The ‘rule of capture’ question

The ‘rule of capture’ question

By most accounts, shale gas and oil production are going gangbusters.

To wit, national shale oil production is expected to increase by 125,000 barrels per day to 7 million barrels. That’s the fourth-consecutive monthly increase, says the U.S. Energy Information Administration.

It also reports national shale gas production is expected to increase to 66.9 billion cubic feet per day in May, the highest on record and a billion cubic feet per day higher than the April forecast. That includes record high production in the Appalachian region.

And while pipeline capacity to carry it all remains a critical issue – stalled in many places by envirocrats — producers might have a new headache to deal with – a reinterpretation of an old law from the courts.

Pennsylvania Superior Court, in what could be a landmark ruling should it be sustained, unplugged the long-standing “rule of capture” axiom.

As CourthouseDirect.com details it, the rule of capture is rooted in English common law. “Under the law, the first person to ‘capture’ a certain resource has rightful ownership to it.”

“(W)hen oil or gas that was previously ‘roaming’ under the ground is captured, it becomes the property of the captor.”  And, “just because oil or gas is present under the ground of somebody’s property does not mean it’s his or her property,” the website notes.

“For example, if a neighbor drills into his own land to obtain oil, and the oil comes into his well from a reservoir on your land, the oil becomes his property.”

Now, “that does not give him the right to drill on your land,” CourthouseDirect.com reminds, “but he has no liability if the oil his well produces came from your land.”

But under “rule of capture,” there is recourse – drill your own well to capture “your” oil and gas.

But in an interesting – some might call “novel”; others might call “nonsensical” – Pennsylvania case (Briggs v. Southwestern Energy) out of Susquehanna County, the Superior Court held that gas and oil trapped in shale rock does not naturally move from one place to another in a pool.

Without hydraulic fracturing, or fracking, to release it, the court held that the shale gas and oil would stay in place. The lawsuit alleges that the act of fracking on one property extended to the complainants property and, thus, was an act of “trespassing.” Others might call it theft.

Said the court: “In light of the distinctions between hydraulic fracturing and conventional drilling, we conclude that the rule of capture does not preclude liability for trespass due to hydraulic fracturing.”

So, is the Briggs family entitled to compensation for Southwestern Energy extracting its gas without a lease? Superior Court says that’s up to a lower court to decide.

As Marcellus Drilling News sees it, the decision “could greatly restrict, even stop, Marcellus drilling in the Keystone State.”

All this said, to a reasonable rule of law constructionist, “rule of capture,” no matter its English common law base, indeed sounds a lot like a license to trespass, if not steal.

If you are the owner of a property, and if you own the mineral rights to the property you own, what “right” does a competing interest have to the mineral wealth of your land?

And that should matter not whether it is a conventional gas or oil well or fracked shale gas and oil wells. Given the high-tech methods that have made modern fracking the revolution it is, surely there is a way to take steps to not “trespass”onto unleased property.

Should that lower court, on remand, award Family Briggs compensation, you can bet this case will be appealed the state Supreme Court. And given the proliferation of fracking nationwide, this case very well could end up before the U.S. Supreme Court.

But the bottom line should remain this: Private property is sacrosanct and the foundation of our American republic. And, again, surely in this modern age, there is a way to balance the procurement of an abundant natural resource without violating republican ideals.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).