1 Introduction

Unknown to most, the gas and oil industry has largely opted out from standard tort liability. For several decades now, members of the gas and oil industry have contractually suspended the rules of negligence and strict liability in their dealings with one another. The industry has endorsed the knock-for-knock rule under which losses lie where they fall and govern their internal interactions. As a result, gas and oil companies are subject to a dual liability regime: vis-à-vis third parties, industry participants are subject to standard tort liability. Vis-à-vis each other, however, they operate under the knock-for-knock principle.