To the Wall Street Journal: Please Follow the Money

The Wall Street Journal has an opinion piece today by Elizabeth Ames Jones, a member of the Railroad Commission of Texas.

For those of us who weren’t aware of it, Commissioner Jones describes how things are run in Texas:

As a former Texas legislator who served on the House Energy Resources Committee, and now a member of the Texas Railroad Commission which oversees the oil and natural gas industry, I know about energy policy. Every rig that dots the landscape of the Lone Star State is drilling a well permitted by the Texas Railroad Commission.

Just so you know who’s in charge of things.

Commissioner Jones recounts how Texas was able to take advantage of the new technology that allows extraction from shale deposits:

In the 1980s, Houston wildcatter George Mitchell drilled the first well into the Barnett Shale formation that stretches through north and central Texas. He tapped into what would turn out to be one of the largest onshore natural gas reserves in the United States.

It would take nearly two decades and millions of dollars to develop the horizontal, hydraulic technology necessary to bring that gas to the surface. But today there are about 7,500 gas wells in the Barnett Shale — many located in the city limits of Fort Worth, and some a stone’s throw from suburban homes and schools.


What I’ve seen is that while Congress balks at drilling in the Arctic National Wildlife Refuge in Alaska out of fear of disturbing a few caribou, we’ve moved ahead to safely tap into an energy reserve located underneath suburban homes. And there is no better example of how Texas gets the balance right between energy and the environment than the development of the Barnett Shale.

Shale oil Ft. WorthGeologists have known that this reserve contains a mother lode of energy for at least 30 years. Yet even today it’s not clear where the boundaries are. Wildcat wells and some dry holes continue to define the perimeter of the Barnett. What we do know is that the formation stretches from the Dallas/Fort Worth area up into rural counties in north Texas, spanning some 5,000 square miles. We also know that there is an estimated 27 trillion cubic feet of natural gas locked up in it. Americans use about 23 trillion cubic feet of natural gas a year; four trillion cubic feet a year are imported. So being able to tap into the Barnett is a big step toward producing all of the country’s natural gas needs domestically.


For nearly a century, Texas’s regulatory and tax structure has worked the way it is supposed to. It didn’t lock up oil and gas fields that seemed to be unprofitable. Instead, because of state policies that have allowed local governments, schools and property owners to benefit through property taxes and royalties, energy companies have been able to lease mineral rights and prepare to tap into the fields once they became profitable.

Here’s the money quote, the one that lets you know we’re only dealing with a politician after all:

state policies that have allowed local governments, schools and property owners to benefit through property taxes and royalties, energy companies have been able to lease mineral rights…

Now that looks like a win-win situation, doesn’t it? Homeowners get royalties and energy companies get to drill in the backyard. Everybody’s happy, right?
– – – – – – – –
Let’s have a look at what the lucky homeowners say [article is dated 2006]:

In neighborhoods all over Fort Worth and in rural and suburban Tarrant County, the story is being repeated. People watch their quality of life being eroded by the same Barnett Shale gas boom that is filling city coffers and putting money in the pockets of developers, gas well drillers, the mayor, and plenty of regular citizens. And the worst part, perhaps, is that they feel powerless to do anything about it, especially when calls and pleas to city hall and the EPA and the Texas Railroad Commission produce no visible results. [my emphasis — D. Remember that the Commission is where Jones earns her bread and butter]

Fort Worth’s drilling ordinance and what many see as a lack of enforcement of even its limited protections are not the only problems. Many homeowners feel betrayed by real estate developers and salespeople who they believe knew about planned gas wells and didn’t tell them, or who now tell them their homes have lost value. They see the value of their biggest investment, in some cases the place they had planned on living the rest of their lives, threatened, as well as their own safety and peace of mind.

And beyond that, they have been stunned to discover the jaw-dropping realities of Texas law, in which mineral rights trump the rights of surface property owners. Until a drilling crew arrives on their property or a royalty contract arrives in the mail, many don’t know whether they even own their minerals, much less what their rights are if someone else owns them. The “split estate,” as it is called, means that homeowners may have no recourse — and little hope of recouping much of their loss — if the owner of the mineral rights decides to sink a well on their land.

