Changing Concepts in the Petroleum Industry

THE function of gas in the development and production of oil has far reaching consequences that should be emphasized. The technical aspects of the subject have recently had a great deal of attention but less thought has been given to fundamental concepts underlying oil and gas law and the many customs and practices that have grown up in the industry. I shall re- view briefly the advance in knowledge of the subject and attempt to relate these concepts to legislative, judicial and operating problems. Early writers on oil and gas in Pennsylvania noted their close association in oil pools and their contemporaneous decline in output; also, that as gas pressure decreases so does production, that new offset wells reduce the output of existing wells, and even that tubing a well lengthens its flowing life. Expanding gas was deduced as the principal expulsive force. These fundamental observations had been made at least as early as 1880.l They were treated, however, as academic considerations and did not greatly influence law or practice for many years except to instil into all operators an urgent desire to hasten offset drilling to obtain as much of the flush as possible.