I've always felt severed surface owners should get an on-going payment for oil produced from a well on their land.
Whether or not eight percent is the right number can be worked out.
[Update: Since posting the above, I've been mulling it around in my little mind. That may have not been well thought out, on my part. Lots of issues to consider. For example, the surface owner who consciously decided to sell his/her mineral rights, now cashes in anyway if the bill is passed. He/she made money selling mineral rights; now gets royalties, anyway. It certainly makes it an easier decision in the future to sell mineral rights on "oil-poor acreage" if the bill passes. If the surface owner erred, he/she will get royalties anyway. On second thought, more work needs to go into this bill. This will be very interesting to follow.]
More discussion here by folks a lot smarter than I am on this issue. Thank goodness.
Bruce the land owner gets between $1200 and $2000 per acre for surface,pipline,and roads. The 8% would amount to a 8% production tax!We need to remember the tax in the 80s and what it did. When the land was purchased the minerals were not there either their family had sold them or the seller retained them. Upon reclamation the surface owner gets the acres back. Most of them want the roads left in becausethey use them to haul grain,work cattle,and general access. That being said we need to keep them happy. They can get a flat fee per year for every year the wellsite is there.As a mineral owner I would guess the producer would try to take that amount from me. It's a slipery slope for all involved.
ReplyDeleteI agree 100%. I am aware, to some extent, of some of the current payments and some of the intangible benefits (like the roads).
ReplyDeleteThis will be interesting to follow.
One cynical comment: the less a surface owner gets, the more likely he/she will become a Sierra Club environmentalist. The more the surface owner gets, the more likely he/she will support the oil industry.
(Don't take this out of context: I am concerned about the environment but I prefer science-based environmentalism.)
Do you mean something like fracing with vedgetable oil? Oh that is a food source we can't use that for energy!(Laughing)
ReplyDeleteTaking property from one private citizen to give it to another private citizen without compensation and without due process of law is clearly unconstitutional. The government power of eminent domain has to be for a public purpose. What is the public purpose in stealing someones private property to give to another?
ReplyDeleteYou are exactly right! I don't know if you recall but Halliburton says all "oil" products it uses to frack come from agricultural / food sources. It will be interesting to see if science is used when it comes to regulating fracking fluids and proppants.
ReplyDeleteTimes are a changing.
ReplyDeleteOnce judges got past "private property" concerns and moved onto European income and wealth redistribution, the horses were out of the barn. Just wait until we get to law of Sharia (see wikipedia for unbiased review).
I guess that's why "they" re-read the Constitution in front of the entire chamber. It has been reported that the minority party skipped the reading.
(Yes, I know it was all theater politics, but at some point, I hope "words mean something" and rule of law prevails.)
surface owners get a pretty raw deal. many are the second or third owners not two have the mineral rights.
ReplyDeletei am not supporting the bill but i know for a fact surface owners get screwed. btw if a surface owner doesn't agree to the compensation the well can be drilled anyway.
It's a difficult issue but it appears more and more to me that every situation is different. I know when I spent time out in the Williston area, I used to (try to) drive on miserable roads that often ended in cow paths, wondering how farmers got their grain from the fields to the highway. Now, the network of roads into the back country has to make a huge difference for some.
ReplyDeleteI can't even begin to imagine property tax appraisals on surface owners if future royalties were taken into consideration, and if no production.
But like I say, this is a difficult issue, but it seems more and more to me, that every situation is different.