Court ruling clouds ownership of Marcellus gas

A ruling by the Superior Court of Pennsylvania has introduced uncertainty into the ownership of natural gas in the Marcellus shale in the state.

In the Butler case, the court remanded a lower court ruling and held that plaintiffs should be given the right to develop a record to prove that Marcellus shale gas is not the type of gas contemplated in an earlier case known as Dunham and that shale may be more similar to coal than to conventional oil and gas reservoirs.

Under Pennsylvania’s nearly unique position that coalbed methane is owned by the owner of the coal, could cause some companies to defer drilling on parcels that rely on any application of the Dunham ruling, said Russell Schetroma of the energy team at Steptoe & Johnson PLLC, Canonsburg, Pa.

Schectoma called the ruling “unfortunate” and said it has “the potential for judicially-caused land title chaos affecting the Commonwealth’s greatest potential driver of wealth and employment.”