II

Calendar No. 939

106TH CONGRESS

2D SESSION S. 1950

[Report No. 106–490]

To amend the Mineral Leasing Act of 1920 to ensure the orderly development

of coal, coalbed methane, natural gas, and oil in the Powder River

Basin, Wyoming and Montana, and for other purposes.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 17, 1999

Mr. ENZI (for himself and Mr. THOMAS) introduced the following bill; which

was read twice and referred to the Committee on Energy and Natural

Resources

OCTOBER 5 (legislative day, SEPTEMBER 22), 2000

Reported by Mr. MURKOWSKI, with an amendment and an amendment to the

title

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend the Mineral Leasing Act of 1920 to ensure the

orderly development of coal, coalbed methane, natural

gas, and oil in the Powder River Basin, Wyoming and

Montana, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Powder River Basin

3 Resource Development Act of 1999’’.

4 SEC. 2. FINDINGS AND PURPOSE.

5 (a) FINDINGS.—The Congress finds that—

6 (1) The Powder River Basin in Wyoming and

7 Montana is one of the world’s richest energy re8 source regions, possessing the largest reserves of

9 coal in the United States and significant deposits of

10 oil and natural gas, including coalbed methane.

11 (2) The coal is predominantly federally-owned—

12 either as part of the public lands or reserved from

13 public lands that were sold under homestead laws

14 enacted in 1909, 1910, and 1916—and is leased to

15 coal producers by the Bureau of Land Management,

16 Department of the Interior, under the Mineral Leas17 ing Act.

18 (3) The gas and oil are owned by the Federal

19 Government, the States, and private parties.

20 (4) The federally-owned gas and oil, like the

21 coal, are part of the public lands and leased to oil

22 and gas lessees by the Bureau of Land Management

23 under the Mineral Leasing Act.

24 (5) The privately-owned gas and oil were con25 veyed with the public lands purchased under the

26 three homestead laws and may have been sold or
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1 leased to oil and gas producers by the successors to

2 those original purchasers.

3 (6) Development of these valuable energy re4 sources is of critical importance to the American

5 public.

6 (7) These energy resources provide fuel to heat

7 and light our homes and power our industries.

8 (8) Extraction of these energy resources pro9 vides royalties, taxes, and wages that contribute to

10 national, State, and local treasuries and economies.

11 (9) Development of both the coal and the gas

12 and oil is occurring in the Powder River Basin.

13 These resources are frequently extracted sequen14 tially, but for safety and operational reasons typi15 cally cannot be extracted simultaneously, in the

16 same location. Even if concurrent development may

17 be possible, disputes often occur.

18 (10) In many locations both the coal and the

19 gas and oil have been leased or sold to different par20 ties, and disputes have arisen among those parties

21 concerning plans for, and the course of, development

22 of those resources.

23 (11) The development of any one of those re24 sources can result in loss of another, either by mak25 ing recovery impossible in the case of coalbed meth-
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1 ane or uneconomic in the case of deep natural gas,

2 oil, or coal.

3 (12) The nature, extent, and value of any loss

4 or delay in development of the gas, oil, or coal re5 source due to development of another of these re6 sources should be ascertained and fair market value

7 for the loss or delay provided either by agreement

8 between the resources’ producers or by an expedi9 tious adjudication procedure.

10 (13) The Federal law under which most of the

11 coal and much of the gas and oil in the Powder

12 River Basin are made available for development

13 should be amended to provide a procedure that will

14 assure the orderly development of the Powder River

15 Basin’s energy resources and fair treatment to the

16 resources’ producers.

17 (b) PURPOSE.—The purpose of this Act is to amend

18 the Mineral Leasing Act to provide a procedure to resolve

19 disputes between producers of coal and producers of nat20 ural gas and oil in the Powder River Basin regarding the

21 sequence of development of those resources in the same

22 location and to determine fair and just compensation owed

23 for the postponement, or loss, of the opportunity to de24 velop a resource resulting from implementation of the pro25 cedure.
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1 SEC. 3. AMENDMENT TO THE MINERAL LEASING ACT.

