Imagine my surprise to learn that only 2% of Texans own minerals rights.
The rights of 2% of Texans override the rights of 98% of Texans.
Tricia Davis who is the president of the Texas Royalty Council wrote an essay supporting HB40, the bill written by former Exxon attorney, Shannon Ratliff, that stripped away a 100 year tradition of concurrent regulation of the oil and gas industry by state and cities. You need to read it all but here is an excerpt:
Carefully constructed policy is also important to protect property rights associated with oil and gas development. More than 570,000 Texans are mineral owners with a Constitutional right to develop their minerals. Source
The U.S. Census Bureau puts Texas population at almost 30 million. To make the math easy, let’s round up the mineral owners to 600,000 mineral owners in Texas. That’s 2% of the population.
Davis is quick to point out that many of the 2% are not wealthy but are regular Texans who depend on their royalties to make ends meet, send children to college and pay for medical bills. In public testimony, I’ve heard her include financing retirement in the benefits of mineral ownership.
Gosh, that sounds a lot like what regular Texans in the 98% do with their private property. A home is normally the largest investment a person makes. Many people make home improvements hoping to sell for a profit so they can use it to make ends meet, send children to college and pay for medical bills and finance retirement.
Mineral owners threaten families’ health and their property value.
Catskill Citizens for Safe Energy found that the value of homes near compressor stations decline by as much as 50 percent.
This video shows a compressor station release of methane and volatile organic compounds into the air in a Mansfield, Texas neighborhood. This release caused complaints of health impacts and foul odors.
Fracking in close proximity to homes declines property values, causes problems with mortgages and insurance.
The mere existence of a signed gas lease can affect the home‘s appraised value and the homeowner‘s ability to obtain a mortgage loan, homeowner‘s insurance, and sell the residence. The cumulative effect of unconventional gas drilling on residences in the thirty to thirty-five states where operations occur, or are planned, poses a potential threat to the nation‘s $6.7 trillion secondary mortgage market, since the secondary mortgage market is supported by an unknown number of mortgages affected by residential fracking.
AT THE INTERSECTION OF WALL STREET AND MAIN: IMPACTS OF HYDRAULIC FRACTURING ON RESIDENTIAL PROPERTY INTERESTS, RISK ALLOCATION, AND IMPLICATIONS FOR THE SECONDARY MORTGAGE MARKET
Tim and Christine Ruggiero’s home was devalued 75% because a mineral owner decided to develop his minerals 200’ from their backdoor. See page 16.
People who live near oil and gas development have more hospitalizations.
Hospitalizations for heart conditions, neurological illness, and other conditions were higher among people who live near unconventional gas and oil drilling (hydraulic fracturing), according to new research from the University of Pennsylvania and Columbia University published this week in PLOS ONE.
High levels of volatile organic compounds and formaldehyde have been detected a half-mile from the facilities and in one Eagle Ford Shale case the air pollution traveled 20 miles impacting all in its wake.
…high levels of pollutants were detected at distances exceeding legal setback distances from wellheads to homes. Highly elevated levels of formaldehyde, for example, were found up to a half-mile from a wellhead. In Arkansas, seven air samples contained formaldehyde at levels up to 60 times the level known to raise the risk for cancer. “This is a significant public health risk,” said lead author David O. Carpenter, MD, in an accompanying interview, “Cancer has a long latency, so you’re not seeing an elevation in cancer in these communities. But five, 10, 15 years from now, elevation in cancer is almost certain to happen.” Source
In Denton, residents where evacuated in a 1000’ radius during a blowout.
Arlington residents were evacuated in a 650’ radius during a blowout.
When lightning struck a well in a Denton neighborhood, terrified residents self-evacuated.
Then there is the flaming and contaminated water. Most often you don’t learn much about these cases because they are kept secret in non disclosure agreements.
Even if the percentage of Texas mineral owners is higher than 2%, they are still in the vast minority. Something has to give.
Are you going to continue to let them push you around?
UPDATE: This letter by Tricia Davis appeared in the Star-Telegram
Anti-fracking groups like to think they’re campaigning against Big Oil, but they’re really attacking millions of property owners across Texas. (See July 9 commentary, “Oil and gas industry may one day reap a fracking whirlwind.”)
The fracking ban in Denton was not a victory for democracy. It stripped Texans of their constitutionally protected rights to develop energy on their own property.
Any government — be it federal, state, or local — that takes rights away is the very definition of Big Government. Texas lawmakers deserve credit for standing up against that with House Bill 40, which protects taxpayers and property owners from the kind of illegal, costly, activist-driven bans that Denton is still paying for.
