New Fracking Legislation Renews Focus on Rejoining Severed Mineral Rights with Surface Ownership

Written by: JD Howard, Esq.

In the most recent legislative session, the Georgia General Assembly passed House Bill 205, which takes steps to safeguard our state’s natural resources by regulating the extraction of oil and gas through hydraulic fracturing. Governor Nathan Deal signed the bill and it is now set to go into effect on July 1, 2018.

The impetus behind the bill’s creation is interest in the Conasauga Shale Field in northwest Georgia. In recent years, the area has drawn more attention from parties who believe that valuable oil and natural gas reserves may lie deep underground. Hydraulic fracturing makes the extraction of those resources possible.

Hydraulic fracturing, or “fracking,” refers to the use of highly pressurized liquids to fracture underground, deep-rock formations so that oil and gas may be more easily extracted from underground. Fracking, like any other method of extracting natural resources, poses certain hazards to the environment. For instance, the highly pressurized liquids used to break apart underground rocks may contaminate important sources of drinking water. However, this bill seeks a compromise that will protect invaluable natural resources by promoting responsible oil and gas exploration.

Generally, HB 205 amends the “Oil and Gas and Deep Drilling Act of 1975” in an attempt to introduce regulatory controls over hydraulic fracturing operations. More specifically, the new legislation defines hydraulic fracturing, provides for the creation of an Oil and Gas Board to review and issue permits and regulate drilling activity, requires the creation of rules and regulations related to drilling and extraction, amends certain permitting requirements, gives authority to local governments to adopt local zoning ordinances limiting the location or timing of drilling activities, and imposes a tax upon the extraction of oil and natural gas. The bill requires the creation of regulations that at are designed to provide public notice when a fracking permit is sought. The bill also calls for groundwater testing within one-half mile of the drilling site before, during, and after drilling operations begin. The bill also calls for regulations to be created that will allow for the restoration and reclamation of drilling sites once they are no longer in use.

The mere fact that this detailed bill made it through the legislative process may amount to a “canary in the coal mine” for many northwest Georgia property owners who may hold surface rights subject to a subsurface right owner. In some cases, mineral rights may have been severed from the surface rights decades ago when speculators moved through areas buying subsurface rights. According to Georgia law, where mineral rights deeds are silent as to restrictions on entering the land for mining purposes or permitted drilling activities, such rights are often implied. For instance, Georgia case law holds that a grant of minerals rights with a reservation of the surface soil conveys, by necessary implication, the right to enter and mine the area to remove the minerals, unless the language of the conveyance repels such construction. Therefore, a surface right owner who does not own subsurface mineral rights may be taking the property subject to considerable risk of interference with it surface rights.

If in fact the interest in Conasauga Shale Field that partially prompted HB 205 is a signal of things to come, buyers and owners of real property may elect to protect their surface rights by filing a declaratory judgment action seeking to rejoin the surface and subsurface rights. Specifically, O.C.G.A. § 44-5-168 allows, upon certain conditions, for a surface right owner to gain title to subsurface minerals through adverse possession, “if the owner of the mineral rights or his heirs or assigns have neither worked nor attempted to work the mineral rights nor paid any taxes due on them” for a period of seven years. While these petitions can be filed by current owners of surface rights, this process (and the likely necessary corresponding affidavit) should certainly be considered during due diligence leading up to acquisition of property that may have severed mineral rights. Where there is no imminent threat of mineral exploration, retaking mineral rights can be a somewhat inexpensive task (albeit sometimes slow process). This new law gives all property owners a reason to dig a little deeper into the issues around mineral rights