Case Title: Belle Fourche Pipeline Co. v. State

Citation: 

Docket Number: 86-144

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-12-16T00:00:00Z

Document:
Belle Fourche Pipeline Co. v. State1988 WY 158766 P.2d 537Case Number: 86-144Decided: 12/16/1988Supreme Court of Wyoming
BELLE FOURCHE PIPELINE 
COMPANY, A WYOMING CORPORATION, AND EIGHTY-EIGHT OIL COMPANY, A PARTNERSHIP, 
PETITIONERS,

v.

THE STATE OF WYOMING, THE 
ENVIRONMENTAL QUALITY COUNCIL OF THE STATE OF WYOMING, RANDOLPH WOOD, AS 
DIRECTOR OF THE DEPARTMENT OF ENVIRONMENTAL QUALITY, ROGER SHAFFER, AS 
ADMINISTRATOR OF THE LAND QUALITY DIVISION OF THE DEPARTMENT OF ENVIRONMENTAL 
QUALITY, AND THUNDER BASIN COAL COMPANY, RESPONDENTS.

* Chief Justice Cardine 
not participating.

Petition for review from 
the District Court, CampbellCounty, Timothy J. Judson, 
J.

R. Stanley Lowe 
and Manuel A. Lojo, Casper, for petitioners.

A.G. McClintock, 
Atty. Gen., Stephen R. Shanahan, Sr. Asst. Atty. Gen., and Michael N. Patchen, 
Legal Intern, for respondent, State of 
Wyoming. 

Marilyn S. Kite 
and Lawrence J. Wolfe, Holland & Hart, Cheyenne, for respondent, Thunder Basin Coal 
Co.

Before CARDINE, C.J., THOMAS, URBIGKIT and MACY, 
JJ., and BROWN, J., Retired.

THOMAS, 
Justice.

[¶1.]     The problem that must 
be solved in this appeal is whether a long-term lessee of land or the holder of 
a right-of-way easement is a "surface landowner" or "surface owner," alluded to 
in §§ 35-11-406(b)(xii) and 35-11-416, W.S. 1977, and entitled to the protection 
of the statutory provisions requiring consent of a "surface landowner" and the 
posting of a bond to protect the "surface owner or owners." Collateral questions 
are presented with respect to whether an administrative agency is required to 
consider questions raised concerning the validity of its rules in the context of 
a contested case hearing, and whether the Wyoming Department of Environmental 
Quality, Land Quality Division Rules and Regulations, Ch. IV, § 3.k. (1985) 
[hereinafter Ch. IV, § 3.k.] (relating to a requirement that mining operations 
be conducted in order to minimize disruption of any services provided by 
facilities within the permit area) is lawful. The Environmental Quality Council 
(EQC) granted a coal mine permit in response to the application of Thunder Basin 
Coal Company without affording Belle Fourche Pipeline Company and Eighty-Eight 
Oil Company the protection afforded by §§ 35-11-406(b)(xii) and 35-11-416, W.S. 
1977. It held that the applicant had met its burden of proof in demonstrating 
that the application was in compliance with applicable state laws and that it 
was appropriate to invoke Ch. IV, § 3.k. Belle Fourche Pipeline Company and 
Eighty-Eight Oil Company appealed the decision of the Environmental Quality 
Council to the district court which certified the case to this court in 
accordance with our rules of appellate procedure. We affirm the decision of the 
Environmental Quality Council.

[¶2.]     Belle Fourche Pipeline 
Company (Belle Fourche) and Eighty-Eight Oil 
Company (Eighty-Eight) state the issues in this way:

"I. Whether the 
Environmental Quality Council erred in finding that neither Appellant is 
entitled to the protections of §§ 35-11-406(b)(xii) and 
35-11-416?

"II. Whether the 
Environmental Quality Council erred in finding that Appellee Thunder Basin Coal 
Company has met its burden of proof in that its application is in compliance 
with all applicable state laws?

"III. Whether the 
Environmental Quality Council erred in failing to find Chapter IV Section 3.k. 
of the Land Quality Division rules invalid, either of itself or as applied in 
this matter?

"IV. Whether the 
Environmental Quality Council erred in failing to respond to Appellant's 
contention that said rule, either of itself or as applied, is 
invalid."

Thunder Basin 
Coal Company (ThunderBasin) frames the issues as 
follows:

"I. Whether the Environmental Quality Council correctly 
determined that the interests held by Appellants did not qualify them as 
`surface landowners' under W.S. § 35-11-406(b)(xii) or as a `surface landowners' 
under W.S. § 35-11-416.

"II. Whether the Land 
Quality Division Rules and Regulations, Chapter IV, Sec. 3.k. are 
unlawful.

"III. Whether the surface 
owner consent statute, if construed to apply to appellants, is unconstitutional 
because it is preempted by federal law and violates the guarantees of Equal 
Protection."

The State of 
Wyoming, on 
behalf of the EQC, articulates these issues:

"1. Are a lessee of land 
and the holder of an easement surface landowners or surface owners within the 
meaning of W.S. 35-11-406(b)(xii) and 35-11-416?

"2. Is DEQ Land Quality 
Rule IV(3)(k) unlawful?

"3. Is it necessary to 
remand an administrative agency order for failure by the agency to make findings 
concerning a legal issue when that issue is before the Supreme Court on 
appeal?"

 

[¶3.]     We will address whether 
either a long-term lessee of the surface or the holder of a right-of-way 
easement comes within the terms "surface landowner" or "surface owner" as used 
in §§ 35-11-406(b)(xii) and 35-11-416, W.S. 1977; whether the EQC was required 
to consider the validity of its rules in the context of a contested case 
hearing; and, if so, whether Ch. IV, § 3.k. is lawful. The resolution of these 
questions is dispositive of this case and, for that reason, it is not necessary 
to address the questions posed in Issue II urged by Belle Fourche and 
Eighty-Eight and Issue III presented by Thunder Basin.

