Rule of Capture

The well permit applications from Conservation Equity Management, LLC, founded by hedge fund investor J. Kyle Bass, have caused quite the uproar locally as this could mean up to 15 billion gallons annually being pumped from the Carrizo-Wilcox Aquifer, which is the primary water source for most water users in our East Texas area. An aquifer is really like a giant underground lake. Since this water would likely be sold and moved out of East Texas, many wonder how it might affect the local water supplies. Would there still be enough for us?
In Texas, the law is “rule of capture” and it’s why many think there can be little we can do to stop it.
The Texas Rule of Capture is a legal doctrine that governs the ownership of oil, gas and groundwater in the state. Here’s a clear explanation: The Rule of Capture in Texas holds that a landowner owns the oil, gas or groundwater produced from a well located on their land, even if that fluid originated from beneath neighboring property.
This means if you drill a well on your property and oil, gas or water flows into it – even from under your neighbor’s land – you can legally keep everything you extract.
Conversely, if your neighbor drills a well near your property and captures resources that migrated from beneath your land, you have no legal claim to those resources.
Rooted in 19th-century English law and adopted by Texas courts in 1889, it encouraged rapid drilling during the early oil booms, often leading to overproduction and waste.
The rule of capture still applies today, although it has been modified and regulated through laws by the Texas Railroad Commission.
The rule also applies to groundwater, under Texas law. Landowners can pump as much groundwater as they want, even if it depletes a shared aquifer or affects neighboring wells. However, over-pumping can be restricted by Groundwater Conservation Districts (GCDs), which regulate well permits and usage limits. In our area, the Neches-Trinity Valley Ground Water Conservation District would be the entity regulating the proposed wells. 
The Rule of Capture in Texas allows landowners to keep the oil, gas or water they extract from their land – even if it migrates from a neighbor’s property. While it promotes resource development, it also creates challenges in conservation, fairness and sustainability.
However, as the immortal Yogi Berra said, “It ain’t over ’til it’s over.”