CHAPTER 1 REGULATION OF SURFACE USE BY MINERAL DEVELOPERS
| Jurisdiction | United States |
(Jan 1994)
REGULATION OF SURFACE USE BY MINERAL DEVELOPERS
Cyprus Coal Company
Englewood, Colorado
William A. Keefe
Gorsuch Kirgis L.L.C.
Denver, Colorado 1
TABLE OF CONTENTS
Page
I. INTRODUCTION
II. DEVELOPMENT OF THE DOCTRINE
A. Early Roots.
B. Doctrine's Development in Oil & Gas Context
1. Early Cases: Necessary Access
2. 1950's; Mineral Estate Labeled Dominant Estate; Tort Limitations
3. 1960's; Beyond the Drillsite Surface; Two Limitations Defined
4. The Accommodation Doctrine
C. Doctrine's Development in Mining Context
1. Early Cases: Right to Destroy the Surface Entirely
2. Rights Under the Broad Form Deed
3. Legislative Attempt to Limit Dominant Estate
4. Popular Limitation on Dominant Estate
III. RESTRAINTS ON THE DOCTRINE
A. Restraints on Mining
1. Changes Wrought By Courts
2. Changes Wrought by the Federal Government
(A) Coal
(B) Hardrock Minerals
3. Changes Wrought By State and Local Governments
(A) State Limitations
(B) Local Restrictions
B. Restraints on Oil and Gas Development
1. Changes Wrought by Courts: The "Accommodation Doctrine"
2. Changes Wrought by Private Parties Holding Interests
3. Changes Wrought By State Governments
(A) Notice Statutes and Regulations
(B) Dormant Mineral Acts (Lapse Statutes)
(C) Surface Damages Acts
(D) Surface Damages Bonding Provisions
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(E) Statutes Expressly Limiting Right of Entry onto Surface Estate
4. Changes Wrought by Local Governments
5. Federal Considerations
IV. PRIVATE PROPERTY RIGHTS V. STATE & LOCAL LAND USE REGULATION:—WHEN IS A TAKING A "TAKING"?
V. CONCLUSION
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I. INTRODUCTION
The doctrine that the mineral estate is the dominant estate arises from the concept that minerals can be owned separately from the surface of land. This concept came to the United States from the legal systems of both England and Spain. In the late nineteenth century, separate ownership of the mineral estate and surface estate began to conflict as mineral development progressed.
This paper traces the development of the doctrine from is early roots through its development in both the mining and oil and gas contexts. The paper then examines limitations which have been placed upon the doctrine by recent court decisions, legislative enactments, and private agreements.
The doctrine has been continually evolving from a status which allowed the mineral estate owner to occupy, pollute and even destroy the surface estate, to one in which the two estates must co-exist. This trend is one with which everyone in the extractive industries must learn to live. The doctrine of dominance cannot be relied upon to the same degree as in past years. Nonetheless, while the doctrine has been increasingly qualified by courts, legislatures, and private parties, it remains at the core of the relationship between these two inevitably conflicting property interests.
II. DEVELOPMENT OF THE DOCTRINE
A. Early Roots.
Under the early English common law, a person who owned a piece of property owned it from the heavens to the center of the earth. Later, it became common for the surface of a tract of land to be sold while the seller
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retained (or "excepted") the mines under that tract.2 The English courts dealt with many complaints of subsidence resulting from underground coal mining, but as late as 1850 there were apparently no reported cases in England, the United States, or elsewhere involving the rights or obligations between surface owners and mineral owners as to conflicting uses of the surface.3 One English court recognized that the mineral estate carries with it the right of access to the minerals and the right to remove them through the surface estate,4 but also recognized that the surface owner was entitled to subsurface support of his land. The court thought that this "reciprocal advantage" would bring about "a compromise, advantageous to the parties and to the public,"5 but also stated that the right to remove minerals was subservient to the right of the owner of the surface to have it supported.6
The coal fields of western Pennsylvania saw conflicts between the interests of mineral owners and surface owners when surface owners began allowing oil drilling to occur in the late 1800's. One of the most significant early cases, Chartiers Block Coal Co. v. Mellon,7 recognized the right of the mineral owner to utilize the surface of the land to the extent necessary to reach the minerals. The court in Chartiers noted that the mineral owner was required to exercise its rights with "due regard" for the owner of the surface:
As against the owner of the surface, [the mineral owner] would have the right, without any express words of grant for that purpose, to go upon the surface to open a way by shaft, or drift, or well, to his underlying estate, and to occupy so much of the surface beyond the limits of his shaft, drift, or well, as might be necessary to operate his estate, and to remove the product thereof. This is a right to be exercised with due regard to the owner of the surface, and it will be restrained within proper limits by a court of equity, if this becomes necessary; but, subject to this limitation, it is a right growing out of the contract of sale, the position of the stratum sold, and the impossibility of reaching it in any other manner.
