## Facts

- Indiana enacted a 1893 statute regulating the operation of natural gas and oil wells.
- Section 1 made it unlawful for any well operator to allow gas or oil to escape into the open air for more than two days after it was struck, requiring thereafter that production be safely confined in the well, pipes, or other receptacles.
- Ohio Oil Company operated five oil and gas wells in a common field and allowed gas to flow into the open air beyond the statutory period.
- The State alleged that open-flowing wells wasted valuable gas and damaged the shared reservoir by reducing “back pressure,” increasing the risk that salt water would invade the gas-bearing strata and impair or destroy the supply.
- The Indiana Attorney General sought an injunction, alleging statutory penalties were inadequate and that continued violations would cause irreparable injury and lead to multiple suits.
- The trial court enjoined Ohio Oil; the Indiana Supreme Court affirmed.

## Issues

1. Whether enforcing Indiana’s requirement that gas and oil be confined (rather than allowed to escape into the open air) effected a taking of private property without compensation in violation of the Fourteenth Amendment.
2. Whether the statute, as applied and enforced by injunction, denied due process because it unreasonably restricted an operator’s use of its wells and produced gas.

## Decision

- The U.S. Supreme Court (Justice White) affirmed.
- The Court held that enforcing § 1 did not take private property without compensation and did not deny due process under the Fourteenth Amendment.
- The provision was upheld as a valid state regulation within Indiana’s lawful authority.

## Legal Principles

- Oil and gas in a common subterranean reservoir are migratory; an operator’s right to capture is qualified by the correlative rights of other owners drawing from the same pool.
- A state may exercise its police power to prevent waste of oil and gas and to protect the common supply and the reciprocal interests of owners in a shared reservoir.
- Regulation of the manner of production and use—aimed at preventing harmful escape and preserving the resource—can be a permissible restriction on use rather than a compensable appropriation.
- An anti-waste requirement that permits initial testing or flow for a limited period and then mandates secure confinement is not arbitrary when directed at safety and conservation concerns.
- Injunctive enforcement may be appropriate where ongoing violations threaten irreparable injury to the reservoir and legal penalties are inadequate to prevent continued waste.

## Conclusion

Indiana’s anti-waste statute requiring operators to confine gas and oil after a brief post-discovery period was a reasonable police-power regulation protecting a common reservoir and correlative rights, and its enforcement by injunction did not violate the Fourteenth Amendment’s takings or due process protections.


Ohio Oil Co. v. Indiana, 177 U.S. 190 (1900)