You’re sitting on gas, but do you own it?

August 19, 2008  

Cujus est solum, ejus est usque ad coelum et ad inferos — if you’re not up on your Latin, don’t worry. When it comes to drilling for oil and gas, it’s a term that’s as obsolete as the language itself.

Before technology allowed us to drill into the earth or fly thousands of feet above it, land rights extended both ways — up and down. But with the value of subterranean mineral deposits increasing as our society became gradually more and more powered by fossil fuels, those traditional rights were eventually abandoned.

Now, across Canada, while some landholders retain mineral rights to their property, the vast majority (about 90 per cent) are retained by the government. In Canada, property holders who still retain the mineral rights to their land are allied under the Freehold Owners Association, an information and advocacy group.

Recently, however, a group of landowners calling themselves the United Land Owners of Alberta, have recently challenged the Alberta government’s rights to coalbed methane. Arguing that the natural gas produced is actually a renewable resource produced from coal, the group claims that the government has no claim under either the Law of Property or the Mines and Minerals Act. The government, in turn, argues that because coal is a non-renewable resource, the point is moot.

It’s a distinction that’s of particular interest to landowners because, whether or not they want to benefit financially from the transaction, it places control in their hands. For those who feel that the Energy Resources Conservation Board (ERCB), the body responsible for leasing mineral rights, has been given unfair leeway on private property, the possibility of controlling coalbed methane extraction is tantalizing.

Because control, in any language you put it, is always an attractive prospect.

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