The Law of Petroleum Unitization: Legislating for Effective Regulatory Governance.

• Date: 01 September 2021
• Author: Fitzgerald, Timothy

The Law of Petroleum Unitization: Legislating for Effective Regulatory Governance, Paul F. Worthington (Edward Elgar, 2020). 265 pages, ISBN 978-1-78990-710-0.

As a theoretical problem, oilfeld unitization is a classic in the spirit of other solutions to tragedies of the commons. Any externality that producers from a common pool impose upon one another can be avoided by simply "agreeing" to operate the pool as a single entity. With that important precept established, we can expeditiously move on to the next solution to a commons problem, perhaps overfshing or overgrazing. This glosses over the reality that unitization is devilishly dificult and often engulfs the careers and lives of many otherwise innocent bystanders. Paul Worthington has invested his career in the practice of petroleum unitization issues, and has drawn on his own experience and scholarship to deliver a compact and powerful guide to the dos and don'ts (mostly dos, distilled from plenty of don'ts) of creating an environment for unitization to thrive.

The focus of this volume is clear and consistent throughout, focusing on country's domestic petroleum unitization and excluding issues relevant to international agreements. There are six goals clearly laid out at the outset: articulate the rationale for unitization of common petroleum deposits; examine the current international state of unitization law across 90 jurisdictions; classify the existing schemes to provide analysis; examine legislative unitization schemes to provide a sense of best practices; generate an expanded list of legislative elements; and compile a comprehensive set of best prescriptions for unitization law. The volume delivers on each of these goals.

Worthington starts where the law did, with water. He gets at it from pretty early on in the game, starting with the Pandects of Justinian, a comprehensive codification of Roman law, as was relevant to running water. He then sketches out two relevant legal regimes relevant to groundwater that came along later. One is the "American rule," drawn from an 1862 decision in Bassett v. Salisbury, which explicitly considered correlative rights. The other is the "English Rule" as laid out by the 1843 decision in Acton v. Blundell, which applied a rule of capture to groundwater. This capture precedent was widely adopted, if not always cited, by U.S. courts adjudicating disputes in the nascent petroleum industry, setting the stage for conficts in shared reservoirs around the...