[¶4.]     On November 1, 1967, 
Atlantic Richfield Company (ARCO) obtained Federal Coal Lease No. W-3446, which 
granted ARCO the right to mine coal by surface mining methods. That lease 
covered the coal in Section 21, Township 46 North, Range 70 West, 6th P.M., in 
Campbell County, Wyoming, as well as other lands. Robert Deaver 
and Freda Dunlap owned the surface estate in Section 21, and, on May 1, 1970, 
they leased a portion of that section to Black Hills Oil Marketers, Inc., for a 
term of ninety-nine years. That lease was assigned to Eighty-Eight, which 
operates a truck receiving station for oil on the property. The station is 
equipped with a tank, pumps, meters, valves, piping, ladders, and other 
equipment, and annually it receives approximately 10,000 barrels of oil from 
producing wells in the area which are outside the subject 
property.

[¶5.]     In November of 1970, 
Robert Deaver and Freda Dunlap granted to Belle 
Fourche a right-of-way for oil and gas pipelines across portions of 
Section 21. In February of 1971, they granted a second right-of-way to 
Belle Fourche for oil and gas pipelines. 
Belle Fourche constructed, and continues to 
operate, two common carrier oil pipelines, which serve Eighty-Eight's truck 
receiving station and are situated in part within Section 
21.

[¶6.]     On November 3, 1976, 
ARCO acquired the surface of Section 21 pursuant to a warranty deed from Robert 
and Evelyn Deaver. The record does not disclose whether Freda Dunlap still held 
an interest in the surface of Section 21, but the record seems to assume that 
ARCO acquired complete ownership to the surface subject to "all rights of way, 
easements, exceptions, reservations and any and all instruments of record as of 
the date of this Warranty Deed, the provisions of which instruments touch and 
concern, or pertain to, the lands conveyed hereby." There is no question that 
Eighty-Eight and Belle Fourche had recorded the 
lease and the easements and that the acquisition by ARCO of the surface estate 
was subject to those interests.

[¶7.]     ARCO applied to the 
Department of Environmental Quality (DEQ) for a permit to mine Section 21. The 
DEQ then issued to ARCO a Permit to Mine and a License to Mine, No. 483, 
effective March 16, 1979. That permit authorized ARCO to begin mining operations 
in what was designated as the Coal Creek Mine within the designated permit area 
for a period of five years. The permit accorded with the interim program adopted 
by the State of Wyoming pursuant to the Federal Surface Mining Control and 
Reclamation Act, 30 U.S.C. § 1201-1328 (1977) (SMCRA). ARCO began construction 
of the Coal Creek Mine in the permit area in 1979, and actual production of coal 
commenced in 1982.

[¶8.]     In the meantime, in 
December of 1980, ARCO filed an application for modification of its existing 
interim permit for the Coal Creek Mine. The purpose of that application was to 
bring that permit into compliance with what had become Wyoming's permanent state 
program under SMCRA. Among other things, that application provided all 
utilities, including oil and gas pipelines, would be relocated away from the 
active mining area prior to the initiation of surface mining activities. The DEQ 
approved the new application after finding that it was technically complete. 
Notice of that application was published in March of 1985, and that notice was 
sent to the owners of record of surface rights within the permit area including 
Eighty-Eight and Belle 
Fourche.

[¶9.]     Various objections were 
filed opposing the issuance of the permit to mine which, with the approval of 
the DEQ, had been transferred from ARCO to ThunderBasin, a wholly-owned subsidiary of ARCO. 
Eighty-Eight and Belle Fourche presented 
objections to the issuance of the permit. These entities alleged that the 
proposed mining activities sought in the permit application would require a 
removal of their facilities which are located within the permit area, or would 
result in a cessation of their operations. Eighty-Eight and Belle Fourche refused to withdraw their objections, and a 
contested case hearing was held before the DEQ's Environmental Quality Council 
on September 10, 1985. Belle Fourche and Eighty-Eight agreed to limit their 
objections to the area which would be impacted by ThunderBasin's proposed mining operations during 
the first five-year term sought under the permit which expires in 
1988.

[¶10.]  Following the hearing, the EQC issued its 
Findings of Fact, Conclusions of Law and Order, granting Thunder Basin a permit 
to mine and rejecting the contention of Belle Fourche and Eighty-Eight that they 
were entitled to the protections provided in the consent and bonding provisions 
of §§ 35-11-406(b)(xii) and 35-11-416, W.S. 1977. Belle Fourche and Eighty-Eight 
then filed their petition for review of the decision of the EQC in the District 
Court of the Sixth Judicial District in and for CampbellCounty. ThunderBasin and the EQC jointly presented a 
petition for certification to this court which the district court 
granted.

[¶11.]  The parties to this appeal are in accord 
that relocation of the Belle Fourche and 
Eighty-Eight facilities is necessary, as well as operationally and economically 
feasible. The parties have not agreed with respect to which of several potential 
locations would best serve the interests of Belle 
Fourche and Eighty-Eight, nor have they reached any meeting of the 
minds as to who should bear the relocation costs. The justification for this 
appeal is found in the disagreement as to who shall bear the costs of 
relocation, with Belle Fourche and Eighty-Eight desiring to have security in the 
form of a bond posted by ThunderBasin which they contend they are entitled 
to as "surface owners" under the statute.

[¶12.]  The crux of this case requires a 
definition of which persons or entities are included within the statutory terms 
"surface land owners" or "surface owners." The material statutory provisions 
state in relevant part:

"(b) The application 
shall include a mining plan and reclamation plan dealing with the extent to 
which the mining operation will disturb or change the lands to be affected, the 
proposed future use or uses and the plan whereby the operator will reclaim the 
affected lands to the proposed future use or uses. The mining plan and 
reclamation plan shall be consistent with the objectives and purposes of this 
act and of the rules and regulations promulgated. The mining plan and 
reclamation plan shall include the following: Section 35-11-406(b), W.S. 
1977.