The situation is deeply confusing for the real estate industry, even for the majority of agents who act ethically in dealing with mineral rights and property near gas wells. (Is there any residential property left in Tarrant County that isn’t near a well or potential well?) Like their clients, many have never before had to deal with property where the surface rights are held by one person and the mineral rights by another.

So much for the rosy picture painted by Commissioner Jones.

The reality is uglier than just surface rights vs. mineral rights, though:

Finding out about the limited rights that surface property owners have compared to mineral rights owners is perhaps the biggest shock for many people. In Texas, “the law is clear,” Fambrough said. “The mineral estate is dominant over the surface [owners] when it comes to mineral exploration and production. That precedent was set probably over 100 years ago.”

That’s why Hyde and Green [two property owners cited in the story — D] have made repeated trips to Fort Worth City Council and to the Texas Railroad Commission in Austin: They want to educate citizens and officials about the realities of gas drilling. They’re appalled by the ignorance of even state officials about what really goes on around wells during and after drilling. For instance, Green said, Railroad Commission officials said they didn’t know and couldn’t find out what was in the sludge left over from drilling operations because it was “proprietary information” to the drillers. So how could the people testing their water — which in their neighborhood is now so brown and nasty-smelling that most people have started drinking bottled water — know what chemicals to test for?

Based solely on the blatant omissions of Ms Jones, The Wall Street Journal has a story here, and a moral obligation to look into the details. The editors published this opinion piece and now it’s time for due diligence on their follow-up story.

There is going to be some follow-up, right?

You can ask here, which is the link to their forum for this particular article. I put in a comment, but these are moderated, so who knows if it will go up?

Here’s what the page says:

Welcome to the Opinion Journal forum.

Please comment on this week’s Cross Country column, “How Texas Struck It Rich Beneath Suburbia,” by Elizabeth Ames Jones.

And remember to include your FULL NAME in order to be considered for posting.

Opinion Journal editors will be making a selection of entries to post online.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *

Here is how this post evolved past what I’d originally intended:

I found the WSJ article on Larwyn’s email tips. Being an enthusiast for shale oil production, I opened the op ed piece and read with satisfaction what was happening in Fort Worth. It appeared to be a good blend of technology, capital investment, and protection of private property rights.

Not wanting to replicate the picture that the Wall Street Journal used, I began a Google image search for similar suburban oil or gas wells on private property in the Fort Worth area. I found them all right, but I got more than I bargained for.

Using “Barnett shale Fort Worth suburbs” as my search label, I came across the perfect picture (see image above the fold). It accompanied a story of the underbelly of the paradisiacally friendly beast that Commissioner Jones described.

Yes, I was disappointed. I like the WSJ and it bothered me to see this propaganda published with no balanced story from those who are left to deal with the fallout of short-sighted decisions by cities and municipalities. What is most disturbing is the insistence by local government that the property values of these homeowners has not decreased — thus they are forced to pay unfairly assessed property taxes for homes that have dropped in value since the wells have been installed without their knowledge or say-so.

This is cynicism at its worst. Fort Worth and Tarrant County ought to be ashamed.

After finding The Fort Worth Weekly account from 2006, I looked around for more recent stories. They are out there, in abundance, and they don’t make the politicians look any nicer.

Googling “gas shale wells Fort Worth” (sans the quotes) turned up a mother lode of information. I decided to go with Fort Worth’s Star-Telgram, since they started a blog on the Barnett Shale phenomenon in October, 2007. The site is full of news and up-to-date. For example, they reported that the Railroad Commission is finally opening an office in Fort Worth, leasing their space from the City Council.

Given that the Star-Telegram has its own section on this problem, there is no way on God’s green earth that Commissioner Jones was unaware of the issues involved:

The City Council leased some office space today to the Texas Railroad Commission, so that the commission can open a district office in Fort Worth.

The commission has been under fire from the State Auditors office and others over lax enforcement of environmental rules. The office in Fort Worth is supposed to help the commission get closer to the Barnett Shale gas play.

Here are our previous stories about the Railroad Commission:

Many_wells_go_uninspected:_30 percent_in_Tarrant_have_not_seen_state_scrutiny

Here’s an editorial about the plan for the satellite office:


The Star Telegram section — “Barnett Shale” — has this as its subtitle: Drilling deep for answers about the natural gas boom in North Texas Check out the journalists who are running herd on this story. They’ve had the real story on Commissioner Jones and her cronies for nine months now. In a short post entitled (Texas style), “Dancin’ with the ones that brung ’em?”, the paper’s Barnett Shale section has this information on the shenanigans of Ms. Jones & Co:

A couple of readers were surprised to see that the Texas Railroad Commissioners, the three elected officials who oversee the oil and gas industry, got a lot of campaign contributions from the industry.

