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Oil & Gas Drilling Conflicts with Landowners

by Kenneth E. DuBose on September 25, 2012

Oil and gas drilling conflicts with landowners are undoubtedly on the rise. The sheer number of mineral owners has grown tremendously over the past ten years as operators have leased millions of acres of land from North Dakota to Pennsylvania and Texas. The combination of lease negotiations, surface disturbance negotiations, drilling operations, and everything midstream (pipelines, processing facilities, etc.) open numerous opportunities for conflict.

In Texas, the Eagle Ford Task Force met to address many of the issues challenging landowners. The discussion included everything from eminent domain to abandon wells and surface owners who don’t have mineral rights.

Polly McDonald from the Texas RRC said it is mostly people who don’t own mineral rights that have conflicts with the oil companies. If you are getting royalty checks and they want to lay a pipeline across your land, you get defensive.

A TIPRO representative commented: “Some of this stuff is just too complicated for Joe Q. Citizen to handle without legal help.”

Current issues being addressed across the state included:

  • Abandoned wells – New legislation passed in 2009 makes rules more stringent for operators who aren’t producing from a well, but have not abandoned it and reclaimed the surface. As the law goes into full effect this year, we expect you’ll see more wells abandoned than before
  • Eminent Domain – A recent decision in Texas Rice Land Partners Ltd. and Mike Latta v. Denbury Green Pipeline-Texas LLC makes way for landowners to challenge whether a pipeline is actually a “common carrier” that moves product for multiple companies. If it’s only used by one company, the rights of eminent domain don’t apply.

And I’m betting this is just the beginning. With millions of new royalty owners, there will likely need to be new legislation and court resolutions for disputes in several states.

Read more about the Task Force meeting at fuelfix.com

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