"(xii) For any 
application filed after March 1, 1975, including any lands privately owned but 
not covered by the provisions of paragraph (b)(xi) of this section an instrument 
of consent from the surface 
landowner, if different from the owner of the mineral estate, to the mining 
plan and reclamation plan. If consent cannot be obtained as to the mining plan 
or reclamation plan or both, the applicant may request a hearing before the 
environmental quality council." (emphasis added) Section 35-11-406(b)(xii), W.S. 
1977.

"(a) In those instances 
in which the surface owner is not the 
owner of the mineral estate proposed to be mined by mining operations a permit 
shall not be issued without the execution of a bond or undertaking to the state, 
whichever is applicable, for the use and benefit of the surface owner or owners of the land, in 
an amount sufficient to secure the payment for any damages to the surface 
estate, to the crops and forage, or to the tangible improvements of the surface 
owner." (emphasis added) Section 35-11-416, W.S. 1977.

The thrust of 
these two statutory provisions is to afford to "surface land owners" or "surface 
owners" the opportunity to refuse consent to a mining applicant to enter that 
"surface owner's" or "surface land owner's" property for the purpose of 
conducting mining or reclamation operations (§ 35-11-406(b)(xii)) and to require 
that a bond be posted for the purpose of insuring compensation for any damages 
resulting to the surface estate from the mining operations, including damages to 
crops, forage, or tangible improvements. Section 35-11-416, W.S. 1977.1

[¶13.]  Whenever this court is engaged in the 
construction of a statute, the primary consideration is to discern the intention 
of the legislature. State Board of Equalization v. Tenneco Oil Company, 694 P.2d 97 (Wyo. 1985); State ex rel. Motor Vehicle 
Division v. Holtz, 674 P.2d 732 (Wyo. 1983); 
Oroz v. Hayes, 598 P.2d 432 (Wyo. 1979). That legislative intent should be 
ascertained, as nearly as is possible, from the language incorporated in the 
statute, which is viewed in the light of its object and purpose. K N Energy, 
Inc. v. City of Casper, 755 P.2d 207 (Wyo. 1988); Amoco Production Company v. 
State Board of Equalization, 751 P.2d 379 (Wyo. 1988); State Department of 
Revenue and Taxation, Motor Vehicle Division v. Andrews, 671 P.2d 1239 (Wyo. 
1983); In re Adoption of MM, 652 P.2d 974 (Wyo. 1982); Board of County 
Commissioners of Campbell County v. Ridenour, 623 P.2d 1174 (Wyo. 1981), reh. 
denied 627 P.2d 163 (Wyo. 1981); Oroz, 598 P.2d  at 432; School Districts Nos. 2, 
3, 6, 9, and 10, in Campbell County v. Cook, 424 P.2d 751 (Wyo. 1967). In those 
instances in which the language in the statute is plain and unambiguous, the 
words used are to be accorded their plain and ordinary meaning unless there is 
some manifestation of a legislative intent that they not be accorded the plain 
and ordinary meaning. Amoco, 751 P.2d  at 379; Thomson v. Wyoming In-Stream Flow Committee, 651 P.2d 778 (Wyo. 1982); Wyoming State Department of Education v. 
Barber, 649 P.2d 681 (Wyo. 1982); Croxton v. 
Board of CountyCommissioners of NatronaCounty, 644 P.2d 780 (Wyo. 1982).

[¶14.]  The plain and ordinary meaning concept 
often directs us to dictionary definitions. Those who are entitled to the 
protection afforded by §§ 35-11-406(b)(xii) and 35-11-416, W.S. 1977, are 
described as "surface landowners" and "surface owners." Those precise phrases do 
not appear in our dictionaries, and, consequently, we must parse them. In 
Webster's Third New International Dictionary (1971) at 1612, an "owner" is 
defined as "one that has the legal or rightful title whether the possessor or not." 
(emphasis added) A "landowner," then, is defined in Webster's at 1269, simply as 
an "owner of land." The word "surface" means the "exterior or outside of an 
object or body; * * * situated on the surface of the earth rather than in the 
air or underground." Webster's at 2300.

[¶15.]  A more comprehensive definition is found 
in Black's Law Dictionary (5th ed. 1979). There the word "owner" is defined 
generally as "[t]he person in whom is vested the ownership, dominion, or title of property * * * who * * * has a 
right to enjoy and do with [the property] as he pleases, even to spoil or 
destroy it, as far as the law permits * * *." (emphasis added) Black's at 996. 
When it is applied to land, the term "owner" means, according to Black's at 996 
"one who owns the fee and who has the 
right to dispose of the property." (emphasis added) The term "surface," when 
invoked in connection with mining, means "that part of the earth or geologic 
section lying over the minerals in question." Black's at 
1293.

[¶16.]  A composite definition from these 
dictionary sources can be iterated: a "surface landowner" or "surface owner" is 
one who has a legal, rightful, or fee title to the exterior or outside of the 
earth, and who has an inherent right to enjoy or dispose of that property to the 
extent permitted by law; a "surface landowner" or a "surface owner" is the owner 
in fee of the surface estate.

[¶17.]  In Black's at 457, an "easement" is 
defined as "[a]n interest which one person has in the land of another." The 
definition ascribes "ownership" of the land to someone other than the person 
holding the easement. The Supreme Court of Arizona stated the proposition this 
way:

"* * * The essential 
qualities of easements as enumerated by all the authorities are: First, they are 
incorporeal; second, they are imposed upon corporeal property and not upon the 
owner of it; third, they confer no right 
to a participation in the profits arising from such property; fourth, they 
are imposed for the benefit of corporeal property; fifth, there must be two 
distinct tenements, a dominant, to which the right belongs, and a servient, upon 
which the obligation is imposed." (emphasis added) Day v. Buckeye Water 
Conservation and Drainage District, 28 Ariz. 466, 237 P. 636, 640 (1925), citing 19 
C.J. 864.

