What are the liabilites associated with the purchase of Mineral rights? I am thinking of purchasing mineral rights in Coloroado. What steps can i take to reduce or eliminate my liability? I have read on other forums that the EPA is going after mineral rights owners over environmental issues - is this correct?
Why don't you expand on what you have read? Offer some more facts or cases where the EPA is going after mineral owners over environmental issues.
I have heard of strict liability issues that arise if you own a pet tiger, but nothing like that associated with buying minerals. I would imagine that normal negligence standards would apply, but your questions are so vague, I'm not even sure where you are coming from. I guess you can reduce or eliminate your liability by not doing anything that would cause the EPA to want to come after you.
If you are alive, then you exhale carbon-dioxide, which the EPA has deemed a threat to the environment, so they're coming after you no matter what.
Go ahead and buy the minerals; just save & send a little bit of $ to conservative groups that are effective in keeping the EPA in check with truth, and out of your nose.
Dave Quincy said:
Why don't you expand on what you have read? Offer some more facts or cases where the EPA is going after mineral owners over environmental issues.
I have heard of strict liability issues that arise if you own a pet tiger, but nothing like that associated with buying minerals. I would imagine that normal negligence standards would apply, but your questions are so vague, I'm not even sure where you are coming from. I guess you can reduce or eliminate your liability by not doing anything that would cause the EPA to want to come after you.
Another interesting, yet vague reply, coming after mineral owners for what? Purchasing minerals? I'm alive and breathe. The EPA has never bothered me. I am also a record mineral owner. That alone must not be enough. Have never heard from them.
oldoak said:
If you are alive, then you exhale carbon-dioxide, which the EPA has deemed a threat to the environment, so they're coming after you no matter what.
Go ahead and buy the minerals; just save & send a little bit of $ to conservative groups that are effective in keeping the EPA in check with truth, and out of your nose.
Dave Quincy said:Why don't you expand on what you have read? Offer some more facts or cases where the EPA is going after mineral owners over environmental issues.
I have heard of strict liability issues that arise if you own a pet tiger, but nothing like that associated with buying minerals. I would imagine that normal negligence standards would apply, but your questions are so vague, I'm not even sure where you are coming from. I guess you can reduce or eliminate your liability by not doing anything that would cause the EPA to want to come after you.
My main concern would be to do my diligence and make sure the title is clear to the mineral rights. I would also make sure they aren't HBP from any old producing leases, but I am going to assume you have done this already. Other than that, I would have no concerns buying minerals. People sell and buy all the time. Haven't heard of issues with the EPA, but I wouldn't be concerned. Have minerals in Louisiana, never heard from the EPA.
HERMAN,
Since you are an investment advisor, follow the same principles you use when buying any asset. Evaluate the purchase based on your business plans or that of your client. Minerals are no different. Understand the geologic potential since you can't see the minerals even if it is an open pit gravel mine. If the property is producing a mineral product, determine the proven reserves as the SEC requires. THEN evaluate the potential for things to go wrong and those things are are usually far greater than speculating what the EPA may or may not do.
Fore example, if the mineral property is anywhere near a sulfide mineral, like fools gold, acid mine drainage liability will kill he deal. If it is an old uranium property, you will be buying a lot of Environmental problems. If the minerals are in a jurisdiction where oil and gas well franking have been banned or if an old drilling pad exists as a result of previous oil production, some governmental agency will most likely come after you especially if you have deep pockets. Abandoned oil wells, failed mines, closed coal mines, contaminated water wells, coal-bed methane operations, all of which occurs in Colorado have a better chance of creating a future liability than not.
If you are just attracted to the pride of ownership of minerals in a hyped area thinking the demand for your minerals will be an automatic coup, you better decide what you want and go after it as an educated buyer not a greater fool.
Certainly don't buy minerals anywhere unless you properly evaluate the purchase. If you plan to turn the minerals to a client, best re-read your broker license. In the minerals business, good science trumps political rumor any day.
In a scenario that bleak, it's likely that the current mineral owner would already have his hands full. That posting is all conjecture and hypothetical. I have much better advice to him if that does in fact apply to the minerals he is considering buying. Don't buy them. However, given that all of that is worst case, it is likely that it doesn't apply. None of that was included in the facts of the original question. I would have preferred that the poster would have filled in the blanks. I think the more accurate picture is that most mineral owners are not pursued by the EPA, whether they be rich or poor.
Gary L. Hutchinson said:
HERMAN,
Since you are an investment advisor, follow the same principles you use when buying any asset. Evaluate the purchase based on your business plans or that of your client. Minerals are no different. Understand the geologic potential since you can't see the minerals even if it is an open pit gravel mine. If the property is producing a mineral product, determine the proven reserves as the SEC requires. THEN evaluate the potential for things to go wrong and those things are are usually far greater than speculating what the EPA may or may not do.
Fore example, if the mineral property is anywhere near a sulfide mineral, like fools gold, acid mine drainage liability will kill he deal. If it is an old uranium property, you will be buying a lot of Environmental problems. If the minerals are in a jurisdiction where oil and gas well franking have been banned or if an old drilling pad exists as a result of previous oil production, some governmental agency will most likely come after you especially if you have deep pockets. Abandoned oil wells, failed mines, closed coal mines, contaminated water wells, coal-bed methane operations, all of which occurs in Colorado have a better chance of creating a future liability than not.
If you are just attracted to the pride of ownership of minerals in a hyped area thinking the demand for your minerals will be an automatic coup, you better decide what you want and go after it as an educated buyer not a greater fool.
Certainly don't buy minerals anywhere unless you properly evaluate the purchase. If you plan to turn the minerals to a client, best re-read your broker license. In the minerals business, good science trumps political rumor any day.
Gary L Hutchinson
Minerals Management