2 The Mineral Leasing Act (30 U.S.C. 181 et seq.) is

3 amended by renumbering section 44 as section 45 and in4 serting the following new section:

5 ‘‘SEC. 44. DEVELOPMENT OF COAL, NATURAL GAS, AND OIL

6 IN THE POWDER RIVER BASIN.

7 ‘‘(a) MULTIPLE USE.—

8 ‘‘(1) IN GENERAL.—Insofar as it is operation9 ally and economically practicable, all operations for

10 the development of coal and all operations for the

11 production of oil or natural gas, including coalbed

12 methane, in the Powder River Basin, as depicted on

13 a map entitled ‘MLA Section 44 Powder River

14 Basin Area’, dated July 1, 1999, and on file in the

15 Wyoming and Montana State Offices of the Bureau

16 of Land Management (hereafter referred to in this

17 section as the ‘Basin’), shall be conducted under ap18 plicable Federal and State law so as not to unduly

19 interfere with each other and in a manner compat20 ible with such multiple use.

21 ‘‘(2) PARTIES ENCOURAGED TO ENTER INTO

22 WRITTEN AGREEMENT.—On any land in the Basin

23 which is both leased under this Act for the develop24 ment of Federal coal and leased under this Act or

25 otherwise made available by the owner thereof for

26 the production of Federal, State, or private gas or
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1 oil, the Federal coal lessee and the holder of the

2 lease for, or the right to develop, the Federal, State,

3 or private gas or oil (hereafter referred to in this

4 section as the ‘oil and gas lessee’), subject to appli5 cable Federal and State law, may and are encour6 aged to enter into a written agreement that details

7 operations and assigns or assesses costs for the con8 current or sequential development of those resources.

9 ‘‘(b) EXPLORATION.—Unless otherwise provided by

10 law, on any land described in subsection (a)(2) where no

11 coal, gas, or oil development operations have commenced,

12 the Federal coal lessee and the oil and gas lessee shall

13 each—

14 ‘‘(1) have access to conduct exploration activi15 ties; and

16 ‘‘(2) conduct such activities in a manner that

17 will avoid undue interference with the other’s activi18 ties.

19 ‘‘(c) NEGOTIATIONS CONCERNING DEVELOPMENT

20 PRIORITY FOR CERTAIN OPERATIONS IN THE BASIN.—

21 ‘‘(1) OBLIGATION TO PROVIDE WRITTEN NO22 TICE OF CONFLICT.—Whenever a holder of a lease

23 issued under this Act for coal in the Basin or an oil

24 and gas lessee of Federal, State, or private gas or

25 oil in the Basin (hereafter referred to in this section
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1 as the ‘oil and gas property’) determines that the

2 Federal coal lease or the area to which applies the

3 Federal or State permit issued to the Federal coal

4 lessee pursuant to the Surface Mining Control and

5 Reclamation Act (Public Law 95–87, 91 Stat. 445)

6 within or including the Federal coal lease, whichever

7 is larger, and the oil and gas property overlap in

8 whole or in part (hereafter referred to in this section

9 as the ‘common area’) and, pursuant to a mining

10 plan that is approved or proposed (whether or not

11 submitted for approval) (hereafter referred to in this

12 section as an ‘approved or proposed mining plan’),

13 mining operations or facilities in support of mining

14 for coal on the leasehold or for State or private coal

15 within a logical mining unit with the lease will be

16 located within the common area, the Federal coal

17 lessee or the oil and gas lessee shall provide written

18 notice of the determination to the other party no

19 later than 210 days prior to the date on which the

20 mining operations or construction of the mine sup21 port facilities is expected to commence in the com22 mon area.

23 ‘‘(2) OBLIGATION TO NEGOTIATE.—Promptly

24 after providing the notice referred to in paragraph

25 (1), the Federal coal lessee or oil or gas lessee shall
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1 seek to negotiate a written agreement with the other

2 party that resolves any conflict between the produc3 tion of gas or oil and development of coal in the

4 common area.

5 ‘‘(d) COMPENSATION PROCEDURES FOR ASSIGNMENT

6 OF DEVELOPMENT PRIORITY.—

7 ‘‘(1) PETITION FOR RELIEF.—

8 ‘‘(A) If the Federal coal lessee and the oil

9 and gas lessee engage in negotiations, but do

10 not reach agreement, pursuant to subsection

11 (c)(2), the Federal coal lessee or the oil and gas

12 lessee may file a petition for relief as described

13 in subparagraph (C) in the United States dis14 trict court for the district in which the common

15 area is located on any date which is not more

16 than one year or less than 150 days prior to the

17 date on which the mining operations or con18 struction of the mine support facilities is ex19 pected to commence in the common area.

