# Presentation: 917642

## Split Estate

**Split Estate**
**Private Surface / Public Minerals**
**What Does it Mean to You?**
**2006**

## Overview of Presentation

- Why Were the Surface and Mineral Estates, Split?
- Energy Policy Act of 2005, Section 1835 and a Report to Congress – Our Task
- How BLM Manages Split Estate
- How To Reduce the Impact of Energy Development on Private Surface

## Where Is Oil and Gas Foundin the Western United States?

- Green and Red areas
- on the map show
- Oil and Gas production areas.

## Private  Federal

_**Private **_** Federal**

_**Private**_** State**

_**Federal **_** Federal**

_**State**_** Private**

_**Private**_** **
**Private**

_**State**_
** ****Federal**

_**Federal**_
** ****State**

**This Presentation**** **

**Notes:**
There are several types of land status out there where someone owns surface, and someone different owns the minerals..

The one we are here to focus on today is Private Surface/Federal Minerals, where the surface estate is privately owned and the mineral estate is owned by the Public.  In this case the Public’s minerals estate is managed by the Federal government for the benefit of the public.  I will refer to this situation as “split estate”.

## How did the surface estate become separated from the mineral estate? 

_**Private Surface  **_** **
**Public Minerals**

**Notes:**
So, how did we end up with this situation of private surface owners having federal minerals under their land?
We have to go back in history to answer that.......

## After the Revolutionary War, the Continental Congress began the process of selling lands in order to help repay the war debt. 

**After the Revolutionary War, the Continental Congress began the process of selling lands in order to help repay the war debt. **

**Notes:**
After the Revolutionary War, the Continental Congress began the process of selling lands in order to help repay the war debt. 

## FREE LAND!

**FREE LAND!**

**FREE LAND!**

**Eventually a cry went out for “FREE LAND” that could be obtained through sweat equity.**
**The Country also saw the need for a way to encourage settlement of the West.**

**Notes:**
Eventually a cry went out for FREE LAND that could be obtain through sweat equity:

## 1862

**1862**

**Over time, Congress responded with **_**3**_** main Homestead Acts to encourage settlement of the West.**
**In 1862 the Original Homestead Act was passed.  **
**It provided a gift of 160 acres if****	****you lived on the land for 5 yrs; cultivated it; and constructed at least a 12'X14‘ building on it. **_**You also received the minerals!**_

**Notes:**
Over time, Congress responded with 3 main Homestead Acts to encourage settlement of the West.
In 1862 The Original Homestead Act was passed.  
It provided a gift of 160 acres if:
	you lived on the land for 5 yrs; 	cultivated it; and constructed at least a 12'X14‘ building on it ; You also received the minerals

## 320 Acres

**320 Acres**

**1909**

**37 years later in 1909 Congress passed The Enlarged Homestead Act.  Since the prime river bottoms had largely been claimed under the previous act, homesteaders began looking for land they could dryland farm.  Since this land was generally less productive than river bottom acreage, homesteaders were given 320 acres under this act.**

**Notes:**
37 years later in 1909 Congress passed The Enlarged Homestead Act.  
Since the prime river bottoms had largely been claimed under the previous act, homesteaders began looking for land they could dryland farm.  Since this land was generally less productive than river bottom acreage, homesteaders were given 320 acres under this act.

**1910**

**Surface = agriculture** _       _

**Subsurface = minerals**

- Congress Recognizes Different Values

**As early as 1910 Congress recognized that some Federal lands had surface that was valuable for **_**agriculture**_** and subsurface that was desired for **_**mineral extraction**_**, so......**
**The Government began selling the surface, and either retaining the minerals, or selling them to someone else.**

**Notes:**
As early as 1910 Congress recognized that some Federal lands had surface that was valuable for agriculture and subsurface that was desired for mineral extraction, so......
The Government began selling the surface, and either retaining the minerals, or selling them to someone else.

