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Judon Fambrough, oil and gas attorney at the Texas Real Estate Center in College Station, says exceptions to the rule on surface use can be negotiated in specific lease provisions. For example, the lease terms could be altered to require the surface owner and mineral lessee to mutually agree on the location of wells, roads, pipelines and related activities. Likewise, the lease might require the surface to be restored and surface damages paid once drilling operations cease. On small tracts, the mineral lessee may waive all rights to use the surface. Most lease forms prohibit drilling activity within 200 feet of any dwelling on the property.
Another exception arises where the mineral activity occurs within the boundaries of a municipality. The mineral producer's activities must conform to any valid ordinances instituted under the police powers of the city or town.
And finally, a subdeveloper may impose certain deed restrictions on a subdivision to designate operation sites (drill sites) and the location of road and pipeline easements within the subdivision. The procedure is outlined in Chapter 92 of the Texas Natural Resources Code.
Court cases resolve conflicts
Citizens who do not qualify for these exceptions and cannot negotiate a surface-use agreement with the producer can find recourse only through the judicial system. The cases evolving from the conflict between surface owners and mineral lessees have concentrated in three areas: What is reasonable use? When does negligence occur? When do the minerals belong to the surface owner? Texas courts have ruled that certain activities, such as seismic testing, well site selection, housing employees on premises, installation of a pipeline, and use of water above or below the surface, to constitute reasonable use.
In fact, Texas courts have ruled that completely draining underground aquifers serving as the sole source of the surface owner's domestic and agricultural water supply, does not constitute negligence. The Texas Supreme Court has ruled, however, that subsidence caused by the negligent or excessive withdrawal of groundwater will create liability. Several Texas appellate cases have found the mineral lessee negligent for polluting fresh water with salt water.
Coal, lignite not minerals
The courts have held that any coal or lignite found at the surface is not a mineral and thus belongs to the surface owner.
The courts have also held that the term mineral does not include, as a matter of law, limestone, caliche, surface shale, building stone, sand and gravel. These substances belong to the surface owner along with fresh water, whether located on the surface or in the subsurface.
However, surface owners may pursue the following where they clearly own no rights to the minerals:
• Contact the mineral lessee in an attempt to work out a land-use agreement. Basically, the agreement would restrict the lessee's operations to a certain section of the land or restrict operations from the surface entirely. Of course, the lessee is not under any legal obligation to enter such an agreement.
• Contact the mineral owner and work out a land-use agreement or a comprehensive surface-use and surface-damage clause to be included in future leases. Again, the mineral owner has no legal obligation to respond to the request.
• Attempt to purchase all or a part of an undivided interest in the mineral estate. By doing so, future mineral lessees may have to negotiate with them when leasing the property.
• If all or a part of the minerals cannot be purchased from the mineral owners, surface owners may attempt to purchase the right of ingress and egress. This will require the lessee to make arrangements with the surface owners before entering to explore or produce on the property. At the same time, the mineral owners giving up this right are not deprived of any bonus, delay rentals or royalty payments.
In Texas, the mineral lessee has the implied right to use the surface estate for exploring and producing minerals. Such mineral rights are superior to the right of the surface owner to the extent that they are reasonably necessary for the development of the mineral property. The courts have moderated this rule somewhat. However, the surface owner still may wish to protect and preserve the surface by securing an independent contractual arrangement. Competent legal assistance when purchasing land is indispensable.
Mineral owners can also request provisions in a lease related to seismic testing of the ground in order to protect the surface owner.
For specific recommendations, refer to the Texas Real Estate Center publication No. 840, Minerals, Surface Rights, and Royalty Payments. The 14-page technical report is available for $4 or can be downloaded free at http://recenter.tamu.edu/pubs, where you will find many other related publications.
