Oil, Gas, and Mineral Law Commons^™

Refunding Overcharges Under The Emergency Petroleum Allocation Act: The Evolution Of A Compensatory Obligation, Michigan Law Review

Michigan Law Review

The DOE's authority to order noncompensatory remedies has been seriously questioned. This Note will evaluate the propriety of such remedies in light of the history of petroleum price control enforcement. Although the DOE's enabling legislation does not explicitly impose a compensatory obligation, the Note finds that Congress anticipated that remedies would compensate, to the extent feasible, those persons actually overcharged. Part I traces the development of a compensatory obligation through the various stages of price regulation. Part II criticizes the DOE for abnegating that obligation. The Note concludes that the Department's recent consent orders violate both its own rules and …

Security Aspects Of The Abc Transaction, John T. Schmidt

Michigan Law Review

In recent years, investments in subterraneous oil and gas have become a common addition to the investment portfolios of national financial institutions. Relying on the assurances of reputable geological studies, traditionally conservative financers have invested amounts ranging up to several hundred million dollars against collateral once accepted only by speculators and a few adventurous oil-country bankers. The increased interest in these investments is in part attributable to the development of the ABC method of financing the purchase of producing oil and gas properties. This method offers unique tax advantages, which have been discussed elsewhere, but also creates problems for the …

Sec Enforcement Of The Rule I0b-5 Duty To Disclose Material Information-Remedies And The Texas Gulf Sulphur Case, Edmund B. Frost

Michigan Law Review

On April 16, 1964, the Texas Gulf Sulphur Company announced one of the most significant mineral discoveries of the twentieth century-a major copper and zinc deposit near Timmins, Ontario, found by means of geophysical exploration and exploratory drilling. Unusual market activity prior to this announcement prompted a Securities Exchange Commission (SEC) investigation of insider stock transactions. In April 1965, the SEC brought suit against a group of Texas Gulf insiders, alleging that their purchase of stock on national exchanges before the disclosure of the information concerning the Timmins strike constituted a violation of section 10(b) of the Securities Exchange Act …

The Maritime Boundaries Of The States, Avrum M. Gross

Michigan Law Review

It has long been recognized that the boundaries of coastal states encompass certain adjoining maritime areas. The settled existence of those boundaries, however, stands in marked contrast to the confusion which has surrounded their location. The geographic extent of the waters to which state jurisdiction extends has remained largely undetermined.

The recent development of refined methods for extracting minerals from offshore areas has translated questions of state jurisdiction into issues of substantial economic significance. In this regard, an increasing number of disputes have arisen between the states and the federal government, primarily over rights to offshore oil deposits. The …

Promotion By Oil Company Of Tba Products Held Violative Of Ftc Section 5--Goodyear Tire & Rubber Co. V. Ftc, Michigan Law Review

Michigan Law Review

The Atlantic Refining Company entered into an agreement with the Goodyear Tire and Rubber Company which provided that Atlantic would receive a commission on all tires, batteries, and accessories (TBA) sold by Atlantic's wholesale and retail dealers. This commission was to be paid Atlantic in consideration for assistance given in promoting Goodyear products to the independent Atlantic service station operators. After an investigation of these agreements the Federal Trade Commission issued a complaint against Goodyear and Atlantic charging them with violating section 5 of the Federal Trade Commission Act. Evidence introduced at a hearing before a Federal Trade Commission trial …

Personal Holding Companies And The Revenue Act Of 1964, Jerome B. Libin

Michigan Law Review

By 1964, many years had elapsed since significant changes were made in the federal income tax treatment of so-called "personal holding companies." For that reason alone, any amendments contained in the Revenue Act of 1964 that dealt with personal holding companies would have deserved attention. But the fact is that the changes made by the 1964 Act are so powerful in their thrust that they require the most careful kind of study by every practitioner charged with advising closely held corporations. Since the new provisions are rather complicated in nature, such a study cannot lead to a full understanding of …

Unitization Of Oil And Gas Reservoirs: A Reply To Professor Merrill, George W. Hazlett

Michigan Law Review

In "Compulsory Oil and Gas Unitization," Professor Maurice H. Merrill launched an attack on unitization of oil and gas reservoirs in the form of a sharply critical review of the decision by the United States Court of Appeals for the Seventh Circuit in favor of the defendant in Peter Fox Brewing Co. v. Sohio Petroleum Co. Terming his review the "hypothetical judgment" of a mythical court of justice, Professor Merrill stated that, if the questions involved were determined improperly, "the effect of the precedent, if we allow it to go unexamined, may be most unfortunate." On the other hand, …

