# Coalbed Methane Ownership

**Source:** Buckhead Energy Oil & Gas Encyclopedia (https://www.buckheadenergy.com/learn) — canonical: https://www.buckheadenergy.com/who-owns-coalbed-methane

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.

## Why the question arises at all
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.

## How the leading cases came out
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.

## What controls in practice
- The instrument. Whether the severing deed conveyed "coal," "coal and mining rights," "oil and gas," "all minerals," or "all gas" — and whether it says anything about gas in or from the coal — is the first and usually decisive question.
- The state. Alabama, Pennsylvania, West Virginia, Virginia, Colorado, and others have addressed the issue through courts or statutes, and they do not all agree. Some states have enacted coalbed-methane statutes that set up escrow or pooling procedures when ownership is disputed.
- Where the gas is when it is produced. Under the Alabama approach, the same molecule can belong to one estate while it sits in the coal and to another after it has migrated out. Which wells and which completion methods are involved can matter.
- Mine safety rights. Even where the gas owner holds the methane, the coal owner generally keeps the right to vent or drain it as needed to mine safely, which can affect how and when it is produced.

## What a royalty owner should do
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.

## Frequently asked questions

**Who owns coalbed methane when the coal and gas are owned by different people?**
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.

**What did the Alabama Supreme Court decide about coalbed methane ownership?**
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.

**Does a deed that conveys "all minerals" include coalbed methane?**
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.

**Can the coal owner vent or drain methane even if the gas owner owns it?**
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.

**How does coalbed methane ownership affect selling my royalties?**
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.

## Related terms
- [Coalbed Methane (CBM): Production & Royalties](https://www.buckheadenergy.com/coalbed-methane)
- [Black Warrior Basin Mineral Rights (Alabama & Mississippi)](https://www.buckheadenergy.com/mineral-rights/basins/black-warrior-basin)
- [Split Estates: Surface and Minerals Owned Separately](https://www.buckheadenergy.com/split-estates)
- [Alabama Mineral Rights](https://www.buckheadenergy.com/mineral-rights/alabama)
- [Sell Black Warrior Basin Mineral Rights](https://www.buckheadenergy.com/sell/black-warrior-basin)
- [Oil & Gas Encyclopedia — all terms](https://www.buckheadenergy.com/learn)

_Educational information only, not legal or tax advice. Buckhead Energy is a direct buyer of oil & gas mineral and royalty interests._