# Underground Gas Storage and Hydrogen Storage Leases: An Owner's Guide to Selling

> Buckhead Energy buys underground natural gas storage and hydrogen storage leases and royalties. How storage leases work and who owns stored gas.

- URL: https://www.buckheadenergy.com/gas-and-hydrogen-storage-leases
- Last updated: 2026-11-03
- Publisher: Buckhead Energy (https://www.buckheadenergy.com/)
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Quick answer

Buckhead Energy buys underground natural gas storage and hydrogen storage leases and royalties. Natural gas is most commonly stored underground under pressure in depleted oil and gas reservoirs, aquifers and salt caverns.^\[1\] Federal law lets a storage authorization on leased federal land pay a storage fee or rental, or instead a royalty when stored gas is produced together with gas not previously produced.^\[2\]

## What an underground storage lease covers

Underground storage holds natural gas in three main kinds of facilities: depleted reservoirs in oil and natural gas fields, aquifers, and salt cavern formations.^\[1\] Base gas, also called cushion gas, is the volume kept in a reservoir as permanent inventory to maintain pressure and deliverability, while working gas is the gas above that level that is available to the market.^\[1\] Most working gas in storage is held under lease with shippers, local distribution companies or end users who own the gas.^\[1\]

EIA counted 375 active underground storage fields in the Lower 48 states as of November 2025, not counting 28 inactive fields.^\[3\] Michigan leases state-managed underground storage rights, which cover the storage space beneath a property and the right to use it for natural gas and other substances allowed by law.^\[4\] A Michigan storage lease is not a transfer of ownership, and it expires after its seven-year term if natural gas is not being stored and facilities are not maintained.^\[4\]

## How storage leases pay: rentals, storage fees and royalties

On federal oil and gas leases, a storage authorization may provide for a storage fee or rental on the stored gas, or instead a royalty other than the lease royalty when stored gas is produced together with gas not previously produced.^\[2\]

A federal lease on which storage is authorized is extended at least for the period of storage, and afterward for as long as gas not previously produced is produced in paying quantities.^\[2\]

Louisiana's statute on leases of state lands, which covers underground storage leases, requires reasonable consideration that may include a bonus, a rental, or consideration for the injection or withdrawal of stored product, alone or in combination.^\[5\]

A Louisiana state-land lease for underground storage is limited only by the extent of the storage reservoir beneath the leased lands, and its term may not exceed twenty-five years, with renewals or extensions capped at an additional twenty-five years.^\[5\]

Michigan's state underground natural gas storage lease form provides for a cash bonus and a yearly rental per acre that is adjusted at five-year intervals, with surface facilities covered by a separate surface use lease.^\[6\]

## Who owns the stored gas and the storage formation

Kansas law makes natural gas previously reduced to possession and then injected into underground storage the property of the injector, and for gas that migrates to adjoining property, or to a stratum not condemned or otherwise purchased, the injector keeps title only if it proves by a preponderance of the evidence that the gas was originally injected into storage.^\[7\] The Kansas Supreme Court has held that identifiable storage gas within a storage facility's certificated boundaries is no longer subject to the rule of capture once the certification is approved, while the statute preserves the rule of capture for injected gas that migrates horizontally beyond property adjoining those boundaries.^\[21\] Where injected gas has migrated to adjoining property, or to a stratum or part of a stratum that has not been condemned or otherwise purchased, Kansas entitles the owner of that stratum and the owner of the surface to the compensation provided by law, including compensation for use of or damage to the surface or substratum.^\[7\] For the storage space itself, the Supreme Court of Texas held in a 2025 salt cavern case that, absent an agreement otherwise, the surface owner, and not the mineral owner, owns the space under the property's surface, including space inside hollowed-out salt formations.^\[20\] The court noted that technological development has enabled the storage of oil and gas in salt caverns, which has made the right to use them valuable, and that the mineral owner's right to use the space is limited to what is reasonably necessary to produce its minerals.^\[20\] In Louisiana, the secretary may issue an order providing that natural gas previously reduced to possession and then injected into an underground storage reservoir is at all times deemed the property of the injector.^\[8\]

## What you sell and what you keep

What Buckhead buys depends on the deal, and Buckhead tells the seller up front which interest it is offering to buy — for example, the payments for the rest of the current lease term, a term easement, or a longer-term interest. Michigan's DNR explains that its state storage leases grant the right to use storage space for a term without transferring ownership, and that they expire after a seven-year term if gas is not being stored and facilities are not maintained.^\[4\] Terms can be long: a Louisiana state-land storage lease may run up to twenty-five years, with renewals or extensions of up to another twenty-five years.^\[5\] On federal land, a lease on which storage is authorized is extended at least for the period of storage.^\[2\]

