Subsurface Mineral Rights
West Virginia grants expansive implied property rights to owners of subsurface mineral estates. Such rights can be expansive. In West Virginia and other states with rich mineral resources, it is common for a property’s surface rights to be split from the subsurface mineral rights and held separately. When a separate owner holds mineral rights, its legal rights are extensive.
The Whiteman Case
In the 2013 West Virginia case of Whiteman v. Chesapeake, the Fourth Circuit explained how expansive those rights could be. It held that a hydraulic fracturing company’s construction and use of drilling waste pits, in an area where the company held subsurface mineral rights, on the surface of another’s property did not constitute trespass because it was reasonably necessary for the recovery of natural gas.
The Whitemans were West Virginia landowners who raised sheep and grew hay on the surface of approximately 101 acres of land. Their property rested atop the Marcellus Shale, one of the largest shale formations in the United States. The mineral estate beneath the Whitemans property was split from the surface estate. As a result, the Whitemans owned the surface while Chesapeake held the rights to the subsurface minerals. Chesapeake, the second-largest producer of natural gas in the United States, operated three natural gas wells on the surface of the Whitemans’ property.
The Whitemans primary concern was Chesapeake’s disposal of waste produced from the construction and use of these wells on their surface property. Stored in open pits on the surface property, the waste included drill cuttings, mud, and chemical additives. The use of open pits for waste disposal was a common disposal method employed by Chesapeake in West Virginia at the time the wells were drilled. The Whitemans sued for trespass, claiming that Chesapeake’s waste disposal system made that land otherwise unusable. Because it was unusable, it was beyond Chesapeake’s rights on the property and therefore trespass.
The Ruling
The Fourth Circuit held that permanent disposal of drill cuttings and other waste products from the operation of three natural gas wells stored by the holder of subsurface mineral rights in open surface pits did not constitute a trespass under West Virginia law. The court reasoned that such disposal was reasonably necessary for the extraction of natural gas, in part due to the valid permits possessed by Chesapeake. Specifically, the court held that a reservation by deed of mineral rights constitutes a constructive grant that, unless explicitly restricted by the deed, carries an implied right to use the surface to the extent necessary for the reasonable enjoyment of the mineral estate. That included the right to waste disposal.
However, this right is limited. The court reasoned that such use of the property must be necessary, not convenient. In its own words, a mineral owner does not have the right to use the surface property merely “because it is convenient for him, unless it is first necessary.”
If you own an energy company in West Virginia and face legal challenges due to operational issues, contact the defense firm of Hendrickson and Long, experienced West Virginia energy defense lawyers.
