Document Type

Article

Publication Date

Fall 2018

Publication Title

Georgetown Environmental Law Review

Keywords

oil, gas, mineral rights, drilling, dissenting landownder, mandatory pooling, unitization laws, Ohio

Abstract

This article addresses the legal circumstances arising when a state agency authorizes oil and gas production operations beneath a landowner’s land against that landowner’s wishes. One might assume that, if a landowner wants to preserve his or her land from oil and gas development, the landowner could simply refuse to allow drilling to occur beneath the land. However, neighbors may want to develop the oil and gas resources beneath their own land. To satisfy the neighbors’ wishes, an oil and gas producer must assemble mineral production rights on or beneath enough contiguous land to satisfy state spacing and acreage requirements and industry best practices. This may require the producer to include the landowner’s land in the contiguous parcel. In fact, the producer often cannot assemble an appropriately sized or shaped drilling unit to satisfy the state spacing and acreage requirements without including that landowner’s land in the contiguous parcel.

The producer may offer the landowner payment in exchange for permission to add his or her land to the drilling unit. However, the landowner may still prefer that the land and its subterranean oil and gas resources remain undisturbed; the landowner may value no drilling more than he or she values the monetary incentive offered to him or her. Therein lies the dilemma. Without including the landowner’s land in the contiguous parcel, neighbors cannot develop the oil and gas resources beneath their own land. By dissenting, a single landowner could veto his or her neighbors’ efforts to develop underground oil and gas. And yet, including the “dissenting landowner’s” land in a drilling unit against his or her will seems to violate traditional common law notions of property ownership.

Is one landowner really able to veto his or her neighbors’ prospects of developing oil and gas resources by refusing to add his or her own land to a producer’s drilling unit? Although landowners generally control rights of access and rights of use on their land, legislation in many states allows a state agency to add land to a drilling unit without the owner’s permission. These laws protect neighbors’ development rights—called correlative rights—to develop resources, promoting the broader development of oil and gas resources. Therefore, the state agency can add land to a producer’s drilling unit without the landowner’s per-mission so that oil and gas producers can assemble legally sized and efficient drilling units, and neighbors can develop the oil and gas beneath their land.

This article explores the legal circumstances of the “dissenting landowner”— a land (or mineral rights) owner who wants to bar oil and gas development from occurring beneath his or her land but whose land is forced into a drilling unit by a state agency as authorized by state mandatory pooling or forced unitization laws. It briefly explains the history and nature of the mandatory pooling and forced unitization laws that force dissenting landowners into drilling units against their will. It describes the tensions between the dissenting landowners’ property rights and the neighboring landowners’ correlative rights. It considers and describes the ways states use these laws to reduce the dissenting landowners’ property rights, instead favoring the correlative rights of their neighbors. It illustrates these issues by focusing on Ohio’s application of mandatory pooling and forced unitization. Finally, it considers the various statutory, regulatory, constitutional, and common law methods a dissenting landowner may employ to avoid drilling unit production (and thus allow the resource to remain underground) during the mandatory pooling or unitization process and following the forced pooling or mandatory unitization as a means of redress.

Volume

30

Issue

4

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