This court has 
quoted with approval a definition of an easement as a "liberty, privilege, or 
advantage in land, without profit, and existing distinct from the ownership of 
the soil * * *." Metcalf v. Hart, 3 Wyo. 514, 27 P. 900, 906 (1891). See also 
Potter v. Northern Natural Gas Company, 201 Kan. 528, 441 P.2d 802 
(1968).

[¶18.]  Appellant, Belle 
Fourche, holds only an easement. Analyzing its rights in the light 
of the definition of principles set forth above, it is clear that Belle Fourche, as the holder of an easement, is not a 
statutorily-protected "surface landowner" or "surface 
owner."

[¶19.]  A similar distinction between ownership 
and rights of occupancy is found with respect to leaseholds. A "lease" is 
defined as "[a]ny agreement which gives rise to the relationship of landlord and 
tenant." Black's at 800, citing Smith v. Royal Insurance Company, 111 F.2d 667, 
671 (9th Cir. 1940), cert. denied 311 U.S. 676, 61 S. Ct. 43, 85 L. Ed. 435 
(1940). Fundamental to the relationship of landlord and tenant is the 
proposition that a lease, while very often granting exclusive possession of the 
premises to the lessee for the period specified in the lease, does not grant 
"ownership" of the land to the lessee as that term has been defined. The very 
nature of a lease encompasses a recognition by the lessee that he does not have 
an ownership interest in the property. The necessary elements of the 
relationship of landlord and tenant have been said to be: "[p]ermission or 
consent on the part of the landlord, subordination to the landlord's title and 
rights on the part of the tenant, a reversion in the landlord, an estate in the 
tenant, and the transfer of possession and control of the premises to the tenant 
under a contract either express or implied between the parties." See Coggins v. 
Gregorio, 97 F.2d 948, 950 (10th Cir. 1938). While the landlord and tenant enjoy 
separate and distinct estates in the leased premises, it is inherent to the 
relationship that the legal title is in the landlord, and the tenant has only a 
usufructory interest limited by the term of the lease. Redgrave v. Schmitz, 584 S.W.2d 374 (Tex. 1979). A leasehold is an "interest" in 
real estate, but it is not a freehold. King v. White, 499 P.2d 585 (Wyo. 
1972).

[¶20.]  Eighty-Eight is a tenant or lessee in 
accordance with these definitions. When the elements of the relationship as set 
forth above, particularly the second one, are applied, it is clear that the 
lessee is not included within the statutory protections afforded the holders of 
the fee title in the property. When the definitions of "surface landowner" and 
"surface owner" are compared to the definitions of an "easement" and a "lease," 
it is clear, from the language used in the statute, that those terms do not 
encompass interests such as easements or leaseholds.

[¶21.]  While we could rest this case on the 
foregoing lexigraphy, the appellants so vigorously urge their position that we 
also test the result in the context of Wyoming legislative history as influenced by 
the federal legislative history relating to similar statutes and the traditional 
concepts of mineral law. Our holding that the holder of an easement or a lease 
is not intended to be protected by §§ 35-11-406(b)(xii) and 35-11-416, W.S. 
1977, finds support in the legislative history surrounding the enactment of 
these statutes and their predecessors in Wyoming, in traditional law relating to 
mineral interests which antedates the adoption of such statutes and still has 
influence and impact, in the history of federal legislation surrounding the 
enactment of the federal counterpart to Wyoming's statute, the SMCRA, and in the 
subsequent legislative action and inaction relating to these statutes and their 
interpretation.

[¶22.]  We commence this analysis by noting that 
traditionally in the law the mineral estate was identified as the dominant 
estate with respect to the ownership of the surface and the incidents of 
ownership of a mineral estate included certain inherent surface rights. The law 
long has recognized an initial, irrefutable principle that there must be a 
legitimate area in which the owner of the minerals of necessity has inherent 
rights to the surface relating to the opportunity to find and develop minerals. 
See generally, Haughey and Gallinger, Legislative Protection of the Surface 
Owner in the Surface Mining of Coal Reserved by the United States, 22 Rocky 
Mtn.Min.L.Inst. 145 (1976). The control of access on the part of the owner of 
the mineral estate was the imposition of a standard of reasonableness, i.e., the 
mineral owner or operator is permitted to use only so much of the surface as is 
reasonably necessary or incident to his finding, developing and producing the 
minerals. Thompson, Surface Damages - Claims by Surface Estate Owner Against 
Mineral Estate Owner, 14 Wyo.L.J. 99 (1959-60). Under such a rule, the surface 
owner received no compensation for surface damage so long as the use of the 
surface by the mineral owner was reasonable but, if the mineral owner was 
negligent or engaged in wilful misconduct in his use of the surface, damages 
could be imposed.

[¶23.]  With the law in this posture, the early 
1900's witnessed the acquisition of public land by private individuals from the 
federal government. In our state, the acquisition of public land was 
accomplished under the Act of March 3, 1909, 35 Stat. 844; the Act of June 22, 
1910, 36 Stat. 583; the Agricultural Entry Act of 1914;2 the Stock Raising Homestead Act of 
1916;3 and the Small Tract Act of 1938.4 With respect to lands acquired 
under these statutes, the patents to the surface owners encompassed a 
reservation or severance of all minerals to the federal government. Lacy, 
Conflicting Surface Interests: Shotgun Diplomacy Revisited, 22 Rocky 
Mtn.Min.L.Inst. 731 (1976). Pursuant to the reservations, the federal government 
was given the power to grant to other private persons the right to develop the 
minerals.

