Compulsory Integration v. the Law of Capture
Submitted by admin on Wed, 09/21/2011 - 07:56
From late 2010, an explanation:
....It's fundamentally incorrect to blame New York's (or any state's) compulsory integration law for the underlying legal principal of someone's rights to mobile property (in this case, natural gas) getting taken away by an extractive enterprise situated upon a neighbor. That's the rule of capture, which goes back to English common law, and to disputes over hunting game. And it’s still out there, this rule of capture, as an underlying legal principle, everywhere in America. The rule of capture came long before compulsory integration, long before IOGA-NY, and long before our modern-day showdown over hydraulic fracturing. All compulsory integration statutes are modern-day tweakings and softenings to the underlying rule of capture.
Though shocking to the uninitiated, most rational people can eventually recognize that the rule of capture is a necessary rule for fossil fuels extraction in a capitalist society (unless you decide to federalize mineral ownership, which many countries have chosen to do). Without this rule, you can't have much of any oil and gas industry within the checker-boarded American system of private land ownership. And that's what American courts long ago recognized when they applied the rule to the nascent oil industry. We’re talking, like, the 1800s here. Without the rule of capture, someone can always say, "Hey, that's my oil!" — and how you gonna prove it one way or the other? It's just endless litigation.
The well-spacing laws soften this rule of capture by — on one level, restraining neighbors from drilling needless additional wells — while on another level calling for them instead to share in the proceeds of a single well, even if it was drilled next door...