Coordinating the Oil and Gas Commons

48 Pages Posted: 15 May 2015 Last revised: 12 Jun 2016

Date Written: May 14, 2015

Abstract

Oil and gas development involves many configurations of property rights and regulations that exhibit certain characteristics of Garrett Hardin's tragedy of the commons and William Buzbee's regulatory commons. Numerous mineral owners have rights to drain oil and gas from shared underground reservoirs, and mineral owners in many states may use the surface to access minerals without paying surface owners any damages, provided their use is reasonable. These mineral owners also use underground resources in a manner that precludes or enhances certain future subsurface uses, such as natural gas and carbon dioxide storage, geothermal development, or other mineral development. Further, drilling an oil or gas well can prevent future surface use -- for example, many municipalities in Texas prohibit building on top of or within a certain number of feet of an abandoned well. Yet current and potential future surface and subsurface users often have no voice, or a very limited voice, in the decision to drill. Within the regulatory sphere, local, state, regional, and federal governments have some voice in oil and gas governance, yet none exercise full regulatory authority over the externalities caused by this development, leading to a type of regulatory commons in which numerous actors have partial control over a regulated activity but leave certain gaps.

This Article explores this complex array of rights and regulations from a commons-based perspective and suggests solutions. To allow oil and gas development while avoiding inefficient externalities, more types of property owners should have individually-defined rights to the subsurface resource and should be able to negotiate with mineral owners; surface owners should receive damages for mineral owners' use of the subsurface; or the rule of capture, which allows for rapid extraction of oil and gas from a common pool and potential over-use of valuable land at the surface, should be modified. In the regulatory sphere, this Article suggests that local, state, regional, and federal actors all need a say in the regulatory process--thus pushing back against the trend to preempt local involvement--but that the federal government should play more of a coordinating role, identifying gaps that need filling.

Suggested Citation

Wiseman, Hannah Jacobs, Coordinating the Oil and Gas Commons (May 14, 2015). 2014 Brigham Young University Law Review 1543 (symposium, 2014), FSU College of Law, Public Law Research Paper No. 754, Available at SSRN: https://ssrn.com/abstract=2606215

Hannah Jacobs Wiseman (Contact Author)

Penn State Law – University Park ( email )

Lewis Katz Building
University Park, PA 16802
United States

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