Rory Perry has this post on WV law regarding who owns coalbed methane, and asking if I know the status of the Virginia Supreme Court case. His post links to the new West Virginia Supreme Court opinion, which declares that "[i]n the absence of specific language to the contrary or other indicia of the parties' intent, an oil and gas lease does not give the oil and gas lessee the right to drill into the lessor's coal seams to produce coalbed methane gas." In its discussion, the WV court observed: "There is a great temptation in this case, urged on us by both sides, to wave a wand and declare coalbed methane to be either “coal” or “gas.” The logic of either position is facially seductive; “coalbed methane” is indeed “methane” in that both have the same chemical composition; but “coalbed methane” is also intimately bound to the coal, which must be disturbed if coalbed methane is to be produced in paying quantities. . . . But the precise question we must answer in this opinion is not whether coalbed methane, for all purposes and in all cases, is “coal” or is “gas.” The specific question we must answer is whether a gas lease executed in 1986, before the widespread commercial production of coalbed methane in West Virginia, signed by a lessor who owned the land, coal, oil and gas, . . . conveyed to the oil and gas lessee the right to develop the coalbed methane, absent any specific language on the issue."
I don't know any more about the pending Virginia case than what's online. The case was fully briefed as of August, according to the Supreme Court's case information site, and it apparently was not among the September cases decided in October, or the cases argued in October, so I'm guessing it will be argued and decided next year, if there is (or has been) no settlement.
The assignments of error in the Virginia case are these:
1. The Trial Court erred in finding that, under Virginia law, the grant of coal rights does not include coalbed methane ("CBM") absent an express grant of CBM.
2. The Trial Court erred in failing to adopt the plain and common meaning of the term "coal" in the 19th century as presented in the defendant's uncontested evidence of such definitions that describe coal as a heterogeneous substance that includes gas, a meaning that was also supported by the defendant's uncontested evidence of the current meaning of the term "coal" as a generic term with constituent parts that vary greatly.
3. In the alternative, the Trial Court erred in failing to acknowledge the ambiguity in the term "coal" contained in the severance deeds at issue in this case, finding instead that the term unambiguously did not include CBM.
4. The Trial Court considered evidence outside the record on the issue of the meaning of the term "coal" as used in the 19th century.
5. Having failed to either find ambiguity in the severance deeds or to adopt the common meaning of the term "coal" as used in the 19th century and as supported by current expert testimony, the Trial Court erred in failing to apply the proper rules of construction that should be applied to the severance deeds, finding instead that the grantors retained an interest in CBM when they could not beneficially use or enjoy the estate without trespassing on the coal owner's estate; and the coal owner could not beneficially use or enjoy the coal estate without trespassing on the purportedly retained estate of the grantor in the CBM. To do so, the Trial Court erroneously relies on a "common law" right of the coal owner to release CBM in connection with its coal operations.
6. The Trial Court erred in adopting a simplistic construction of the severance deeds finding that the grantors on these severance deeds intended only to convey the solid core of the coal and none of its associated volatile components such as CBM. Specifically, the Trial Court held that "the only finding that would allow the Court to rule in favor of the coal owners is that the CBM is a constituent of the coal itself." In doing so, the Trial Court disregarded the law of Virginia on mineral rights, that mineral estates may include non-specified elements when those elements are substantially connected with or integrally a part of the granted estate. Here, CBM is substantially connected with coal and an integral part of the in situ coal.
7. The Trial Court erred in construing the severance deeds to find that the grantors retained an interest in CBM when the grantors could not beneficially use or enjoy the estate without trespassing on the coal owner's estate; and the coal owner could not beneficially use or enjoy the coal estate without trespassing on the purportedly retained estate of the grantor in the CBM.