Coalbed methane ownership is the question of which severed estate — the coal estate or the oil and gas estate — holds title to the methane that sits in a coal seam. Because the gas is physically inside the coal but is chemically natural gas, courts have split, and the answer in any given case depends on the wording of the deed or reservation that severed the estates and on the law of the state where the land lies.
On most tracts in a coal-bearing basin the minerals were severed long before anyone drilled a gas well. A landowner might have sold the coal to a mining company in the 1900s and kept everything else; a later deed might have conveyed "oil and gas" to one party and "coal and mining rights" to another. At the time, methane in coal was a mine-safety hazard to be vented, not a product to be sold. When coalbed methane became commercial in the Black Warrior Basin and elsewhere in the 1970s and 1980s, those old instruments had to be read to answer a question nobody had been asking when they were written.
The physical facts cut both ways. The gas is held inside the coal and cannot be produced without depressuring the seam, which favors the coal owner. But it is methane, chemically identical to conventional natural gas, and once it desorbs it migrates through fractures like any other gas, which favors the gas owner. Courts have weighed those facts differently.
Alabama (Black Warrior Basin). In NCNB Texas National Bank v. West (Ala. 1993), a quiet-title dispute over Tuscaloosa County land, the deeds had conveyed the coal and mining rights while reserving "all gas" to the grantor. The Alabama Supreme Court held that the coal owner held the coalbed gas while it remained in the unmined coal, so the gas owners had no interest in gas recovered by wells drilled directly into the coal seams before mining, but that the gas owners did hold their reserved interest in gas that migrated out of the coal, such as gas collected in mined-out (gob) areas. The result turned on the specific deed language, and later deeds in the basin are read on their own terms.
Pennsylvania. In United States Steel Corp. v. Hoge (Pa. 1983), a coal severance deed that was silent on coalbed gas was read to give the gas in the coal to the coal owner, on the reasoning that gas is owned by whoever has title to the rock it rests in. Pennsylvania courts have since treated that as the general rule for silent coal deeds while noting that an express reservation of the gas can change the result.
Federal reservations. In Amoco Production Co. v. Southern Ute Tribe (U.S. 1999), the Supreme Court held that a federal reservation of "coal" under the Coal Lands Acts of 1909 and 1910 did not include coalbed methane, because "coal" in that era meant the solid fuel and the methane was regarded as a waste product. The gas therefore went with the land patented to the homesteaders, not with the reserved coal. That decision governs the federal statutory reservation and did not overrule the state-law cases on private deeds.
If you receive coalbed-methane royalties, or hold a severed coal or gas interest in a coal-bearing basin, the ownership question is a title question, not a rule of thumb. Pull the deed that severed the estates and the instruments under which the operator pays you, and have a qualified oil and gas attorney confirm what your documents convey under your state's law. If you are considering a sale, expect the buyer's title review to focus on exactly that chain.
Coalbed Methane (CBM): Production & Royalties
Black Warrior Basin Mineral Rights (Alabama & Mississippi)
Split Estates: Surface and Minerals Owned Separately
Sell Black Warrior Basin Mineral Rights
Oil & Gas Encyclopedia — all terms
Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.
It depends on the wording of the deed that severed the estates and on the law of the state. Alabama and Pennsylvania courts have held that gas still in the coal belongs to the coal owner under the deeds before them, with gas that migrates out going to the gas owner in Alabama; the U.S. Supreme Court held that a federal reservation of "coal" did not include the methane. The deed controls.
In NCNB Texas National Bank v. West (1993), involving Tuscaloosa County deeds that conveyed the coal and reserved all gas, the court held the coal owner held the coalbed gas while it remained in the unmined coal, so the gas owners had no interest in gas from wells drilled into the seams before mining, but the gas owners kept their interest in gas that migrated out of the coal, such as gob gas.
Usually the analysis starts with whether the deed severed coal from gas at all, then with any language about gas in or from the coal. A general "all minerals" conveyance is read under the state's rules on what "minerals" means and whether gas was included. Because results differ by state and by instrument, this is a question for a title examination, not a general rule.
Generally yes. Coal owners have long held the right to ventilate or drain methane from the coal as necessary for mine safety. Where the gas owner holds title to the methane, that right can still affect how and when the gas is produced and who captures it.
A buyer's title review will trace the deed that severed the coal and gas estates and the instruments the operator pays under. If the chain is clean, the sale proceeds like any other royalty sale. If ownership is unclear, curative work may be needed before closing, and the time that takes depends on how many instruments and heirs are involved.
Yes — Buckhead Energy is a direct buyer of mineral, royalty, NPRI, and ORRI interests across the United States, producing or non-producing. Buckhead Energy makes a free written offer, pays the title and closing costs, and charges no broker commission.
Buckhead Energy buys mineral and royalty interests across all 50 states and has completed acquisitions in 33 states. Buckhead Energy is a direct buyer, not a broker — we purchase mineral and royalty interests with our own capital. Buckhead Energy has been buying mineral and royalty interests since 2006. Buckhead Energy holds an A+ rating with the Better Business Bureau.
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