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The Evolution of Resource Property Rights$
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Anthony Scott

Print publication date: 2008

Print ISBN-13: 9780198286035

Published to Oxford Scholarship Online: May 2008

DOI: 10.1093/acprof:oso/9780198286035.001.0001

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Rights over Coal, Oil and Gas

Rights over Coal, Oil and Gas

(p.340) 9 Rights over Coal, Oil and Gas
The Evolution of Resource Property Rights

Anthony Scott

Oxford University Press

After briefly surveying changing coal-mining law, this chapter concentrates on the evolution of petroleum rights. On American public lands rights first came under the placer Mining Law. This was unsuitable for a fluid resource and, urged on by Conservationists Roosevelt reserved most public-land petroleum. In 1920 new licensing legislation distinguished between areas containing known geological structures (KGS) and wildcat areas (UGS). On KGS, leases were to be apportioned by competitive bidding. On UGS the applicant got an exploration permit, then with discovery success a production lease and/or a patent. In the 1930s the US abandoned two-stage procedures but other countries retained them. New fields were subjected to government controls of well spacing and pro-rationing, unless they were unitized. The chapter then surveys the evolution of oil rights on private land — usually royalty-paying drilling leasing. In disputes between farmer and driller the courts sometimes discerned ‘implied’ covenants forcing the tenant to drill more or pump more.

Keywords:   KGS, UGS, leases, claims, implied convenants, offshore rights, pro-rationing, spacing

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