Finders Keepers?

RFF Press | August 2010

RESEARCH TOPICS:

Description

Since the beginnings of the United States oil industry 150 years ago, production activity has been governed by the "law of capture," dictating that a driller owns the oil drilled from his/her propertyeven if the oil has migrated from under neighboring land as a result of the drilling process. This "finders keepers" principle has been excoriated by foreign critics as "theft" and as a "law of the jungle" and has been blamed by American commentators—and the oilindustry itself—as the root cause of the enormous waste of oil and gas resulting from U.S. production methods in the first half of the 20th century. Yet while in almost every other country the law of capture is today of only marginal significance, in the UnitedStates it continues to operate, and indeed to underpin the system of production regulation, with potentially wasteful results. In this meticulously researched and richly documented account, Terence Daintith adopts a historical and comparative perspective to show how legal rules, technical knowledge (or the lack thereof) and political events and ideas combined to shape attitudes and behavior in the business of oil production. He explains both the original adoption of the law of capture—not just in the United States but in other countries as well—and the paths of legal and political development that have led to its consolidation in the United States and its marginalization elsewhere. In contrasting these histories of the law of capture, the book raises the question of whether the U.S. can reduce waste in production without abandoning its deeply-rooted attachment to private property rights in oil and gas.

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