Surface Owners Could See Change in Mineral Development Compensation

Feb 18, 2014

Senate Bill 170 seeks to revise compensation for damage on surface land done by mining and oil drilling companies. It narrowly passed out of the Senate Commerce and Energy committee Tuesday morning after more than an hour of debate. Supporters say current landowners deserve the right to negotiate compensation. But opponents argue the language is too vague.

The proposal amends what is currently under statute by adding use and access to a surface owner’s land for compensation. It also says landowners will be paid annually, rather than a lump sum. Proponents of Senate Bill 170 say new technology for oil wells allow them to last longer than originally expected. They say increased traffic on and near their land leads to accidents that kill livestock. Ron Slaba is a ranch owner in Harding County. He says this measure will give surface owners fair reparation.
 
“If the land valuation keeps increasing, and you pay me for today’s land valuation and in 20 years land valuations go up, you paid me for then, you need to pay me for now. One lump sum payments you cannot structure them to do that, it will not fix that problem. Annual payments will fix that problem because you can put an increase in the annual payments just like we put an increase for the cost of inflation,” Slaba says.
 
Opponents say many outdated rules dealing with oil production and mineral development were repealed, and new ones put in place last year. They say lawmakers should give those new laws a chance to have an effect, after only being in place six months. Steve Willard with the American Petroleum Institute spoke against Senate Bill 170.
 
“At one time, the mineral owners made the decision to severe those minerals. At the time, the surface owners that had the mineral estate made that decision he received compensation for it. So the decision was made to separate the minerals from the surface, that was a conscious decision. The first thing to take in mind is that we’re now going back to recreate history for the individuals that made that decision. We’re now going back and saying the decision you made and the compensation you received, no, we’re gonna take a little different tackle on it because now, for whatever reason, we don’t own those mineral rights,” Willard says.
 
Opponents say the bill could potentially create an unknown liability of doing business in the future. Committee members passed Senate Bill 170 to the Senate floor.