Below is the abstract for “Forced Pooling: The Unconstitutional Taking of Private Property,” available for download on SSRN.
Our society’s continued addiction to fossil fuels poses an existential threat to our future. The scientific consensus clearly tells us that we must stop burning fossil fuels as fast as possible. This poses a huge political challenge, as many people make a lot of money from the fossil fuel industry, and they resist change. But an overlooked legal doctrine shows that we are not even going after the lowest hanging fruit. Oil and gas rights are often privately held in the United States. Some owners of those rights would be happy to leave their oil and gas safely in the ground. But most states have laws which allow for “forced pooling” of oil and gas rights, allowing operators to extract even the minerals of non-consenting landowners. Halting the extraction of oil and gas owned by those set on profiting from it will be challenging enough. Surely we can start by not forcing private property owners to extract oil and gas against their will.
There is a ready legal solution to the problem posed by forced pooling in the Takings Clause. Recent cases such as Horne and Cedar Point have clarified two kinds of government actions that per se violate the takings clause. If government regulations, even longstanding ones, physically take control of personal property such as raisins (or oil and gas), that is automatically a taking. And if government laws take away the right to exclude and thus authorize invasion of private property by others, that is also a per se taking. Both of these precedents would apply where forced pooling laws allow oil and gas companies to invade private property and physically remove the oil and gas found there.
Changes in the oil and gas industry also justify a change in the legal regime of forced pooling. Forced pooling was designed to address problems caused by the rule of capture, which applies to migratory resources such as water, wildlife, or historically to oil and gas. Modern technology in the oil and gas industry, including horizontal drilling and fracking, instead has enabled the extraction of non-migratory oil and gas, to which the rule of capture logically does not apply.
These changes in the law and the oil and gas industry both justify a reexamination of forced pooling on constitutional takings grounds. Perhaps surprisingly, the strong property rights approach taken by the Supreme Court in recent cases can actually be used to protect progressive property owners who wish to leave their oil and gas safely in the ground.