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State Supreme Court Cases Could Determine Who Profits From Oil and Gas Drilling

Thursday, August 21, 2014 at 5:50 PM

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Big money is at stake in two cases argued this week before the Ohio Supreme Court. The decisions could change who profits from the boom in oil and gas drilling. ideastream’s Joanna Richards reports.

The two cases before the court are battles over mineral rights – who owns the potentially valuable stuff below the surface, in these cases, oil and gas.

Most landowners have both surface and mineral rights, but sometimes the two have been severed, meaning one owner controls the surface, while the other controls what’s beneath. Ohio law says if you own mineral rights but don’t exercise them for 20 years, the surface landowner can claim them back.

But then what does it mean to exercise your right to a property’s minerals?

That’s what the two Supreme Court cases are about. They both involve mineral rights owners from long ago, trying to reassert their ownership over the objection of surface landowners. The land in question is in Harrison County, part of the Utica shale gas boom, so the question of who owns what has big financial implications.

“Sometimes those titles become very murky,” said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. “Heirs come and go, heirs may not know that they own oil and gas rights to a piece of property back in Ohio, and they’re now living in California…”

Stewart says in these situations, Ohio law isn’t crystal clear about when mineral rights revert back to the surface landowner. That’s a problem for drillers, who just want to figure out who to lease from, so they can start getting the gas out of the ground. And it also leads to battles over who profits from that drilling.

The way these two cases shake out could bring some clarity to the law.

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