Peter recently purchased Tract 1, a five acre parcel in Alaska, for $100,000.He wanted to build a bed and breakfast on Tract 1. Unbeknownst to Peter, Gasland Corp. had won a state lease to explore for natural gas in some subsurfacelands, including beneath Tract 1. Gasland Corp. planned to locate a drill rig on a part of Tract 2, immediately adjacent to Tract 1. Gasland Corp. had a use agreement with the owner of Tract 2, but it had no agreement with Peter.
Gasland Corp. told Peter that it held a valid state gas lease and that it couldexplore Tract 1 regardless of Peter's objection to such exploration. Peter responded that he received a valid deed conveying the fee title of Tract 1 andthat he could exclude Gasland Corp. from accessing Tract 1 to explore for naturalgas. Soon after Peter acquired Tract 1, the State decided to realign a road and take one acre of Tract 1 as new right-of-way for the realigned road. The State’s decision was unrelated to Peter and Gasland Corp.’s plans.
The State’s engineers had studied the area and concluded that their realignment was the most efficient design. The study did not analyze on a parcel-by-parcel basis the potential effects on any given parcel. The State offered Peter $15,000 for the right-of-way. When Peter refused, the State filed a complaint for taking the right-of-way in state court, filed a declaration of taking which stated that the “road is necessary to address safety concerns” and placed $15,000 in the registry of the court.
1. Can Peter prevent Gasland Corp. from exploring for natural gas in Tract 1? Explain.
2. What arguments should Peter make in court in opposition to the state’s case for taking the right-of-way?