Papers - - Stabilization - Modifying the Capture Law

Dean Roscoe Pound, of Harvard Law School, in addressing the A.I.M.E. Petroleum Division on Feb. 22, 1934, said, "When you are able to work out a program that is mechanically feasible, that is economicaIly advisable, and which seems in your judgment, which is just as good as that of anyone, to be politically wise, you will not have very much trouble in the end in inducing the courts of today to find that it is legally sound." The purpose of this paper is to show: first, legal conditions necessary to promote conservation and stabilization; and second, to suggest operating procedure when those legal conditions are established. The proposal is mechanically feasible and economically advisable. A growing public understanding should make it politically wise. The disappointing progress in the development of conservation and stabilization can be attributed to the lack of two legal concepts as integral parts of oil and gas law; i.e., (1) a practical substitute for the capture rule, (2) collective ownership control for the individual oil and gas pool. When these two concepts are established on an equitable basis, conservation and stabilization procedure will become a comparatively simple process, more or less automatic in its adaptation and operation. Establishing these concepts is the function of the law-making agencies and might well be left to them for discussion except that the mechanical processes that give them form and substance must first be developed by the engineer. A Substitute for the Capture Rule Much has been written on these subjects, but the most concrete statement that has come to the attention of this writer is the following from an article by Charles G. Haglund in the Kentucky Law Journal of May, 1934: The Oxford1 case is not only authority for the proposition that it is competent for the legislature to modify the old property law of capture with respect to oil and gas but that it may also delegate such authority to a subordinate body.