The owner of the land keeps the storage space itself in Texas, absent an agreement otherwise, because the surface owner owns the space under the surface, including space inside salt formations.^\[20\] The stored gas is a different matter: Kansas makes injected storage gas the injector's property, and for gas that migrates to adjoining property the injector keeps title only if it proves the gas was originally injected into storage.^\[7\]

## Storage field certificates and eminent domain

The Federal Energy Regulatory Commission approves the location, construction and operation of interstate pipelines, facilities and storage fields involved in moving natural gas across state boundaries.^\[9\] A storage facility that serves interstate commerce is subject to FERC jurisdiction.^\[1\] FERC's landowner guide says that only natural gas storage used in interstate commerce is under its jurisdiction, and that the remaining facilities are under state and/or local jurisdiction or are privately owned and unregulated.^\[9\] FERC explains that a certificate approving a new or expanded storage field gives the company the right to ask a state or federal court to award the needed property rights where good-faith negotiation has failed.^\[9\] Under the Natural Gas Act, a certificate holder that cannot acquire needed property by contract or agree with the owner on compensation may acquire it by eminent domain in state court, or in federal district court when the amount the owner claims exceeds the statute's jurisdictional threshold.^\[10\]

Kansas allows a natural gas public utility to appropriate a subsurface stratum for underground storage once the state commission finds it suitable and in the public interest.^\[11\] The Kansas commission's certificate must also find the amount of recoverable oil and native gas, if any, remaining in the formation.^\[12\] Kansas appraisers awarding damages must consider the recoverable oil and native gas remaining in the property being taken.^\[13\] In Louisiana, the secretary must hold a public hearing and make findings before a reservoir is used for natural gas storage or eminent domain is exercised.^\[8\] A Louisiana reservoir that can produce oil in paying quantities may be used for gas storage only if all owners agree.^\[8\] For every Louisiana reservoir, storage also requires either that the original gas and condensate producible in paying quantities has all been produced, or that storage is worth more than producing what remains and at least three-fourths of the owners in interest, excluding a lessor as defined in R.S. 30:148.1, consent in writing.^\[8\]

Federal pipeline safety rules regulate underground natural gas storage facilities, and storage in a depleted reservoir or aquifer built after July 18, 2017 must meet API Recommended Practice 1171.^\[14\]

## Hydrogen storage and geologic hydrogen

A three-year Department of Energy assessment found a technical basis for storing hydrogen in porous rock in depleted oil and gas reservoirs, beyond the salt domes and caverns that had mainly been studied.^\[15\] The same DOE team concluded that the current regulatory framework for underground natural gas storage can generally be applied to underground hydrogen storage.^\[15\]

Texas gave its Railroad Commission jurisdiction over the pipeline transportation and underground storage of hydrogen, effective September 1, 2023.^\[16\] That change came from House Bill 2847, which also addressed a study of hydrogen production, pipeline transportation and storage.^\[17\] Louisiana's salt dome storage statute covers hydrogen along with nitrogen, ammonia, compressed air and noble gases.^\[18\] After a public hearing, the required findings and their referral to the legislature's natural resources committees, the Louisiana secretary may issue orders providing that hydrogen previously reduced to possession and then injected and stored in a salt dome cavity is at all times deemed the injector's property, subject to any contract with the owners of the overlying solid mineral or land.^\[18\]

Geologic hydrogen, also called natural hydrogen, is hydrogen gas found naturally below the surface of the earth.^\[19\] The first USGS map of potential geologic hydrogen, released in January 2025, highlights a mid-continent region covering Kansas, Iowa, Minnesota and Michigan, the Four Corners states, the California coast and areas along the Eastern seaboard.^\[22\]

## What affects the value of a storage payment stream

Payment type: on federal leases, a storage authorization may provide for a storage fee or rental, or instead for a royalty when stored oil or gas is produced together with oil or gas not previously produced.^\[2\]

Activity on the lease: a Michigan state storage lease ends after its term if gas is not being stored and facilities are not maintained.^\[4\]

Remaining native gas: Kansas condemnation findings and damages both account for recoverable oil and native gas left in the formation.^\[13\]

Volume-based terms: a storage lease may pay consideration tied to the injection or withdrawal of stored product instead of, or alongside, a bonus and rental.^\[5\]

## Related guides

[Subsurface Rights](https://www.buckheadenergy.com/subsurface-rights)

