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Debunking The Myths Surrounding Natural Gas Title Washing

How can one’s title be divested if natural gas was not and cannot be the subject of a proper real estate tax assessment?

With the ever-growing potential that Pennsylvania will play a significant role in the United States’ production of natural gas in the 21st Century, more lawsuits are being filed over who owns the rights to the subsurface gas. Generally, such lawsuits involve a dispute between the heirs of the early landowner who recorded a deed that severed the natural gas from the surface estate and one whose chain of title emanates from a tax sale held after the severance was recorded. Several commentators have opined that if the land was “unseated” at the time of the tax sale and the severed subsurface estate was not separately assessed, then the tax sale “washed” the prior recorded severance and passed title of the natural gas to the tax sale purchaser even though the underlying tax assessment was directed solely to the surface estate or other mineral interests.

Pennsylvania federal and state courts alike, including several from the trial courts in north-central Pennsylvania where such “title washing” was purportedly practiced at the turn of the 20th Century, have cast serious doubts on the extent to which severed natural gas titles have been lost or divested by these early tax sales.

INTRODUCTION

This article summarizes Pennsylvania’s real estate tax laws and the historical taxation of natural gas interests. Also, this article discusses the concept of title washing and its proper application to the real estate taxation of natural gas interests. Finally, it addresses how title washing is being misconstrued by commentators and those claiming title via tax sales in order to improperly deprive owners or the heirs and assigns of their severed natural gas interests.

 

Please follow the link to see the entire article.  http://www.muslaw.com/Files/Admin/Debunking%20The%20Myths%20Surrounding%20Natural%20Gas%20Title%20Washing%20-%20January%202014.pdf

 

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US Approves Expanded Gas Exports

Obama administration approves $10 billion natural gas export facility in Texas.  Just a few years ago we were building import terminals.  What a difference shale gas has made to the strength of the US economy.

Dow Chemical has been in opposition to exporting gas from the US because they say that this will drive up prices and make US industry less competitive.  However they support this measure because it still calls for a case by case review of all new export facilities.  Still, if Dow thinks that we should curtail US exports to keep prices down in the US, then they should not be allowed to export for the same reason.  Right?

Click on this article’s title to see the article from today’s Wall Street Journal.  Log-in may be required.

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Gas Wells in PA Up; Revenue to Towns Down

While the number of natural gas wells in Pennsylvania increased by 26% to 5,500 this year, revenues from fees to municipalities are down.  The culprit? The low price of natural gas.  But in rosier news, gas prices have increased 50% to almost $4.00 from about $2.00 last August.

http://www.foxbusiness.com/news/2013/04/04/natural-gas-futures-climb-after-eia-reports-inventory-draw/