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Mineral Rights in West Virginia
A property that contains minerals will often have two owners – one that owns the above-ground property or surface rights and one that owns the below-the-surface property or mineral rights. Often, these property rights conflict. The mineral owner may want to do work on the surface of the property that is necessary to extract minerals from the ground; at the same time, the surface owner may not want the mineral owner to do that work on his or her property.
Buffalo Mining Case
In the Buffalo Mining case, the Supreme Court of Appeals for West Virginia created a test to properly deal with these two competing property rights. In that case, Buffalo Mining owned a coal mine beneath the surface of the ground. It sought to create an above-ground power line that would ventilate an underground coal mine. The surface owner interfered with the building of the powerline. In determining whether Buffalo Mining, as mineral rights owner, had a right to build a powerline on the property, the Court laid-out a two-prong test:
- The proposed activity must be reasonably necessary; and
- It must not cause a substantial burden to the surface owner.
In that case, the Court held that Buffalo Mining satisfied the first prong of the test because it was reasonably necessary to have ventilation under the ground to assist in mining. The ventilation was reasonably necessary to continue the coal mining process. However, Buffalo Mining did not satisfy the second prong of the test because it was a substantial burden to the surface owner. The Court reasoned, based on the facts and circumstances, that building a powerline caused substantial damage to the property.
While the Buffalo Mining case can be viewed as protection for surface rights owners, it does not give definition to the “substantial burden” requirement. Other cases have used the Buffalo Mining test to determine how to split surface v. mineral rights, yet the extent of the burden remains unclear. In the 2013 Whiteman mineral rights case, a 10% damage to the property did not rise to the level of a substantial burden.
While the extent of the Buffalo Mining case remains to be seen, its implications as a surface rights protection case may have significant impact. At the moment, many companies are furthering their oil and natural gas exploration and operations. Places that 20 years ago had no energy industry now have burgeoning energy industries. The increasing and growing fracking industry needs to consider the Buffalo Mining ruling before committing to West Virginia fracking fields. The extent of the Buffalo Mining ruling may inhibit those companies’ abilities to extract minerals from the ground. This would hurt West Virginia’s economy because of slower growth in the mining sector.
If you are in the energy business, you need to partner with a law firm that understands the business. Contact the law firm of Hendrickson and Long, a West Virginia firm dedicated to protecting the rights of those companies involved in the energy industry.