The ownership of land usually includes the right to use all of the property, both above and below the surface. As a general example, the owner of the surface of the property may use it as he or she sees fit and can also explore for and produce oil and gas from below the surface. But the law allows that the ownership of the land and the ownership of the mineral rights may be separate. In this situation, the interests of the separate owners may not always align. However, even though their interest may not align and their rights and obligations may differ, each can take certain precautions to protect their respective rights.
Under Louisiana law, the owner of the land and the owner of the mineral rights “must exercise their respective rights with reasonable regard for those of the other.” Absent a contractual agreement between them, the owner of the mineral rights “shall use only so much of the land, including the surface, as is reasonably necessary to conduct his operations.”
Contamination from oil and gas operations can exist on property due to historic and current operations. In situations in which the landowner is acquiring a piece of property with oil and gas operations, the landowner can take several steps to address potential contamination. First, a Phase I Environmental Site Assessment should be done so that the landowner may obtain information about past and current uses, including oil and gas operations, of the property. The location of operations can be identified, on-site inspections should detect visible signs of contamination, and the operational practices of the current operator can be observed. For example, the investigation may reveal sloppy practices that could lead or have led to discharges of oily wastewater.
If there are visible signs of contamination or evidence of poor operational practices that could lead to contamination, notices should be sent to the regulatory agencies governing environmental protection and/or oil and gas operations. The agencies should be urged to address the contamination and/or conduct inspections to address ongoing noncompliance. A notice should also be sent to the current operator insisting on full and complete compliance with all applicable laws and regulations. Finally, the landowner should conduct regular audits of the current oil and gas operations to ensure that the operator maintains compliance.
If allowed under any applicable contract, the landowner should also insist that the operator minimize its “footprint” on the property. Reducing the area where the operator conducts activities can contain or minimize the extent of potential contamination from those activities.
An operator coming onto property to conduct oil and gas operations should also take precautions to limit liability to a landowner for contamination that could be attributed to on-site operations. Of course, operating in a responsible manner and in accordance with applicable regulations is a good start. Additional precautions should be taken, such as handling fluids in tanks or containers as opposed to in-ground pits. If possible, communications with the landowner should occur so that the landowner is aware of the steps taken to prevent contamination of the property.
As an added precaution and to minimize the chance that the current operator will be accused of pre-existing, historic contamination, the operator should conduct environmental testing of the soil and groundwater where the activities will occur on the property to create a “baseline” of the contamination on the property. After operations cease, additional sampling can occur to establish that any pre-existing contamination was not made worse by the current operations.