The Tribune Democrat, Johnstown, PA

Business

December 21, 2013

THOMAS YOUNG | Gas fuels debate on ‘minerals’

— Got gas?  Not the kind that Tums gets rid of, but the kind that sits under your real estate and makes you rich?

Well, first we have to decide whether that kind of gas is a mineral or not.

In 2009, a couple named Jon and Mary Josephine Butler decided to go to court to see if they owned the natural gas under their property. They owned 244 acres of land in Susquehanna County.

Now, to understand their argument, you have to have a little background on deeds.  

The owner of land can sell it, but still keeps some of the rights to the land. There aren’t many rights that the average buyer would permit, but coal, for instance, deep coal, is often the subject of a “reservation,” where the seller reserves (or keeps) the coal rights and sells them to a coal company. If you live in Richland Township, for instance, it’s a pretty good bet that the coal under your property is owned, or was, by Berwind Coal Co. For you newcomers, you’ll get the name of a close by coal town if you separate the syllables of “Berwind” and put the last one first.

The Butlers chased the ownership of their property back through the years. They found that in 1881 a previous owner purchased the property from Charles Powers who, in his deed, reserved one-half the minerals and petroleum oils.  

Ultimately the property passed through other hands until the Butlers bought it.

The wonderful thing is that the reservation has a life of its own, separate and apart from the surface. The real question is what is meant by the word “minerals?” Or in this case, is natural gas a mineral?

The lawsuit the Butlers filed is called an “action to quiet title” and named the present heirs of Charles Powers as defendants.

One of my daughters thought that was the funniest name for a lawsuit, and she’d sometimes ask as I came home from work, “Did you find any loud titles today Dad?”

But I digress.

The county trial court referred to an 1882 case in which the state Supreme Court decided that neither natural gas nor oil is included in the word “mineral,” and most people think of a mineral as having a “metallic character.”

Accordingly, the court ruled that the Butlers owned the gas.

The case didn’t end there, however, because it was appealed to our intermediate court, the Superior Court, which overruled the county court, arguing that discussing coal, whoever has the right to mine the coal also owns the coal gas.

Another appeal followed, this time to the state Supreme Court, which overruled the Superior Court, stating again that the word “minerals” seems to have a connotation of something “metallic.”

So there. It’s not gas unless it says gas, and if you have it, get paid to get rid of it.

Thomas Young, a graduate of Pitt and Harvard Law School, has been a lawyer in Johnstown since 1958. He is a former professor of business law at Pitt-Johnstown. Readers may send questions to Young in care of The Tribune-Demo-crat.

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