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In Pennsylvania, Is Natural Gas a Mineral?

by Kenneth E. DuBose on September 26, 2011

In Pennsylvania, if the mineral rights have been severed it does not necessarily mean the natural gas rights were severed with it. A court in Susquehanna County hearing might change everyone’s perception completely. Pennsylvania state law does not explicitly define minerals as oil & gas. That means mineral owners who severed their rights and didn’t include specific language about natural gas could be left out of the Marcellus Shale boom all together. Oil & gas companies could be forced to go back and re-lease the “natural gas” rights if the decision is made that natural gas is not a mineral.

What a mess this could be……

The vast expansion of the Marcellus Shale natural gas industry in Pennsylvania has been, in part, an exercise in demonstrating the inadequacy of state law to deal with the boom. Now a court case in Susquehanna County demonstrates that the inadequacy might be as deep as the shale itself.

Mineral extraction has been a principal industry in Pennsylvania since the mid-1800s. One would think, given vast practical experience in the extraction of oil and coal, that legal issues regarding drilling leases and mineral rights would be settled.

Not so, according to the state Superior Court, which has directed a court in Susquehanna County to conduct a hearing that could upset an unknown, but certainly substantial number of drilling leases.

At issue are cases where surface land is owned by one party but subterranean mineral rights are owned by another. That is not uncommon in Pennsylvania, where mineral rights routinely have been considered separately since at least 1880. It is not unusual for a party to sell a parcel of land while retaining mineral rights.

State law does not definitively include gas or oil as a mineral. This isn’t the first time that the law has led to substantial confusion.

Read the full news release at thetimes-tribune.com

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