The Federal Power Commission Does Not Have Jurisdiction Over The Sale Of A Developed Leasehold Interest Of Gas In Formation-Marr V. Fpc, Michigan Law Review

Michigan Law Review

Independent gas producers erected producing wells upon certain land to extract leased mineral interests. This development of the leasehold supplied geological information from which the amount of gas reserves was estimated. The gas leasehold was then sold to Texas Eastern Transmission Company, an interstate pipeline company that sought additional reserves. Texas Eastern applied to the Federal Power Commission for a certificate of public convenience and necessity to connect its transportation system to the field. The FPC asserted jurisdiction over the sale of the leasehold in order to investigate the cost aspects of the transaction. Because the details of the sale …

New Values Under Old Oil And Gas Leases: Helium, Who Owns It?, C. Douglas Kranwinkle

Michigan Law Review

It is a well known maxim among oil and gas lawyers that "a producing well always clouds a title and a dry hole cures it." A variation of that maxim might be applied to producing wells which may or may not include, as by-products of the primary mineral, other substances that are extractible and valuable. Of course, once production of by-products begins, conveyancers give special attention to these resources, but many instruments executed before such development may be phrased in general terms without specific mention of substances unimportant when the conveyance was made. Even a recent instrument may lack specificity …

Administrative Law-Rate-Making-Authority Of Fpc To Limit Rate Of Return On Tax Reserves Resulting From Liberalized Depreciation, Harry T. Edwards

Michigan Law Review

Plaintiff, a natural gas pipeline company, filed a petition for review of a Federal Power Commission ruling in a rate proceeding under section 4(e) of the Natural Gas Act. Plaintiff argued that Congress did not intend tax deferrals arising from liberalized depreciation to be shared by producers and consumers and that, consequently, accumulated tax reserves should be included in the company's rate base at an ordinary rate of return. The FPC ruled that the petitioner could include its tax reserves in the rate base, but that the rate of return on the reserves would be limited to one and one-half …

Compulsory Oil And Gas Unitization: Effect On Overriding Royalty Obligations- A Hypothetical Judgement Of The High Court Of Juristic Review In Peter Fox Brewing Co. V. Sohio Petroleum Co., Maurice H. Merrill

Michigan Law Review

Jus, Chief Justice. As should be well known, our practice is to sit in review of decisions presenting elements of difficulty, and concerning the propriety of which there seems reason for doubt. We have no jurisdiction to reverse, to modify, or to affirm. Our judgment must be confined to approval or to disapprobation, or to some position between these two extremes.

Trade Regulation-Robinson-Patman Act-Price Discrimination In The Marketing Of Gasoline, Howard R. Lurie S.Ed.

Michigan Law Review

The emergence of chain stores and mail-order houses in the 1920's posed a new threat to competition; this time at the retail level. The quantity purchase discounts which large buyers could exact placed the small independent merchant at a competitive disadvantage so substantial as to cast doubt upon his continued presence in the competitive picture. To prevent these competitive advantages, which were felt to be unfair and undesirable, Congress, in 1936, passed the Robinson-Patman Act which, in part, amended section 2 of the Clayton Act. The effect of the amendment was to tighten the application of the quantity purchase defense …

Taxation-Federal Income Tax-Transfers Of Mineral Rights In Soil Deposits As Lease Or Sale, Philip Sotiroff

Michigan Law Review

Petitioner executed a written agreement with a contractor in 1954 whereby the contractor acquired the right to enter petitioner's land and extract sand and gravel for a fixed amount per cubic yard. This agreement was terminated in 1955 when the excavations had reached the desired level of street access. Petitioner had entered into a previous oral agreement in 1949 with a different party for the sale of the gravel on the same land down to the same elevation, but that party had not fully exploited the agreement. Petitioner claimed that the agreements were sales of sand and gravel in place …

Taxation - Income Tax -Gross Income From Mining As The Basis For Computing Percentage Depletion Allowances, John Niehuss

Michigan Law Review

Respondent, a miner of raw fire clay and a manufacturer of such clay into vitrified products, claimed a percentage depletion deduction based upon the gross income from the sale of its finished goods, contending that because its crude minerals could not be sold profitably in a local market, these final products were the first to meet the statutory standard of "commercially marketable mineral product." The district court and the Court of Appeals for the Seventh Circuit accepted respondent's contention. On certiorari to the United States Supreme Court, held, reversed, one Justice concurring. The fact that a taxpayer himself cannot …

Sullivan: Conservation Of Oil And Gas. A Legal History - 1958, Joseph R. Julin

Michigan Law Review

A Review of Conservation of Oil and Gas. A Legal History - 1958. Edited by Robert E. Sullivan.