## 1914

**During the early homesteading days the Fed govt didn't retain the minerals, or it retained only the coal (i.e.. the Homestead Act or the Enlarged Homestead Act).    **
**However, concern grew that strategic minerals needed to fuel the economy were being locked up by a relatively few people.  **_**So in 1914 Congress began retaining most of the mineral estate under acts like the Stockraising Homestead Act of 1916**_**.  **

**Notes:**
During the early homesteading days the Fed govt didn't retain the minerals, or it retained only the coal (i.e.. the Homestead Act or the Enlarged Homestead Act).    
However, concern grew that strategic minerals needed to fuel the economy were being locked up by a relatively few people.  So in 1914 Congress began retaining most of the mineral estate under acts like the Stockraising Homestead Act of 1916.  

## 640 Acres

**For Ranching Purposes**

**640 Acres**

**1916**

**In 1916 The **_**Stock Raising Homestead Act**_** was passed.  It provided settlers 640 acres of prairie for ranching purposes.  Under this act, the **_**minerals were reserved to the Fed Govt**_**.****  **

**Notes:**
In 1916 The Stock Raising Homestead Act was passed.  
It provided settlers 640 acres of prairie for ranching purposes.  
Under this act, the minerals were reserved to the Fed Govt.  

## 261 Million Surface Acres

**Administers Surface and Minerals**
**for the Federal Government**
**261 Million Surface Acres**
- ----------------------------------------------------------------------------------------------------------------------------------------------------------------
**700 Million Mineral Acres**
**58 Million Acres**
_**NonFederal Surface**_
**Federal Minerals**

**Notes:**
As a result, of the 2.3 billion acres in the US.....
BLM manages 261 million acres of surface and 700 million acres of mineral estate
On approximately 58 million acres, the surface is owned by someone other than the Federal government. Could be State, Could be Private...

## Energy Policy Act of 2005

***Energy Policy Act***

***Of 2005***

**Energy Policy Act of 2005**

- The Energy Policy Act  was signed by the President in August of 2005.  The focus of the Act is securing reliable, affordable supplies of energy for American homes and businesses.

**Notes:**
The Energy Policy Act  was signed by the President in August of 2005
	The Focus of the Act is about securing reliable, affordable supplies of energy for American homes and businesses.
	The Act includes provisions for improving the way the BLM carries out its energy-related responsibilities, including increasing the efficiency of the permitting process for energy resource development and enhancing management practices.

## Energy Policy Act of 2005Sec 1835                                 Split Estate

- ► In consultation with **private surface owners, industry and interested parties**, the Secretary shall **review current policies** **and practices** of management of Federal subsurface oil and gas activities **and their effects** on private surface ownership.

- Energy Policy Act of 2005Sec 1835                                 Split Estate

**Notes:**
Section 1835 addresses Split Estate.
BLM is charged with a specific task:
► In consultation with private surface owners, industry and interested parties, the Secretary shall review current policies and practices of management of Federal subsurface oil and gas activities and their effects on private surface ownership.

## Affected Party Consultation

- Meeting with Local BLM Managers
- Listening Sessions
- Public Comments to a Panel
- E-mail Comments:
- Were Due April 1: _[splitestate@blm.gov](mailto:splitestate@blm.gov)_
- Report to Congress
- Further Information:
- Website: _[www.blm.gov/bmp](http://www.blm.gov/bmp)_

**Notes:**
Meeting with Local BLM Managers
Listening Sessions
Today: Public Comments to the Panel
E-mail Comments: 
Due April 1: splitestate@blm.gov
Report to Congress
Further Information:
Website: www.blm.gov/bmp

**BLM Conducted Split Estate**
**Listening Sessions & **
**Accepted E-mail Comments**

**New Mexico**
**Colorado**
**Montana**
**Washington, D.C.**

- splitestate@blm.gov

**9 listening sessions were held at 5 locations across the West and Washington DC**

**Notes:**
9 listening sessions are being held in 5 locations across the West and Washington DC
Albuquerque, New Mexico; Grand Junction, Colorado; Casper, Wyoming; Miles City, Montana; Washington, D.C.

