Texas Supreme Court Clarifies Ownership of Salt Caverns

The issue of ownership of salt caverns as between the surface estate and the mineral estate has become increasingly relevant and commercially significant, though previously unsettled under Texas law. The Texas Supreme Court had never directly addressed the question of who owns residual salt caverns. However, in Myers-Woodward, the Court ruled that, in the absence of conveyance language or contractual terms to the contrary, ownership of the cavern space remains with the surface estate. This decision clarifies the mineral and surface owners’ rights, which enhances certainty for landowners and developers of gas storage facilities. This ruling is timely. Underground natural gas storage has become increasingly valuable in Texas as the market for natural gas expands and liquified natural gas exports increase, and numerous new projects are being considered and in the development stage.

Background of the Case

The case stems from a 1947 lease for the mineral estate of a parcel of land. Like many mineral leases, it did not specifically allocate the right to own the caverns. The petitioner and surface owner (Myers) and the respondent and mineral owner (USM) disagreed on ownership of salt caverns created as a result of salt mining. USM acquired the salt rights in 2008. Myers and USM had disagreements, and USM sued in 2013, asking the court to declare, among other things, that USM owned the cavern space created by its mining.

The Courts’ Circuit Split

Before this decision, lower courts in Texas were divided on the issue of cavern ownership. The Texas Supreme Court resolves the circuit split and establishes a clear framework for parties moving forward.

The trial court initially held that the caverns were owned by the mineral estate (USM), but such ownership did not automatically confer the right to storage of hydrocarbons or off-site materials within the caverns. The cavern ownership was confined to the purposes expressly contemplated by the lease: salt mining.

Both parties appealed the case. The 13^th Court of Appeals ruled that the surface estate retains ownership of empty spaces and that mineral estate has no usage right for any purpose not specifically stated in the mineral conveyance. This was in conflict with a previous 9^th Court of Appeals decision, Mapco, Inc. v. Carter, 808 S.W.2d 262 (Tex. App. — Beaumont 1991, writ granted), rev’d on other grounds, 817 S.W.2d 686 (Tex. 1991), that ruled that the mineral estate retained ownership of caverns. Mapco was an outlier case that contravened the majority of Texas jurisprudence on the issue and was widely criticized as it rested heavily on nonbinding authorities, including law review commentary and out-of-state precedent rather than established Texas law. Discrepancy of treatment by courts left parties uncertain as to their respective ownership rights. Both parties once again appealed, and the question was brought before the Texas Supreme Court.

Supreme Court of Texas Decision

“Absent an agreement otherwise, ownership of underground salt does not include ownership of underground empty space within or around a salt formation.”

Myers-Woodward, LLC v. Underground Services Markham, LLC, 2025 WL 14158892 (Tex. May 16, 2025).

The Supreme Court of Texas affirmed the majority view espoused by the 13^th Court of Appeals and adopted a bright-line rule that the space within salt formations is not included in mineral rights. The Court held that salt caverns left by those with salt mineral rights are owned by the surface rights owner. The court made an important distinction between the right to the minerals underneath the ground and the right to the space in which the minerals were located. “Put more simply … empty space is not salt.” Myers-Woodward LLC, 25 2025 WL 14158892 at *13. The surface owner, not the mineral owner, retains ownership of the empty space and can convey or offer an interest in it to other developers.

“The severed mineral estate has the implied right to use as much of the surface estate as reasonably necessary to produce and remove minerals.”

Myers-Woodward, LLC v. Underground Services Markham, LLC, 2025 WL 14158892 (Tex. May 16, 2025).

The court held that a party that contracts to own or lease the minerals has no ownership right to the cavern, but has a limited right to use the cavern. Their right of use of the surface estate is limited to only that which is reasonably necessary to produce the minerals. Unless necessary for the production of salt, a mineral owner has no right to use the salt caverns for injection and storage of hydrocarbons produced elsewhere. Here, the Court found that the mineral estate owner did not need to use the cavern for the production of salt. There is no implied right to use the cavern created by the removal of salt for any purpose other than what is reasonably necessary to extract the minerals, and any right to use the salt caverns for injection or storage would need to be explicitly contracted.

Takeaways

The key takeaway is that ownership of salt caverns remains with the surface estate, unless agreed otherwise in a conveyance or lease. The right to store natural gas in a salt cavern is not among the rights automatically transferred upon conveyance or lease of a mineral estate.

Surface rights owners retain the right to contract with third parties to develop salt cavern storage facilities and should be proactive about these newly clarified rights given the profitable and developing market.