Don’t be fooled by their rhetoric on “local control.” Frack Free Denton wants to expand its campaign statewide to tell all Texans what they can and cannot do with their own land.
Cities in Texas haven’t been fooled thus far, and many have actually spoken in favor of HB 40. Speaking for those of us who still cherish individual rights, let’s hope it stays that way.
— Tricia Davis, president, Texas Royalty Council, Austin
So now Davis inflates the numbers by saying it’s millions of property owners instead of what she said previously: “570,000 Texans are mineral owners.”
Davis likes to throw out the terms “property rights” and “constitutional,” but constitutional rights apply to all Texans not just an elite 2%. The rhetoric Davis uses comes straight from the playbook used throughout history to convince the majority to make sacrifices that only benefit a minority.
Please recall when this same rhetoric was used to convince regular Texans to vote against an estate tax they would never have to pay by calling it a death tax.
The wealthiest 2% of Americans tried to convince regular, hard working Americans that their assets would be taxed after death. The estate tax only applied to estates valued at over $1million dollars. In other words, Paris Hilton and her ilk, don’t what to pay taxes on the millions or billions they inherit. That’s free money that they did not work to earn. Of course they are entitled to their inheritance but it is income that should be taxed like any income.
All Texans have the right to enjoy their private property. Private property owners should not be considered squatters by the 2% mineral owners. Constitutional property rights extend to all Texans.
Mineral owners do not have the right to destroy surface owner’s private property subjecting their families to health and safety risks. These are not family values!
Help me think of other examples where the minority used rhetoric to convince the majority to act against their best interest.
About Sharon Wilson
Sharon Wilson is considered a leading citizen expert on the impacts of shale oil and gas extraction. She is the go-to person whether it’s top EPA officials from D.C., national and international news networks, or residents facing the shock of eminent domain and the devastating environmental effects of natural gas development in their backyards.
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Fishcreek Neighbor says
Thank you for this story. I hope to see HB40 challenged in the courts to protect OUR property rights
As a homeowner who also owns the minerals on an average-sized suburban tract, I know it is a mathematical loss after calculating the health and safety risks, rising costs of a family’s medical bills due to increased health issues, along with the overall risks and blight that this heavy industrialization brings to the entire community. Overall, urban/suburban drilling mostly benefits those who live far away from the day-to-day impacts.
The 98% need to vote out every legislator who voted against their best interest and FOR profits over people.
We need to gather up all the mineral owners who feel as you feel. There are so many of us out there.
Tim Ruggiero says
When hydraulic fracturing just started, I can understand why, in the beginning, that most mineral right owners leased. Honestly, if I were in that position I probably would have too, and not given a second thought about how that was going to happen. It certainly doesn’t help that Industry, starting with Landmen, are less than honest, if not just outright liars about what will happen. We all know that even to this day, they minimize actual dangerous events and continue to sing the song about how safe it all is.
But that was then-there’s been enough incidents, accidents, blowouts, blowoffs and many other well publicized issues just in the last 4-5 years alone, that those who may have been uninformed or misinformed-should damn well know better now.
For far too long, mineral right owners have had the legal right to not only sell the land, but retain the mineral rights to exercise at a later time-like right after the last home is built in what is now a subdivision. That almost always results in a number of other people being placed at some level of risk in the event of something on the site going wrong. Rarely is the mineral right owner residing anywhere near the risk, and certainly never any of the energy company executives.
For starters, given this information that 2% of the people get to dictate and control the other 98%, we need to get rid off those politicians-regardless of political stripe. The Myra Crownovers, the Phil Kings and Craig Estes, and yes, even those on the Democratic side-got to go. And we cannot replace them with somebody else that will not represent the people. I’d even go so far as to say we need not wait until election time; let’s start calling for their resignations for violating the trust of the people, for representing Industry instead of their actual constituency. Let’s get a petition going for recall elections on every one of these traitors. We may not win, but there will be much more publicity and the entire world will know how dishonest and untrustworthy these people are. Perhaps it will serve as a strong message to the other politicians to do the job they were elected to do, not the one they get paid by Industry to do.
The old saying ‘There’s strength in numbers’ is true. The 98% have got to stop letting the 2% push us around.
They only way we will have any chance at all, is to change politics in Texas. It’s happening but it’s slow.