The website spits shows that commissioners Michael Williams , Chairman Victor Carrillo and Elizabeth_Ames Jones got the bulk of their campaign money from the oil and gas industry.

The commission was criticized by the state auditor for its low level of inspections and for allowing inspectors to accept gifts from the companies they oversee. Williams wrote in an opinion piece that the aupdit was positive overall.

So we come full circle. First, Williams wrote his propaganda piece for the Fort Worth paper about what was in reality a condemnatory audit of the Railroad Commission. Now, one of his Commissioners has a fairy tale published in the Wall Street Journal.

The US is in dire need of domestic oil and gas. Running roughshod over the constitutional rights of property owners is not the way to do it.

Bad karma, Commissioner Jones. Y’all are definitely storing up more than your share. You should know by now: given the tenacity of Texans, you’re going to reap more sorrow than all those bribes and oil shares will be able to paper over.

19 thoughts on “To the Wall Street Journal: Please Follow the Money

  1. And beyond that, they have been stunned to discover the jaw-dropping realities of Texas law, in which mineral rights trump the rights of surface property owners.

    As John Paul Getty once said:

    The meek may inherit the earth … but not its mineral rights.

  2. A lot of the wildcatters who developed the Permian Basin in West Texas came from Ft. Worth, so its not like the city is ignorant of the ways of the oil business.

    The Texas Legislature starts its next session on 3 January; the unhappy homeowners need to be there,and to lets their reps know that they are not amused at the situation.

  3. Dymphna:

    Full disclosure: I’m working in the offshore oil and gas biz.

    We’re servicing a rig drilling a natural gas well just over a mile off the beach here in Hurricane Rita-devastated SW Louisiana,(google “Holly Beach”), and the rig is observing a “Zero Discharge” policy in it’s operations.

    What this means is that the drilling mud coming back up from the hole must be dumped either into metal cutting boxes,(think small dumpster), or pumped into our tanks, and then ferried ashore for disposal. It’s added expense and danger a royal PITA, frankly.

    I can look out the windows of the wheelhouse and see pods of porpoises chasing pogies, and shrimp boats drag their butterflies right down the shipping channel of the Calcasieu River,(The Skipper HATES that practice).

    Now, granted, a drilling derrick and its’ associated machinery has a rather large footprint, but it’s not like anyone,(least of all the derrick owner/operators), want that rig to sit at a site for weeks and months on end. This biz operates on bonuses, y’know.
    Once the well is completed, all that’s left is a “christmas tree”,(the blowout preventer and valve manifold), some piping underground, and perhaps a fence…altogether a much more unobtrusive presence. To some eyes, less so than a cellular phone tower.

    It would seem that the folks in Texas are discovering the mixed blessings of residing above a whole heapin’ sh*tload of desirable hydrocarbons. And the consequences of having “Big Awl” having a Big Seat at the table back when Fort Worth was naught but a cow town within spittin’ distance outside of Dallas.
    On the one hand, these folks have a beef…but OTOH, without the economy generated by Url, I wonder how many would even be living there…and if there would even BE a “there” there?

    I will say one thing for Oy-Yull…they don’t seem to flinch at throwing money at people to solve problems.
    (And to take the cynical view,I’d wager that that is exactly what a lot of this brouhaha is really about…squeak the wheel, get the grease.).

  4. Dymphna, I have to respectfully disagree with many of your points in this post.

    (1) When someone buys real estate, it is their responsibility to determine whether or not they are also acquiring the mineral rights. This is something that must be specified on the title and the courthouse records. It is not possible to hide this from the purchaser.

    When I bought my house, on 11 acres near Oklahoma City, I was fully aware that I was not acquiring any mineral rights. There is so much oil and gas in this area that the mineral rights were separated from the surface rights decades before I bought it.