[Pore Space Rights vs Mineral Rights](https://www.buckheadenergy.com/pore-space-rights-vs-mineral-rights)

[Saline Aquifer CO2 Storage: Mineral Owner Guide](https://www.buckheadenergy.com/saline-aquifer-storage-mineral-owners)

[Pipeline Easements and Mineral Owners](https://www.buckheadenergy.com/resources/pipeline-easements-and-mineral-owners)

[Split Estates](https://www.buckheadenergy.com/split-estates)

[Helium Lease Language for Mineral Owners](https://www.buckheadenergy.com/helium-lease-language-mineral-owners)

[Sell Oil and Gas Royalties](https://www.buckheadenergy.com/sell-oil-gas-royalties)

[Carbon Storage Royalties](https://www.buckheadenergy.com/carbon-storage-royalties)

[Water, Brine and Saltwater Disposal Royalties](https://www.buckheadenergy.com/water-royalties)

[Energy Easement Payments](https://www.buckheadenergy.com/energy-easement-payments)

Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.

## Frequently asked questions

### What is underground natural gas storage?

It is natural gas held in inventory underground under pressure, most commonly in depleted oil and gas reservoirs, aquifers and salt caverns.^\[1\] EIA counted 375 active storage fields in the Lower 48 states as of November 2025.^\[3\]

### How do gas storage leases pay landowners?

Payment types include a bonus, a rental, and consideration for injection or withdrawal of stored product, as Louisiana's state-lands leasing statute lists.^\[5\] On federal leases, storage may instead pay a storage fee or rental, or a royalty when stored gas is produced together with gas not previously produced.^\[2\]

### Who owns the gas stored under my land?

In Kansas, natural gas previously reduced to possession and injected into storage is the injector's property, and the injector keeps title to gas that migrates to adjoining property only if it proves the gas was originally injected into storage.^\[7\] The Kansas Supreme Court has held that the rule of capture still applies to injected gas that migrates horizontally beyond property adjoining a storage field's certificated boundaries.^\[21\] In Louisiana, the secretary may issue an order deeming natural gas previously reduced to possession and injected into a storage reservoir the property of the injector.^\[8\]

### Who owns a salt cavern under my land in Texas?

Absent an agreement otherwise, the surface owner does: the Supreme Court of Texas held in 2025 that the surface owner, not the mineral owner, owns the space under the surface, including space inside hollowed-out salt formations.^\[20\]

### Can a storage company use eminent domain for a gas storage field?

FERC explains that its certificate for a new or expanded storage field lets the company ask a court to award the needed property rights where good-faith negotiation has failed.^\[9\] Kansas also allows a natural gas public utility to appropriate a subsurface stratum the state commission has found suitable and in the public interest for storage.^\[11\]

### Can hydrogen be stored underground like natural gas?

A Department of Energy assessment found a technical basis for storing hydrogen in depleted oil and gas reservoirs as well as salt caverns, and for reusing parts of existing natural gas storage infrastructure.^\[15\]

### What is geologic hydrogen?

Geologic hydrogen, also known as natural hydrogen, is hydrogen gas that is naturally found below the surface of the earth.^\[19\]

### Who buys gas storage lease payments and hydrogen storage royalties?

Buckhead Energy buys underground natural gas storage and hydrogen storage leases and royalties.

## Sources

\[1\] [The Basics of Underground Natural Gas Storage](https://www.eia.gov/naturalgas/storage/basics/) — U.S. Energy Information Administration (accessed November 3, 2026)

\[2\] [30 U.S.C. 226, Leasing of oil and gas parcels](https://uscode.house.gov/us/usc/t30/s226/) — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)

\[3\] [Underground Natural Gas Working Storage Capacity, With Data for November 2025](https://www.eia.gov/naturalgas/storagecapacity/pdf/ngstoragecapacity.pdf) — U.S. Energy Information Administration (accessed November 1, 2026)

\[4\] [Underground Natural Gas Storage](https://www.michigan.gov/dnr/managing-resources/minerals/gas-storage) — Michigan Department of Natural Resources (accessed November 3, 2026)

\[5\] [La. R.S. 30:148.6](https://legis.la.gov/legis/Law.aspx?d=86989) — Louisiana State Legislature (accessed November 1, 2026)

\[6\] [Underground Natural Gas Storage Lease (Form PR4350)](https://www.michigan.gov/dnr/-/media/Project/Websites/dnr/Documents/Minerals/Forms/PR4350.pdf) — Michigan Department of Natural Resources (accessed November 1, 2026)

