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State Oil and Gas Laws

In the U.S., oil and gas law regulates the acquisition and ownership rights in oil and gas and adjudication regarding those rights.

The purpose of oil and natural gas regulations is to establish the framework within which regulatory programs insure that protection of the environment is given the highest consideration with respect to the development of oil and gas resources.

Extraction of oil and gas is generally regulated by the individual states through statutes and common law.  Federal and constitutional law apply as well.

The regulation of oil and gas field activities are managed best at the state level where regional and local conditions are understood and where regulations can be tailored to fit the needs of the local environment.  Hence, the experience, knowledge, and information necessary to regulate effectively most commonly rests with state regulatory agencies.

State regulation of oil and natural gas exploration and production activities are approved under state laws that typically include a prohibition against causing harm to the environment.

Oil and gas rights to a particular parcel may be owned by private individuals, corporations, Indian tribes, or by local, state, or federal governments.  Unless explicitly separated by a deed, oil and gas rights are owned by the surface landowner.  Once severed from surface ownership, oil and gas rights may be bought, sold, or transferred, like other real estate property.

The two conflicting legal doctrines covering oil and gas extraction are the rule of capture and the correlative rights doctrine.  Which of the doctrines applies in a particular case depends on state law, which varies considerably from state to state.

Although oil and gas laws vary by state, the laws regarding ownership prior to, at, and after extraction are nearly universal.  An owner of real estate also owns the minerals underneath the surface, unless the minerals are severed under a previous deed or an agreement.

Inside State Oil and Gas Laws