    (2) The reason why mineral rights are superior to surface rights are because the mineral rights would be worthless if you could not get the oil or gas to the surface. Consider this analogy: Suppose I own a parcel of land that is completely surrounded by land that you own. If I did not have the right to cross your land in order to get to my land, then my land would be worthless because you could simply forbid me from trespassing on your land. For this reason, I can get an easement that will allow me to cross your land. Its the same principle with mineral rights.

    Whoever owns the mineral rights to my land has the right to drill for oil or gas whenever they want to. But they must, by law, compensate me fully for any destruction or disruption to my surface rights. There is even a special court to handle disputes of that nature.

    My mother owns a house in Arlington, Texas, which is in eastern Tarrant county. She has a typical 1/3 acre suburban lot. She leased her mineral rights to an oil company for $4500 up front, plus 25% royalties. In the agreement, the company she is dealing with does not have any rights to disturb her house or yard. They own some surface land approximately 1/2 mile away and they will access the gas via horizontal drilling. Many people in Tarrant, Denton, and Wise counties in north central Texas have similar deals, and they have benefitted greatly.

  5. I wanted to add one more point. The power of the Texas Railroad Commission is actually much diminished from what it used to be. For decades before OPEC began exerting its power, the Commission used to set the price of oil.

  6. My family has been involved in the oil and gas business in the American South, since the 1920’s, at some level.
    When it comes to buying a new house or property, the contract will state if everything conveys or not, when it comes to property rights. That an inexperienced home buyer would sing a contract without knowing this, is their fault, as well as their lawyer and or mortgage lenders. Personally, I will not buy property if the mineral rights don’t convey. It eliminates a lot of properties from the search.
    I also have an old friend that works for a major drilling firm, and he is a chemist that designs the drilling fluids, and for the past twenty years, they have had strict compliance on the drilling muds content, that it be enviro friendly, and degradable.
    While I will agree with you on the sleazy appearance of political corruption between the oil and gas companies, and the TRCC, there are some very positive aspects of the Barnett Shale, as well as other operations, that are overlooked in this article. A great deal of personal wealth is created for the owner’s of the minerals, the companies, their employees, the local government, the state government, as well as the Feds.
    One example is DFW International Airport. Part of this huge facility sits on Tarrant County. DFW’s property line is larger than Manhattan Island, with huge areas of unimproved land. The airport signed a deal with Chesapeake Energy a few years ago, to drill as many as three hundred gas wells on DFW property. The airport received around $175million up front, with 25% royalties, thereafter. It has been amazing to watch these operations for the past few years. The rigs are so high tech, and portable, they move them around with ease, and when they are done, and the plumbing is installed, they remove everything, put a ten foot high hurricane fence around it, and the foot print is gone in a matter of months. Also, several Independent School Districts in this area have guaranteed their financial futures, without having to raise taxes on the local population.

    Dymphna, since you are interested in oil and gas shale, then you must be aware of what is happening in DeSoto Parish, Louisiana.
    The amount of gas in the Barnett Shale is miniscule in comparison.
    Louisianians cash in on gas rush.

    Geology dot com.

    Sadly, of the mineral rights I have shares in for La., Miss., and Texas, none are in Desoto, Parish, but am hopeful some we have in East Texas will be proven.
    I’m all for hope and change, in this manner.

  7. Jungle Jim-

    The Barnett Shale situation does not sound like your description of your mother’s experience. OTOH, she may not have been the blind-sided newcomer that many of these people were. Perhaps the quality of the water in her house has not been affected.

    When it comes to the interface between a regulated business and individual property owners, the latter need to be protected.

    The blog site at the newspaper has entry after entry re the situation for land owners and the ecological mess many of them are left to handle on their own.

    These are people with children, animals, etc., and the extraction sites are often not even fenced off. Black ooze is left for others to clean up.

    Perhaps your mother’s oil or gas extraction is not the loud, intrusive kind that the Barnett Shale blog is concerned with. It’s hard to believe a newspaper would have five reporters and multiple weekly posts dating back to October 2007 if this were not a pressing community issue.

    A short snip from the Fort Worth paper’s report on the 2007 audit:

    The commission recently moved extra inspectors into the offices that cover the Barnett Shale.

    The Shale, one of the country’s most active gas fields, covers most of Denton, Parker and Tarrant counties and includes parts of 13 other counties. Because of its size, the field is policed by inspectors from district offices in Wichita Falls, Kilgore and Abilene.

