Airport Participation in Oil and Gas Development (2018)

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67 INTRODUCTION Determining mineral rights involves few rigid rules and many court-determined guidelines. As technology develops an ever- increasing multitude of uses for the material found below the surface of the land, determining the ownership of these resources is essential. Many states, particularly those with a history of mining and drilling, have evolved systems of interpretation. Others, especially those in the Northeast and Central Great Plains regions, have less developed legal frameworks. The summary below attempts to find commonality among these various methods of interpretation, including the definition of the generic term mineral, the use of longstanding canons of common law interpretation, and the consideration of extrinsic evidence in cases of ambiguity. When a state has adopted a particular method with exceptions, such caveats are noted. SEVERABILITY Forty-nine states recognize the severability of mineral rights from the surface estate. Subsurface rights can be transferred in whole (all resources below the surface) or in part (for example, shale gas rights). In the case of Louisiana, mineral rights (in whole or part) can be conveyed only via 10-year servitude. If the owner of the servi- tude does not make a good faith effort to extract the resources, the subsurface rights revert to the owner. INTERPRETATION: TERMS, METHODS, AND CANONS Terms The following states have demonstrated a predisposition to interpreting the term mineral broadly. These states have included or would include gas, oil, and shale products under the general term mineral: Alaska Arkansas (for leases after 1900, mineral interpreted broadly) California Illinois (with the exception of limestone) Kentucky (with the exceptions of limestone, clay, and surface shale) Louisiana Michigan Mississippi Nebraska New York North Dakota [If conveyance occurred prior to 1955, mineral is interpreted broadly; for conveyances between 1955 and 1983, mineral does not include coal; since 1983, mineral has been construed broadly when rights are sold but narrowly (only those listed in the written instrument) when rights are leased.] Ohio Oklahoma Texas Utah West Virginia Some states have addressed the intersection of coalbed methane (CBM) and coal. The following states have recognized that the conveyance of coal rights includes the right to CBM: Alabama Kentucky APPENDIX A Ownership of Mineral Estates – Review of State Laws

68 Oklahoma Pennsylvania Texas Terms – Additional Notes Pennsylvania interprets the word mineral to apply exclusively to metallic substances. Oil, gas, shale, and shale gas must be explicitly stated in an instrument to convey the right to the resource. Washington has adopted a similar stance. Montana’s legislature has specifically defined the words coal, gas, and oil. Under the statute, coal does not include oil shale or gilsonite. The term gas includes all gases, including methane, and any fluid hydrocarbons that do not fall under the definition of oil. Finally, oil refers only to crude petroleum and other hydrocarbons that are produced at the wellhead in liquid form. The term does not include gases that are condensed into liquid either before or after their extraction from the reservoir. Kentucky, New York, Oklahoma, Texas, and Utah appear to take the broadest approach to the interpretation of the general term mineral. These states have demonstrated a willingness to include all subsurface rights under the term, regardless of the resource being known or valued at the time of conveyance. Methods Some states have developed additional considerations when faced with a written instrument that contains generic terms. The meth- ods and canons will likely be considered alongside the generic definitions of mineral described above. Extrinsic Evidence A majority of states have ruled that the “intention of the parties” should assist in determining the scope of rights conveyed in a mineral interest. These states have recognized the use of extrinsic evidence to interpret ambiguities within the written instrument: Alabama Alaska Arkansas Colorado (by looking to intent, will construe against the grantor of the rights) Connecticut Hawaii Idaho Illinois Kansas Kentucky Louisiana Maryland Michigan Minnesota Mississippi Montana Nebraska Nevada New Jersey New Mexico Ohio (mineral not viewed as ambiguous term requiring extrinsic evidence, will consider extrinsic evidence if warranted by other factors) Oklahoma (by looking to intent, will construe against the grantor of the rights) Pennsylvania South Dakota (by looking to intent, will construe against the grantor of the rights) Virginia West Virginia Wyoming Washington