Let me get this straight- if the surface owner somehow obstructs the mineral owner from exploiting the oil and gas, it’s a bad thing under the law (a ‘taking’ something or other). But if the activities of the mineral owner degrade the value of the land by 75%, or permanently pollute the land, or destroy the water resources, there’s no penalty on the mineral owner?
By all means, the fracking companies doing the damage should be hammered for these crimes, but why aren’t the mineral owners held responsible for what they did with ‘their’ rights? Why isn’t the mineral owner required to compensate the surface owner for a ‘taking’ of their property?
Also, to add a layer of depravity to this: a few years ago the great pyramid scheme called Chesapeake Energy sold a 1/3 stake of its 600,000 acres of South Texas oil and gas leases to China. China!!! So given the Texas “who gives a s#it!” (trademark) regulating philosophy, are we eventually going to have Chinese oil and gas companies here fracking away? Texas really is trying hard to become a 3rd world oil state…
Tim Ruggiero says
It’s called Split Estate. Surface Rights are subservient to Mineral Rights. (And given that surface owners really have no rights, they really should stop calling it ‘rights’) Similar to Eminent Domain proceedings, your land can be taken and you are compensated for the ‘market value’ of the land taken. Simply put, as a surface owner, you don’t get to say ‘No’. Same with pipelines. In addition to a well site, the pipeline company (which may be a subsidiary of the gas company) will take even more land for the pipeline. Once again, you get compensated for the market value of your land; They’ll know before the pipeline goes in how much your land is worth based on County Appraisals. The Rules were written long ago by those who stand to profit from such, and not much has changed since then. The Railroad Commission can’t even get their name changed.
Tom, I think you have summed it up nicely. I think the mineral owners will become a target. Things cannot continue they way they are. Everyone knows this.
Lance Irwin says
Otherexamples where this rhetoric was used to convince the majority to act against their interest for the benefit of the minority…. Trickle Down Exonomics – Star Wars – TTP – 1984 – ALEC – GOP Platform
Most wars fought starting with the civil war where the minority of plantation slave owners convinced young men to die to preserve their right to own slaves.
They use the rhetoric of taxation to create inequality that benefits the top 1% at the expense of the rest of us. Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride. Vanity Fair.
Todd Armstrong says
Unfortunately the fact that mineral rights are superior to surface rights have long been established as a basic premise of “English Common Law” is legal reality. It would take an amendment to the constitution to change that relationship.
There are a number of things that could be done. In a few states, if the mineral rights lie fallow (ie un-drilled dry holes count to restart the clock) or not in a producing unit for a number of years (10 or 20 years are most common)). Then the mineral rights revert to the surface owner. This revision of mineral law in Texas could possibly be achieved. But the basic fact is, that if you bought land without the mineral rights, then you are STUPID, and you deserve what you get.
Basic rules of real estate, don’t buy in a flood plain, don’t buy in a subdivision without good deed restrictions, and NEVER buy without getting at least some of the mineral rights so you can control your own destiny.
NO ONE deserves to be poisoned in their own homes. What kind immoral jackass are you to say such a thing?
Amendments to the constitution happen all the time. Like the blog post says, there are vastly more non-mineral owners than there are mineral owners in this country.
Even if you own your mineral rights you cannot control your destiny unless you own hundreds of acres. Rule 37 is a fact. And what good is owning your minerals if your neighbors all frack and ruin your air and water?
Todd Armstrong says
I stand by my statement. If you buy a house on a barrier island (ie Galveston), don’t be surprised when a hurricane storm surge pushes it off it’s foundation. If you buy a house in a flood plain (ie Driftwood, Tx), don’t be surprised when it floods. If you buy property without mineral rights don’t be surprised when the owner leases it, and an energy company drills on it.
You might get Texas law changed so that dormant mineral rights revert to the surface owner after a period of time (I would be in favor of that), but you have zero chance of getting the Federal Constitution amended to to eliminate the concept of mineral rights.
And no, the constitution does not get amended all the time (after the bill of rights just 17 in 239 years).
It’s not at all easy to trace mineral ownership. Many people who move to Texas know nothing about fracking or the split estate. At closing they are given a paper and told that they don’t own the mineral rights which means if an oil is discovered they don’t get the oil. They are not given full disclosure.
Here’s full disclosure:
If you don’t own the mineral rights the mineral owner can use force to seize part of your property to extract his minerals. There will be a drilling rig as close as 200′ from your home for weeks or months. It will run night and day and be 90 decibels or more. Dangerous air pollution containing carcinogens, neurotoxins and teratogens and diesel fumes will blow through the air.
