Magazine article Parks & Recreation

Private Property Mineral Rights under State Parks

Magazine article Parks & Recreation

Private Property Mineral Rights under State Parks

Article excerpt

WHen PriVaTe land is originally conVeyed to develop a state park, the State may not in fact have acquired all of the property rights associated with a given parcel. In particular, pre-existing subsurface mineral rights may have been retained by the original owner and/or conveyed to other private parties. As illustrated by the recent state supreme court opinions described herein, a private party who has the right to mine a tract of land also "has the right of possession even as against the owner of the soil, so far as it is necessary to carry on mining operations."

As a result, the State may not unduly interfere and/ or burden the use and access to such private property rights in the interest of state park preservation and resource protection. On the contrary, any regulation of such private subsurface mineral rights to protect park resources must be reasonable and not so burdensome as to effect an unconstitutional regulatory "taking" of private property without just compensation. On the other hand, the private owner of such subsurface mineral rights is also "limited by a good faith requirement that it use the surface area only in a reasonably necessary manner to extract the minerals."

Oil Creek State Park, Pennsylvania

In the case of Belden & Blake Corporation v. Commonwealth of Pennsylvania, Department of Conservation and Natural Resources, 600 Pa. 559; 969 A.2d 528; 2009 Pa. LEXIS 664 (April 29, 2009), plaintiff Belden & Blake (B&B) notifi ed the Department of Conservation and Natural Resources (DCNR) that it was in the preliminary stages of developing gas wells on three parcels of property in which it owned oil and natural gas estates in Oil Creek State Park. The defendant Commonwealth of Pennsylvania through DCNR owns and operates the surface of the state park.

B&B posted bond with the Department of Environmental Protection (DEP) as required by the state oil and gas law to secure well closure, well site reclamation, and pollution remediation costs. DCNR, however, sought to impose an additional "coordination agreement" on B&B before allowing it to access the parcels. The terms of the agreement would require a $10,000 performance bond for each well, and $74,885 in stumpage fees, double the fair market value of the timber to be removed.

B&B objected to this DCNR requirement and pursued judicial review in state court claiming "an implied easement with a right to enter the parcels was acquired with the oil and gas estates." Accordingly, B&B sought a court order to enjoin (i.e., prohibit) "DCNR from further interference with its rights." In so doing B&B alleged DCNR had effectively refused B&B access to its subsurface oil and gas property rights "by imposing unlawful bonds, fees, and an unnecessary right-of-way (as it already had an easement)."

In response, DCNR contended that it was "authorized to condition the surface use of a state park" as "a trustee for public resources under Article I, § 27 of the Pennsylvania Constitution." In pertinent part, Article I, § 27 provided as follows:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania's public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people. Pa. Const. art. I, § 27.

The trial court agreed with B&B. In so doing, the trial court held "the law recognizes Belden & Blake's right to enter upon the land to exercise its oil and gas rights; consequently, DCNR has no power to condition Belden & Blake's exercise of those rights by requiring it to enter into the coordination agreement." DCNR appealed.

On appeal, DCNR reiterated its argument that it was "obligated to preserve state parks" and it had a fiduciary obligation to conserve and maintain parklands as natural resources under Article I, § 27 of the Pennsylvania Constitution. …

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