Family Grapples Over Selling Mineral Rights

1st September 2011

Family Grapples Over Selling Mineral Rights

Posted by blogwriter

In Cook family lore, a broad, flat stone placed by the porch was where George Washington once stood to address his troops. A gray rock used as a planter was a watering trough. Two stones cut like steps were "upping blocks" to help ladies mount horses sidesaddle.

Another stone once marked the grave of Col. Edward Cook, who finished building the stone house at the heart of the Fayette County farm in 1776. His great-great-great-grandson, Robert J. Cook, 75, lives on the 350-acre Belle Vernon property now. He owns the stone house, a nearby red brick house and the land in between, but the rest is divided among 12 Cook heirs who live as far away as Florida, Washington, Maine and California.

The Cooks have not farmed this land for four decades, and for years the far-flung cousins struggled with the question of whether to sell the land. Now they are finding that it is what is beneath the rolling farmland that is at issue.

After years of rising taxes and responsibility, they all are ready to sell -- even Mr. Cook, a retired aircraft mechanic for U.S. Airways (although he will retain the two homes). But the family remains unsettled over parting with the land and divided on the terms they should follow before letting it go.

At first, they hoped a buyer might preserve the place as farmland, or perhaps a golf course, and many wanted to retain the mineral rights so that future owners wouldn't be able to permit the land to be disturbed by drilling.

But with the natural gas industry's rapid expansion through Pennsylvania, the family began to realize that the possibility of controlling what would happen beneath the surface was less and less likely.

Pennsylvania law includes something called "mineral estate." It pertains to the ownership of minerals underground. It can include the natural gas in the Marcellus Shale, a rock formation that underlies much of Appalachia. Such an estate can be "severed" from the surface estate and is the dominant estate. That means mineral estate owners have the right to develop or extract their holdings and must be given reasonable access to them.

"We had felt we'd been told for years by my parents and grandparents that we should maintain those mineral rights," said Cook heir Becky Bumsted, 70, of the town of Willow Street in Lancaster County. "Then, this whole Marcellus Shale thing seemed to pop up overnight and we're learning that some people don't want to buy just the land."

Mr. Cook has concerns about the mineral rights.

"I'm not happy with selling them unless the price is right," Mr. Cook said. "I would rather see the family get money out of that than sell it off to some corporation and they'd reap the profits. We've lived here and worked it. It has a value, and we ought to be compensated for it, not just give it away to get rid of the property. The mineral rights are probably worth more than the real estate value of it."

With a lawyer, a series of conference calls and a spokesman for each side of the family, the heirs decided to sell the rights to what lies under the farm. They already are under contract with Atlas Energy, now owned by Chevron, which has drilled nine shallow wells on the property.

Selling the mineral rights could lead to the deeper wells required to drill for natural gas in the Marcellus Shale. To extract natural gas from this rock, companies must splinter the shale through a hydraulic fracturing process that has raised environmental concerns.

"We've always felt that we wanted to be good stewards of the land," Ms. Bumsted said. As a girl, she returned to the farm each summer with her mother, who grew up and was married there. They liked to go walking and collect eggs.

"It's really changed the focus in our state," Ms. Bumsted said of the Marcellus boom. "In Western Pennsylvania, people are not so interested in the land for the land. They are interested in mineral rights."

 

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