Chesapeake Energy has near-perfect win rate in mineral rights cases before Texas Railroad Commission

gas flame

The land grab rights of Texas are legend, handed over to corporations fairly easily. Reuters writes another piece on the simple process of taking private land for mineral rights, using a couple from Arlington as a jumping off point.

Chesapeake Energy Corp., the story notes, has an overwhelmingly high success rate at getting approval from the Texas Railroad Commission. It has been rejected in its overtures for land rights in 5 of 1,628 cases since 2005, or .03 percent of the time, the story reports.

 

“Chesapeake has sought the most exceptions during that time -- almost twice the number sought by a subsidiary of giant rival Exxon Mobil,” the story reports.

 

The company obtains the authority under a state statute from 1919 called Rule 37, originally intended “to prevent excessive drilling of oil wells and to protect the mineral rights of small landowners, say legal experts.”

 

Fast-forward a century, and small landowners like the Arlington couple say they don’t feel very protected. The couple is not owed any money for the mineral rights Chesapeake secured under Rule 37. A commission spokeswoman says her agency isn’t charged with weighing the fairness of the law, but rather making sure natural resources don’t “go to waste.”

 

Indeed, the Commission has allowed Chesapeake to run over private land holders, a land grab strategy that Chesapeake itself brags about on its corporate Web page, speaking of its successes between 2003 and 2007:

During this time, we rapidly increased our acreage positions in these unconventional plays as we won what we have called the “gas shale land grab.” We believed that by winning this land grab, we could establish Chesapeake as the premier U.S. natural gas producer for decades to come.

It’s one thing to strike a deal, albeit a bad one taking advantage of someone, as happens a lot.

 

But it’s quite another when a corporation has an advantage at the regulatory level. We reported in early 2011 about the notion that energy companies run the Railroad Commission as the state’s Sunset Advisory Commission considered the need for the agency.

 

But the numerous complaints from the public fell on deaf ears, as a report on the commission failed to address a perceived coziness between big energy and the state.

 

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Contact Steve Miller at 832-303-9420 or stevemiller@texaswatchdog.org.

 

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