Last fall we wrote about the decision in Butler v. Estate of Powers in which the Pennsylvania Superior Court appeared to overturn more than 100 years of case law to cast doubt on whether the natural gas found in shale is a “mineral” for purposes of deed interpretation. We called it a “Case to Watch,” and it looks like we were right because earlier this month the Pennsylvania Supreme Court agreed to hear the case.
From their petition for allowance of appeal, we know that the plaintiffs in Butler will argue that the Pennsylvania Supreme Court should reverse, and apply the rule from the Dunham case, which created a rebuttable presumption in Pennsylvania that the owner of “mineral rights” does not own rights in a property’s natural gas stores. Given the fact that so many leases have been written relying on this rule, it is hard to imagine that the Pennsylvania Supreme Court would do anything else. In fact, it could do even more, and hold as a rule of law that deeds that convey or reserve mineral rights do not include the rights to natural gas. Given the activities in the Marcellus Shale and other shale plays, any additional certainty in this area of the law would surely be welcomed by all interested parties.