## Slide 18

| State/Date | Speakers | Participants |
| --- | --- | --- |
| Albuquerque, NM
March 20, 2006 | 1:00 PM        25
7:00 PM          7 | 1:00 PM    100+
7:00 PM      64 |
| Grand Junction, CO
March 22, 2006 | 1:00 PM        12
7:00 PM          7 | 1:00 PM      43
7:00 PM      22 |
| Casper, WO
March 24, 2006 | 1:00 PM        32
7:00 PM          7 | 1:00 PM      72
7:00 PM      20 |
| Miles City, MT
March 27, 2006 | 1:00 PM          6
7:00 PM          2 | 1:00 PM      20
7:00PM         6 |
| Washington, DC
March 31, 2006 | 1:00 PM          4 | 1:00 PM      10 |
| Total | 102 | 360+ |

## Local Listening Opportunities

- Our Doors Are Always Open

- In addition to the National listening sessions, our doors are always open at the State Office, District Office, and Field Office level to discuss local problems and find local solutions.

**Notes:**
In addition to the National listening sessions, our doors are always open at the State Office, District Office, and Field Office level to discuss local problems and find local solutions.

## Split Estate

**Rights, Responsibilities, and Opportunities**

**Split Estate**

**BLM produces a brochure that helps explain the Rights, Responsibilities, and Opportunities of the BLM, Operator, and Surface Owner. Contact your local BLM office to obtain a copy.**

**Notes:**
The Brochure you picked up by the door can be a helpful guide to determining your rights, responsibilities, and opportunities as an oil and gas operator or surface owner.

The brochure has 3 main columns, one pertains to BLM, one for the lessee/operator, and one for the private surface owner.

Rows across are highlighted to indicate the various stages of:  Land Use Planning and Lease Sales; Permitting and Development; Operations and Production; and Well Plugging and Surface Reclamation

## How Does the BLM Manage Oil and Gas Development in Split Estate Situations?

- Land Use Planning
- The BLM Resource Management Plan is the Foundation for Oil and Gas Decisions on Split Estate.
- Open or Closed to Leasing
- Lease stipulations
- BLM routinely updates its land use plans.
- BLM strongly encourages public involvement during the Resource Management Plan process.
- State and Local Governments may be Cooperating Agencies.

**Notes:**
How Does the BLM Manage Oil and Gas Development in Split Estate Situations?
Land Use Planning
The BLM Resource Management Plan is the Foundation for Oil and Gas Decisions split estate.
Open or Closed to Leasing 
Lease stipulations.
BLM Routinely updates its land use plans.
BLM strongly encourages public involvement during the Resource Management Plan process.

## How Does the BLM Manage Oil and Gas Development in Split Estate Situations?

- Lease Sales
- BLM provides a minimum of a 45-day public notification prior to leasing
- BLM is looking at ways to better notify the public prior to leasing.

**Notes:**
Lease Sales
BLM provides a 45-day public notification prior to leasing
BLM is looking for ways to better notify surface owners prior to leasing.

## How Does the BLM Manage Oil and Gas Development in Split Estate Situations?

- The Onsite Meeting
- The surface owner is invited to attend and identify development preferences.

**Notes:**
The Onsite Meeting
The surface owner is invited to attend the onsite meeting and identify development preferences.

## Current BLM Policy

- ►**BLM Requires that the Operator engage the Surface Owner in negotiations for the purpose of obtaining a surface use agreement:**
**Surface owner ****agreement for access, ****or**
**Waiver**** from surface owner for access, or**
**Agreement regarding ****compensation**

**Notes:**
►The Drilling Permit cannot be approved by BLM until:
Surface owner agreement for access, or
Waiver from surface owner for access, or
Agreement regarding compensation, or
Sufficient bond for the benefit of the surface owner to cover damages to crops or tangible improvements 

## Current BLM Policy

- Surface Use/Access Agreement
- BLM requires the lessee/operator to make a _good faith effort_ to obtain an agreement with the surface owner.
- Failing that, the operator can “bond-on”
- Bonding-on is a very rare occurrence.