Future Interests - Oil And Gas - Applicability On The Rule Against Perpetuities To Remote Future Interest Following Reserved Oil And Gas Interest, Robert B. Nelson S.Ed.

Michigan Law Review

A grantor conveyed real property to defendant reserving "all oil and gas and all minerals" in and under the land "for the period of twenty-five years... and as long thereafter as oil or gas or petroleum products" should be produced. Following this reservation, but in another clause of the deed, the grantor provided, "Subject to the reservations and conditions aforesaid, [grantor] hereby grants ... all of said real property ...to the [defendant], together with ...the reversion and reversions thereof." Some years later, the same grantor quitclaimed to the plaintiff "all oil and gas in and under" the same property. The …

Administrative Law - Procedure - Consideration Of Initial Rate In Natural Gas Act Sale Certification, Robert Jillson

Michigan Law Review

In a Natural Gas Act sale certification proceeding the Federal Power Commission twice refused to issue an unconditional certificate, finding public convenience and necessity unproved because the unprecedented initial contract rate was not "shown to be in the public interest." Applicants declined to present evidence of the reasonableness of the initial contract rate. A commission proposal to certify at a lower rate, with increase to the contract price after twenty-four hours of delivery but under the public protection provisions of section 4 of the act, was refused. After being informed that the applicants would not dedicate the gas to the …

Atomic Energy - Uranium Procurement - Legal Aspects Of The Aec Domestic Ore Purchase Program, Michael Scott S.Ed., Edward M. Heppenstall

Michigan Law Review

The federal government's domestic uranium ore procurement program, initially announced following World War II to ensure maximum exploration and development for military purposes, has met with extraordinary success. So improved is this country's military uranium picture that the Atomic Energy Commission was recently able to announce that uranium concentrate purchases would not be further increased. This announcement is viewed as a matter .of serious concern by the domestic ore producer, who must continue to look to the federal government as his sole market; a noticeable private market for peaceful uses of atomic energy fuels may not be realized for more …

Oil And Gas - Construction Of Lease-Dry Hole And Cessation Of Production Clause, James L. Burton

Michigan Law Review

Newman Brothers Drilling Company obtained an oil and gas lease on land subject to a prior lease held by Stanolind Oil and Gas Company and under which a well commenced within the primary term had been completed as a dry hole after the expiration of the primary term. Forty-nine days after completion of the dry hole Stanolind commenced and completed a second well as a producer. Upon suit by Newman in trespass to try title and for declaratory judgment the court of civil appeals, reversing the trial court, held that the lease under which Stanolind claimed had terminated with the …

Oil And Gas - Leases - Validity When Executed By Life Tenant And Remaindermen At Different Times, Albert A. Haller

Michigan Law Review

In 1952 plaintiffs acquired an oil and gas lease from the life tenant which they assigned two years later, reserving an overriding 1/16 royalty interest. Subject to plaintiffs' royalty rights this lease was eventually acquired by the defendant. In 1954, the remaindermen executed an oil and gas lease to defendant's wife who assigned a 7/8 working interest to eight persons, and reserved a 1/8 working interest which she later assigned to defendant, subject to a 1/16 overriding royalty interest in herself. Action was brought by plaintiffs against defendant, his wife and her eight assignees for a declaration of rights of …

Constitutional Law - Delegation Of Legislative Power - Use Of State Agency Classification As Basis For Federal Law, James Tobin

Michigan Law Review

Under provisions of the Federal Coal Mine Safety Act a coal mine is classified as gassy within the meaning of the act, and certain precautionary measures are thereby required, when the U. S. Bureau of Mines finds that the mine atmosphere fails to meet tests set forth in the act or when the mine is found to be a "gassy or gaseous mine pursuant to and in accordance with the laws of the State in which it is located." One of appellant's coal mines was classified as gassy by the West Virginia Department of Mines. When appellant failed to comply …

Justice Murphy And The Welfare Question, Leo Weiss

Michigan Law Review

In 1941, an Italian law professor arrived in the United States to make his home here. Born in Russia during Czarist days, he was educated in Austria, England, and Italy, finally settling there and becoming a citizen. A member of the Italian bar and teacher of law at the Universities of Florence and Rome, he found himself in 1939 unwanted in his adopted homeland. He went to France, where he practiced law until coming to this country. In New York City he joined the Graduate Faculty of the New School for Social Research, remaining in that post for five years, …

The Rule Against Perpetuities And Typical Oil And Gas Leases, David R. Macdonald S.Ed.

