Who Owns The Mineral Rights On Your Property in Iowa
After listening to possible mineral exploration in Iowa on the news recently when more funding is provided, I had some questions. Do my husband and I as property owners own the mineral rights to our land? Is there some way a drilling company can come in and start defacing our land? It was a surprise to me that oil wells have been drilled in Washington County, Iowa. Three struck oil but not a large amount. I know for a fact that a good share of Oklahoma property owners own the land but not the property rights which previous owners sold years ago. I know this because my father had a cousin who became wealthy from her mineral rights because of money from oil companies. Oil wells were placed in pastures and front yards with no regard for the owners.
Below is the answers I came up for Iowa.
The U.S. and a few other countries allow mineral rights on private property, but those rights are commonly “separable” from the surface rights. That means a property owner can sell the rights to take the valuable stuff out the ground while holding on to the right to use the surface of the ground. Once mineral rights have been sold, they’re gone. A previous owner may have sold the mineral rights out from under you 200 years ago. If that’s the case, you can put up a gazebo, but not an oil well.
Geography
Where you live plays a major role in determining whether you own the mineral rights to your property. In some places, the standard practice has been to keep surface and mineral rights bound together. In areas without significant mineral resources — that anyone knows about, at least — no one’s bothered to separate mineral rights, since no one was buying them. By contrast, the vast mineral-rich lands of the West were once owned by the federal government, and big chunks still are. When the government made these lands available to homesteaders, it typically reserved the mineral rights and sold them separately.
Finding Out
The way to learn for sure whether you own your property’s mineral rights is by examining the “chain of title” to your land. That means tracing the ownership of the property all the way to the original land grant — the official act that made the land private property. These are all public records and should be available through your county clerk’s office. If you received an “abstract of title” when you bought your property, you already have these records. Read through the records in chronological order; if mineral rights have been separated — or were never granted in the first place — that should be noted. You can also hire an abstracting company to compile the records for you. If your property ownership is defined in public records as “a fee simple title,” that usually means you have full rights to the land, both surface and mineral rights.
Conflicting Rights
If it turns out you don’t own the mineral rights, that doesn’t necessarily mean a gang of coal miners is going to show up and demand to start blasting down into the earth from your basement. The rights may have been sold decades ago and then essentially abandoned. Still, it could happen. Local laws govern the accommodations that surface rights owners must make for mineral rights owners; in general, mineral rights holders are expected to minimize the impact of their extraction activities on surface owners. They may offer to buy your surface rights to avoid headaches — but if the property owner who originally sold off the rights gave the buyer certain rights, like to dynamite any structures on the property, you’re likely bound by that agreement.
How Are Mineral Rights Separated Out for a Piece of Property?
Mineral rights are automatically included as a part of the land in a property conveyance, unless and until the ownership gets separated at some point by an owner/seller. An owner can separate the mineral rights from his or her land by:
Conveying (selling or otherwise transferring) the land but retaining the mineral rights. (This is accomplished by including a statement in the deed conveying the land that reserves all rights to the minerals to the seller.)
Conveying the mineral rights and retaining the land. (In this case, the seller will issue a separate mineral deed to the purchaser of the mineral rights.)
Conveying the land to one person and the mineral rights to another.
Since a seller can convey only property that he or she owns, each sale of the land after the minerals are separated automatically includes only the land. Deeds to the land made after the first separation of the minerals will not refer to the fact that the mineral rights are not included.
This means that in most cases, you cannot determine whether you own the rights to the minerals under your land just by looking at your deed. Owners are sometimes surprised to find out someone else owns the rights to the minerals under their land.
Additionally, U.S. laws regulating mining and mineral rights typically prohibit the mineral owner from damaging, or interfering with the use of any homes or other improvements on the land when extracting minerals. As a result, mineral owners do not typically attempt mineral extraction in highly populated areas. This means that if you live in a city, or an area with many houses on small plots of land, you probably won’t need to worry about whether or not you own the minerals under you.
When Who Owns the Minerals Does Matter
In areas where mineral exploitation is common, whether or not you own the minerals under your land might be a real concern. For example, if your property is in an area where oil rigs are an everyday sight, where natural gas drilling is prevalent, or where coal mining operations exist, if you don’t own the minerals under your land, the mineral owner might come calling.
The Extent of the Mineral Owners’ Rights
A mineral owner’s rights typically include the right to use the surface of the land to access and mine the minerals owned. This might mean the mineral owner has the right to drill an oil or natural gas well, or excavate a mine on your property. The mineral owner is also commonly allowed to build roadways or other improvements necessary to facilitate the mineral extraction.