20 ‘‘(B) The petitioner shall serve the oil and

21 gas lessee or the Federal coal lessee, as the case

22 may be, with a copy of the petition for relief.

23 ‘‘(C) The petition for relief shall include

24 the following:
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1 ‘‘(i) A description and map of the

2 Federal coal lease, the oil and gas prop3 erty, and the common area.

4 ‘‘(ii) A list containing the names and

5 addresses of all owners of any non-Federal

6 interest in the oil and gas property, includ7 ing working interests, mineral interests,

8 and royalty interests, and all owners of any

9 non-Federal interest in the Federal coal

10 lease or logical mining unit. The petitioner

11 shall list those owners of any non-Federal

12 interest in the oil and gas property and of

13 the Federal coal lease or logical mining

14 unit whom the petitioner is able to ascer15 tain from the properly indexed records of

16 the county recorder of the county or coun17 ties in which the oil and gas property and

18 Federal coal lease or logical mining unit

19 are located, and the respondent shall file

20 with the court and serve on the petitioner

21 any corrections or additions to the list

22 within 10 days of service of the petition for

23 relief pursuant to subparagraph (A).

24 ‘‘(iii) A certified copy of the notice de25 scribed in subsection (c)(1).
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1 ‘‘(iv) A statement that, pursuant to

2 subsection (c)(2), the petitioner and the re3 spondent attempted to negotiate a coopera4 tive agreement for development of the coal

5 and gas or oil resources or an agreement

6 to compensate the oil and gas lessee and

7 all other owners of any non-Federal inter8 est in the oil and gas property for any loss

9 of, or delay in production of, the oil or gas

10 resource, or the Federal coal lessee and all

11 other owners of any non-Federal interest

12 in the Federal coal lease or logical mining

13 unit for any loss of, or delay in develop14 ment of, the coal resource, resulting from

15 the conflict between production of gas or

16 oil and development of coal in the common

17 area.

18 ‘‘(D) The Federal coal lessee shall submit

19 a copy of the approved or proposed mining plan

20 for the mining operations or support facilities

21 that are the subject of the petition for relief—

22 ‘‘(i) with the petition for relief if the

23 Federal coal lessee is the petitioner; or
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1 ‘‘(ii) within 5 days of the date of serv2 ice of the petition for relief if the Federal

3 coal lessee is the respondent.

4 ‘‘(2) JOINDER OF PARTIES.—The petitioner

5 shall join in the proceedings the Secretary of the In6 terior and the interest owners identified pursuant to

7 paragraph (1)(C)(ii).

8 ‘‘(3) PARTIES’ RESPONSE TO PETITION.—The

9 non-Federal respondent or respondents shall have 30

10 days from the date of service of the petition for re11 lief in which to respond to the petition. The Sec12 retary of the Interior shall have 60 days from the

13 date of service of the petition for relief in which to

14 respond to the petition.

15 ‘‘(4) COURT’S INITIAL RESPONSE TO PETITION:

16 PUBLIC INTEREST DETERMINATION AND ORDER

17 CONCERNING SEQUENCE OF DEVELOPMENT.—With18 in 120 days of the filing of the petition for relief

19 pursuant to paragraph (1)(A), the court shall take

20 the following actions:

21 ‘‘(A) The court shall determine—

22 ‘‘(i) whether a common area exists;

23 and –

24 ‘‘(ii) whether the approved or pro25 posed mining plan provides for the mining
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1 operations to intersect, or the mine sup2 port facilities to be constructed in, any

3 portion of the common area.

4 ‘‘(B)(i) If existence of the common area

5 and intersection of, or construction in, the com6 mon area are determined pursuant to subpara7 graph (A), the court shall determine whether

8 the public interest is best realized either by sus9 pension or termination of all or any part of the

10 oil and gas lease or right to develop to accom11 modate coal development, or by suspension of

12 the Federal coal lease to accommodate gas or

13 oil production, in any existing or proposed pro14 duction segments of the common area.

15 ‘‘(ii) Notwithstanding the obligations of

16 Federal and State officials to maximize the eco17 nomic benefit to be received from mineral re18 sources, the public interest determination de19 scribed in clause (i) shall be made solely by the

20 calculation of the greater economic benefit to be

21 realized by comparison, on a net present value

22 basis, of the Federal and State revenues from

23 royalties and severance taxes likely to be gen24 erated from each mineral underlying the com-
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1 mon area to which the petition for relief ap2 plies.

