I have been involved in several conversations with politically astute people lately. I mentioned that I believe there are one to three million mineral rights owners in the US, and most of these are generally average middle class types. It came as no surprise that I was asked to support that assertion. The contrary argument was that there are very few, and those are mostly "big oil". As I looked around the web, I found little to support either position.
I would like to locate an authoritative source for this figure, so I can speak to the issues with a reasonably accurate number.
Anyone have a link or know of a document that offers an estimate?
Figuring this out to any reasonable accuracy seems close to impossible to me.
In Texas, you could run the mineral tax roles for each county & then remove the duplicates to see how many have production. It wont count non-producing minerals though. Not sure what other states assess minerals.
Consider areas like NE Pennsylvania where it is not uncommon for the vast majority to own their oil & gas rights. I know I worked a single township there that had around 3000 parcels and we didnt find a single reservation as we ran them out.
I agree that the IRS may have some source data, but I doubt they tally it. Even if they do (or did) the information will be incomplete as it will not consider non-producing property.
Adam, I am not sure what you meant by "didn't find a single reservation as we ran them out". How do you define "reservation" in this case?
When property is sold, if the Grantor owns all or a portion of the mineral rights, he can reserve those rights, thereby severing the mineral estate from the surface estate. That is what I meant by reservation.
In almost every other country in the world the govt owns all the mineral rights (oil, gold, silver, etc). That being the case, we shouldn't be assholes all the time leasing here as it's so much easier to lease in some of the other countries where you dont have to deal w/ so many ppl.
Still in the USA the local, state & federal governments own over 1/3rd of the land - most w/ the mineral rights.
I'd make a wild guess that less than 15% of the people in the USA own mineral rights & if you exclude those w/ less than a 5 acre interest it'd be less than 3%.
Excuse me Dillon, but what does government ownership in other countries have to do with mineral owners making a decent profit off their own property in this country? Oil pro’s like to say drill your own well if a mineral owner objects to making pennies on the dollar off HIS minerals. The mineral OWNER should have every right to tell the oil producer to MAKE your own oil. Also the state and federal govt. doesn’t own the land, THE PEOPLE DO COLLECTIVELY. Think about that last sentence for a minute. I won’t say you have drunk the koolaid or that you have lost sight of what is and are just parroting what is spoon fed to you, but you might want to step back and assess things before you start calling mineral owners, who have the right to be as capitalisitic as the oil co’s derogatory epithets starting in A.
Dillon said:
General Statement:
In almost every other country in the world the govt owns all the mineral rights (oil, gold, silver, etc). That being the case, we shouldn't be assholes all the time leasing here as it's so much easier to lease in some of the other countries where you dont have to deal w/ so many ppl.
Still in the USA the local, state & federal governments own over 1/3rd of the land - most w/ the mineral rights.
I'd make a wild guess that less than 15% of the people in the USA own mineral rights & if you exclude those w/ less than a 5 acre interest it'd be less than 3%.
Almost every other country in the world began as a kingdom or the colony of one. Thus the arrangement that the king owns everything is not a pro-active choice of the citizenry but simply an artifact of a by-gone form of governance (or tyranny, depending on your point of view).
That said, Dillon, highjacking a thread with a new topic is considered poor manners. Please don't do that; simply start another thread with an appropriate topic.
If one assumes your wild guess is anywhere near accurate, then some number around 8 million people own mineral rights in the United States. If a less than a 5 acre interest is still valuable to its owner, there may be as many as 24 million owners.
Mr. Phillips, I apologize as I feel I am less that totally innocent of hijacking myself. I find it very hard to not comment on misinformation wherever I find it, and vulgarity has no place here. That said; I believe that 24 million may be a low number. I would count everyone, down to the last house lot. I think there may be as many as 25% or more of Americans who personally own mineral rights. Whether all of them realize they own minerals, and whether anyone will ever want to produce those minerals are different subjects.
r w kennedy, no apology required, but thank you for the gesture. I do understand the desire to respond. I agree that profanity cheapens the argument. For what it is worth, I love talking politics. I just prefer to keep it out of other discourse.
Your comments reflect my suspicion about the number of mineral rights owners. I believe that the number is far higher than most people assume. Getting an accurate answer is as Adam suggested: nearly impossible short of visiting every county seat in the country. Perhaps, though, there is a some way to gather this info without spending five years in a car. :-)
Mr. Phillips, Thank you for the kind words. I wonder how many new owners of minerals there would be in 5 years, that was not countered by someone selling their total interest?
