Developing Adverse Possession of Severed Mineral Estates in Ohio

• Author: Cody Smith
• Position: J.D., Capital University Law School; B.S. Mathematics, May 2012, Marietta College. I want to express my gratitude toward Matthew Warnock for his expertise, Professor Dennis Hirsch for supplying a general understanding of the relevant law, Nicolaus A. Gordon for his guidance, and Joel Blue for his spark of my general interest in oil and gas law....
• Pages: 360-392

DEVELOPING ADVERSE POSSESSION OF SEVERED

MINERAL ESTATES IN OHIO

CODY SMITH*

I. INTRODUCTION

Imagine it is 1814 in rural Noble County, Ohio. While traveling a

familiar path, you stumble across a clearing where deer are licking a spot on

the ground. Thinking it will lead to much-needed salt to preserve meat

through the harsh winter months, you begin to exhaustively mine the patch

in hopes of finding the valuable mineral. Once explored, you do indeed find

the salt, but it is unusable because it is saturated with oil.

Today, this would not be such an unfortunate discovery. As Jed

Clampett learned, oil is nothing more than “black gold,” an extremely

profitable resource to those with easy access to it.1 Nonetheless, the real

settlers who experienced this situation in Ohio in the early 1800s, Silas

Thorla and Robert McKee, were discouraged with their find because oil and

gas were not considered worthwhile commodities at that time.2 Even so,

some call their accidental discovery the first “oil well” in North America.3

Copyright © 2016, Cody Smith.

* J.D., Capital University Law School; B.S. Mathematics, May 2012, Marietta College.

I want to express my gratitude toward Matthew Warn ock for his expertise, Professor Dennis

Hirsch for supplying a general understanding of the relevant law, Nicolaus A. Gordon for his

guidance, and Joel Blue for his spark of my general interest in oil and gas law. I would al so

like to express my gratitude toward all of my friends and family who have helped me reach

where I am today.

1 Jed Clampett is the main protagonist of the television series The Beverly Hillbillies,

which aired on CBS from 1962 to 1971. See The Beverly Hillbillies, IMDB,

http://www.imdb.com/title/tt0055662 (last visited Jan. 10, 2016). In the series, Jed had the

fortune of stumbling upon an oil reserve, which comically landed him, his family, and their

“hillbilly” lifestyle within the ritzy Beverly Hills district of California. Id.

2 See First Oil Well in North America, ROADSIDE AMERICA,

http://www.roadsideamerica.com/story/11665 (last visited Feb. 17, 2016).

3 Id.; but see Ohio Crude Oil and Natural Gas Producing Industry, OHIO OI L & GAS

ASS’N 1–2, http://burchfieldcraig.org/FamLib/FamBus/OilGasGeneral/OhioOilandGas

IndustryOverview-OOGA.pdf (last visited Feb. 17, 2016) (noting that the first commercial

oil well in Ohio went into production in 1860).

360 CAPITAL UNIVERSITY LAW REVIEW [44:359

Today, oil and gas production has come full circle with a strong return

to its roots in Ohio.4 “The heart of it all”5 is quickly becoming the heart of

Appalachian oil and gas production.6 As producers continue to fund massive

operations in Ohio connected to the Utica and Marcellus Shale formations,7

shale continues to be “the biggest thing to hit Ohio since the plow.”8

Although Ohio has a rich history of production,9 its oil and gas

jurisprudence lags behind other traditional, oil-producing states (e.g.,

Oklahoma, Colorado, and Texas).10 As Ohio’s shale boom continues,11 the

law should catch up with technology as it has in these other states.12 In

particular, old doctrines must be interpreted in light of technological

advancements designed to facilitate oil and gas exploration and

4 See id. at 3.

5 See Ohio’s State Tourism Slogans, OHIO HIST. CENT., http://ohiohistorycentral.org/

w/Ohio’s_State_Tourism_Slogans (last visited Feb. 16, 2016).

6 See OHIO OIL & GAS ASS’N, supra note 3, at 8. Ohio recently obtained its one-

thousandth well searching for gas, oil, and natural gas liquids, a fact that demonstrates the

state’s strengthening position as a producing state. See Dan Shingler, Ohio Gets Its 1,000th

Shale Well, CRAIN’S CLEVELAND BUS. (Aug. 8, 2015, 4:30 AM), http://www.crainsclev

eland.com/article/20140808/ENERGY/140809841/ohio-gets-its-1000th-shale-well.

