Editor’s Note: The following story is part of a periodic series exploring regional issues of interest or importance outside San Antonio.
Texas has over 268,000 square miles of rugged landscape, and much of it is currently being explored for oil and gas. This development has complicated land ownership, especially when taken into account the competing surface, mineral, and private property rights of those involved.
The boom in shale plays has made mineral rights issues increasingly germane in land ownership. For example, when a mineral owner must use a portion of the surface in order to develop the minerals, the rights of a mineral owner and a surface owner are in conflict. The solution to this conflict may occur either by mutual agreement or by Texas’ common law, known as the Accommodation Doctrine.
Texas law provides that the mineral estate is dominant over the surface estate. Nonetheless, each estate must accommodate the other’s use according to certain guidelines. The Texas Supreme Court recently discussed the Accommodation Doctrine, holding that a mineral owner “has the right to go onto the surface of the land to extract the minerals” and to use all the incidental rights that are reasonably necessary for the extraction. The mineral owner’s rights include the ability to use as much of the surface as reasonably needed to extract and produce the minerals – potentially even if the use precludes, or substantially impairs, an existing use of the surface, such as farming, ranching, and other traditional surface uses.
The mineral owner’s rights can pose a complicated issue for surface landowners with competing objectives. For example, if a landowner purchased acreage above the Eagle Ford years ago, but did not also receive a deed to all or a portion of the minerals, that landowner could face a situation in the future when an operator comes seeking access to drill, build roads, construct infrastructure, and more.
Here is how the Accommodation Doctrine works, as explained by the Texas Supreme Court in the 2013 Merriman v. XTO Energy, Inc. case:
“To obtain relief on a claim that the [mineral owner] failed to accommodate an existing use of the surface, the surface owner has the burden to prove that (1) the [mineral owner’s] use completely precludes or substantially impairs the existing use, and (2) there is no reasonable alternative method available to the surface owner by which the existing use can be continued. If the surface owner carries that burden, he must further prove that given the particular circumstances, there are alternative reasonable, customary, and industry-accepted methods available to the [mineral owner] which will allow recovery of the minerals and also allow the surface owner to continue the existing use . . . . Evidence that the [mineral owner’s] operations resulted in inconvenience and some unquantified amount of additional expense to the surface owner does not rise to the level of evidence that the surface owner has no reasonable alternative method to maintain the existing use.”
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The Supreme Court’s last sentence deserves emphasis: mere inconvenience and added expense to the surface owner does not necessarily demonstrate an unreasonable use of the surface. The proof required of a surface owner should be carefully considered before wading into potentially lengthy litigation.
Note that a surface owner can also violate the rights of the mineral owner by interfering with the development of minerals. Interruptions in the mineral estate’s development caused by the surface owner, including threats, destruction of property, or other efforts aimed at thwarting an operator’s work or otherwise interfering with the mineral owner’s right to develop can result in a restraining order being issued against the surface owner.
As the minerals under more and more land are developed, the competing question of surface owners’ rights versus mineral owners’ rights rises in importance. When the surface owner is also the person leasing to an operator, his or her preferences for surface use can be addressed in the oil and gas lease or through a surface use agreement; that is, rights and restrictions can be agreed to by the terms of a contract. However, if those rights aren’t carefully articulated, or if the surface owner doesn’t own the minerals, Texas’ common law principles would take precedence.
The Accommodation Doctrine was created to balance the rights of the surface owner and the mineral owner in the use of the surface. You can bet that Texas courts will carefully consider both when weighing the important rights of surface and mineral owners.
Featured/top image: Heavy machinery on a parcel of land east of Cotulla. Photo by Ernesto Rodriguez.