Cooperative Development of Oil Pools (Volume 8)

THE present system of competitive exploitation of oil pools results in losses, both of petroleum and of profits. Under a competitive system the owner produces or withholds his product according to the price, which reflects the demand, but in the pe-troleum industry the producer does not have complete control over the expansion and contraction of his out-put. Under a series of court decisions, reviewed in detail in the paper, petroleum is not covered by- the general theory of English common law that the owner of land owns everything from the center of the earth to the sky within the areal limits of his property, but is considered to be his only when he has reduced it. to possession, which he can only do by taking it out of the ground. If A can obtain possession of the petro-leum which is beneath the property of B without tres-passing on B's property he commits no legal wrong and B has no defense except to get it into his (surface) possession before A takes it. No one would expect an. owner under such a system to forego the possibility of securing some oil from his property in order to in-crease the ultimate production of the pool. The pe-troleum industry. should offer a constructive program, that will eliminate losses and protect the interests of individuals as far as possible. If improved methods of oil recovery can be applied the quantity of petroleum recovered might be double or even treble the amount recovered by ordinary procedure. But increased recovery is not the only benefit from pool development. In brief, the following advantages can be claimed for unit operation: 1. Saving in development and operating costs. 2. Less danger of damage to the fields by defective wells. 3. Development is better gaged to fit market demand and to effect the most efficient recovery of oil. 4. More oil, gas, and gasoline can be marketed. 5. By regulating pressures, recovery .of oil and gas will be greater and the wells will flow longer. Reagan County (Big Lake), Rainbow Bend and Cabin Creek are examples of longer life of pools thus obtained.