As the price of oil continues to rise, the demand for alternative energy sources like coal and natural gas is at an all-time high. This presents a unique opportunity for abstractors affected by the downturn in the housing market to supplement their income. According to some local experts, however, the work isn't necessarily being done by experienced searchers.
I just sent in my annual premium for the mine subsidence insurance policy I purchased when I built my home. For the uninitiated, Mine Subsidence Insurance is a program administered by the Commonwealth of Pennsylvania and provides a homeowner with protection in the event of damage to a home from subsidence due to underground mining operations, something which isn't normally covered by traditional homeowner's insurance. It's a good investment if you're a homeowner in this part of the country because of southwestern Pennsylvania's long history as a coal-producing region. While it's not something that I think about much, I sure do sleep better at night knowing that it's there should I ever need it.
Most traditional title policies don't include coverage of mineral interests, either, although some owner's policies may include an endorsement which covers damage to existing improvements in the event of damage by someone exercising their right of surface entry to extract minerals or water. "We always advise buyers who are interested in mineral interests to order a special mineral rights search," says Diane Cipa, General Manager of The Closing Specialists®, a title agency located in Ligonier, PA. She also recommends that consumers interested in mineral rights consult an experienced attorney who specializes in mineral rights law.
Real estate law in the Keystone State is peculiar to that of most others in that it recognizes three separate and distinct interests in land, 1) the surface interest, 2) the mineral interest, and 3) the support interest. Mineral interests can be separated, or "severed" by one of two methods, either by a separate deed of conveyance or by specific exception or reservation contained in a conveyance of the surface interest. If the surface owner holds title to the support interest, then the mineral owner must leave enough of the substrata, i.e., coal, etc. to support the surface interest. However, if the mineral owner also holds the support interest, the surface owner may or may not have any legal right to have his buildings supported by anything.
With oil trading at $100 per barrel and up, demand for coal is at its highest level in 25 years. There's also been a lot of interest in coal bed methane, a gas contained in coal formations. However, the newest "gold rush" is the natural gas contained in the Marcellus Shale, a rock formation covering a 54,000 square mile area covering most of the Appalachian Basin and stretching from southern West Virginia through parts of Pennsylvania and Ohio into upstate New York. Estimates are that as much as 50 trillion square feet of the stuff could be contained in the shale, which lies more than a mile underground. One of the major players, Range Resources of Fort Worth, Texas already has plans to drill at least 4,700 such wells in southwestern Pennsylvania at a cost of $3 million each, not counting leasing costs.
That got me to thinking about all those new faces I've been seeing in some of the county offices lately. I've been talking with several of the "old hands" who specialize in mineral searches in these parts, whom I won't name in the interest of confidentiality. They tell me that one of their biggest concerns is that some energy companies exploring the region are putting inexperienced people in the courthouses. "It's booming right now," says one fellow with over 25 years of experience, "but I know that after it's over, I'm going to have at least another three to four years worth of work just cleaning up all the legal issues left by these guys." He also tells me that some of the searchers, who have only a few months on the job themselves, are already training new hires. Another guy I spoke with says that he sees a continuing need for experienced mineral searchers. "I just don't see how you could do this job from a computer terminal," he says, commenting on the fact that the Recorder of Deeds in his county recently went online with images of deeds and mortgages, "you need to to go back 150 years in some cases to pull some of those old condemnations."
Even with years of residential abstracting experience, I never attempted to undertake such searches without proper training. It is an extremely complex area of real estate law which requires a specialized set of skills combined with years of experience and is definitely not something that we should be trusting to rank amateurs.