Texas Oil and Gas Accommodation Doctrine Does Not Protect Merely Advantageous Uses of Surface Estate
Oct 30, 2018
Austin, TX (Law Firm Newswire) October 30, 2018 – The Texas Supreme Court’s “accommodation doctrine” can force a mineral rights owner to respect the surface owner’s right to make use of the property, but only in cases of extreme hardship.
The accommodation doctrine is alive and well in Texas, but it is no larger than it was when the Texas Supreme Court created it in Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971).
In a recent case, Harrison v. Rosetta Resources Operating LP, the El Paso Court of Appeals ruled that the accommodation doctrine — which gives courts limited authority to play referee between mineral rights and surface rights owners — was not violated when a lessee refused to purchase water from the surface owner as a prior lessee had done.
“The Texas accommodation doctrine allows surface rights owners to challenge a lessee’s use of the surface estate in limited circumstances,” notes Gregory D. Jordan, an oil and gas attorney with The Law Offices of Gregory D. Jordan in Austin, Texas. “It has been suggested that the Texas accommodation doctrine is based on the common-sense view that conflicting mineral and surface estate owners should act with due regard for each other’s rights.”
The protections of the accommodation doctrine are limited, however. Under the doctrine, a court may enjoin the mineral estate’s owner’s activities on the surface estate if the surface estate owner can prove:
that the mineral estate owner’s use of the surface completely precludes or substantially impairs the surface estate owner’s existing use;
the surface estate owner has no reasonable alternative method available to continue his existing use of the surface; and
there are alternative reasonable, customary and industry-accepted methods available to the mineral estate owner that will allow recovery of the minerals and also allow the surface estate owner to continue the existing use.
In Getty, the Texas Supreme Court held that the accommodation doctrine was violated when an oil rights lessee installed two above-ground wells that interfered with the surface estate owner’s pre-existing, automated crop irrigation system. Decades later, in Merriam v. XTO Energy, Inc., 407 S.W.3d 244, 249 (Tex. 2013), the court held that the accommodation doctrine was not violated by a gas driller’s activities because, even though they disturbed the surface estate owner’s cattle operations, the surface estate owner failed to prove that the cattle operation could not be moved to a different location on the same property.
The facts of the Harrison case can be boiled down to these: A prior mineral rights lessee, Comstock Oil & Gas, allegedly caused damage to the surface by destroying a drainage ditch during road construction operations. Part of the settlement of the resulting lawsuit was Comstock’s promise to purchase water from Harrison, the surface rights owner, for 50 cents per barrel. Comstock later assigned its rights to Rosetta Resources Operating LP, which continued the drilling operations, but decided to pump water in from an adjoining property rather than purchase water from Harrison.
Justice Yvonne T. Rodriguez, writing for a unanimous appellate panel, ruled that the accommodation doctrine was not broad enough to reach what appeared to her to be merely an advantageous business arrangement — not a necessary use of the surface estate. “While creative, categorizing a refusal to buy goods produced from the land as ‘interference’ with the land for purposes of the accommodation doctrine would stretch the doctrine beyond recognition,” the court wrote.
As Jordan notes, “Getty’s formulation of the accommodation doctrine requires the surface estate owner to show that they have ‘no reasonable alternative’ other than maintaining the existing use.” Harrison’s evidence showing that the prior water supply arrangement was convenient and financially beneficial falls short of the Getty test, the court concluded.
The case is Harrison v. Rosetta Resources Operating LP, No. 08-15-00318-CV (Tex. Ct. App., 8th Dist., decided Aug. 8, 2018).
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