    Those three offices, which cover 86counties, have 32 inspectors among them, commission spokeswoman Ramona Nye said. Those offices also have 13 well pluggers and five cleanup coordinators who also perform inspections, Nye said.

    There have been three accidents in the past month involving Shale drilling rigs:

    A cloud of vapor escaped from a rig near Acton on Aug. 29.

    Red-dyed diesel fuel spilled into a creek in Johnson County on Sept. 7.

    An explosion at a tank battery at a drill site near Granbury on Sept. 13 scorched two trucks.

    Nye said that the sites in Granbury and Acton were inspected in spring 2006.

    Drilling began Aug. 6 at the Johnson County site, which had not been inspected before the accident.

    A perusal of the official state audit (pdf) shows the extent to which this Commission is lax; it provides inconsistent oversight and poor follow-up along with bad record-keeping. Were th RC a private business enterprise it would have expired long ago.

    Inspection and EnforcementActivities in the Field Operations Section of the Railroad Commission August 2007

  8. no2liberals–

    Your caveat emptor response to these property owners is cynical at best.

    Good luck to you and the airport. Meanwhile, check the Fort Worth newspaper’s blog on Barnett Shale to see about those who aren’t doing so well.

    The Railroad Commission is a disgrace:

    Each well in the Barnett Shale has a surface casing that runs from the surface to a level below the water table. Each casing has to be installed and sealed with cement to protect the groundwater before drilling can continue. Inspectors didn’t check 33 percent of cementing operations in Tarrant County, according to the commission’s statistics.

    So where do you get your drinking water? Anywhere near one of those uninspected casings? I hope not.

  9. Dymphna,
    Well, caveat emptor has always been a guiding principle. People need to control their “Jones” over the cute house, and do their due diligence. I don’t view it as cynical, but realistic. I’m sorry for those folks who have been fooled or harmed, but they must know what they are getting into.
    As for DFW, considering the impact it took due to 9-11, as well as the airlines, it will allow them to maintain a strong financial position without imposing new or higher fees on the airlines, who are struggling terribly, which affects all of us. DFW International is the economic engine of North Texas.
    I’m no big fan of the TRCC, and think they should do much more, but living in this area, and knowing people from the Ft. Worth side, this isn’t a story that gets discussed very much.
    Dallas water comes from sources separate from Ft. Worth.
    Yes, all the casings need to be inspected, but even if they are, and they fail, what then? I don’t know any in the energy sector that want to harm the environment, or face excessive fines or lawsuits, later on.

  10. I live in Richardson which is just to the north of Fort Worth and everybody I know is pleased with the Barnett Shale play.

    What this sounds like is upset property owners who aren’t getting checks because they didn’t buy the mineral rights to their land.

    I don’t understand the water issue. If they are in the city limits, they should be on city water.

  11. Excellent post, however, as a Fort Worth resident, I feel the need to shed some light on a few issues.

    Fort Worth residents are not universally pleased with the Barnett Shale play. The problems are myriad.

    First, our Mayor, Mike Moncrief, comes from a family that is legendary for its ties to the oil and gas industry. Over the pas several years, he has shown himself to be more interested in protecting the interests of his friends in the industry rather than the safety and property rights of the people of Fort Worth.

    The current drilling ordinance is a sham and current efforts to “improve” it are really just about smoothing over public concerns while maintaining the status quo. While suburbs like Southlake are adopting 1000-foot setback requirements to keep drilling sites away from homes and schools, Fort Worth regularly issues waivers to its 600-foot setback requirements. A waiver request from the industry has never been denied.

    Second, an environmental impact study has never been conducted by the city, in spite of the fact that we have some of the worst air quality in the country and the drilling process uses hundreds of trucks to transport water to drilling sites each day. Also, each of the 1,400 or so wells active in the city require around 5 million gallons of water to frack. This water comes out of the water from the Trinity River upstream from Dallas, so Big D, this is your problem, too. Even through it has only been a couple of years since a major drought when water restrictions were in full force, no one in the City of Fort Worth has stopped to consider the environmental impact.