69 Plain Meaning States vary in what they consider proper evidence to determine the intention of the parties. The following states interpret the written instrument in light of the plain meaning of the language as utilized by the parties at the time of the interest’s transfer. These states will likely study when particular resources became commonly held as minerals within a scientific, industrial, or geographic community: Alabama Arkansas Indiana Kansas Maryland Michigan Minnesota New Mexico New Jersey Pennsylvania Virginia Wyoming West Virginia Alabama, New Jersey, and Oregon specifically look to the language and intentions of the grantor when the rights were conveyed. Canons Some states have adopted the use of common law canons to assist in their interpretation of the contract. These canons provide gen- eralized rules to understand the intent of the parties at the time of conveyance. Ejusdem Generis The following states have recognized the use of ejusdem generis (i.e., when a general word follows a list or series, the general word is to be construed as applying to the same general type and class as the words specifically mentioned). In situations where an instru- ment lists a series of subsurface resources followed by “and all other minerals,” these states are likely to interpret the general term all other minerals to apply only to those resources that share the same characteristic as those explicitly mentioned: Colorado Indiana Louisiana Montana Oklahoma (considers use of canon as a last resort) Pennsylvania West Virginia Wyoming Texas explicitly rejects the use of ejusdem generis when interpreting subsurface instruments of conveyance. Expressio Unius Est Exclusio Alterius The following states have recognized the use of expressio unius est exclusio alterius (i.e., to express or include one thing implies the exclusion of the other) in interpreting leases. The greater the specificity within the instrument, the greater the likelihood that these states will determine that items not listed are intentionally excluded: Massachusetts Montana North Dakota (for conveyances after 1943) Tennessee

70 ADDITIONAL REFERENCES Alabama • Vines v. McKenzie Methane Corp., 619 So. 2d 1305 (Ala. 1993) Alaska • Norken Corp. v. McGahan, 823 P.2d 622, 628 (Alaska 1991) Arkansas • Mo. Pac. R.R. Co. v. Strohacker, 152 S.W.2d 557, 561 (Ark. 1941) • Staggs v. Union Pac. R.R. Co., 2012 Ark. 156, at *5 (2012) California • Pariani v. State of California, 105 Cal. App. 3d 923, 935, 164 Cal. Rptr. 683, 690 (Ct. App. 1980) Colorado • McCormick v. Union Pac. Res. Co., 14 P.3d at 352 (Colo. 2000) Connecticut • Miller v. State, 121 Conn. 43, 183 A. 17, 19 (1936) Georgia (statutes to not appear to assist in lease interpretations) • 2015 Georgia Code § 12-4-42 – Definitions • Ga. Code Ann. § 12-4-72 (West) Idaho • Ida-Therm, LLC v. Bedrock Geothermal, LLC, 154 Idaho 6, 10, 293 P.3d 630, 634 (2012) Illinois • Schreier v. Chi. & N. W. Ry. Co., 239 N.E.2d 281, 284 (Ill. App. Ct. 1968) • Ill., Inc. v. Ill. Methane, L.L.C., 847 N.E.2d 897 (Ill. App. Ct. 2006) Indiana • Richardson v. Citizens Gas & Coke Util., 422 N.E.2d 704, 711 (Ind. Ct. App. 1981) • Besing v. Ohio Val. Coal Co. of Kentucky, 155 Ind. App. 527, 532, 293 N.E.2d 510, 513 (1973) Iowa • Patterson v. May, 239 Iowa 602 N.W.2d 547, 549 (1947) Kansas • Wulf v. Shultz, 211 Kan. 724, 724, 508 P.2d 896, 898 (1973) Louisiana