## Current BLM Policy

- ► There are _**2**_ Types of Bonds
**3104 “**_**Performance”**_** Bond** – Required
- Ensures Performance During Drilling, Production, Plugging and Abandonment, Reclamation** **
- Minimum Bond Amounts:
- $10,000 Per Lease
- $25,000 Statewide
- $150,000 Nationwide

**Notes:**
► 2 Types of Bonds
3104 Bond
Drilling, Production, Plugging and Abandonment, Reclamation 
Bond Amounts:
$10,000 Lease
$25,000 State
$150,000 Nationwide

## Current BLM Policy

- ► 2nd Type of Bond –
**Surface Owner Protection Bond**
- 	(aka: Damages Bond or 3814 Bond)
- If the lessee/operator and surface owner fail to reach a Surface Use Agreement
- _Coverage_ (Depends on statute under which the land was patented.)
- For example, under the Stock Raising Homestead Act : Reasonable & foreseeable damages to _Crops (including grazing lands)_ and _Tangible Improvements_
- Minimum Bond = $1,000

**Notes:**
► 2nd Type of Bond
3814 Bond (Stock Raising Homestead Act Bond)
Covers:  Reasonable & foreseeable damages to Crops and Tangible Improvements*
Minimum Bond = $1,000

## Damages Bond

- Bond is filed with BLM, with a copy to the surface owner
- Surface owner has 30 days to object
- BLM reviews objections and:
- Rejects bond:  _Operator_ has 30 days to appeal to the Interior Board of Land Appeals (IBLA)
- Accepts bond:  _Surface owner_ has 30 days to appeal to the Interior Board of Land Appeals

## Inspection and Enforcement

- BLM conducts inspections based on a priority ranking system.
- If a surface owner detects noncompliance, they should contact the BLM. (2nd set of eyes)
- BLM will investigate and
- 	take appropriate
- 	enforcement action.

**Notes:**
BLM conducts inspections based on a priority ranking system.
Inspection and Enforcement 
If a surface owner detects noncompliance, they should contact the BLM.
BLM will investigate and
	take appropriate 
	enforcement action.

## Current BLM Policy

- The surface owner is invited to attend the reclamation inspection & identify concerns to BLM.
- BLM will consult with the surface owner prior to approving final reclamation.

**Notes:**
The landowner is invited to attend the reclamation inspection & identify concerns to BLM.

BLM will consult with the surface owner prior to approving final reclamation.

## How to Reduce the Impact of Energy Development on Private Lands

**Environmental **
**	****	****Best Management Practices (BMPs)**
- Minimize Road Traffic
- Minimize Noise
- Maintain Scenic Quality
- Protect Property Values

**Notes:**
Typical BMPs May Include:
Minimizing Roads, Utilities, & Well Pads
Drilling Multiple Wells from a Single Well Pad
Interim Reclamation
Reducing Noise
Remote Production Monitoring
Centralized Production Facilities

## Use Best Management Practices To:

- Use **B**est **M**anagement **P**ractices To:

-        

- FOR MORE INFORMATION, VISIT:  www.blm.gov/bmp

- A Choice of Color

- Interim Reclamation

- Minimize Footprint

**Reduce the Impact**
**Of Energy Development**

**Notes:**
Best Management Practices
It is “a given” that there will be energy development – how to reduce its impact on the surface owner is the key.
There are many best management practices to choose from for reducing the environmental effect of oil and gas development.
Visit the Best Management Practice website for more ideas.

## 1

- 2

- 3

- 4

**A Temporary Use**,
- not a Permanent Use of the Land

**Notes:**
Energy Development is considered a Temporary Use of the Public Lands.

While its effects may be short- or long-term, it is not permanent.

## For More Information:

- _[www.blm.gov/bmp](http://www.blm.gov/bmp)__ _**  BMPs**

- _[www.blm.gov/bmp](http://www.blm.gov/bmp)__  _**Split Estate**

- _[www.blm.gov/bmp](http://www.blm.gov/bmp)__   _**Oil and Gas Gold Book**

**For More Information:**

**Notes:**
We’d be happy to take any questions you might have about our oil and gas program.