Coal-bed Methane Included within a Conveyance of “Coal and Minerals”
April 21, 2016
By: Blair M. Gardner
In a unanimous decision, the Virginia Supreme Court affirmed on Thursday that a conveyance of “coal and minerals” includes coal-bed methane (CBM). The decision represents an incremental expansion of the Court’s 1936 Warren v. Clinchfield Coal decision which held that severance deed which conveyed “coal and minerals” included conventional oil and gas. The plaintiff/appellant in the present case attempted to limit the application of Warren in circumstances where CBM, not conventional natural gas, was recovered. The trial court granted the mineral owner’s and well operator’s motions to dismiss the claims of the surface owner who sought a declaration that the two deeds at issue did not convey the CBM under the two operative severance deeds.
The seven page opinion is terse. It approves the analysis employed by the trial court to determine that no ambiguity existed in the deeds, therefore making dismissal appropriate without any need to receive evidence as to the alleged intention of the parties to the 19th Century deeds. The Supreme Court also robustly affirmed the legal principles in its 1936 Warren decision. It reviewed the conclusions from that case and observed that its analysis is supported by the vast majority of American jurisdictions. A contrary 19th Century decision from Pennsylvania remains a distinctly minority view.
Although challenges to the meaning and scope of mineral deeds in Virginia will not be precluded by this decision, the opinion broadly signals reliance on traditional legal principles even when applied to new circumstances of mineral development. Jackson Kelly represented the mineral property owner together with local counsel, Eric Whitesell, from Tazewell, Virginia.
The case is Dye v. CNX Gas and Buckhorn Coal Company, Record No. 150282 in the Virginia Supreme Court. [link].
The article was authored by Blair M. Gardner, Jackson Kelly PLLC.