<p>Economists have long described the historical production of crude oil (and natural gas) under the rule of capture as a market failure. Assigning first-title to the physical above-ground possession incited too many wells and surplus production between competing surface owners, resulting in the physical and economic waste of a valuable nonrenewable, depleting asset. Government intervention based on sound reservoir principles was judged necessary to achieve economic efficiency and avoid waste in the face of this time-preference and commons problem. This consensus on the problem and solution has gone virtually unchallenged. Yet a classical-liberal, free-market perspective yields a different conclusion. The commons problem could have been all but removed under a homestead theory that assigned initial property rights to the first developers of oil and gas reservoirs. The unbounded nature of resource creation in place of fixed supply questions the alleged market defect of present-oriented production. And importantly, the incentive to minimize cost and maximize revenue was not absent to drillers in the U.S. experience, just hampered and misguided by the cumulative effect of government intervention. A more rational development of the upstream industry from its nineteenth-century inception was frustrated by judicially imposed lease obligations, state and federal antitrust law, nonneutral taxation, public-land policies, pipeline regulation, import restrictions, and conservation law itself. The economic waste that has long been attributed to profit-maximizing entrepreneurship was also due to unsettled knowledge about reservoir mechanics. These government and analytic failures, not market failure, were the historical obstacles to wellhead oil and natural gas conservation.</p>