3 ‘‘(C)(i) If the determination made pursu4 ant to subparagraph (B) is that the public in5 terest is best realized by suspension of all or

6 part of the oil and gas lease or right to develop,

7 the court shall issue an order fixing the date

8 upon which the Federal coal lessee may com9 mence mining operations or construction of

10 support facilities in the common area.

11 ‘‘(ii) The date fixed by the court pursuant

12 to clause (i) may not be later than the com13 mencement date referred to in subsection (c)(1)

14 and provided in the notice submitted pursuant

15 to paragraph (1)(C)(iii), except for good cause

16 shown.

17 ‘‘(D)(i) If the determination made pursu18 ant to subparagraph (B) is that the public in19 terest is best realized by requiring suspension of

20 the Federal coal lease, the court shall issue an

21 order prohibiting the mining operations from

22 intersecting, or the support facilities from being

23 constructed in, the common area.
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1 ‘‘(ii) The order issued pursuant to clause

2 (i) shall expire upon the issuance of an order

3 pursuant to paragraph (11)(C).

4 ‘‘(5) CONDITIONS IN WHICH COURT MAY RE5 FRAIN FROM ISSUING ORDER.—

6 ‘‘(A) The court may receive such briefs

7 and/or testimony as it deems appropriate within

8 90 days of the filing of the petition for relief

9 pursuant to paragraph (1)(A), but may refrain

10 from issuing the order required by paragraph

11 (4)(C) or paragraph (4)(D) only if the court de12 termines, pursuant to paragraph (4)(A), that—

13 ‘‘(i) no common area exists; or

14 ‘‘(ii) the approved or proposed mining

15 plan does not provide for the mining oper16 ations to intersect, or the support facilities

17 to be constructed in, the common area.

18 ‘‘(B) If the court makes either determina19 tion described in subparagraph (A), the court

20 shall issue an order terminating–the proceeding.

21 ‘‘(6) VALUATION PROCEDURE: APPOINTMENT

22 OF EXPERTS.—

23 ‘‘(A) Within 30 days of the issuance of an

24 order pursuant to paragraph (4)(C) or para25 graph (4)(D), the petitioner, the respondent,
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1 and the Secretary of the Interior shall each ap2 point an expert in appraising the value of, and

3 right to develop, gas or oil if the order is issued

4 under paragraph (4)(C), or coal if the order is

5 issued under paragraph (4)(D), to assist the

6 court in making the determinations required by

7 paragraph (10) or paragraph (11).

8 ‘‘(B) The petitioner shall be responsible for

9 compensation of the expert appointed by it and

10 reimbursement of the Secretary for the reason11 able and customary costs of the expert ap12 pointed by the Secretary. The respondent shall

13 be responsible for compensation of the expert

14 appointed by it.

15 ‘‘(7) SUBMISSION OF BRIEFS.—Within 30 days

16 of the appointment of the panel of experts pursuant

17 to paragraph (6), the petitioner and the respondents

18 may submit briefs concerning the determinations to

19 be made pursuant to paragraph (10) or paragraph

20 (11).

21 ‘‘(8) HEARING.—Within 45 days of the ap22 pointment of the panel of experts pursuant to para23 graph (6), the panel may, or if requested by the –pe24 titioner or a respondent shall, receive testimony from

25 petitioners and –respondents concerning the deter-
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1 minations to be made pursuant to –paragraph (10)

2 or paragraph (11).

3 ‘‘(9) EXPERTS’ REPORT.—Within 90 days of

4 the appointment of the panel of experts pursuant to

5 paragraph (6), the panel shall submit a written re6 port to the court providing in detail the panel’s rec7 ommendations on the determinations to be made

8 pursuant to paragraph (10) or paragraph (11).

9 ‘‘(10) COURT’S FINAL RESPONSE TO PETITION:

10 VALUATION CONCERNING OIL OR GAS RESERVES

11 LOST OR DELAYED, SUSPENSION OR TERMINATION

12 AND PAYMENT ORDER.—Within 180 days of the

13 issuance of an order pursuant to paragraph (4)(C),

14 the court shall take the following actions:

15 ‘‘(A) The court shall determine whether, as

16 a result of the rder issued pursuant to para17 graph (4)(C), all or any part of the oil and gas

18 lease or right to develop should be terminated

19 at the end of the court’s proceeding or sus20 pended during the period in which the mining

21 operations or support facilities occupy the com22 mon area.

