Real Estate & Property Law

Southwest VA Gas Wells

By Alan Ackerman

TriCities

Every month, a bank in Roanoke receives checks for thousands of dollars belonging to people who might never cash them.

The checks are royalty payments for people whose mineral rights the state of Virginia has leased – against their will or without their knowledge – to private energy corporations. These payments represent the financial crumbs of natural gas production in Southwest Virginia – a multibillion-dollar industry that in 2008 produced enough gas every second to heat the average home for 16 days.

But instead of reaching the pockets of mineral owners, the money is funneled into an opaque state-run escrow fund, where it has accumulated with scant oversight for nearly 20 years. As of October, the fund held more than $24 million – and that isn't everything it should hold.

The outstanding research done by Daniel Gilbert illustrates the problem of having quickie state legislation of major decisions.  Here, people have lost the valuable property interest, in their mineral rights below the ground.  This benefits private entities without the least real or full obligation.  Further, the opportunity to expect and calculate the correct amount of mineral rights removed was not even taken into consideration.

But for the too speedy legislation of the state house, placing basic rights of the individuals in a quasi-judicial process, this never would have happened.  There are all sorts of issues as to whether there was knowledge or lack of knowledge in the owners, potentially barring them from the opportunity to be fully compensated because of unconstitutional public policy decisions.  This will likely receive recompense by the judiciary.

Full post as published by National Eminent Domain Blog on December 09, 2009 (boomark / email).