The court thus recognized that the mineral owner had to use the surface to reach the minerals, and that the mineral owner could use as much of the surface as was necessary to do so. However, the court also recognized that the mineral owner was required to stay within "proper limits" in using the surface to avoid damaging the surface owner's rights.
Under early Spanish law, the King owned all minerals under public and private lands. The surface estate was thus servient to use by the King to reach and produce the minerals. The Republic of Mexico, and subsequently the
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Republic of Texas, retained this concept of sovereign ownership of the minerals under all land, as did the State of Texas upon admission to the Union in 1846. The competing interests of surface and mineral ownership first arose in Texas with respect to salt mines. In 1862, the Texas Supreme Court recognized that the right to the minerals carries with it the right to enter the surface "and all such incidents thereto as are necessary to be used for getting and enjoying them."8 By the State Constitution of 1866, the State released and relinquished ownership of all mines and minerals to the owners of the surface.9
Thus, by the turn of the century, Curtis Lindley was able to state unequivocally that the mineral owner had, by implication, "all privileges reasonably necessary" to use the surface estate for "full and fair enjoyment" of the mineral estate. Lindley also recognized that the privileges had to be exercised with "due care" so as not to interfere with the rights of the surface owner, and that the surface owner had a reciprocal obligation to the mineral owner.10 The mineral owner could use so much of the surface as was reasonable and necessary,11 and the mineral owner was not liable to the surface owner for damage "necessarily occasioned by the ordinary and careful operation" of the mine.12
B. Doctrine's Development in Oil & Gas Context
The doctrine that the mineral estate is the dominant estate has been most frequently applied in reported decisions by the Texas courts. Most of these cases involve conflicts between surface owners and oil and gas development, although a few important cases apply the doctrine to other minerals. Courts in other states have relied upon the Texas authorities to develop the doctrine in their jurisdictions. The doctrine began as a recognition that the mineral owner required some surface to reach and produce the minerals. Later, concepts of tort law were applied to define when surface use by the mineral owner exceeded the rights inherent in owning the mineral estate. In the 1960's, Texas courts began recognizing the surface owner's rights to a much larger degree in what became known as the "accommodation doctrine."
1. Early Cases: Necessary Access
The earliest Texas cases primarily involved the issue of how much of the surface mineral owners could use. The courts recognized that a grant or reservation of minerals included by implication a mineral easement allowing the mineral owner to use the surface. In 1862, when title to the minerals was still held by the State, the Texas Supreme Court confirmed this doctrine and traced its roots in English, Spanish and Mexican law:
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It is well established doctrine from the earliest days of the common law, that the right to the minerals thus reserved, carries with it the right to enter, dig and carry them away, and all other such incidents thereto as are necessary to be used for getting and enjoying them. (The Queen and Earl of Northumberland, Plow, 310, 336; Earl of Cardigan v. Armitage, 4 Barn. & Cres. 197). And this is also the civil law. (Rockwell's Spanish and Mexican Law, 49, 53, 83).13
Sixty years later, in an early case involving a conflict between an oil and gas lessee and a surface owner concerning the right to capture waste oil flowing from wells "down the creeks, ravines and across the land," the court gave an explanation of the rationale for surface access: without surface access the right to produce oil "would be worth little." However, the court also noted that the mineral owner's surface rights are limited "to those things expressly authorized or necessarily implied in the lease as a necessary incident to the business of producing oil or gas."14 These concepts were restated in disputes over the rights to royalty income from oil and gas after all the minerals had been transferred from the state to the overlying surface owners.15
The Texas Supreme Court appears to have begun...
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