After the hole is drilled, they frack the well. If you thought drilling was loud… Hundreds of trucks are required to haul the silica sand, which is also a carcinogen and blows everywhere. DO NOT BREATHE! They use hazardous chemicals. (Oh BTW, if you use well water get it tested because it can be contaminated with those hazardous chemicals.) Your house will shake and it may crack your walls.
After fracking they start producing oil or gas. See the vent pipes on top of the tanks? That’s where a lot of hydrocarbon air pollution come out. It comes out other places but mainly there. At least 10 workers have died recently from inhaling those fumes so it’s going to make you and your family very sick. Trucks will come to pick up the produced water. They come night and day and they spill a lot. The truckers (all the workers, in fact) need to pee and poop just like everyone else so they will do that on your property. Keep watch for spills. Keep watch for the operator to spread new gravel, which means they are covering up a spill. Valves will blow and it will sound like a jet engine while hydrocarbons spew everywhere. Evacuate your family and pets.
Calling the regulatory agencies is important because you need to help people like me document their failure. They use your tax dollars to serve the industry not the public. Industry gives them presents like dinners, lunches, pens, ball caps, parties, new gravel driveways and pipe fences. These presents we have seen but there may be presents that aren’t seen.
Don’t despair. If you treat documentation like a full-time job taking pictures and video of everything and recording all conversations and doing open records requests, sometimes you can find an attorney who will use your evidence to sue for damages. Industry has deep pockets and an endless stream of attorneys so this will take a couple of years. If you do win the lawsuit, don’t expect a lot of money. Usually it’s only enough to move away. Oh! And you know that thing about free speech in the constitution? It no longer applies to you. You will never be able to talk about what happened to you again and all your evidence of harm will disappear.
How many people would buy property if they were given full disclosure?
You know what’s STUPID: blaming the victims instead of working to change this repressive system.
Tim Ruggiero says
Todd: So 98% of the people of Texas are stupid? I’ve lost count of how many times over the last 6 years someone that either works for Industry or has a financial interest has said to me “You’re stupid for not buying the mineral rights” or some variation of this. It’s almost always said as the ‘last word’ after someone who got run over by Industry explained what happened to them. Funny how it’s only the Industry people that say this.
Aside from the fact that there’s less than full disclosure (simply stating that “If oil or gas is ‘discovered’ on your property, it’s not yours” is hardly full disclosure.) mineral rights are not always for sale, and when they are, are expensive. To illustrate my point, if it were law that when you buy property, you must also buy the mineral rights, I’d bet anything the larger percentage of Texans would be renting their home. Then again, I can only wonder how many homes would even be built if the builder knew very few would buy them.
To simply dismiss someone by calling them ‘stupid’ for not buying the mineral rights just goes to show the level of arrogance that exists amongst those in Industry or the ignorance of those who don’t have to live with it.
Todd Armstrong says
I am kind’ave on your side, but I come at it from a more libertarian perspective. I agree, that no one should get a well drilled on their property that they do not want. Our differences are in how you try to prevent this from happening.
If you were able to elect a very progressive ((ie socialist party) super majority to 2/3rds of congress and get that same group in 3/4rds of the state houses (what is required to amend the constitution)., they would still not eliminate mineral rights. What they would do, would be to nationalize mineral rights so that the minerals rights belonged to the federal government. Which is how mineral rights work in 99.9% of the countries of the world (only the US and parts of Canada have private ownership of mineral rights).
If my suggestion of dormant mineral rights reverting to surface owners had been in place in Texas 15 years ago. Practically everyone in the Barnnet Shale would own their own mineral rights.
Todd Armstrong says
As to the discussion point about people moving to Texas do not know about mineral rights vs surface rights. The same property rights relationship exists in every other state in the union. So no, ignorance is no excuse for not protecting yourself from a bad situation. READ BEFORE YOU SIGN DOCUMENTS. This is what being an adults means, you have to look out for yourself, because no one else is going to.
However, if dormant mineral rights reverted to surface owners, it would help remove one more stumbling block that life puts in front of a person that could trip them up and leave them in a bad spot in life.
Tim Ruggiero says
You can read all the documentation you want, it doesn’t even begin to describe or inform or state what is very likely to happen. You could hire a real estate attorney to go through the documents as well, and while that may be the better decision, it’s still remains a Catch-22. The home buyer has to have some level of advance knowledge of Mineral Rights and ‘Split Estate’, but more so the real estate attorney. Even then, the home buyer is entirely reliant on the attorney to explain in plain English what the mineral right clause means and what it potentially means to the home buyer.