    Third, once all of that water is used to frack the wells, in needs to be disposed of. Although the industry says that it is just salt water, these companies do not disclose what other chemicals might be used. The reason? “Trade secrets.” However, research from the EPA and other reputable organizations indicate that this water includes many chemicals that could present a danger to the people and environment. Although technologies exist to recycle this water, the industry prefers used disposal wells, also called injection wells, to shoot this wastewater into the ground under Fort Worth. Currently, a moratorium is in place to prevent this because the City of Fort Worth Environmental Department has serious concerns about the safety of this practice.

    Finally, the most serious issue is the one that has the people of Fort Worth the most up in arms — the issue of eminent domain. Currently, energy companies enjoy the eminent domain powers that public utilities enjoy for routing their pipelines. This means that when a gas drilling company decides they want to run a pipeline aross your yard, you as a property owner have no due process. Under the current laws of the state of Texas, enforced by the Railraod Commission, you can’t stop that. You can only go to court to decide how much you will receive to compensate you. And that’s a good idea because their first offers are usually pennies on the dollar of actual value. For more on this, Google Billy Mitchell and Aledo and pipelines or Jerry Horton and Fort Worth and pipelines. There are things that cities can do, however. Southlake and Flower Mound have modern, state-of-the-art, pipeline guidelines. Fort Worth has nothing.

    Natural gas is tremendous energy advantage that we have right here in our backyards. However, we need to produce the minerals in a way that protect the health, safety, property rights and quality of life of the people who live on top of this bounty. Right now, that isn’t happening in the Barnett Shale. I urge people who live in the Marcellus, Haynesville and other shale plays across the country to learn from the mistakes of Fort Worth and ask the right questions and demand answers before signing a lease. There’s no hurry. The deals from the companies only grow richer with time, and that gas isn’t going anywhere. Take the time and do it right.

  12. no2liberals said:

    “Personally, I will not buy property if the mineral rights don’t convey. It eliminates a lot of properties from the search.”

    You would have difficulty buying any real property in Oklahoma at all. With few exceptions, the mineral rights were sold seprately several decades ago.

  13. jungle jim,
    It’s a no-deal demand in most of these southern states, but a position I adopted years ago. I like Oklahoma, especially the Sooners, but I doubt I will ever be living there again. Hopefully, it won’t be too much longer, when Caddo Lake will be home, and not just my decompression chamber.

  14. Please understand the paper of record is very liberal. I live in Ft Worth. I have seen the rigs go in all around my neighborhood. It is one month of noise and then all done. Detroit is much worse with the stamping plants and small metal shops. I’ll take a drill rig for short duration to one of those presses pounding all night long. Property values in North Ft Worth are among the strongest in the nation in that they have not fallen like the rest of the country. Even the very upscale Southlake community is leasing rights under the subdivisions. The ugly picture that was painted is incorrect. As far has knowledge of property, many people in my subdivision did not even know they lived in Ft Worth because the mail staion and the school district are not based on city boundaries.

  15. In the interest of full disclosure, I am an oil and gas attorney in Texas. No throwing stones, please.

    To quote Dymphna “When it comes to the interface between a regulated business and individual property owners, the latter need to be protected.”

    The problem here is that the property is typically split between the mineral owners and the surface owners. Usually, when one buys a property with significant acreage, you get at least a portion of the minerals. If the property is in a known oil and/or gas play, the minerals are harder to get or generally not worth the expense to the buyer (at least until oil is found). From my experience, it is very, very clear what you get when you buy the property. I saw one contract that mentioned the buyer was not buying minerals about 6 times and a 10 page document, in large, bold type. (that guy tried to say he wasn’t aware of it…)

    So, you have to protect both sets of property owners. If the surface owner is damaged, they can be recompensed (the usual course is to have at least a set amount for the well site as damages and to build the owners a nice new road, and then pay for anything above and beyond that amount later on). In the Shale area, the efforts gone to to protect the surface owners in the are extraordinary. With thousands of wells being drilled and produced, shady companies can and do make a mess and run off. It happens. The hard part is striking a balance between the surface and mineral rights that makes everyone happy. That doesn’t happen every time, sadly.

    My thought has been that the 1)conveyance of property needs to include a set amount of the minerals; and 2) unscrupulous drillers and producers need to be punished and hard, to keep those likely to make a mess wary of doing so.

  16. Mr. MacDiarmid —

    Thanks for your input on this subject.

