The Third Age of Oil and Gas Law
41 Pages Posted: 6 May 2019 Last revised: 13 May 2020
Date Written: April 7, 2019
History’s biggest oil boom is happening right now, in the United States, ushering in the third age of oil and gas law. The first age of oil and gas law also began in the United States a century ago when landowners and oil companies developed the oil and gas lease. The lease made the modern oil and gas industry possible and soon spread as the model for development around the world. In the second age of oil and gas law, landowners and nations across the globe developed new legal agreements that improved upon the lease and won these resource owners a larger share of the benefits of oil and gas production. The third age of oil and gas law, which is now beginning, will be defined by three forces. First, fracking is transforming the common law doctrines that underlie oil and gas law and policy. Second, both private and public landowners are perfecting agreements that can win them a greater share of the oil and gas under their land. Third, public landowners are beginning to seek ways to balance their efforts to extract maximum value from their oil with their efforts to limit climate change.
This Article is the first to identify these ages of oil and gas law, which have been central to the development of law, the global economy, and the modern world. It also reveals the legal and economic logic of agreements between oil and gas companies and public and private landowners, and how they have evolved over the past century. And it describes how landowners can ensure maximum benefit from the unprecedented oil boom now transforming global oil production.
Keywords: oil, gas, energy, property, law, carbon, climate change, fracking, hydraulic fracturing, commodities, lease, concession, international law, history, developing countries, royalty, severance
JEL Classification: K11, K12, K20, K23, K32, Q30, Q32, Q33, Q34, Q35, Q38, Q40, Q48, Q50, Q54, Q58, N52, N55, N72, N75
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