Land rights and interests continue to be a prominent fixture in the legal landscape. Among other things, the ownership of highly sought-after pore space has been at the center of multiple property rights cases and legislation in recent years.
“Pore space” refers to emptied underground geological formations that can be used as storage reservoirs for natural gas or other minerals. The law remains unclear concerning who has the right to use — and be compensated for the usage of — pore space.
West Virginia is one of the few states that clearly delineates a stance on the rights to pore space. West Virginia Code § 22-11B-18(a) states: “Title to pore space in all strata underlying the surface of lands and waters is vested in the owner of the overlying surface estate.” Title to pore space “may not be severed from title to the surface of the real property overlying the pore space.” If title to the surface of real property is conveyed, the title to the pore space is also conveyed.
The legislation took effect May 30, 2022, and did not affect transactions that took place before the effective date. The West Virginia Legislature foresaw issues with this, however, and wrote that “there shall be a rebuttable presumption that for all transactions prior to the effective date of this article, that the pore space remains vested with the surface owner unless there was a clear and unambiguous reservation, conveyance, and/or severance of the pore space from the surface upon the face of the instruments.”
Kentucky also addresses pore space and defines it under Kentucky Revised Statutes § 353.800(7)-(8) as “the voids in subsurface reservoir strata suitable to contain stored carbon dioxide.” Pursuant to § 353.806(1)-(2), a storage operator is required to negotiate with the owner of pore space and acquire the rights needed to access and use the pore space. If the storage operator cannot locate or cannot reach an agreement with all necessary pore space owners after good-faith negotiation, but has secured written consent or agreement from owners of at least 51% of the interest in the pore space, then the division shall order the pooling of all pore space included within the proposed storage facility if the division finds that the requirements of §§ 353.806 and 353.808 have been met.
The question of who owns pore space in Ohio is more complicated than in West Virginia and Kentucky — and remains unsettled. For example, in 1996’s Chance v. BP Chemicals, Inc., the Supreme Court of Ohio held that the landowners’ subsurface property interests included the right to exclude only invasions that actually interfered with the landowners’ reasonable and foreseeable use of the surface of the land. The plaintiffs claimed their property rights were violated when injectate that the chemical company placed under its property laterally migrated below the landowners’ property. The landowners subsequently sought recovery for trespass, nuisance, negligence, strict liability and fraudulent concealment.
The Supreme Court of Ohio affirmed summary judgment in favor of the chemical company on claims for emotional distress and punitive damages, affirmed the directed verdict in favor of the chemical company on several of the landowners’ claims, and agreed with the lower court that the landowners bore the burden of proving all elements of their trespass claim. Regarding the trespass claim, the landowners argued that they had absolute ownership of all the subsurface property. The court held that the landowners’ subsurface rights were not absolute. Instead, their subsurface rights were contingent on interference with the reasonable and foreseeable use of their property. The court in Chance regarded property rights as unfixed by any doctrine, deeming instead that they vary “with our varying needs.”
An earlier Ohio case, however, supports the majority rule argument that pore space is owned by the surface estate holder. In 1986’s Columbia Gas Transmission Corp. v. Smail, the U.S. District Court for the Northern District of Ohio rejected the secondary holding in Hammonds v. Cent. Ky. Natural Gas Co. (1934), in which the Court of Appeals of Kentucky adopted the minority rule that pore space is owned by the mineral owner. The Northern District held that “[a]lthough Ohio courts have not spoken on the point, the Court finds persuasive the rationale … that one who injects natural gas into storage facilities in the ground does not lose title to the gas when he stores it.”
Accordingly, the Northern District found that Columbia did not lose title to the natural gas by injecting it into the underground pore space. When it severed the gas stored in the pore space, the gas became the property of Columbia, notwithstanding its storage beneath the land, and Columbia did not lose its possessory interest in the gas as personal property upon reinjecting the gas into the pore spaces. See also Kelly v. Ohio Oil Co. (1897), in which the Supreme Court of Ohio deemed petroleum oil, a mineral, part of the realty of the tract of land to which it attaches while it is in the earth. Once it is raised from the earth, it becomes personal property, subject to ownership distinct and separate from the realty. For further reference, see 1949’s Terteling Brothers, Inc. v. Glander, in which the Supreme Court of Ohio stated that although minerals in place beneath the land are real property, they become personal property immediately upon severance from the land.
Ultimately, the Northern District of Ohio held that the legal status of Columbia’s storage gas does not change when it is injected into the pore spaces; it remains Columbia’s personal property and should be treated like the escape of any other personal property.
Unlike West Virginia and Kentucky, the Ohio Legislature has not codified its stance on the intersection between surface rights and pore space ownership. The majority rule recognizes that the gas stored in pore spaces belongs to the injector, while the minority rule finds that the pore space belongs to the surface rights owner, and, when gas is injected therein, the surface rights owner claims ownership over the gas.