June 19, 2019

West Virginia Court Rulings Highlight Evolving Law on Property Owner Rights

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Two recent decisions by the West Virginia Supreme Court illustrate the evolving legalities over the rights of property owners near gas drilling operations.

In a ruling issued June 5, the court unanimously ruled that EQT trespassed when it drilled wells on property owned by two Doddridge County residents to access gas reserves on neighboring properties.

While the company had a lease that entitled it to drill for gas beneath their property, it did not have permission to enter the land to build a new well pad to take the gas from thousands of acres of adjoining land.

Unconventional gas well development involves drilling horizontal wells deep into the earth, which then are turned laterally and can stretch out a mile or more. After drilling, a process called hydraulic fracturing is used that involves pushing fluids and sand under high pressure into the well to fracture or “frack” the Marcellus Shale layer and allow the gas stored in it to be released. One well pad can access gas under properties for several miles.

The drilling and fracking process involves fleets of heavy trucks and equipment being transported to well pad sites, with the resulting noise, traffic, dust, and odors. Since many of the wells are drilled in rural areas, local roads are often used and residents’ lifestyles are affected.

In many cases, the rights to the surface land and gas underneath were long ago split, before gas drilling production exploded.

While case law has held that the owner of a mineral estate has the implicit right to

use the surface overlying the minerals, in a reasonable manner, to access and remove

those minerals, the Supreme Court held that it that does not extend to the right to access minerals on other properties.

“A mineral owner or lessee has an implied right to use the surface of a tract in any way reasonable and necessary to the development of minerals underlying the tract. However, a mineral owner or lessee does not have the right to use the surface to benefit mining or drilling operations on other lands, in the absence of an express agreement with the surface owner permitting those operations,” the court’s opinion states.

In the second case, decided a week later, the court threw out a group of lawsuits claiming that the traffic, noise and dust from Antero Resources gas drilling operations were creating a nuisance for nearby residents and disrupting their lives. The Harrison County residents were seeking compensation for the disruption.

Again, the court pointed to the tenet that the mineral rights holder has a right to do what is reasonably necessary to access its holdings.

As the gas drilling industry continues to grow, the need to clarify the rights of property owners and gas companies will continue to evolve. In Pennsylvania, a case currently before that state’s Supreme Court will decide whether companies can drill a well and take gas from a neighboring property without compensating the owner.

Last year, an appeals court said that the long-held “rule of capture” does not apply to hydraulic fracturing because the gas in shale formations is tightly held and the layer must be fractured to get at it, the gas doesn’t migrate as it does it does in conventional reservoirs.

The case is being closely watched by the gas industry and by advocacy groups.

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