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V.  So why is the Rule of Capture still the law?

So if well spacing and royalty sharing is such a good idea, why isn’t it made the law of West Virginia (for more than just statutory deep wells, statutory shallow wells above coal seams, and coal bed methane wells.)?

First, inertia and vested interests.  It takes a lot of energy to make a change in the laws affecting this big a resource and this many different people and entities and interests many of whom who have arranged their business models around the Rule of Capture.

Second, it is argued, that there were so many wells already drilled under the Rule of Capture, at least in some places, both before and after we knew better, that it is too late.  There may be some limited areas where this is true, at least for the formation to which the early wells were drilled, though no sensibly planned new well would drain where those existing wells already drain, so this should not come up, and where it does, exceptions can be made.

Third, it is argued that we don’t know for really sure where pools of gas start and stop under the ground, so we should not make operators drill spaced wells if we are not sure.  This is not a valid argument.  We can be very sure most of the time.  And if in fact it does turn out that wells spaced 2000 feet apart are too far apart, that there is a structure like a fault line that divides the pool we though we had into two smaller pools,  we can always go back later and drill one in between.  The exception for the odd circumstance should not create a bad rule for the common circumstances.

The fourth and largest reason why well spacing and royalty sharing does not exist for most wells drilled in West Virginia, is that well spacing and royalty sharing also affects the lessee/operators.   Most of the time the mineral owners, the “lessors,” have already signed leases for their land that puts the well drilling decisions in the hands of the “lessees”, the “operators”.


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