71 • Indigo Minerals, LLC v. Pardee Minerals, LLC, 45,160 (La. App. 2 Cir. 5/28/10), 37 So. 3d 1122, 1128, writ denied, 2010-1669 (La. 10/8/10), 46 So. 3d 1274, and writ denied, 2010-1677 (La. 10/8/10), 46 So. 3d 1274 • Childs v. Porter-Wadley Lumber Co., 182 So. 516, 518 (1938) • Etchison Drilling Co. v. Flournoy, 59 So. 867, 869 (La. 1912) Massachusetts • Kitras v. Town of Aquinnah, 474 Mass. 132, 144, 49 N.E.3d 198, 208 (2016) Michigan • Deer Lake Co. v. Mich. Land & Iron Co., 50 N.W. 807, 809 (Mich. 1891) • Weaver v. Richards, 120 N.W. 818, 819 (Mich. 1909) Minnesota • http://files.dnr.state.mn.us/lands_minerals/mineralownership_2016.pdf • http://www.dnr.state.mn.us/lands_minerals/ownership.html • Vang v. Mount, 300 Minn. 393, 396, 220 N.W.2d 498, 500 (1974) Mississippi • Cole v. McDonald, 109 So.2d 628, 635 (Miss. 1959) • Castle v. Harkins & Co., 464 So.2d 513 (Miss. 1985) Montana • Carbon Cnty. v. Union Reserve Coal Co., 898 P.2d 680, 686 (Mont. 1995) • Mont. Code Ann. § 82-1-111 (1993) Nebraska • Bulger v. McCourt, 179 Neb. 316, 323, 138 N.W.2d 18, 22 (1965) Nevada • Christensen v. Chromalloy Am. Corp., 99 Nev. 34, 40, 656 P.2d 844, 848 (1983) New Jersey • Toth v. Bigelow, 64 A.2d 62, 64 (N.J. 1942) • N.J. Stat. Ann. § 46:30B-6(o) • J. Zinc Co. v. Bos. Franklinite Co., 15 N.J. Eq. 418, 441 (N.J. 1862) New Mexico • Townsend v. State ex rel. State Highway Dep’t, 1994-NMSC-014, 117 N.M. 302, 303, 871 P.2d 958, 959 • Prather v. Lyons, 2011-NMCA-108, 267 P.3d 78, 90 New York • Armstrong v. Lake Champlain Granite Co., 42 N.E. 186, 189 (N.Y. 1895)

72 North Carolina • Builders Supplies Co. of Goldsboro, N. C. v. Gainey, 14 N.C. App. 678, 683, 189 S.E.2d 657, 660, aff’d sub nom. Builders Supplies Co. of Goldsboro, N. C. v. Gainey, 282 N.C. 261, 192 S.E.2d 449 (1972) North Dakota • N.D. Cent. Code § 47-10-24 (2011) • Lee v. Frank, 313 N.W.2d 733, 737 (N.D. 1981) – earlier statute ruling • N.D. CENT. CODE §§ 47-10-24, 47-10-25 (1955) – excluded unless included Oklahoma • Douglass v. Mounce, 303 P.2d 430, 433 (Okla. 1956) • Mack Oil Co. v. Laurence, 389 P.2d 955, 960 (Okla. 1964) Oregon • Whittle v. Wolff, 249 Or. 217, 221, 437 P.2d 114, 116 (1968) South Dakota • Buhl v. Bak, 400 N.W.2d 903, 906 (S.D. 1987) Tennessee • Murray v. Allard, 43 S.W. 355, 356 (Tenn. 1897) Texas • Heinatz v. Allen, 217 S.W.2d 994, 997 (Tex. 1949) • Moser v. U.S. Steel Corp., 676 S.W.2d 99, 101 (Tex. 1984) Utah • W. Dev. Co. v. Nell, 4 Utah 2d 112, 114, 288 P.2d 452, 453-54 (1955) Vermont • Galkin v. Town of Chester, 168 Vt. 82, 90, 716 A.2d 25, 30-31 (1998) Virginia • Harrison-Wyatt, L.L.C. v. Ratliff, 593 S.E.2d 234, 238 (Va. 2004) Washington • Kunkel v. Meridian Oil, Inc., 114 Wash. 2d 896, 904, 792 P.2d 1254, 1258 (1990) Wisconsin • Wis. Stat. Ann. § 706.01 (West) Wyoming • Lazy D Grazing Ass’n v. Terry Land & Livestock Co., 641 F.2d 844 (10th Cir.)