Subsurface Mining Rights Revisited

In Commonwealth v. Seneca Resources Corporation, 2014 LEXIS 608 (Pa. Commw. Ct., October 6, 2014), the Commonwealth Court of Pennsylvania revisited the Pennsylvania Gaming Commission’s (“Commission”) complaint that alleged that although Seneca Resources Corporation (“Seneca”) possessed the rights to oil and gas under certain parcels of land owned by the Commission, the language in one of the deeds gave permission to Seneca to extract oil and gas only using methods that existed in 1928. In its January 2014 opinion Commonwealth Court resolved some issues from the complaint but continued the case on the sole issue of whether Seneca’s hydraulic fracturing extraction methods were restricted by the language of the 1928 deed.

The present decision addresses Seneca’s summary judgment motion seeking to dismiss the complaint. The Court notes that neither party engaged in discovery and that neither party provided any extrinsic evidence that might explain the language of the 1928 deed. With respect to the extraction methods that existing in 1929, Seneca did provide one article discussing a historical method of well creation using torpedoes, and the Commission provided affidavits from industry professionals stating that current hydraulic fracturing technology did not begin until 1947.

Ultimately, the Court concluded that the 1928 deed did not prevent Seneca from horizontally extracting its oil and gas from beneath the Commission’s property from adjacent land. This would allow the Commission to protect its surface rights in accordance with case law that permits those with the right to remove subsurface minerals to enter and make reasonable use of the surface to retrieve the minerals. See Chartiers Block Coal Co. v. Mellon, 25 A. 579 (Pa. 1893). However, the Court partially denied Seneca’s summary judgment motion and allowed the case to proceed on whether the 1928 deed restricted Seneca’s oil and gas extraction methods from the surface of the Commission’s property.

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