Monday, November 1, 2010

Terence Daintith, Author of Book About the History of Oil and Gas Industry, Speaks to Adjunct Professor Ken Jones' Oil and Gas Course

The author of Finders Keepers? How the Law of Capture Shaped the World Oil Industry spoke recently at the University of Denver Sturm College of Law. Terence Daintith, the former director of the University of London's Institute of Advanced Legal Studies and a co-editor of a treatise on United Kingdom oil and gas law, was a guest in Adjunct Professor Ken Jones' course "Oil & Gas Law."

Mr. Daintith spoke about a 2008 Texas Supreme Court decision, Coastal v. Garza, in which the majority held, according to Mr. Daintith, that "the rule of capture prevents recovery for drainage caused by [hydraulic fracturing], both to the early development of the rule of capture in the U.S. and to contemporaneous developments in the United Kingdom, where the legal consequences of slant-hole drilling have just been considered for the first time by the U.K. Supreme Court [formerly known as the House of Lords] in Bocardo v. Star Energy."

Mr. Daintith's comparison illustrated the "effects of different property right systems for oil and gas, and also demonstrates the contrasting approaches to policy and doctrinal questions in the two [U.K. and U.S.] courts."

He also talked more broadly about the law of capture (also called the rule of capture), that provides that "oil and gas become the property of the person who recovers them by drilling on land he or she owns or has lawful access to, even if that oil and gas may have migrated from under adjoining lands." In his book, Mr. Daintith writes:
"At first thought, this may seem like just one of a multitude of rather mundane and technical rules of property law; in practice, however, the choice between acceptance and rejection of this particular rule has been crucial to the way the oil industry has developed. This is true not just of the United States, but of oil-producing countries generally...One of the aims of this book is to show why, despite this common beginning, the rule today is of marginal importance elsewhere yet remains the foundation of the complex legal structure that regulates the domestic U.S. industry."
For those interested in the oil and gas sector, this book is well worth reading. Owen L. Anderson, a professor at the University of Oklahoma, has written that the book is "a thorough analysis of the most fundamental of all rules of oil and gas. Every oil and gas lawyer, petroleum landman, petroleum geologist, and petroleum engineer should read this important book."

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