7 See, e.g., Bob Downing, Production Increases, Profits Decline for Antero Resources in

Utica Shale, OHIO.COM (July 30, 2015, 3:45 PM), http://www.ohio.com/business

/utica/production-increases-profits-decline-for-antero-resources-in-utica-shale-1.612142;

see also Bob Downing, Gulfport Energy Loses $1.2 Billion in 2015, Production to Grow,

OHIO.COM (Feb. 18, 2016), http://www.ohio.com/blogs/drilling/ohio-utica-shale-

1.291290/gulfport-energy-loses-1-2-billion-in-2015-production-to-grow-1.662948.

8 Joseph Triepke, Best Thing Since the Plow? Utica Gas Production Finally Ramping,

OILPRO, http://oilpro.com/post/2105/best-thing-since-the-plow--utica-gas-production-final

ly-ramping (last visited Mar. 8, 2016).

9 See Oil and Gas Fields Map of Ohio, OHIO DEP’T OF NAT. RES., DIV. OF GEO. SURV.,

http://geosurvey.ohiodnr.gov/portals/geosurvey/PDFs/Misc_State_Maps&Pubs/pg01.pdf

(last visited Jan. 10, 2016).

10 See Timothy M. McKeen & Kristen L. Andre ws, The Effect of Missing Production on

Ohio’s Held By Production Oil and Gas Leases, 37 OHIO ST. L.J. FURTHERMORE 13, 13

(2012).

11 See id.

12 Id. at 17. See also Joe P. Koncelik, Governor Releases Bill to Regulate Shale Gas

Drilling and Wastewater Disposal, OHIO ENVTL. L. BLOG (Apr. 9, 2012, 3:39 PM),

http://www.ohioenvironmentallawblog.com/2012/04/articles/federal-and-state-

developments/governor-releases-bill-to-regulate-shale-gas-drilling-and-wastewater-

disposal.

2016] DEVELOPING ADVERSE POSSESSION IN OHIO 361

development.13 The purpose of this Comment is to analyze one of those

fundamental doctrines, adverse possession, and explore how it provides an

avenue to simplify title to oil and gas estates and facilitate Ohio’s steady and

productive growth and development.14 Adverse possession will be the crux

of this Comment, the scope of which will be limited in one major respect: it

will only focus on adverse possession of a severed mineral estate.15

Based on existing Ohio jurisprudence and guiding principles from other

producing jurisdictions, this Comment makes several conclusions. First,

adverse possession of a severed mineral estate is likely feasible under

existing Ohio law.16 Second, a claimant17 must prove possession through an

adjusted adverse possession scheme that is a modified version of the doctrine

regarding surface estates.18 Finally, the minerals transferred and the title the

claimant has acquired thereto depends on the depth explored and the

minerals produced.19

13 Although new doctrines, such as the Ohio Dormant Minerals Act, have been developed

to simplify title pertaining to minerals by allowing a surface owner to obtain an “abandoned”

mineral interest after the record owner of such minerals does not conduct a “savings event”

within twenty years, the Act’s scope is limited to specific claimants. See OHIO REV. CODE

ANN. § 5301.56 (West 2014). Adverse possession is another avenue with a broader reach.

14 This Comment will focus on adverse possession as it pertains to mineral estates in oil

and gas. A mineral estate may include other resources as well, including, but not limited to,

coal, gypsum, salt, gold, and silver. See id. § 5301.56(A)(4). Although the application of the

doctrine is similar for any of these minerals, this Comment focuses only on oil and gas

because of Ohio’s recent shale boom.

15 Before a severance, jurisdictions universally agree on how to adversely possess

minerals. See 1 EUGENE KUN TZ, A TREATISE ON THE LAW OF OIL AND GAS § 10.5 ¶¶ 1–2

(Matthew Bender rev. ed. 2013). Title to mineral rights, which includes oil and gas rights,

may be acquired by adverse possession of the surface where there has been no severance of

such mineral rights prior to the time adverse possession began. See id.; Bremhorst v. Phillips

Coal Co., 211 N.W. 898, 902 (Iowa 1927).

16 See infra Part III.

17 In this Comment, “claimant” is used to signify a person who seeks to obtain title

through the use of adverse possession, while “record owner” is used to signify a person who

has title to real estate, evidenced b y a recorded instrument, that is being adversely possessed

by a claimant.

18 See infra Part IV.

19 See infra Part V.