In a landmark ruling with far-reaching implications for property law in Texas, the Texas Supreme Court has settled a long-running dispute over the ownership of subsurface salt caverns, deciding that surface owners, rather than mineral owners, retain ownership rights over salt caverns created through their activities. This significant decision, handed down on May 16, 2025, brings clarity to a key issue in Texas property law and sets a precedent that could affect future cases involving subsurface resources and land use.
The case, which involved Undergrounds Services Markham, LLC, a corporation that specializes in salt cavern storage, has sparked widespread interest in both legal and commercial circles. The dispute centered on the question of who holds rights to the salt caverns that are created below a piece of land after mineral extraction processes. The court’s decision offers valuable insights into how Texas law treats subsurface property rights and will have far-reaching consequences for future development and resource extraction.
Background of the Dispute
The case arose when Undergrounds Services Markham, LLC, which operates salt cavern storage facilities, entered into an agreement with a landowner for the use of a portion of their property for the creation of a salt cavern. The cavern, a massive underground void created by the removal of salt deposits from the earth, is used for various industrial purposes, including storing natural gas and other chemicals.
However, a dispute arose when the company’s efforts to store natural gas in the cavern led to claims from the landowner’s neighbors—who were mineral rights holders—arguing that they should control access to and the use of the cavern. The neighbors contended that because mineral rights, including subsurface resources like oil, gas, and salt, typically extend beneath the land’s surface, they should have the right to control what happens below the ground, including the creation and use of salt caverns.
The legal battle stretched on for several years, with arguments over whether mineral owners maintained their right to salt caverns beneath the surface or whether those caverns were part of the surface estate. The Texas Supreme Court’s ruling in favor of surface ownership represents a final resolution to this complex issue.
The Court’s Ruling
The Texas Supreme Court’s decision affirms that salt caverns are considered part of the surface estate, meaning that the rights to these caverns belong to the landowner. The Court’s opinion clarifies that salt caverns—once created—are separate from the mineral rights associated with a piece of land and are to be treated as part of the surface property.
In its ruling, the Court emphasized the fact that salt caverns are artificial, man-made structures created through the extraction of salt from the ground. The opinion also referenced previous rulings in Texas property law that dealt with issues of subsurface ownership and clarified that surface owners maintain exclusive rights to the structures they create, regardless of the underlying mineral rights.
The Court further explained that mineral owners typically hold rights to natural minerals such as oil, gas, and minerals like salt that can be extracted. However, when those minerals are extracted in a way that creates a permanent change to the land, such as the creation of a salt cavern, the rights to that modified subsurface structure revert to the surface estate owner.
This decision provides a clear legal framework for landowners and developers alike, establishing that surface property rights extend to man-made subsurface structures like salt caverns, which could affect the development of infrastructure projects, storage facilities, and resource extraction operations in Texas and beyond.
Legal Implications for Texas Property Law
The Texas Supreme Court’s ruling is a significant contribution to the ongoing evolution of property law in Texas. It provides clarity to the often-complex issues of subsurface ownership, particularly in a state where resource extraction plays a key role in the economy. For many landowners, particularly those engaged in oil and gas production or related industries, this decision clarifies the ownership of subsurface caverns and other man-made structures created during the course of resource extraction.
The decision also sets a precedent for future cases involving subsurface rights. By asserting that surface owners maintain control over the caverns they create, the Court’s ruling underscores the principle that changes to the subsurface, even those made during resource extraction, do not automatically confer ownership of those modifications to mineral rights holders.
Additionally, the ruling provides significant guidance for businesses involved in salt cavern storage and similar industries. These businesses must now consider the implications of the Texas Supreme Court’s decision when negotiating land use agreements, knowing that surface estate owners control the resulting salt caverns. It also raises the issue of how businesses and developers in other states may address similar concerns regarding subsurface ownership, as Texas law has often served as a model for property law in other oil and gas-producing states.
Economic and Commercial Impact
The ruling is expected to have a profound impact on industries that rely on subsurface storage and extraction. The use of salt caverns for natural gas storage, in particular, is a critical aspect of the energy infrastructure in Texas, as these caverns provide safe and efficient storage for large volumes of gas. The ruling, by affirming that surface owners have control over the caverns, will likely have implications for the energy sector, particularly in terms of negotiating storage contracts and dealing with disputes over land use.
Energy companies and other commercial enterprises that operate in this area may need to review their existing land agreements to ensure they are in compliance with the Court’s ruling. The decision is also likely to spur more legal discussions around the ownership of other subsurface modifications made during resource extraction, such as oil and gas reservoirs or other underground facilities.
For businesses operating in the oil and gas industry, this decision could lead to a rethinking of their land use strategies, particularly in terms of the legal relationships they maintain with surface estate owners. Companies may seek to structure more comprehensive agreements with surface landowners to avoid potential disputes and clarify ownership issues related to subsurface storage.
The ruling also highlights the need for continued attention to land use issues as the energy sector evolves and businesses increasingly look to subsurface storage solutions. The Texas Supreme Court’s decision brings much-needed clarity and reduces the legal ambiguity that has surrounded these types of agreements.
Future Cases and Challenges
While the Texas Supreme Court’s decision resolves the immediate dispute over salt cavern ownership, it is likely to set the stage for future litigation involving similar questions about subsurface rights. The ruling could influence how courts in other jurisdictions handle similar disputes, particularly in states with active resource extraction industries such as Louisiana, Oklahoma, and North Dakota.
Legal experts are also speculating about how the ruling might affect cases involving other types of subsurface modifications, such as aquifers, underground water storage, and geological formations created through hydraulic fracturing (fracking). As businesses and landowners continue to explore new ways to use the subsurface, questions about ownership and rights will likely continue to emerge.
For now, however, the Texas Supreme Court’s decision provides a solid legal foundation for how salt caverns are to be treated under the law, providing clarity for landowners and developers alike. As the case demonstrates, it is crucial for businesses and individuals engaged in resource extraction and subsurface land use to understand their legal rights and obligations, particularly in a state as resource-rich as Texas.
Conclusion
The Texas Supreme Court’s decision on subsurface salt cavern ownership marks a pivotal moment in Texas property law. By ruling in favor of surface owners, the Court has provided much-needed clarity on the ownership of subsurface structures created through resource extraction. This decision will have lasting implications for businesses, landowners, and legal professionals in Texas, particularly those involved in energy storage and extraction industries.
As resource extraction technologies continue to evolve, the principles established in this case will likely serve as a precedent for future legal battles over subsurface ownership. With this landmark ruling, Texas is reinforcing its role as a leader in energy law, providing businesses with the certainty they need to operate effectively while maintaining fairness for landowners.