Sometimes the terms of the conveyance of the mineral rights restrict the mineral owner’s rights. For example, a mineral deed might put a time limit on how long drilling can continue, or restrict excavation to a certain depth. Additionally, to protect the land owner and the environment, state and local laws regulating mining and drilling typically contain restrictions on mineral extraction activities.
What to Do if You’re Concerned About Mineral Rights
If a mineral owner contacts you about removing the minerals under your land, your first step should be to contact a lawyer in your area experienced in mineral law. The attorney can help you wade through this complex area of law and determine who really owns the minerals under your land (an arduous process of tracing deeds back to the original mineral reservation or conveyance). A number of owners might even own the rights to different minerals. Additionally, sometimes mineral royalties (the right to profit from the minerals) are conveyed separately from the mineral ownership rights.
If the person claiming mineral ownership has a valid ownership right, you might not be able to prevent him or her from removing the minerals. You can, however, talk with the attorney about how to minimize the removal operations’ impact on you and your land. At a minimum, the attorney can take steps to ensure that the mineral owner complies with any and all restrictions and regulations governing the mineral extraction and clean-up process.
‘Needle in a haystack’
Right now, only one window into the region’s mystery mineral prospects exists — a core drilled near Elkader by a mineral company in the 1960s. UI researchers are pulling rocks from that core and testing the age of minerals found within.
“We have used modern techniques to try to find a needle in a haystack,” Clark said, noting colleagues “have been going through with fine-toothed combs for anything we can find that could possible yield an age.”
The Iowa Geological Survey could seek funding to drill a second core for further research in the hilly region. The USGS had a plan to do just that before its budget was cut last year.
“We are sitting and waiting to see if the funding is restored or not,” Clark said.
If it is, Iowa could pursue financing for underground monitoring. If it’s not, the state could take the helm in creating a new core, or a mineral company could come in and pay to drill.
“But their purpose might be different from ours,” Clark said. “Our job is to get a better understanding of what the whole formation is.”
Should Iowa geologists achieve adequate access to the untapped trove, Clark said, “I really believe we would get the information of what this rock formation is, and prove that it’s similar to the Duluth Complex.”
Public vs. private
One known difference between the Duluth and Northeast Iowa complexes is ownership of the land under them.
Much of the Duluth Complex is on public property, managed by the state’s Department of Natural Resources.
That includes “School Trust Lands,” which is property the federal government granted Minnesota at statehood for schools, according to Minnesota’s DNR. The state today boasts 2.5 million acres of School Trust Lands, along with another 1 million acres of severed mineral rights, which occurs when the state sells the land but retains the rights to subsurface materials.
For revenue generated from the School Trust Lands, Minnesota established a permanent school fund for the benefit of K-12 public schools, according to Peter Clevenstine, assistant director of minerals in Minnesota’s Division of Lands and Minerals.
Leasing land to mining companies has produced hundreds of millions in revenue for the K-12 and public university trusts, according to Clevenstine.
Although the mineral-rich public property has been known about for decades, Minnesota only now is pursuing its mining potential.
“We have three deposits of nonferrous metals that are not producing,” he said. “If they do start producing, we could put another $2 billion into the permanent school trusts for K-12 education.”
Mining operations must complete environmental reviews and jump through permitting hoops before that can happen. But one company is close to meeting its requirements — recently landing a permit from the state and waiting on its last from the federal government, according to Clevenstine.
“We have the opportunity now in the next 30 years from three operations to have $2 billion added to that trust,” he said.
Iowa’s situation is different. Most of its underground potential sits under privately-owned land, according to Clark. That means any company — or state or government entity, for that matter — must negotiate with individual landowners over access and royalties.
“The lack of public land has been an issue,” Clark said.
He’s found a defunct limestone quarry that owns land in the target area and is willing to provide access for research.
“That is the closest thing I’ve found to being able to drill this next research hole,” Clark said. “If it does go to the exploration phase, where a company can come in, they would have to enter into an agreement with whoever owns the land.”
That commercializing side is where the economic potential for Iowa lies. Arriving mineral companies would create jobs and generate revenue through taxes, fees and the like.
Natural resources
But Clark and Clevenstine stressed this work requires care in protecting the land while also exploring the potential benefits.
“It’s our job to balance and protect those natural resources and also provide economic opportunities for the wide use of these resources,” Clevenstine said.
So long as Iowa maintains that bilateral view, Sen. Dan Zumbach, R-Ryan, said he’s OK with further research and even exploration into the hidden potential of the region he represents.
“I think it’s important that no matter how you use your resources, you need to be thoughtful,” he said. “It’s always exciting to see new potential for job opportunities, and you need to look at those things. But you always want to be respectful to the environmental as well.”