Good question. In some jurisdictions, an interest that becomes "too small" is quashed by administration of state law* and the interest is returned to the surface owner. Also, there is brisk trade in some areas from time to time, so tracking all of that would be a lot of work. Clearly, the number ebbs and flows with the market for the products.
I am looking for a snapshot. If I could state, with some authority to back me up, that circa 2010 there were X million owners, I might gain some traction in discussions on how to best preserve and promote private ownership of property.
* As an aside, I feel such laws are patently unfair, as most severed mineral interests were secured by an agreement between willing parties. I know there are exceptions, and real estate in general is rife with traps for the naive. Nevertheless, those laws smack of an unethical taking of property for the benefit of a few; the polar opposite of the intention of public domain policy.
I dont have objections to those states which have laws stating that any mineral rights reserved will revert back to the surface owner if no production in 10 or 20 yrs, because w/out that you can end up w/ so many owners.
I believe Louisana has a 10 yr period, ND a 20 yr period - dont know about other states
I do object to some states that seem to take the position that if it's a small interest, the company shouldn't worry about it - for w/out money being placed in escrow I do consider it a taking w/out compensation.
Mark Phillips said:
Good question. In some jurisdictions, an interest that becomes "too small" is quashed by administration of state law* and the interest is returned to the surface owner. Also, there is brisk trade in some areas from time to time, so tracking all of that would be a lot of work. Clearly, the number ebbs and flows with the market for the products.
I am looking for a snapshot. If I could state, with some authority to back me up, that circa 2010 there were X million owners, I might gain some traction in discussions on how to best preserve and promote private ownership of property.
* As an aside, I feel such laws are patently unfair, as most severed mineral interests were secured by an agreement between willing parties. I know there are exceptions, and real estate in general is rife with traps for the naive. Nevertheless, those laws smack of an unethical taking of property for the benefit of a few; the polar opposite of the intention of public domain policy.
If the government owns 1/3 of the mineral rights, who owns the rest? Big oil? nope, they are minor mineral interest owners. Almost all of their interest comes from leasing and producing activities.
Mark,
"In some jurisdictions, an interest that becomes "too small" is quashed by administration of state law* and the interest is returned to the surface owner."
Please cite your authority, I have never heard such a thing.
Dillon said:
General Statement:
In almost every other country in the world the govt owns all the mineral rights (oil, gold, silver, etc). That being the case, we shouldn't be assholes all the time leasing here as it's so much easier to lease in some of the other countries where you dont have to deal w/ so many ppl.
Still in the USA the local, state & federal governments own over 1/3rd of the land - most w/ the mineral rights.
I'd make a wild guess that less than 15% of the people in the USA own mineral rights & if you exclude those w/ less than a 5 acre interest it'd be less than 3%.
Dillon, you have again presented an interesting but off topic comment. I would be happy to jump into that conversation in another thread if you care to start one.
Mr. Cotten, I will look into finding an authority. However, on second thought, I may have mingled two concepts. I will post again after a bit of research.
NARO did testimony I believe or publicity last year or the previous before Congress committee opposing Obama's push to remove tax incentives favorable to royalty owners. They quoted who their average member was and I think how many royalty owners there are. Contact them.
There are numerous current and past class action lawsuits filed on behalf of royalty owners against the various oil/gas producers. While personal information on class members are not necessarily public record in those cases there is usually some public filing that requires the number of class members to be mentioned. Most names are crossed referenced to a number which may be public. There may be news articles on those cases that mentions the potential class member numbers. This is not fool proof and has many pit falls for accuracy of numbers but gives you an idea of the huge numbers there are all across the USA as most class actions relate to a specific area or situation.
I know of one class action case involving 1 state (small confined area of state) and 1 producer that had over 6,000 royalty owners and another class action case involved in same state but different producer in same confined area of state that has over 4,000. These royalty owners are not typically other oil/gas producers who may also have a royalty interest as oil/gas producers don't like to be included in other oil/gas producers lawsuits. :) Also many times overriding royalty owners are not members of a class action suit as they also have a stake in the producing wells as an owner of such.
I appreciate the thought about the legal actions. However, for the reasons you state, I would not be tempted to extrapolate a number from the case work. Nevertheless, the example of 6,000 members in a single class action in a "small" area of a state does give one a sense of the number that may be out there.
In the older oil/gas wells the undivided interests have been diluted greatly. I have seen a family mineral interest get down to the 246th interest. That person is a royalty owner but with that small of an interest they probably are not getting a very large royalty check each month.