The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

The “rule of capture” had continued to govern the industry’s operations since its early days in western Pennsylvania, and it had repeatedly been sanctioned by the courts, based upon the English common law regarding migratory wild beasts and game. To some property owners who complained to one court that their oil was being drawn off by their neighbors, the justices had scant solace to offer: “Only go and do likewise.” Because of the rule, every operator everywhere in the United States put down his wells and produced as rapidly as he could, draining not only the oil under his own property but also that under his neighbor’s property, before his neighbor drained his own. This doctrine fueled the riots of flush production and the wildly fluctuating prices that came with every new discovery. Doherty believed that the multiplication of wells and rapid production resulting from the rule of capture exhausted the underground pressure in a field more quickly than need be the case. The consequence? Much oil that might otherwise be produced would be left underground, unrecoverable, because there was not enough pressure from gas—and also from water, it was later understood—to provide the “lift,” or push, to get the oil to the surface. Recognizing how important oil had been in World War I, Doherty feared what it would mean for the United States in another war if wanton—and what he called “extremely crude and ridiculous”—production practices were to prevent vast stores of oil from ever be...