Homeowners try to protect their properties from oil boom

Marketplace Staff Mar 7, 2011

Homeowners try to protect their properties from oil boom

Marketplace Staff Mar 7, 2011


Kai Ryssdal: As I mentioned earlier, crude brushed up against $107 a barrel at one point today. That makes every drop of the stuff pumped out of the ground ever more profitable, especially if it can be pumped here in the United States without all that expensive time in oil tankers bringing it from overseas.

The rush for oil exploration in the western part of the country has come as a shock to a lot of homeowners who’re finding that even though they own the land, they don’t own what’s underneath it. And they can’t control how oil companies go get it.

Wyoming Public Radio’s Molly Messick has the story from Cheyenne.

Molly Messick: Not long ago, about 70 residents of a housing development celebrated the start of a new organization to make sure they don’t suffer if oil rigs move in.

Barry Bruns: We’re trying to protect our property value.

Barry Bruns is a retired Air Force officer. He lives in the subdivision, called North Star Ranch. It’s a collection of spacious houses, surrounded by prairie. Several months ago, he and his neighbors learned that an oil and gas company had leased the minerals beneath their houses.

Bruns: I would like to have an agreement that says, if there’s anything that happens that wrecks our value of our property, we are made whole without having a bunch of litigation, without having this thing drawn out for years. This is all agreed on ahead of time.

For people who have spent years saving up for a house, there’s a lot to be worried about. Take Larenda Mayberry. She’s a stay-at-home mom who moved from California with her husband and three sons. Mayberry says the news that an oil company could drill here caught her completely off-guard.

Larenda Mayberry: I was actually devastated.

For months, she’s been trying to figure out what might happen in her neighborhood.

Mayberry: Really concerned about our water. Traffic, dust, noise. I’m not sure if they’re going to put a pipeline through? I’m pretty much thinking that anything’s possible.

The mineral leaseholder is a multi-billion-dollar company called Noble Energy. Mayberry and other North Star homeowners say they want Noble to take specific steps before any drilling can happen. They want tests of all water wells, and they want home appraisals.

For the homeowners, the dilemma lies in what’s called “split-estate.” If that’s a term you’ve never heard before, then what it means might surprise you. It’s basically dual ownership of a piece of land. Split-estate dates back to the early 1900s, when the federal government gave away ranchland, but held onto the minerals below the surface.

County attorney Mark Voss says that for regular home owners, the fact that they don’t own the mineral rights can be an easy detail to overlook.

Mark Voss: They’re just buying a home to raise their kids in and let the dogs play in the yard. They’re not thinking about what’s under the ground. And unfortunately somebody thought about that a long time ago and split the estate. And now we face the consequences.

In Wyoming — and across the country — a company’s right to extract minerals carries a lot of legal weight. In fact, Voss says, homeowners who only own the surface ultimately don’t have any power to keep an oil company away.

Voss: The split-estate law basically says that an oil company who has an interest in the mineral estate under the ground cannot be kept off the property, for the purposes either of surveying for the mineral or for extracting the minerals.

In that case, what can the residents of North Star Ranch reasonably hope to negotiate? Noble Energy doesn’t want to comment on the specifics of the situation, but the company has met with the homeowners, and says it will work with all local stakeholders. And for now, the homeowners say they’re optimistic.

Jim Ruby: What we want to do is try to find a way that all of us win.

Jim Ruby is the president of the North Star association, and a staffer at a state environmental agency.

Ruby: They get to do their exploration and development and we get to keep what we got. And everything stays — just as if they weren’t here.

Ruby says that if the North Star residents’ negotiation works out, perhaps they can stand as a model to others across the West.

From Cheyenne, Wyo., I’m Molly Messick for Marketplace.

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