Correlative rights are inherent property rights landowners have in a common reservoir or aquifer. They refer to each owner having a fair opportunity to produce their share of the resource. Case law establishes that correlative rights exist because of the physical properties of subsurface resources, not because of statutes. They require equal treatment of all owners overlying the same resource. Disparate rules between aquifers or unequal treatment of owners in one aquifer may amount to an unconstitutional taking of property under the correlative rights and fair share doctrines.

4. “CORRELATIVE RIGHTS”
WHAT DOES THAT MEAN IN THE
WONDERFUL WORLD
OF GROUNDWATER?

5. OWNERSHIP

6. OWNERSHIP
• EAA v. Day & McDaniel:
• We decide in this case whether land
ownership includes an interest in
groundwater in place that cannot be
taken for public use without adequate
compensation guaranteed by article I,
section 17(a) of the Texas Constitution.
We hold that it does.

7. OWNERSHIP
CORRELATIVE RIGHTS

8. CORRELATIVE RIGHTS
• Day interpreting East:
• “By “correlative rights”, we referred specifically to
the right East claimed: to sue for damages from a
loss of water due to subsurface drainage by
another user for legitimate purposes. The
reasons the law did not recognize that right —
the “hopeless uncertainty” involved in its
enforcement and the material interference with
public progress — did not preclude all correlative
rights in groundwater.”

9. CORRELATIVE RIGHTS
• Inherent in ownership
• Not created by regulation or statute
• Elliff v. Texon Drilling Co:
– ‘These existing property relations, called the
correlative rights of the owners of land in the
common source of supply, were not created by
the statute, but held to exist because of the
peculiar physical facts of oil and gas.’

10. OWNERSHIP
CORRELATIVE RIGHTS
FAIR SHARE

11. FAIR SHARE
• Elliff v. Texon Drilling [as quoted in Day]
• “Correlative rights between the various
landowners over a common reservoir of oil or
gas” have been recognized through state
regulation of oil and gas production that
affords each landowner “the opportunity to
produce his fair share of the recoverable oil
and gas beneath his land”

12. FAIR SHARE
• Elliff:
• In recognition of such ownership, our courts, in
decisions involving well-spacing regulations of
our Railroad Commission, have frequently
announced the sound view that each landowner
should be afforded the opportunity to produce
his fair share of the recoverable oil and gas
beneath his land, which is but another way of
recognizing the existence of correlative rights
between the various landowners over a common
reservoir of oil or gas.

13. FAIR SHARE
• RRC and Rule 37 Exceptions
– To prevent waste
– To prevent “confiscation”
• Confiscation?
– Drainage without right of offset

14. FAIR SHARE
• RRC v. Shell Oil
– The rule of fair chance or fair share is the reason for
the "confiscation" exception to Rule 37 whereby an
owner or lessee can get a well permit for a small tract.
(Citations omitted). In fact, it has been held that the
proper test of confiscation under Rule 37 is whether
an owner, with the wells which already exist, has been
accorded a fair and equal opportunity with other
producers of surrounding tracts within the drainage
area to recover his fair share of the oil in place
beneath his tract. If he has, no confiscation results.

15. FAIR SHARE
• Coastal O&G v. Garza
–The minerals owner is entitled, not
to the molecules actually residing
below the surface, but to “a fair
chance to recover the oil and gas in
or under his land, or their
equivalents in kind.”

16. OWNERSHIP
CORRELATIVE RIGHTS
FAIR SHARE

17. IMPLICATIONS?

18. AREAS OF POTENTIAL APPLICATION
• MARRS V. RRC
• Disparate treatment of owners in the
same field

19. MARRS V. RRC

20. MARRS V. RRC

21. MARRS V. RRC
• The conclusions:
• "As a result, petitioners are being forever
deprived of their property. It is the taking of one
man's property and the giving it to another."
• Groundwater districts “cannot indulge in unjust,
unreasonable, or arbitrary discrimination
between different [aquifers], or between
different owners in the same [aquifer].”

22. MARRS V. RRC: APPLICATION?
• Disparate rules governing fields/aquifers
• Application: rules of GCD’s that fail to treat
everyone in the same aquifer equally

23. Sec. 36.108 (d-1)

24. GMA 14

28. CONCLUSION

29. OWNERSHIP
CORRELATIVE RIGHTS
FAIR SHARE