Pacific Gas & Electric Co. v. Zuckerman

Opinion

SPARKS, J.

—In this appeal we are called upon to determine a variation on the theme of the “rule of capture” as it applies to recovered gas. Plaintiff Pacific Gas and Electric Company (PGandE) acquired storage rights to an exhausted gas reservoir on an island in the San Joaquin delta. It also entered into an oil and gas agreement with the owners of the island to operate a nearby well on a parcel adjacent to the reservoir and to pay royalties for gas extracted from the well. PGandE then purchased gas from suppliers in Texas and Canada and injected it into the reservoir for use in periods…