Rule 37: How Oil & Gas Companies Can Drill Your Property Without Consent or Compensation

NEW 7/3/21 from Spectrum News: Rule 37 allows Texas oil and gas companies to take residents' minerals without payment

One would think that any Texan who wishes to protect their health would have the right to say no when a company asks to drill for fracked gas under their property.

But not in Texas.

Here, Oil and Gas Companies can simply turn to the state agency that regulates them, the Texas Railroad Commission, and ask them to override homeowners’ rights and authorize drilling on their property without consent or compensation under a provision called “Rule 37 exception.”

Unfortunately, the Railroad Commission generally supports drilling companies’ requests and forces homeowners to go through a complicated, difficult process to contest their decision, with little chance of winning.

Now, a foreign oil & gas company is trying to use Rule 37 to force homeowners in Tarrant County to let them drill on their property.

French energy conglomerate Total has applied to the Texas Railroad Commission for Rule 37 exception cases against more than 120 small mineral owners in SW Fort Worth. This is most likely connected to Total’s recent application to drill two gas wells under the Ridglea golf course.

So, what does this mean? If uncontested or unsuccessfully contested (as is the norm), Rule 37 will allow Total to take advantage of Texans who did not sign drilling leases in this area by:

• Drilling up to the properties of these homeowners without their consent, and

• Providing the homeowners zero royalties, despite extracting minerals on their property.

If mineral owners do not file paperwork and show up in Austin to defend their property, the Railroad Commission administratively approves these applications. The typical cost of legal representation for these hearings runs in the thousands of dollars, making it very difficult for ordinary Texans to defend their property.

Instead, a wealthy French corporation like Total inherits all of the financial benefit of the minerals.

That a state agency would support oil & gas industry interests at the expense of homeowners is not surprising. In Texas, there is a revolving door between state government and industry, where it’s not uncommon for lawmakers and state bureaucrats to become lobbyists for the oil & gas industry as soon as they leave office.

If we want to protect our health and our communities, we need to end this type of political corruption and reform public institutions, like the Railroad Commission, that are supposed to be protecting us.