Earthworks

Forced Pooling

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“Forced Pooling” is the mandatory consolidation of leased and unleased minerals to access one common underground mineral reserve. Also known as compulsory drilling, compulsory pooling, mandatory pooling & unitization or statutory drilling laws, these laws allow for oil & gas drilling in a large area even if some of the mineral owners have not consented or signed leases. 

In its essence, forced pooling is the taking of private property (also known as private eminent domain) that also forces the impacts of drilling onto landowners. Pooled landowners face toxic air emissions, risks of water pollution and other environmental impacts related to drilling.

Nearly 40 states have laws - often times old, unused laws - allowing forced pooling for mineral leases over large acreages of land (usually 640 acres or more). Minerals found under land that was not leased but part of the “pool” can be extracted through fracking or similar techniques.

Generally, a certain percentage of minerals must be leased to willing mineral rights owners before the pooled area can be drilled, but this percentage can be as low as 25%. Non-consenting mineral owners cannot holdout against drilling; instead, they receive some form of royalty payment for the oil and gas.

State oil & gas regulatory agencies must first hold a public hearing at which mineral owners can voice their concerns before they can authorize a petition for forced pooling. If a drilling company successfully petitions the state for forced pooling, unwilling mineral cannot “opt out” of the consolidated pool.

The case for forced pooling, argued by drilling companies and some landowners, is that it is more efficient because fewer wells can be used to tap into a common underground reservoir or shale. However, forced pooling laws have rarely been used until now.

Some states are trending away from forced pooling. For instance, residents and government officials fought back a recent petition for forced pooling in Pennsylvania. Texas company Hilcorp Energy Co. recently withdrew its application for forced pooling in Western PA because of the outcry.


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Tagged with: texas, oil and gas, forced pooling, drilling

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