I would argue that mineral right disclosure is deliberately vague. It has to be, other wise, very few homes would be built and therefore, very few would be sold. O&G Industry certainly knows this, and more importantly, the real estate industry.
There’s a clear difference between the couple who buys a piece of land to have a horse ranch and the couple who buys a piece of land next to an airport or steel mill. Or to your point, lakefront property. If you buy or build a home next to an existing airport or steel mill, you really can’t complain about the noise and air quality.
On the other hand, if you buy a piece of land and build a home on it, and then some energy company comes along, takes half the property, build a gas plant and installs pipelines, condensate tanks, dehydration units and compressor stations, well, then those people are just ‘stupid’ for not buying the mineral rights up front, right?
Todd Armstrong says
My comments have been made on basically two separate and distinct subjects. I will try again because I obviously been doing a bad job making my points:
1) I do not see any legal pathway to ever eliminate mineral rights. At best in an extremely unrealistic scenario, you could legally have all mineral rights nationalized by the federal government. This in my opinion, would actually be a worst case scenario , because that make the beneficiary of all oil and gas production the same entity, that is the watchdog, judge, juror, and executioner. If you want corruption, here is your chance for shenanigans galore.
2) As the legal situation in Texas (and for that matter the entire United States) now exists, mineral rights can be permanently (in most states) severed from surface rights. That is the reality. Because of this situation , you need to be wary of what property you buy. Adults are responsible for their actions. If you buy a piece of property, the buyer should be responsible for knowing what they are buying, including the fact that mineral rights are or are not include in a real estate purchase.
Now I will argue that usually when a real estate purchase is made, the buyer usually has paid a “Title Insurance Company” to insure that they are getting what was described by the purchase deed. If the “Title Insurance Company” does not make it clear that there are no mineral rights being purchased, especially when they are an agent for, and have been paid by the purchaser. Then the purchaser should have a BIG problem with the “Title Insurance Company”. The purchaser should be made aware by both verbal communication and written document, that you are not purchasing the mineral rights. If you are aware of this, and you still go through with the purchase, then it is no difference than not having looked at a topo map and seeing that piece of land you are thinking about buying, sits 2 ‘ above sea level on Galveston Island. If you are old enough to sign that purchase contract, then you are old enough to take responsibility for your actions.
All I am saying is do not go through life blindly.
I don’t think you can hear us..
Todd Armstrong says
You don’t think I can hear you. I made some suggestions on how to improve the mineral rights issue. I would like to hear some practical suggestions out of you. I liked the” full disclosure” when buying real estate idea. I think that one has some real merit.
Let’s stick to the reality of the situation:
1) You cannot eliminate mineral rights without a Amendment to the Constitution (which you are not going to get)
2)Mineral rights are superior to surface rights (centuries established in English Common Law)
3) You just lost home rule on local drilling restrictions, and you are not going be getting them back (not in a state that just OK”ed college students to go to class while packing heat).
So faced with this reality, what should we do to improve this problem, because I agree it is a problem? I am listening>
Tim Ruggiero says
I agree with your last three points. Here’s #4: The Texas Supreme Court is soaked in oil money and will not rule fairly or without bias on any lawsuit that reaches their court. #5: The Gas and Oil companies learned long ago it’s much easier and cheaper to get the laws written in their favor if they buy themselves politicians instead. #6: If a gas and oil company behaves badly (otherwise known as ‘operates’) they will have already bought and paid for the decision by the Texas Supreme Court, enjoy the ‘No violations found’ from both the TCEQ and TRRC, and fully expect at large testimony by the likes of EnergyInDepth, BSEEC and TXOGA to name a few.
Todd Armstrong says
What you just said in that last response was just noise and wind, and totally ignores the question I posed. I am trying to listen.
Let me ask this again. Given the political realities of the State of Texas, what do you and Sharon suggest that we should be trying to do to improve the severed mineral issue. Please give me some solutions that might actually be politically achievable.
You did not seem like any of my ideas. Fine, OK, I am no political genius. I am more than willing to listen to any ideas you might have. I am listening. Let them rip.
Todd, I doubt Tim is still watching this post.
Given the political realities… Before we make much progress we will need to change the political realities. Part of that is informing people that the majority in Texas is not being represented. The other part is organizing statewide. So this post is part one and part two is in progress. Big changes like this take time.
please watch my video visit my group give some insight there’s a lot of us suffering around here with the big oil companys taking our homes and our land from us through injunction and leaving everything in ruins