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A pending decision by the Pennsylvania Supreme Court could drastically alter the rules governing the rights to natural gas in the state’s Marcellus Shale region. The case, John E. Butler et al. v. Charles Power Estate, concerns land transfer deeds that reserve mineral rights whether the deeds should also include the rights to natural gas. It could affect 130 years of legal precedent set by Dunham & Short v. Kirkpatrick in 1882, in which the rights to oils and minerals could be reserved as part of a land transfer.

Gregory J. Krock, shareholder in the Litigation Section, represents John E. and Mary Josephine Butler, who filed a title complaint on a land deal that originated in 1881, in which the Butlers were entitled to “half the minerals and petroleum oils,” while Charles Powers and his heirs were entitled to the other half. The Butlers filed their case to argue that all of the natural gas should belong to the property, since natural gas was not listed among the rights.

The Butlers won their case in the county court, but the Superior Court reversed the decision and requested expert testimony on whether Marcellus Shale is a mineral. The Supreme Court will decide whether the Superior Court could legitimately request such a hearing.

Krock explained that a dangerous precedent could be set in the state with the Supreme Court’s ruling. “That almost makes each interpretation of ‘mineral’ a case-by-case, expert-by-expert analysis that would create a lot of uncertainty, a lot of costs to landowners, and, certainly if it was applied retroactively, could create havoc on an industry that’s relied on the Dunham rule.”