[¶24.]  The Agricultural Entry Act of 1914 and 
the Stock Raising Homestead Act of 1916, "enacted to carry out the expressed 
national policy of conserving the natural resources for future generations,"5 operated together and permitted the 
settlement for agricultural and livestock purposes of much of the land 
throughout the west. The activities primarily pursued by the surface owners were 
agricultural, and so the acts incorporated protections from the destruction 
caused by mining activities for lands used for crops and those improvements that 
had an agricultural purpose. These acts provided for the posting of a bond or 
surety to secure payment of all damages to crops or other improvements on the 
lands. In Kinney-Coastal Oil Company v. Kieffer, 277 U.S. 488, 48 S. Ct. 580, 72 L. Ed. 961 (1928), the Supreme Court approved the decision of the District Court 
for the District of Wyoming, Kinney-Coastal Oil Company v. Kieffer, 1 F.2d 795, 
797 (D.Wyo. 1924), which limited the act by stating:

"* * * The term `crops' 
clearly refers to agriculture, and the term `improvements,' in the connection in 
which it is found, can reasonably have no other significance than those of an 
agricultural nature."

We followed this 
reasoning in Holbrook v. Continental Oil Company, 73 Wyo. 321, 278 P.2d 798 
(1955).

[¶25.]  Subsequently, the federal acts were 
expanded to include protection for land supporting grazing and cattle interests 
because of the increase of those activities.6 Both acts provided, using identical 
language, that the mineral grantee could "occupy so much of the surface" of land 
overlying the minerals as was "required for all purposes reasonably incident [or 
necessary] to the mining." See Kinney-Coastal, 277 U.S.  at 491, 48 S. Ct.  at 581; Bourdieu v. 
Seaboard Oil Corporation, 48 Cal. App. 2d 429, 119 P.2d 973 (Cal. 1941); Thompson, 
Surface Damages - Claims by Surface Estate Owner Against Mineral Estate Owner, 
supra. These provisions were consistent with traditional mineral law recognizing 
the right to use the surface possessed by the owner of a mineral interest. See 
Transwestern Pipeline Company v. Kerr-McGee Corporation, 492 F.2d 878 (10th Cir. 
1974). The acts adjusted the traditional approach, however, by providing for the 
posting of a bond or undertaking to be filed with the Secretary of the Interior 
for payment of damages resulting to the crops and improvements of the owners of 
the land resulting from the mining operations. See, e.g., Agricultural Entry 
Act, Act of July 17, 1914, 30 U.S.C. § 121 (1958); Stock Raising Homestead Act, 
Act of Dec. 29, 1916, 43 U.S.C. § 299 (1958); Haughey & Gallinger, 
Legislative Protection of the Surface Owner in the Surface Mining of Coal 
Reserved by the United States, supra.

[¶26.]  Those acts used interchangeably the terms 
"surface patentee," "entryman," and "owner of the land." These terms equate to 
"ownership" of the surface of the land under the acts. In 1934, Congress enacted 
the Taylor Grazing Act, Act of June 28, 1934, Ch. 865, 48 Stat. 1269, which, 
although not expressly repealing the prior acts, limited them because most of 
the remaining unoccupied public land was withdrawn from agricultural entry. See 
Twitty, Law of Subjacent Support and the Right to Totally Destroy Surface in 
Mining Operations, 6 Rocky Mtn.Min.L.Inst. 497 (1960); and Mall, Federal Mineral 
Reservations, X Land & Water L.Rev. 1 (1975). The impetus for this statute 
was overgrazing of the public range creating a danger of permanent injury. The 
Taylor Grazing Act manifested a response to different needs of cattlemen and 
conservationists from those that had existed prior to that time, and this is 
evidenced by the stated purpose which was "[t]o stop injury to the public 
grazing lands by preventing overgrazing and soil deterioration, to provide for 
their orderly use, improvement and development, to stabilize the livestock 
industry dependent upon the public range, and for other purposes." With respect 
to mineral development, the act specifically allowed the mineral owner to "enter 
and occupy so much of the surface as may be required for all purposes incident 
to mining and removal of minerals therefrom, and * * * mine and remove such 
minerals, upon payment to the owner 
of the surface for damages caused to the land and improvements thereon." 
(emphasis added) Act of June 28, 1934, Ch. 865 § 8, 48 Stat. 1269, 
1933-1934. In 1936, this section of the act was amended so that prospecting for 
minerals became one of the approved activities for which one could enter and use 
the surface.

[¶27.]  These early statutory attempts relating 
to the surface lands overlying reserved minerals manifest an intent of the 
Congress to protect primarily the land itself and, secondarily, the owners of 
that land. The lands which were intended to be protected were those in use as 
agricultural or grazing lands. During the 1940's to the 1960's, the owners 
generally used land for the purposes for which it was originally patented but, 
from that time on, many owners of the surface sold it, divided it, or released 
full ownership of the surface estate thereby creating various new interests. 
Then, in the period of the 1960's and 1970's, the energy crisis, coupled with 
the emphasis on surface mining of western coal, clearly demonstrated a necessity 
for increased federal and state regulation to protect the environment and those 
owners of surface lands overlying federally reserved minerals. Lands were mined 
by strip mining methods without restoration, and once-productive agricultural 
and grazing lands were destroyed by mining activities. The states responded by 
enacting their own reclamation legislation intended to curb the destruction of 
traditional agricultural and grazing lands because of the surface mining 
methods. The first meaningful attempt in this area in Wyoming was the Open Cut 
Land Reclamation Act, S.L. of Wyoming 1969, Ch. 192. See Comment, Regulation of 
Open Cut Mining in Wyoming, V Land & Water L.Rev. 449 (1970). 
The policy of this act was to provide for:

"* * * [T]he reclamation 
and conservation of land subjected to surface disturbance by open cut mining and 
thereby to preserve natural resources, to aid in the protection of wildlife and 
aquatic resources, to establish agricultural, recreational, home and industrial 
sites, to protect and perpetuate the taxable value of property, and to protect 
and promote the health, safety and general welfare of the people of this State." 
S.L. of Wyoming 1969, Ch. 
192.

