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Hammonds v. Central Kentucky Natural Gas Co.

Court Not Provided
75 S.W.2d 204 (1934)
ELI5:

Rule of Law:

When previously captured natural gas is injected into a natural underground reservoir for storage, it reverts to its original state as a wild, migratory substance (ferae naturae), and the injector loses exclusive title to the gas.


Facts:

  • Around 1919, a gas company (the appellee) exhausted the native gas from a large underground field spanning approximately 15,000 acres.
  • The appellant owned a 54-acre tract of land located within the boundaries of this field.
  • The appellant had never leased her property to the gas company.
  • After depleting the native gas, the company began transporting vast quantities of gas from distant fields.
  • The company injected this foreign gas through its wells back into the empty underground reservoir for storage purposes.
  • It is not disputed that this underground geological reservoir extends beneath the appellant's land, and the injected gas migrated into the space under her property.

Procedural Posture:

  • The landowner (appellant) filed suit against the gas company (appellee) in the trial court.
  • The suit sought damages for use and occupation of her property, under a theory of trespass.
  • The trial court entered judgment in favor of the defendant gas company.
  • The plaintiff landowner appealed the trial court's judgment to the present court.

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Issue:

Does a gas company become liable for use and occupation or trespass when it injects previously captured natural gas into a natural underground reservoir, and that gas subsequently migrates under the land of an owner who is not a party to the storage agreement?


Opinions:

Majority - Stanley, Commissioner

No. A company that injects previously captured natural gas into a natural underground reservoir is not liable for trespass, because by returning the gas to its natural state, the company loses exclusive title to it. The court reasoned that natural gas, due to its migratory nature, is analogous to wild animals (ferae naturae). While a landowner has the exclusive right to drill for and capture gas beneath their property, their ownership is lost if the gas migrates away. Similarly, once gas is captured and becomes personal property, that ownership is lost if it is returned to a natural reservoir, its 'natural habitat.' Just as a person who captures a fox and later releases it back into the forest loses ownership, the gas company lost its exclusive property right in the gas when it injected it back into the earth. Therefore, since the company no longer exclusively owned the gas that migrated under the appellant's land, it could not be held liable for trespass.



Analysis:

This case establishes a significant common law precedent for underground gas storage, applying the ancient 'rule of capture' and the 'ferae naturae' doctrine to reinjected gas. By immunizing storage operators from trespass liability, the decision encourages the use of depleted reservoirs for gas storage, a critical practice for the energy industry. However, the ruling's logic creates a potential risk for the storage company: if the company loses title to the gas, a neighboring landowner could theoretically drill a well and legally extract the stored gas without liability, as the court itself noted.

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