Attorney Chris Denton
Oil and gas lease attorney, Elmira, New York

To understand Compulsory Integration one must first understand a few fundamentals of Oil and Gas Law in New York State.

Although New York State was an early developer of oil and gas, it was quickly surpassed by Pennsylvania and then the Western States.  Consequentially, Texas and Pennsylvania have a rich supply of judicial decisions (case law) from which to draw for answers to legal questions concerning who, when, how and where oil and gas development can proceed.   A Texas law review has opined that New York State has virtually a clean slate regarding oil and gas case law.  To that fact add that in Texas nearly every bar examination contains at least one question on oil and gas law.   Not so in New York.   The result is that every attorney who practices law in Texas and every judge who sits on their benches, has at least ‘law school’ knowledge of their state’s oil and gas laws.  In New York there are very few attorneys who know anything about oil and gas law, and even fewer who can speak cogently about it.

Additionally, there is little or no statutory law on oil and gas law in New York.  What does exist, exists in such unrelated statutes as the General Obligations Law, the General Construction Law, the Environmental Conservation Law, and the Real Property Law.   Furthermore, New York State is part of an unusual interstate compact called the Interstate Compact to Conserve Oil and Gas, which also affects New York State residents and businesses operating in New York.

New York is surprising in what it does not address in statutes or cases:  there is no state law governing or regulating oil and gas meters at the well site; there is no regulation of oil and gas leasing except a recent law offering a three day cooling off period after signing; there are no statutes or regulations governing the accounting and auditing obligations of oil and gas companies to landowners; there is no bonding related to the actual costs of restoration or clean-up of environmental degradation; and the gas gathering lines are all but unregulated in New York.

The topper is that when it comes to who owns the oil and gas underneath one’s land, New York and America move into the surreal, a regular twilight zone of real property law.   Who owns the oil and gas has been established by the courts, not the legislature or the State Constitution.  The courts, with little or no knowledge of geology at the time, alighted on the legal principle called The Rule of Capture.

Ordinarily, a landowner who owns all the rights in his or her land (a fee simple) owns to the center of the earth and to the edge of the atmosphere (subject of course to FAA rules and over-flight rights regulated by the US of A).  And this is true of ‘hard rock’ minerals, e.g. coal, talc, iron ore, etc, (but not gold and silver, as they were reserved to the state of New York).

Oil and Gas are different.

Read more at http://eidmarcellus.org/marcellus-shale/compulsory-integration-in-a...