LawFuel.com – 16 October 2009
As oil and gas companies are looking to alternate sources for their energy needs, the question of whether lignite/coal is a mineral is becoming a hot topic in the Mississippi court system. It’s a question that has never been answered in the state court system, and the inability of a party to determine whether it possesses the rights to a given substance may hamper efforts to explore and ultimately exploit the State’s mineral wealth.
Lignite is commonly used for the production of electricity throughout the U.S. and at the present time, in 2009, is being mined in Mississippi. Mississippi lignite resources equal about 13 percent of the total U.S. lignite resources of 40 billion tons.
It is well settled in Mississippi that the general rules of construction, which are applicable to deeds and contracts, are also applicable to documents reserving a mineral interest. This type of analysis leaves the Mississippi title examiner in the precarious position of divining the intent of parties to transactions sometimes over a century ago. Undoubtedly, inequities will exist if either method is adopted. Stability of title is paramount to the efficient exploitation of Mississippi’s mineral resources.
Presumptive mineral owners should not be forced to seek a determination whether a particular substance is considered a mineral in a particular community, county or region of the state. This type of approach is likely to lead to a fragmented and disjointed body of law and may stifle economic activity.
Michele McCain, Adams and Reese attorney and former president of the Mississippi Oil and Gas Lawyers Association, recently published an article in the Mississippi College Law Review addressing the importance of Mississippi courts needing to define lignite as a mineral. The article is attached and a portion of the article is below.
For interviews, please do not hesitate to contact Michele McCain at [email protected] or (601) 292-0748