The statute 
required a permit for a new open cut mine, established obligations of the 
operator in mining, reclaiming and restoring land, and the submission of a bond 
to the commissioner of public lands to insure that money would be available to 
carry out the reclamation. The legislative intent was protection of crops, 
agricultural improvements, and the value of land for grazing through a 
reclamation process, and owners were not mentioned in any significant way. This 
statute was repealed in 1973 because its effectiveness was limited. See R. 
Austin and P. Borrelli, The Strip Mining of America, 8 Sierra Club 1971; and Comment, 
Regulation of Open Cut Mining in Wyoming, supra.

[¶28.]  The efforts of the State did not end at 
that point, however. In 1973, the legislature again addressed the effects of 
surface mining and enacted the original version of the Wyoming Environmental 
Quality Act (EQA). Chapter 250, S.L. of Wyoming 1973. The land quality provisions of 
the EQA established a new permit and licensing scheme designed to insure the 
adequate reclamation of strip-mined lands. Sections 35-502.20 through 35-502.41, 
W.S. 1957 (Cum.Supp. 1973). The statute incorporated many of the requirements of 
the Open Cut Reclamation Act of 1969, but it provided additional protection for 
the surface owner of lands proposed to be mined. The applicant for a mining 
permit had to obtain and include in the reclamation plan the written consent of 
the surface owner. If that consent were withheld, the Environmental Quality 
Council, responsible for the administration of the EQA, could hold a hearing and 
issue an order in lieu of consent based upon finding that the mining operations 
would not "substantially prohibit the operations of the surface owner." Section 
35-502.24(b)(x)(C), W.S. 1957 (Cum.Supp. 1973). The issuance of a permit 
depended upon the posting by the applicant of a bond against damages to the 
surface owner's crops and forage or tangible improvements. This expansion of 
protection did not in any way manifest a purpose to extend protection to those 
owners of an interest other than the fee. 

[¶29.]  The EQA was amended in 1975 primarily, 
for our purposes, to distinguish a "resident or agricultural land owner" from 
others with respect to applications filed after March 1, 1975 and from the 
"surface land owner" protected with respect to permits granted between July 1, 
1973 and March 1, 1975. It added with respect to post March 1, 1975 applications 
another category of "any lands privately owned but not covered by the provisions 
of W.S. § 35-502.24(b)(xi)," which were to be included within the provision of 
the statute providing for an order in lieu of consent. This amendment manifested 
a recognition by the legislature of the new uses to which land was being 
devoted. The old version of the EQA and earlier models furnished protection for 
the land owner, but that protection was only for owners who used the lands for 
agricultural or residential purposes. Holbrook, 278 P.2d  at 798. After 1975, 
owners of land that was used for other purposes also were granted protection. 
The protection was not as complete as that provided for owners using the land 
for agricultural or residential purposes. Those owners were given an absolute 
veto to an application while the owners using land for other purposes were 
granted the right to a hearing if they objected to the proposed mining 
activities, after which the EQC still could issue an order in lieu of consent. 
Section 35-502.24(b)(xii)(C), W.S. 1957 (Cum.Supp. 1975) Still the protection 
was limited to owners of land and preferentially to those who lived on the land 
or relied on it for their livelihood. The effect of all this legislation was to 
alter the traditional relationship between the dominant mineral estate and the 
servient surface estate. A residential or agricultural land owner was afforded a 
dominant position with respect to a mining application because of the absolute 
veto power. A surface owner who devoted the land to other purposes also enjoyed 
a dominant position in light of the qualified veto power extended to him. The 
statute did encompass a bonding requirement, § 35-502.33, W.S. 1957 (Cum.Supp. 
1975), the purpose of which was to insure that the mining operator would 
faithfully perform the statutory requirements, most particularly the restoration 
of the surface.

[¶30.]  In about the same period, the federal 
government was evolving its own comprehensive mining and reclamation standards. 
By 1973, several legislative proposals were pending in Congress to either ban 
altogether or strictly regulate the surface mining of coal. Mall, Federal 
Mineral Reservations, supra. More than thirty years of legislative effort in 
this area finally took the form of the SMCRA. The SMCRA was the culmination of a 
congressional attempt to strike a balance between the protection of the 
environment and the nation's need for coal (30 U.S.C. § 1202), and the policy 
was to both protect and enhance one of the nation's valuable 
resources.

[¶31.]  The goal of SMCRA was to provide for a 
"nationwide program to protect society and the environment from the adverse 
effects of surface coal mining * * *." 30 U.S.C. § 1202. In this statute, 
Congress promulgated requirements for all surface mining of coal, however it 
might be owned, as long as the coal entered interstate commerce. The effort of 
SMCRA, however, was to "assist the States in developing and implementing" 
programs to achieve the statutory purposes, instead of pre-empting surface 
mining regulations. 30 U.S.C. § 1202. The several states were invited to 
maintain control over surface mining of lands within their borders, subject to 
federal regulations, provided that the state program could not be less stringent 
in its regulation of land use and environmental controls than SMCRA. 30 U.S.C. § 
1255(b). The federal statute created minimum environmental performance standards 
but maintained for the states discretion to adopt more stringent regulations 
designed to meet the peculiar needs of the state. In pursuing this lead, 
Wyoming 
adopted one of the more restrictive programs in the country in the 
EQA.

[¶32.]  The federal-state partnership of 
regulation was implemented through 30 C.F.R. § 211.77 (1977), providing for 
cooperative agreements between federal and state governments with respect to 
reclamation on federal lands. The agreement relating to the State of Wyoming clearly articulated the purpose which was to 
"prevent duality of administration and enforcement of surface reclamation 
requirements by designating the State of Wyoming as the principal entity to enforce reclamation 
laws and regulations in Wyoming." 30 C.F.R. § 211.77, Art. I (1977). 
There can be no question that Wyoming implemented the policy of the 
SMCRA.

