Oil and gas law

Oil and gas law in the United States is the branch of law that pertains to the acquisition and ownership rights in oil and gas both under the soil before discovery and after its capture, and adjudication regarding those rights.

The law regulating oil and gas ownership in the US generally differs significantly from laws in Europe because oil and gas are often owned privately in the US as opposed to being owned by the national government in many other countries.

In the U.S., extraction of oil and gas is generally regulated by the individual states through statutes and common law. Federal and constitutional law apply as well.

In the US, oil and gas rights to a particular parcel may be owned by private individuals, corporations, Indian tribes, or by local, state, or federal governments. Oil and gas rights extend vertically downward from the property line. Unless explicitly separated by a deed, oil and gas rights are owned by the surface landowner.

Oil and gas rights offshore are owned by either the state or federal government and leased to oil companies for development. The tidelands controversy involve the limits of state ownership.

Although oil and gas laws vary by state, the laws regarding ownership prior to, at, and after extraction are nearly universal. An owner of real estate also owns the minerals underneath the surface, unless the minerals are severed under a previous deed or an agreement.

Unless mineral rights are severed, whoever owns the fee of the soil owns everything below the surface, limited by the extent of the surface rights (Del Monte Mining & Milling Co. v. Last Chance Mining & Milling Co.). Because oil and gas are fluids, they may flow in the subsurface across property boundaries. In this way, an operator may permissibly extract oil and gas from beneath the land of another, if the extraction is lawfully conducted on his own property (Kelly v. Ohio Oil Co.). An operator may not angle a well to penetrate beneath property not owned by or leased to him.

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