Is Marcellus Shale a Mineral?

On Friday, September 23, 2011 0 comments

A pending case in Pennsylvania considers whether Marcellus shale is a mineral.

The answer could determine whether contracts transferring mineral rights to Marcellus shale also transfer rights to Marcellus natural gas, the Pittsburgh Tribune-Review reports. "For anyone who's played the game 'Animal, Vegetable, Mineral,' it might seem obvious that the Marcellus shale isn't alive and doesn't grow—it's a rock layer in the ground, so it's a mineral," the story says. "In the Pennsylvania courts, the answer is not so clear."

Under the state’s so-called “Dunham rule,” Pennsylvania courts have held that a grant of mineral rights in a deed generally does not mean that the parties intended to grant or reserve oil or gas rights, according to a summary by the law firm K&L Gates.

In a ruling earlier this month, a Pennsylvania superior court asked a Susquehanna County court to decide whether the shale is a mineral and, if so, whether anyone who owns the shale also owns the shale gas, according to a summary by McGuireWoods.

The superior court ruled in an action to quiet title filed by John and Mary Josephine Butler. Their deed gives them the rights to half the minerals on their 244 acres of property, the Tribune-Review says. The case is now pending in Susquehanna County. “If the Marcellus shale is not a mineral,” the newspaper says, “it could change everything drillers have assumed about the state's oil and gas laws.”

Hat tip to Pat’s Papers and ABA Journal.


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