Except in narrow circumstances, the severed surface owner does not have the right to participate in or control the development of the minerals underneath the property. Still, many oil and natural gas leases today contain provisions expressly providing for compensation or other benefits to the owner surface estate. Lessees will often agree to voluntarily compensate the surface owner for surface impacts. In addition, leases commonly restrict drilling within certain distance of structures and contain provisions on the use of water for developing the minerals.
Texas courts have long held that the mineral estate is the dominant estate, and that the mineral owner, or the owner’s lessee, has an implied easement to use the surface in a manner that is reasonably necessary to develop the minerals.
However, there are some limitations to the mineral owner’s use of the surface. The most significant restriction is the judicial accommodation doctrine, which requires the mineral owner to accommodate existing surface uses such as ranching or agricultural operations as is reasonably practicable. Contractual agreements, deed restrictions and statutes may also provide protection to surface owners.
Pipeline companies that transport oil, natural gas and their products often approach surface owners seeking an easement to construct pipelines underneath the owner’s property. While greater than 90 percent of these interactions result in a voluntary transfer of an interest in an easement, pipelines may seek to invoke the power of eminent domain if negotiations are not successful. State law provides this condemnation authority to pipeline companies if they are acting as common carriers transporting oil or natural gas or their products, to or for the public for hire under state law.
If the pipeline company represents to the surface owner that it possesses the right of eminent domain and prior to a pipeline company’s provision of a final offer to a surface owner to acquire the easement, the pipeline company must provide to the surface owner a copy of a landowner’s bill of rights. This document, which is prepared by the Texas Attorney General, states among other things that the owner is entitled to adequate compensation if his property is taken for a public use, a written appraisal from a certified appraiser and a good faith offer from the pipeline company.
More information is available at the following link. https://www.texasattorneygeneral.gov/files/agency/landowners_billofrights.pdf.
- Conservation Easements Texas Landowners, Jeff Francell, Guadalupe-Blanco River Trust (2009)
- Texas Law of Oil and Gas, Ernest E. Smith and Jacqueline Lang Weaver, Section 2.1, Volume 1, Second Edition 2015
- Texas Natural Resources Code, Section 111.002
- Texas Business Organizations Code, Section 2.105
- Texas Property Code, Section 21.0112(a)
- Texas Government Code, Section 402.031