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Univ. of Arkansas, Fayetteville

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Thursday, August 29, 2013

Cheren & Gerhart on the Ownership of Subsurface Water, Oil, and Gas

Peter Gerhart (Case Western) & Robert Cheren (Case Western) have posted Recognizing the Shared Ownership of Subsurface Resource Pools (Case Western Law Review) on SSRN.  Here's the abstract:

This Article debunks the widely held view that the law of property in oil and gas is governed by a common law rule of capture. Rather, the common law courts embraced the paradigm of shared property for subsurface pools of oil and gas and treated these resources as owned by tenants in common, as modified by a nuisance exception for injuries to subsurface resource pools.

In this revisionist description of the common law, we show that when faced with questions about the disruption of subsurface resource pools, courts were not concerned about title but about the hidden nature of the resources and the resulting inability of courts to determine which oil and gas was underneath which surface property. Instead of focusing on the capture of wild animals, courts held that injuries to subsurface oil and gas are damnum absque injuria and not legally actionable by analogy to earlier cases dealing with subsurface water. Moreover, although courts could not offer a remedy for diminution of subsurface resource pools because the resources were hidden, the migratory nature of the resources induced courts to develop several doctrines that required each surface owner to take into account the interests of other surface owners when deciding how to exploit the subsurface common pool resource: causes of action for malicious interference, waste, and unreasonable exploitation. The common law recognized, on the one hand, limits on the judicial ability to regulate hidden resources while, on the other hand, recognizing the responsibilities that arose from shared migratory ownership of subsurface resource pools.

Readers may also be interested in the Below the Line podcast episode featuring this article, which features  commentary by Professor Laura Underkuffler (Cornell) and Professor Lisa Wyman (NYU), available here.

http://lawprofessors.typepad.com/property/2013/08/cheren-gerhart-on-the-ownership-of-subsurface-water-oil-and-gas.html

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