The Basics of Oil and Gas Law

Although oil and gas laws are different in each state, the laws regarding ownership before, during, and after extraction are almost always universal. For example, the owner of a parcel of land also owns the minerals beneath the surface of that land, unless the minerals are determined to be owned by another party under a previous agreement or deed. Whoever owns the land owns everything below the surface of the land up to the extent of their rights to that surface. A landowner may be allowed to extract oil and gas from beneath the land of another landowner if the substance is extracted on his own property according to the law. However, a landowner may not conduct extraction at an angle to reach deposits of oil and gas located under another individual’s property.

The laws that concern oil and gas rights in the United States are in many ways different from oil and gas laws in Europe chiefly because oil and gas removal sites located on land are often privately owned in the U.S. To the contrary, many European on-shore extraction sites are owned by the national or local governments. In the United States, oil and gas drilling is frequently administered by state governments through common law and statutes. Also, federal and constitutional law also apply. Oil and gas deposits located offshore can be owned by either state or federal governments who can then lease the extraction sites to oil companies for development.

Rules like these encourage land owners to extract oil as quickly as possible to take possession of it before adjoining property owners do. Extraction practices have shown that this sort of hasty approach lessens surrounding gas pressure to force oil out from the ground. Because of this, extraction by individual owners is regulated by government-affiliated agencies.

Mueller Hillin specializes in Oil and Gas Law in Philadelphia, Atlanta, Houston and Austin.