    You may be interested in what one reporter in Fort Worth experienced when he attempted to find out the status of mineral rights on his property. This is from February of 2008 —

    What happens when journalist and homeowner plays landman

    Just to see what a landowner faces, I tried to run down mineral rights ownership on the Arlington home my wife and I have owned since 1996. It’s not rocket science, but it required shuffling through stacks of documents, browsing some Internet records and finally taking a trip to the Tarrant County Courthouse.

    Step 1: The warranty deed. Among the sheaves of disclosures and agreements in the folder containing records regarding our property is a warranty deed. It gives a legal description of the property and has a section titled “Reservations from and Exceptions to Conveyance and Warranty.” That’s where a reservation of mineral rights would be listed. Mine reads, “Any and all restrictions and easements of record.”

    Step 2: Previous owner’s deed. Make a note of this address:
    It’s Tarrant County’s document search site, and it’s pretty amazing. Deeds, liens, releases and affidavits attached to property in the county are available digitally going back years — but not forever. I enter the name of the previous owner — it’s on the deed — and enter the name in the field labeled “Grantor.” The grantor is the seller. In my case, the search shows a 1993 sale. I click on the link and get a five-page deed of trust for the previous owner.

    Under the “exceptions” section, there are two listings. One is a utility easement. No problem there. The second is more ominous, referring to restrictions recorded on a certain volume and page not available online.

    Oddly, there is no deed for the seller in 1993 listed in the online record. But a search of other records turns up a release of a mortgage, and that document refers to the original deed of trust, also not available online.

    Step 3: Courthouse records. Tarrant County’s records room is in the basement of the downtown courthouse, packed these days with real landmen and title researchers. Note the sign posted by county employees: “We do not do title searches.”

    The records I’m after are on microfilm, stored in a cabinet of drawers containing scores of wallet-sized spools of film. After a little help loading the spools on a microfilm reader, I locate the pertinent pages. One is the page, dated Sept. 16, 1963, cited in the 1993 sale. It’s the original list of restrictions for a new subdivision, such as minimum home size and construction standards. No mention of mineral rights.

    The second is the deed of trust for the property’s first sale in 1969, to the homeowner who had the house built and sold it in 1993. Also no mention of mineral rights.

    If mineral rights are not expressly reserved, they pass to the property’s new owner. So how confident am I about my ownership? Not very.

    The property went into foreclosure in 1995 and went back to the previous owner, according to a record I found online. Did something I don’t know about happen then? And what about the 1963 subdivision? I didn’t go back further than that.

    As it turns out, I haven’t signed a mineral rights lease. So as far as I know the matter hasn’t been professionally researched. My neighbors and I have been mailed expressions of interest from a leasing company, however. So I think I’ll just let the real landmen do the rest.

    Now that’s what someone with the time, energy, and understanding of the process went through.

    I can’t imagine what it is like for those who are uneducated, don’t know the laws, and were blind-sided by this. The too-bad-they-should-have-known-better folks who can’t sleep at night because of the noise and who get the princely sum of a hundred dollars a month for their trouble.

    I’m glad to see that neighborhoods in Fort Worth are banding together, as they are in Mississippi and Louisiana, to protect themselves against the predatory behaviors of the oil drillers and producers, not to mention the city officials who are eager both for the oil money and the tax revenues from the poor sods who are stuck with property they can’t sell for anywhere near what they paid for it.

  17. oops– went over my own rule re comment length on that last one. Should have left some of the reporter’s document out.


    Thanks for the background on some of the politics in this. That kind of dishonorable shady business goes on everywhere. We had a county supervisor who refused to recuse himself on a vote which affected his business.

    Three guesses how the vote came out.

    Now, I hope the Wall Street Journal sees fit to do some follow-up on the op ed from Commissioner Jones that they put up the other day.

  18. Dymphna:
    You’re welcome, fwiw. Title searches are a real pita, and are normally performed by a company for the surface property, and by the oil company for minerals.
    My thought is if you’re buying the single biggest investment of your life, you must review it as thoroughly as you can. 30 years of payments vs. a couple of days of research is no trouble. If it takes more than that, it becomes a balancing act. For example, I know in my house we have no minerals, but I’m ok with that due to our location.

  19. “My thought is if you’re buying the single biggest investment of your life, you must review it as thoroughly as you can. 30 years of payments vs. a couple of days of research is no trouble. If it takes more than that, it becomes a balancing act.”

    Well said.

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