When Shale Drilling Comes to Your Land: Rights of Ohio Surface Owners

By: Thomas White

A practical guide for Ohio landowners

A shale well can substantially change rural property. Well pads, access roads, pipelines, water lines, lights, noise, truck traffic, and drainage changes may affect the land long after drilling ends. Yet the person who owns the surface may not own the oil and gas beneath it.

Ohio law permits the surface estate and mineral estate to be owned separately. Consequently, a surface owner does not automatically have the right to prevent lawful drilling beneath the property—but an operator also does not have unlimited authority to occupy or damage the surface.

Start with the deed, lease, and other recorded documents

The first question is not where the operator wants to place the well pad. It is what rights the parties actually own.

If the surface owner also owns the oil and gas, the owner ordinarily has substantial negotiating leverage before signing a lease. If the minerals were previously severed, however, a mineral owner or operator may already possess specified rights of access and surface use.

Ohio courts therefore begin with the language of the controlling documents. Oil-and-gas leases are contracts whose terms govern the parties’ rights and remedies. Whether an older mineral reservation includes oil and gas likewise depends on the words used and their context.

A complete review should include:

• The current deed and chain of title;

• Mineral reservations and exceptions;

• Existing leases, amendments, and assignments;

• Recorded easements and rights-of-way;

• Surface-use or pipeline agreements; and

• Mandatory-pooling or unitization proceedings affecting the property.

Neither side should rely solely on general statements such as “the mineral estate is dominant” or “I own the land, so I can keep everyone out.” The specific language matters.

May the operator use the surface?

Sometimes—but only within the authority the operator actually holds.

A recorded lease, mineral reservation, surface-use agreement, or easement may authorize well pads, roads, pipelines, utilities, water use, and related facilities. A limited access right, however, is not necessarily a blanket right to place any facility anywhere on the property. Likewise, the right to develop minerals beneath one tract may not authorize using that tract’s surface to develop neighboring acreage.

Mandatory pooling provides an important consent right

Ohio’s mandatory-pooling statute contains a specific protection for surface owners. When a tract is included in a drilling unit through a mandatory-pooling order, “no surface operations or disturbances” may occur on that tract without the surface owner’s written consent or a written agreement approving the work.

Thus, including the minerals in a drilling unit does not, by itself, permit the operator to construct a well pad, road, or other surface facility on that tract.

Unitization is related, but different

Under Ohio’s unitization law, an applicant controlling at least 65 percent of the land area overlying a pool may ask the Ohio Department of Natural Resources to combine mineral interests into a unit. ODNR must hold a hearing, and affected mineral-interest owners may submit statements.

A unitization order concerns mineral development. A surface owner should not assume that the notice or order either grants or resolves the operator’s separate authority to use a particular surface location.

A surface owner may not control subsurface drilling

Horizontal wells can reach minerals beneath a tract from a well pad located elsewhere. If the surface owner does not own the minerals, lawful drilling beneath the property may proceed under a lease, pooling order, or unitization order without placing a rig on that owner’s land.

Royalties ordinarily follow mineral ownership, not surface ownership. Ohio also does not provide every surface owner with an automatic surface-use payment. Compensation usually depends upon a lease, easement, surface-use agreement, or legally compensable damage caused by conduct exceeding the operator’s rights.

Statutory protections during shale development

Setbacks and site conditions

In non-urbanized areas, a new well generally may not be placed within 100 feet of an occupied private dwelling or qualifying public building. A new tank battery generally must remain 100 feet from an existing inhabited structure.

New wells and tank batteries generally must remain 50 feet from a stream, watercourse, water well, pond, lake, or other body of water, although ODNR has limited authority to approve a shorter distance. Urbanized areas have additional setback and written-consent protections

Before issuing a horizontal-well permit, ODNR conducts a site review and may impose site-specific conditions. Ohio law directs the agency to address safety, water-supply protection, fencing and screening, waste containment, access roads, and noise mitigation.

Pre-drilling water testing

An application for a new horizontal well must include pre-drilling sampling results for water wells within 1,500 feet of the proposed horizontal wellhead. The application must also identify water-well locations where the property owner denied access for sampling.

A landowner should ordinarily allow properly documented sampling, request the complete laboratory report, and consider independent testing to establish a reliable baseline. Testing should occur before construction or drilling begins and use defensible sampling and chain-of-custody procedures.