[¶33.]  One of the most debated provisions of the 
SMCRA was that relating to surface owner consent. 30 U.S.C. § 1260(b)(6). That 
section requires that a permit shall not be issued unless the mining applicant 
submits either the written consent of the surface owner or an instrument 
demonstrating a conveyance expressly granting to the mineral operator the right 
to conduct surface mining. Even though this provision is included in the SMCRA, 
surface owner consent was not one of the provisions specifically required to be 
included in a state program.

[¶34.]  Drafts of the federal bills and proposals 
were available to the legislature of the State of Wyoming when it debated the EQA, even though the SMCRA was 
passed after the original version of the Wyoming statute. This clearly is indicated by 
almost identical language in certain key provisions. The SMCRA recognized that 
reclamation requirements of Wyoming found in the EQA afforded general 
protection of the environment at least as stringent as would occur under the 
SMCRA. 30 C.F.R. § 211.77, Art. III.A (1977). Wyoming went even further than the SMCRA in 
its effort to provide more specific protection of the surface owner by imposing 
an absolute or qualified requirement for surface owner consent prior to the 
commencement of mining operations. See Haughey and Gallinger, Legislative 
Protection of the Surface Owner in the Surface Mining of Coal Reserved by the 
United 
States, supra.

[¶35.]  It is significant, in light of the 
parallel purpose of the two statutes, that under the SMCRA "surface owner" was 
narrowly defined to include only persons who either lived on the property or 
conducted farming or ranching operations there. This definition is compatible 
with the Wyoming EQA definition of "surface owner" contained in § 35-11-406(b), 
W.S. 1977. The consent of a surface owner who is a residential or agricultural 
landowner and has owned land since January 1, 1970 is absolutely necessary for 
the issuance of a mining permit. Section 35-11-406(b)(xi), W.S. 1977. The 
requirement is less absolute with respect to all other surface land owners, but 
the proviso still only reaches to "owners" of the land. Section 
35-11-406(b)(xii), W.S. 1977.

[¶36.]  Given this history of compatible federal 
and state legislative efforts, it is not surprising that the DEQ, the 
administrative agency charged with enforcement of the EQA, has consistently used 
a narrow definition of the ownership concept. Over the years, the DEQ has 
maintained a long-standing interpretation in connection with the administration 
of the statutes and rules and regulations pertaining to mining permits that 
holders of easements and leases are not entitled to the protections contained in 
the consent and bonding provisions of the statute. Our rule is that "[t]he 
construction of a statute by an agency charged with its execution is entitled to 
consideration in the case in which the application and construction is an issue 
for the courts." WYMO Fuels, Inc. v. Edwards, 723 P.2d 1230, 1237 (Wyo. 1986) (citing Demos v. Board of County Commissioners 
of NatronaCounty, 571 P.2d 980 (Wyo. 1977)). Further, in analyzing the 
construction of the statute by administrative authorities "contemporaneous 
construction over a period of years, unless clearly erroneous, must be given 
weight." School Districts, CampbellCounty, 424 P.2d  at 758. The 
interpretation that holders of easements and lessees are not surface owners is 
entitled to great weight and deference.

[¶37.]  Our analysis of the legislative history 
is consistent with our interpretation of these terms under the clear language of 
the statute. If the position of the appellants that "owners of surface rights" 
are "surface owners" or "surface land owners" were to be sustained, the 
development of surface coal mines in Wyoming would indeed be limited. If all 
"owners of surface rights" were extended the protections afforded the surface 
owner or surface land owner, then owners of insignificant rights to the surface 
would be able to veto surface coal mine development, or worse, they would have 
the means of extortion at hand.

[¶38.]  We cannot believe that the legislature 
intended that result. It seems clear that the purpose of these statutes was not 
to hinder development of the surface mining, but rather to permit such 
development while protecting the surface of the land itself. It is clear from 
the evolution of the several statutes which have addressed the matter that the 
legislature intended to extend protection to the surface of the land through a 
narrowly defined class of owners, but it did not intend to protect the interest 
of every conceivable possessor of some right to the 
surface.

[¶39.]  We hold that the statutory protections 
encompassed in §§ 35-11-406(b)(xii) and 35-11-416, W.S. 1977, were intended to 
be available only to the fee owner of the surface estate. The holders of other 
lesser interests constituting less than fee ownership, including holders of 
easements and lessees, are not protected by the consent and bonding provisions 
of the EQA. Thus, it was not necessary for ThunderBasin to obtain the consent of the 
appellants to its proposed mining and reclamation plan nor to post a bond to 
insure compensation for damages resulting in any injury to their interests. 
ThunderBasin complied with all the 
requirements of the EQA in its mining application, particularly with respect to 
obtaining the necessary surface owner consents and posting bond to insure 
reclamation of the surface of the mined lands. In light of this compliance, the 
decision of the DEQ to issue a permit and license to mine to ThunderBasin was proper. We do not reach the 
question of whether, at some point, the appellants might be entitled to damages 
under the law. See Thompson, Surface Damages - Claims by Surface Estate Owner, 
supra.

[¶40.]  The next contention of the appellants is 
that this case must be remanded because the EQC failed to address the claim that 
Ch. IV, § 3.k. is unlawful. The pertinent statute provides that in reviewing 
administrative actions, "due account shall be taken of the rule of prejudicial 
error." Section 16-3-114(c), W.S. 1977, specifically 
states:

"To the extent necessary 
to make a decision and when presented, the reviewing court shall decide all 
relevant questions of law, interpret constitutional and statutory provisions, 
and determine the meaning or applicability of the terms of an agency action. 
In making the following determinations, the court shall review the whole record 
or those parts of it cited by a party and due account shall be taken of the rule 
of prejudicial error." (emphasis added)

It would serve 
no purpose to remand this issue to the EQC for its determination. The main issue 
presented by the appellants is the interpretation of a state statute, § 
35-11-406(b)(xiii), and the meaning or applicability of an administrative 
ruling, Ch. IV, § 3.k., which appellants perceive to be impermissible in light 
of the statute. This question is clearly within the province of the court 
because it involves only a question of law for the court to decide. Section 
16-3-114(c), W.S. 1977.

