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Originally Posted by dalmations202
I just hate the fact that I can't buy land with the mineral rights because someone has held the rights for eons because, as I have been told -- why give them up?
They might make something years from now worth more than all the land is worth right now. I'll never sell the mineral rights on the land where I live ...several generations down will have them -- regardless of what happens to the land (unless they start taxing the possible value yearly, in which case they'd have to give them up)
IMO, any land with non-producing wells, mineral rights should go back to the landowner after 10 years of non-production. All mineral rights separated from the land should be taxed heavily every year (if you are going to tax the land). Right now land owners are taxed more than mineral rights are "unless" they are producing.
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you can purchase mineral rights, of course. As a matter of fact, most of the energy companies in the US actively look to buy mineral rights as they find the opportunity. Generally, the selling price is roughly the value of royalties received for three years. So, beynond three years you start to turn a profit. It is a good business investment plan if you can buy those rights. Generally, those mineral rights have been handed down in inheritance to each progressive generation with heavy dilution of the value. Millions of people have a 0.0015 share in this well or that well and they get around 30 dollars per month for it if it is producing. If you want to buy mineral rights, then what you do is find people (like me) with mineral rights that are so watered down that the royalty is 30 dollars per month. The paperwork including the division orders and the tax filing is much more trouble than the royalty is worth. But, if you can find a lot of people like me, then you can buy a lot of mineral rights and make it worth your time and investment. I get emails and letters all the time from people wanting to buy mineral rights. Actually, most of them come from the company paying me (such as Chesapeake).
You are right that the owner of the mineral rights is not taxed directly for that mineral right in the same fashion that the land owner pays property tax. It would be terribly complicated to come up with some way to tax the mineral right. All land has a mineral right attached to it. So, does all land have a mineral right "property tax"? Most land does not produce anything to be sold with that mineral right. It, to me, makes more sense to tax the royalty as a method to tax mineral rights that produce and leave the others alone.
Anyway, the royalty is taxed heavily.
And, you would also probably be appalled to find out how royalty goes to the state instead of persons. A lot of people with minimal royalty checks just quit filing the division orders, and the companies are legally obligated to send the royalty money to the state. But, am I going to hand my 30 dollars per month boondoggle to my three children such that they have to fight all the same paperwork for ten dollars per month? Of course not. It would be cruel.