Replacement of a damaged water supply

When an oil-and-gas operation proximately causes substantial contamination, diminution, or interruption of a water supply used for a legitimate purpose, the operator must replace the supply or, in specified circumstances, compensate for the loss in property value.

While an ODNR order addressing the disruption is pending, the operator must provide or reimburse the reasonable cost of an interim water supply.

Restoration of disturbed land

The drilling-permit application must include a surface-restoration plan. Ohio law establishes deadlines for removing drilling equipment, closing unnecessary pits, grading or terracing disturbed areas, and planting, seeding, or sodding where needed to control erosion.

Following plugging, the operator must address production equipment, debris, and remaining excavations. Significantly, an operator cannot obtain a waiver of the statutory restoration requirements without the surface owner signing the waiver request and ODNR approving it.

Protection from spills and improper waste handling

Ohio law prohibits placing or discharging brine, crude oil, natural gas, or other oilfield fluids in groundwater, on land, or in surface water when the release causes—or could reasonably be anticipated to cause—harm to public health, safety, or the environment. Storage and disposal are subject to additional regulatory controls.

A surface-use agreement is often the best protection

Statutory minimums are not a substitute for a carefully drafted agreement. Before granting a new lease, easement, location consent, or access right, a surface owner should consider negotiating provisions addressing:

• Location and footprint: Approval rights for the location and maximum size of pads, roads, pipelines, power lines, water lines, and staging areas.

• Enhanced setbacks: Greater distances from homes, barns, wells, ponds, streams, septic systems, and other sensitive locations.

• Traffic and access: Designated routes, speed limits, dust control, work hours, gate security, road maintenance, and repair of private drives and bridges.

• Agricultural protection: Preservation of topsoil, drainage tile, crops, timber, fences, livestock, wetlands, and existing agricultural operations.

• Water safeguards: Independent baseline testing, prompt notice of releases, access to monitoring information, and a defined replacement-water procedure.

• Operational impacts: Limits on lighting, noise, flaring, dust, vibration, and non-emergency work hours.

• Compensation: Fixed payments for pads, roads, pipelines, timber, crops, and other losses, with a method for valuing unanticipated damage.

• Insurance and indemnification: Liability coverage, pollution coverage where available, additional-insured status, indemnification, and financial security for restoration.

• Successors and enforcement: Assignment notice, obligations binding later operators, lien releases, inspection rights, default remedies, and recovery of enforcement costs where appropriate.

Oral assurances from a landman or contractor may be difficult to enforce and may not bind a later operator. Every material promise should be included in the signed agreement.

What surface owners should do before work begins

1. Do not sign immediately. A location consent, access agreement, water-use authorization, or easement may surrender valuable leverage and bind future owners.

2. Confirm ownership and existing rights. Obtain a title review covering all mineral reservations, leases, amendments, assignments, easements, and pooling or unitization documents.

3. Demand a complete surface plan. Identify proposed pads, roads, pipelines, utilities, water sources, drainage controls, storage areas, and the anticipated construction schedule.

4. Document existing conditions. Use dated photographs and video and map wells, springs, ponds, drainage tile, culverts, fences, crops, timber, structures, and road conditions.

5. Establish water and soil baselines. Obtain complete laboratory results and consider independent testing.

6. Monitor operations. Maintain a dated record of traffic, noise, odors, dust, spills, drainage changes, damaged improvements, communications, and repair efforts.
   

If a problem occurs

Notify the operator promptly in writing and preserve photographs, video, samples, invoices, and witness information. Review any contractual notice requirements and do not allow a time-sensitive issue to drift while informal negotiations continue.

ODNR accepts complaints involving water supplies, releases, construction, pipelines, odors, noise, dust, road impacts, and restoration. Any adversely affected person may also file a written complaint alleging failure to restore disturbed land. ODNR must investigate and provide its report to the complainant and operator.

For an oil-and-gas emergency, ODNR lists 1-844-OHCALL1 (1-844-642-2551).

The bottom line

Ohio surface owners have meaningful rights, but those rights are not found in a single statute or document. They arise from title, contracts, common-law property principles, ODNR permits and orders, and statutes governing pooling, well locations, water protection, waste handling, and restoration.

The best time to protect the surface is before signing a lease, easement, consent, or access agreement—and before the first bulldozer arrives.

This article provides general information and is not legal advice. Surface-use rights depend upon the property’s title and the language of applicable deeds, leases, easements, agreements, permits, and agency orders. Consult a qualified oil and gas attorney for advice on your land and your rights.