Title

Recognizing the Shared Ownership of Subsurface Resources

Abstract

In this Article, we argue that property theory, appropriately understood, shows that subsurface water, oil, and gas ought to be treated as shared property that can be exploited, if it is to be exploited at all, by the coordinating agreements of owners of the surface property, or their licensees, supervised by common law courts. We therefore offer the paradigm of shared property as the appropriate analysis for thinking about the law's approach to rights in oil and natural gas. We also argue that the shared property paradigm is largely consistent with the common law's approach to subsurface resource pools, even though conventional understanding of the law vacillates between the private property and commons property paradigms.

Much of this Article is revisionist. We argue, unconventionally, that the common law embraced the paradigm of shared property in much of its regulation of subsurface resource pools because it essentially treated those resources as owned by tenants in common, as modified by the common law nuisance exception for injuries to subsurface resource pools. Under this reading, the special common law rules regarding subsurface resource pools have been misunderstood either as providing for (1) commons property treatment of subsurface resource pools underground followed by private property treatment after the resources are extracted from the subsurface pools or (2) private property treatment of the resources even while underground but subject to loss of title if the resources crossed property boundaries. Under our reading of the cases, when interpreted against the paradigm of shared property, the common law consistently recognized shared ownership of subsurface resource pools yet limited surface owner's rights to quiet enjoyment of subsurface resource pools based solely on courts' own perceived incapacity, because the resources are hidden, to understand the causal relationship between land use and disruption of enjoyment of subsurface resource pools. But this limit did not prevent courts from coordinating the exploitation of subsurface resource pools between surface owners by *1043 recognizing causes of action for malicious interference, waste, and unreasonable exploitation.

This analysis supports our claim that the property issues inherent in today's concerns over horizontal slickwater fracturing can be addressed under private agreements that are subject to judicial supervision. Moreover, because we now have the seismic technology to understand resource location and flows, the common law's reluctance to provide common owners of shared property with an accounting should dissipate.

Keywords

Property, Subsurface Resource Pools

Publication Date

2013

Document Type

Article

Place of Original Publication

Case Western Reserve Law Review

Publication Information

63 Case Western Reserve Law Review 1041 (2013)

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COinS Peter M. Gerhart Faculty Bio