Michigan Law Review

This comment is concerned with the examination of various methods of creating future interests in gas and oil and the effect of the rule against perpetuities on these interests.

Real Property-Notice-Recitals In Unrecorded Deeds In Chain Of Title, James S. Taylor

Michigan Law Review

The plaintiff, Eiring, owner of all rights in a tract of land, attempted to convey certain mineral rights to Earnest by deed. The alleged rights passed from Earnest by subsequent mesne conveyances to McMillan, and, on the death of McMillan, to the defendant as trustee. Eiring brought an action against the defendant in statutory trespass to try title to the land. In the deed from Eiring to Earnest blank spaces were left in the granting clause. Held, the blank spaces rendered the deed void, and the deficiency was not cured by reference to another indefinite deed. After holding this, …

Constitutional Law-Relation Of Federal And State Governments- Title Of United States To Tidelands, John K. Delay, Jr.

Michigan Law Review

For the past decade and a half, one of the most harrassing problems in the realm of federal-state relationships has been that concerned with the ownership of the so-called "tidelands." This struggle of interests, which involves 23,000 square miles of offshore lands within the boundaries of the littoral states, has developed since 1937; for prior to that time, the Federal Government recognized the states' claims, making no assertion of federal ownership. The development of the conflict appears to be coextensive with the discovery and development of valuable mineral deposits found under these submerged lands, which have been leased to private …

Taxation-Percentage Depletion Allowance On Income Received From The Reworking Of Dumps And Tailings Deposits, Charles Horning

Michigan Law Review

A dump of waste material and low-grade ore resulted from mining operations by a lessee in the American Mine. London Extension owned an undivided one-half interest in the claims which made up the mine. In 1940 London acquired the lease on the property. Chicago Mines, a wholly-owned subsidiary of London, then took a lease on the dump, agreeing to pay to London a royalty of twenty per cent of the net smelter returns. Chicago worked the dump for a few months, after which it was worked by London. In filing its income tax return for the year, Chicago claimed a …

Taxation-Percentage Depletion Allowance On Income Received From The Reworking Of Dumps And Tailings Deposits, Charles Horning

Michigan Law Review

A dump of waste material and low-grade ore resulted from mining operations by a lessee in the American Mine. London Extension owned an undivided one-half interest in the claims which made up the mine. In 1940 London acquired the lease on the property. Chicago Mines, a wholly-owned subsidiary of London, then took a lease on the dump, agreeing to pay to London a royalty of twenty per cent of the net smelter returns. Chicago worked the dump for a few months, after which it was worked by London. In filing its income tax return for the year, Chicago claimed a …

Real Property - General Mineral Reservation In Deed - Lack Of Knowledge That Substance Is A Mineral, G. B. Myers

Michigan Law Review

In 1892 plaintiff's predecessor in title contracted to convey certain land to defendant, subject to a reservation of "all coal and mineral deposits in and upon said lands," and in 1896 he executed a deed to defendant containing the same reservation. Plaintiff, in 1947, filed a bill to quiet title to bauxite deposits on the land. Held, bill dismissed. Bauxite, not being generally regarded as a mineral at the time of conveyance, was not intended to be within the operation of the mineral reservation. Carson v. Missouri Pac. R. Co., 212 Ark. 963, 209 S.W. (2d) 97 (1948).

Hardwicke: Antitrust Laws, Et Al. V. Unit Operation Of Oil Or Gas Pools, Michigan Law Review

Michigan Law Review

A Review of ANTITRUST LAWS, ET AL. V. UNIT OPERATION OF OIL OR GAS POOLS By Robert E. Hardwicke.

Murphy: Conservation Of Oil And Gas, A Legal History-1948, Michigan Law Review

Michigan Law Review

A Review of CONSERVATION OF OIL AND GAS, A LEGAL HISTORY-1948. Edited by Blakely M. Murphy.