MDN Weekly Update – Oct 9, 2011: Is Gas a Mineral?

Poll resultsAccording to last week’s poll, more MDN readers do not believe in the theory that man causes global warming than do. Looks like MDN editor Jim Willis is not so out-of-the-mainstream as some would charge. A conclusion I draw from this: the so-called science of global warming is far from settled. Those who believe in it want to call those of us who do not “flat earthers,” ignorant, and in denial. We’re the ones you want to keep in the back of the room at the cocktail party for fear we might embarrass the intelligencia with our crackpot notions. Seems there are a few more of us around than you might have thought!

Do you believe in man-caused global warming?

No (53%, 136 Votes)
Yes (41%, 107 Votes)
Not sure (6%, 16 Votes)

Total Voters: 259

Should shale gas be considered a mineral in Pennsylvania?

A few weeks ago MDN reported on a very important case working it’s way through the court system in Pennsylvania (see this MDN story). The Marcellus Shale is a rock layer in the ground—by all accounts and by anyone’s definition, it’s a mineral. But what about the gas, or oil, it contains? Is that gas and/or oil a mineral too? For legal purposes in PA, the answer would be “no”. That is, unless the Pennsylvania courts change it, which is what the current case is about.

Since 1882 a ruling called the “Dunham rule” in Pennsylvania law has maintained that natural gas is not considered a mineral (for the purposes of real estate) and gas in the ground is not conveyed with “mineral rights” unless specifically stated. If all rights to a piece of land are being conveyed to a buyer, no problem. All is all and includes oil and gas as well as anything else. But if mineral rights were at some point separated from the deed, and if someone else owns those rights, oil and gas is NOT assumed to be part of those mineral rights unless there is language specifically making them a part.

That’s the way it has been until a recent court case. A lower court in Susquehanna County ruled in a case that the Dunham rule applies (see the original story for details). But on appeal, the PA Superior Court sent the case back to the lower court asking them to hear expert testimony. The loud and clear message is, maybe it’s time to change the Dunham rule and make natural gas and oil a part of mineral rights by definition. This action by the higher court is causing a great deal of angst for landowners and drillers. To overturn a 129 year-old precedent would throw the drilling industry in PA into turmoil with lawsuits popping up like spring dandelions.

Almost all other states presume that natural gas and oil are part of “mineral rights” for the purposes of real estate contracts. Pennsylvania is unusual in that it does not. However, it’s been that way in PA for a long, long time.

MDN wants to know what you think. Should PA courts redefine natural gas as a mineral right? Or would such an action constitute changing the rules of the game long after the game has been played? Register your opinion in this week’s poll on the right side of any page.

Below are the most recent “top 5” lists and the calendar of Marcellus related events for the next two weeks.

Happy reading,
Jim Willis, Editor

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