\[7\] [K.S.A. 55-1210, Property rights to injected natural gas established](https://ksrevisor.gov/statutes/chapters/ch55/055_012_0010.html) — Kansas Office of Revisor of Statutes (accessed November 3, 2026)

\[8\] [La. R.S. 30:22](https://legis.la.gov/legis/Law.aspx?d=87252) — Louisiana State Legislature (accessed November 3, 2026)

\[9\] [An Interstate Natural Gas Facility on My Land? What Do I Need to Know?](https://www.ferc.gov/sites/default/files/2020-04/gas.pdf) — Federal Energy Regulatory Commission (accessed November 3, 2026)

\[10\] [15 U.S.C. 717f, Construction, extension, or abandonment of facilities](https://uscode.house.gov/us/usc/t15/s717f/) — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)

\[11\] [K.S.A. 55-1203](https://ksrevisor.gov/statutes/chapters/ch55/055_012_0003.html) — Kansas Office of Revisor of Statutes (accessed November 1, 2026)

\[12\] [K.S.A. 55-1204](https://ksrevisor.gov/statutes/chapters/ch55/055_012_0004.html) — Kansas Office of Revisor of Statutes (accessed November 1, 2026)

\[13\] [K.S.A. 55-1205](https://ksrevisor.gov/statutes/chapters/ch55/055_012_0005.html) — Kansas Office of Revisor of Statutes (accessed November 1, 2026)

\[14\] [49 CFR 192.12, Underground natural gas storage facilities](https://www.ecfr.gov/current/title-49/subtitle-B/chapter-I/subchapter-D/part-192/subpart-A/section-192.12) — Electronic Code of Federal Regulations (accessed November 1, 2026)

\[15\] [DOE Three-Year U.S. Underground Hydrogen Storage Assessment Expands Future Opportunities in the Subsurface](https://www.energy.gov/hgeo/articles/doe-three-year-us-underground-hydrogen-storage-assessment-expands-future) — U.S. Department of Energy (accessed November 1, 2026)

\[16\] [Texas Natural Resources Code Chapter 81](https://tcss.legis.texas.gov/resources/NR/htm/NR.81.htm) — Texas Legislature (accessed November 1, 2026)

\[17\] [H.B. 2847, 88th Legislature (Enrolled)](https://capitol.texas.gov/tlodocs/88R/billtext/html/HB02847F.htm) — Texas Legislature (accessed November 1, 2026)

\[18\] [La. R.S. 30:23](https://legis.la.gov/legis/Law.aspx?d=87313) — Louisiana State Legislature (accessed November 3, 2026)

\[19\] [What is geologic hydrogen?](https://www.usgs.gov/faqs/what-geologic-hydrogen) — U.S. Geological Survey (accessed November 1, 2026)

\[20\] [Myers-Woodward, LLC v. Underground Services Markham, LLC, No. 22-0878 (Tex. May 16, 2025)](https://www.txcourts.gov/media/1460523/220878.pdf) — Supreme Court of Texas (accessed November 1, 2026)

\[21\] [Northern Natural Gas Co. v. ONEOK Field Services Co., No. 118,239 (Kan. Sept. 6, 2019)](https://kscourts.gov/Cases-Decisions/Decisions/Published/Northern-Natural-Gas-Co-v-ONEOK-Field-Serv-1) — Kansas Supreme Court (accessed November 3, 2026)

\[22\] [USGS releases first-ever map of potential for geologic hydrogen in U.S.](https://www.usgs.gov/news/national-news-release/usgs-releases-first-ever-map-potential-geologic-hydrogen-us) — U.S. Geological Survey (accessed November 1, 2026)

## Ready to Sell Your Storage Lease or Royalties?

Buckhead Energy buys underground natural gas storage and hydrogen storage leases and royalties.

[Get a Free Written Offer](https://www.buckheadenergy.com/sell#inquiry:source=%2Fgas-and-hydrogen-storage-leases)

## About Buckhead Energy
Buckhead Energy is a direct buyer, not a broker — we purchase mineral and royalty interests with our own capital. Buckhead Energy buys mineral and royalty interests across all 50 states and has completed acquisitions in 33 states. Buckhead Energy has been buying mineral and royalty interests since 2006. Buckhead Energy holds an A+ rating with the Better Business Bureau. Buckhead provides a free written offer. Buckhead Energy typically provides an offer within 24–48 hours. Closings typically take 30–45 days, subject to title review and clearance. Buckhead Energy's written offers stay open for 14 days.

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