[¶41.]  We then reach the final issue presented 
by the appellants which is that Ch. IV, § 3.k. is unlawful. The rule in question 
provides:

"Section 3. Special environmental protection performance 
standards applicable to surface coal mining and reclamation operations. In 
addition to those performance standards contained in the Act and Section 2 of 
this Chapter, the following performance standards shall be applicable to all 
surface coal mining and reclamation operations:

* * * * * 
*

"k. * * * All operations 
shall be conducted so as to minimize 
disruption of any services provided by facilities located on, under or through 
the permit area, unless otherwise approved by the administrator or owner of such 
facilities." (emphasis added)

The appellants 
contend that this rule is invalid because it does not meet what they perceive as 
a stringent requirement of § 35-11-406(b)(xiii), W.S. 1977. They see that 
requirement in the statute as one which demands the applicant include in its 
mining and reclamation plan "[t]he procedures proposed to avoid * * * 
endangering * * * property * * * in or adjacent to the permit area * * *." 
(emphasis added) The appellee points out correctly that the appellants gloss 
over the difference between the statute and the rule. The reach of the statute 
is to property located in or adjacent to the permit area, while the rule applies 
to services provided by facilities in that area. The two provisions are not 
inconsistent because they address different topics. As such, they can co-exist, 
and the application of the rule does not displace the application of the 
statute.

[¶42.]  It would appear that the rule affords 
greater protection to owners of facilities offering services in the area, such 
as those owned by the appellants, than does the statute. The rule is not less 
stringent than the statute, as the appellants argue, but appears to be more 
stringent because it requires the applicant for a mining permit to do more than 
the statute requires. If we were to declare this rule invalid, which is what the 
appellants urge, that would take away a protection not otherwise granted under 
the statute to owners of interests in service facilities in the permit area. 
That surely is not the result which the appellants would choose and, of course, 
it is apparent that the validity of their contention depends upon the acceptance 
of their earlier claim to be "surface owners" or "surface land 
owners."

[¶43.]  Furthermore, there really is no 
difference between "avoidance," as used in the statute, and "minimization," as 
used in the rule. As a practical matter, the words intend the same result. The 
statute does not contemplate a situation in which a coal company would be 
required to mine around existing property within the mine permit area, nor does 
the rule. Whether the standard is to avoid or minimize is irrelevant when the 
property is in the path of a surface mining operation permitted under the 
statute, because in either instance the property must be moved. Any difference 
is inconsequential when applied to property in the path of the surface mining 
operation, because the legislature did not intend that such property be 
preserved from interference by the mining operations. Rather, as was the rule at 
common law, the use of such property is to be reasonable in light of the 
intended mining, and the property is not entitled to preservation. At most the 
owners will be compensated.

[¶44.]  The Wyoming legislature intended to establish a 
flexible system compatible with minimum federal standards and thereby retain 
state control over reclamation of surface-mined areas. The delegation to the 
administrative agency of the development of substantive reclamation standards in 
rules and regulations is consistent with that intention and reaches the desired 
result. The system does not require that the holder of an easement or a 
ninety-nine year lease is to be treated as a "surface owner" or a "surface land 
owner" for purposes of the statute. The owners of such interests cannot 
foreclose mining development, but they may claim compensation for any taking of 
surface improvements in the process of mining. Destruction of improvements owned 
by the surface owner was never perceived as a reasonable use of the property by 
the owner of the minerals.

[¶45.]  The decision of the administrative 
agency, the Department of Environmental Quality, is 
affirmed.

FOOTNOTES

1 The statute ostensibly 
permits a surface landowner to veto the mining permit, but, in fact, that 
provision is subject to authority in the EQC to issue an order in lieu of 
consent, after a hearing. In order to do that, the EQC must find that the permit 
application meets the requirements of § 35-11-406(b)(xii)(A)-(E), W.S. 1977, 
which provide that the EQC shall issue the order if it 
finds:

"(A) That the mining plan 
and the reclamation plan have been submitted to the surface owner for 
approval;

"(B) That the mining plan 
and the reclamation plan is detailed so as to illustrate the full proposed 
surface use including proposed routes of egress and 
ingress;

"(C) That the use does 
not substantially prohibit the operations of the surface 
owner;

"(D) The proposed plan 
reclaims the surface to its approved future use, in segments if circumstances 
permit, as soon as feasibly possible;

"(E) For surface coal 
mining operations, that the applicant has the legal authority to extract coal by 
surface mining methods." Section 35-11-406(b)(xii)(A)-(E), W.S. 
1977.

2 Act of July 17, 1914, 
Ch. 142 § 1, 38 Stat. 509; Act of June 16, 1955, Ch. 145 § 2, 69 Stat. 138, as 
amended 30 U.S.C. § 121-124 (1958).

3 Act of Dec. 29, 1916, 
Ch. 9, § 1, 39 Stat. 862, as amended 43 U.S.C. § 291-301 
(1958).

4 Act of June 1, 1938, 52 
Stat. 609, as amended 43 U.S.C. § 682a-682e (1958).

5 Twitty, Law of Subjacent 
Support and the Right to Totally Destroy Surface Mining Operations, 6 Rocky 
Mtn.Min.L.Inst. 497, 514 (1961).

6 In 1949, Congress passed 
30 U.S.C. § 54 which provided that "any person mining by open pit or strip 
mining methods [would] also be liable, in addition to his liability for damages 
to crops or improvements of the homesteader, for damages that may be caused to 
the value of the land for grazing." Brimmer, The Rancher's Subservient Surface 
Estate, V Land & Water L.Rev. 49, 60 (1970). See also Mall, Federal Mineral 
Reservations, X Land & Water L.Rev. 1 (1975).