The Rule of Capture in Pennsylvania Oil and Gas Law

Michael Giberson

Via the Agricultural Law Resource and Reference Center at Pennsylvania State University, a presentation on “The rule of capture in Pennsylvania oil and gas law(see also this summary). Among other things, the presentation clears up my question (in yesterday’s post on oil production in the state) about the current relevance of the rule of capture in Pennsylvania.

In brief, yes the rule of capture still applies, but many of the adverse consequences that could flow from the legal approach are mitigated by the state’s 1961 Oil and Gas Conservation Law (see summary).

Pennsylvania’s Oil and Gas Conservation law provides for well spacing, pooling and tools for compulsory unitization for oil and gas developments.  The law applied only to production from underground resources in the Onondaga horizon (an underground geological feature) and below on the theory that the resources nearer the surface had already been extensively developed.  Interestingly, the Marcellus Shale, currently the subject of great interest, lies above the Onandaga horizon.

Related: a video produced by Penn State’s Agricultural Extension service explains whether the rule of capture allows someone to “steal” gas from their neighbors.

Summary: It isn’t stealing if your neighbor didn’t own it in the first place, and they don’t own it under the rule of capture until it is produced. (I’m brushing over some important legal details, I’m sure.)  On the other hand, you can’t send your drill horizontally under your neighbor’s property – that would trespassing.

Also related: A writer at the Huffington Post advocates use of the legal doctrine of “anticipatory nuisance” to sue  neighbors before they begin drilling for gas on their property.