This Too Shale Pass
Lately, as children develop an inexplicable interest in lumps of coal, their parents are becoming concerned about another kind of rock: shale. And they want it. Bad.
This has become abundantly clear considering the many times I’ve been asked about mineral rights lately from people buying property in Ohio. They’re all eager to know if they own the mineral rights to the ground beneath their property, and whether they can sell or lease those rights to make a little money. Well, I’m afraid the short answer is, “No, you probably don’t own those rights.”
But before we go any further, here’s some back story. Roughly 390 million years ago, during the Devonian period, shale deposits formed through much of the Appalachian Basin, which … wait — that’s probably too far back. Let’s move it up to the 1800s. That’s when people began realizing Ohio, especially eastern Ohio, had potential energy sources to exploit. Consequently, companies came in and began leasing the mineral rights to people’s properties so that they could drill beneath them and take the gas or oil they found.
(A side note, in case you were wondering: Common law’s idea of real estate is that when you buy a piece of property, ownership extends from down to the center of the earth all the way up to the heavens. That’s why property owners are able to lease mineral extraction rights deep under what is commonly thought of as their “property.”)
In the past 10 years or so, technology and energy prices have made extracting natural gas from the area’s Marcellus Shale formation more attractive, and there’s been even more buzz after the recent discovery of a deeper formation, called Utica Shale.
As a result of all this, mineral rights have become a hot topic in Ohio. But here’s the thing: With all of the companies that have been extracting energy here for well over a century, most of eastern Ohio has been leased up. Chances are, I’m afraid, your ship has, ahem, already shaled. (Sorry for that.)
In closing -
If you’re curious about your mineral rights, you’ll need an attorney to go through your real estate documents to see if previous owners ever sold or leased those rights to someone else. An attorney will be especially helpful, too, since Ohio has separate laws regarding rights to coal, oil, and gas, and they can get pretty technical.
Finally, if Santa doesn’t bring you a mineral rights windfall this holiday season, look on the bright side: With any luck, you didn’t get a fruitcake either.
Scott Stevenson
