Commentary

Long Lives the King’s Rule

By Joyce Hale |

By Joyce Hale

Landowners today are often surprised to find their property rights are limited by laws first established centuries ago to benefit English kings. The separation of surface ownership and mineral ownerships is known as the “split estate.” When early English kings decided that minerals were critical for the wealth and security of their realm, the rights to those minerals were severed and given dominance over surface ownership. This includes access for drilling, exploring, developing, storing, handling, transporting, and marketing oil, gas and other minerals without compensation to the surface owner.

In most nations, minerals underneath private property belong to the national government with jurisdiction over the surface, regardless of who owns it. In the United States and a few other nations, a private owner of the surface also owns the minerals underneath, as long as they hold title in “fee simple.” But if the owner decides to sell or lease his mineral ownership, all rights to mineral access transfer without obligation or consideration of the surface owner.

Western expansion of the U.S. was encouraged through government land grants for development but mineral rights were retained for the nation’s benefit. That is why exploration and development companies have had easier access to the mineral rich states of Wyoming, Colorado and New Mexico.

In these states, negotiating with political interests and the Bureau of Land Management, which holds all Federal leases, is a lot easier and less expensive for companies than in the East where private mineral ownership dominates. Public input expressing negative feedback over impacts on the nation’s forests, parks, water bodies, and preserves may be taken in hearings and comment periods. However, the BLM is required to do no more than consider these sentiments and has sole power to cast the final vote on what it considers best for the country.

Determining mineral rights ownership today may require extensive detective work and corrections to title defects. Rights can be sold, traded, or inherited. If the area has not had exploration and production in recent times, people lose sight of any future value. Paperwork may be lost by previous owners or old records destroyed in courthouse fires. The value may be regarded as essentially worthless as multiple heirs add to a family’s claims over time. In these cases, the additional problem of conflicting personal interests and values pit family members against one another while the landman applies pressure for signature approval on a lease.

State-owned property ties mineral and surface ownerships together. Controversy arose as to whether the Arkansas Game & Fish Commission would be allowed to retain signing bonuses and royalties from gas leases on state property under their management. Some legislators thought revenues should be utilized through the state’s General Funds. A compromise was reached by Commission allocating $350,000 to fund four additional gas field inspectors working under Arkansas Department of Environmental Quality. Properties that revert to the state for nonpayment of taxes are managed by the Arkansas Land Commissioner through statutory directives.

While the split estate devised by English kings has an abundance of modern detractors, it has centuries of case law and support by moneyed interests. To many it is an injustice backed by the courts, especially those in the agriculture industry who struggle to work the surface. Royalty owners, who may have no connection to the land, reap the profit bearing none of the inconveniences or damage. A comprehensive Landowners’ Bill of Rights is badly needed and it is the public’s obligation to make sure legislators understand this.

 

 

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