related: Judge Dismisses Suit Against Energy Companies Over Louisiana Erosion

All of which shows that the legal system is still very much an x-factor in the American energy revolution. With several years of production now behind the shale sector, government lawmakers and interest groups are catching up to the game -- and starting to jockey for position.

There are a number of effects this could have on the oil and gas industry. In Texas, for example, state judges recently refused to throw out charges of "chemical trespass" in a case where fracking fluids allegedly migrated off a drill site. Leaving drillers here open to uncertainty and potential future legal action.

Keep an eye on breaking energy developments around the U.S. courts. There could be some surprises coming.

Here's to critical uncertainty,

Dave Forest

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