23 ‘‘(B)(i) If the court makes a determination

24 to suspend pursuant to subparagraph (A), the

25 court shall determine the–amount of any net in-
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1 come that will not be realized due to loss or

2 delay in production of economically recoverable

3 reserves of oil or gas from the area underlying

4 the proposed –––mining operations or support

5 facilities within the common area, and any un6 avoidable fixed expenses (including, but not lim7 ited to, the expenses of shutting in production,

8 maintenance, testing, redrilling or reconnecting

9 an existing well, relaying pipeline, all other ex10 penses reasonably related to reestablishing any

11 existing oil or gas production, and any royalties

12 on oil or gas not produced) that will be in13 curred, by the oil and gas lessee as a con14 sequence of the suspension.

15 ‘‘(ii) If the court makes a determination to

16 terminate pursuant to subparagraph (A), the

17 court shall determine the–amount of any net in18 come that will not be realized due to loss of eco19 nomically recoverable reserves of oil or gas from

20 the area described in clause (i) as a con21 sequence of the termination.

22 ‘‘(C) The court shall issue an order that—

23 ‘‘(i) either suspends or terminates all

24 or part of the oil and gas lease or right to

25 develop, including any payment or produc-
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1 tion obligations on the oil and gas lease or

2 right to develop for the period in which the

3 mining operations or mine support facili4 ties are expected to occupy the common

5 area in accordance with the approved or

6 proposed mining plan; and

7 ‘‘(ii) awards to the oil and gas lessee

8 and all other owners of any interest in the

9 oil and gas property, as their interests may

10 appear, a sum of money from the Federal

11 coal lessee equal to the net income amount

12 and unavoidable fixed expenses determined

13 pursuant to subparagraph (B)(i) or sub14 paragraph (B)(ii).

15 ‘‘(11) COURT’S FINAL RESPONSE TO PETITION:

16 VALUATION CONCERNING COAL RESERVES LOST OR

17 DELAYED, SUSPENSION OR TERMINATION AND PAY18 MENT ORDER.—Within 180 days of the issuance of

19 an order pursuant to paragraph (4)(D), the court—

20 ‘‘(A) shall determine whether the Federal

21 coal lease shall be ––suspended to accommodate

22 oil or gas production in the common area; and

23 ‘‘(B) shall determine the amount of any

24 net income that will not be realized from the

25 loss or postponement of development of eco-
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1 nomically recoverable reserves of coal, and the

2 unavoidable fixed expenses (including, but not

3 limited to, additional expenses–associated with

4 reclamation, expenses associated with stranded

5 costs of mining equipment and facilities, a pro6 portionate refund of the lease bonus, and any

7 royalties on coal not produced) that will be in8 curred, by the Federal coal lessee as a con9 sequence of the –suspension; and

10 ‘‘(C) shall issue an order that—

11 (i) suspends the Federal coal lease, in12 cluding any payment or production obliga13 tions on the lease or logical mining unit,

14 for the period necessary for expeditious

15 production in the common area of the gas

16 or oil that is the subject of the petition for

17 relief as demonstrated to the court in a

18 production plan submitted by the oil and

19 gas lessee; and

20 ‘‘(ii) awards to the Federal coal lessee

21 and all other owners of any interest in the

22 Federal coal lease or logical mining unit,

23 as their interests may appear, a sum of

24 money equal to the net income amount and
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1 –unavoidable fixed expenses determined

2 pursuant to subparagraph (B).

3 ‘‘(12) REVIEW OF EXPERTS’ REPORT.—

4 ‘‘(A) The court shall make the determina5 tions required by –paragraph (10) or paragraph

6 (11) after reviewing the report of the panel of

7 experts submitted pursuant to paragraph (9)

8 and the hearing required by subparagraph (B).

9 ‘‘(B) After submission of the report of the

10 panel of experts pursuant to paragraph (9) and

11 prior to making the determinations required by

12 paragraph (10) or paragraph (11), the court

13 shall hold a hearing in which the panel of ex14 perts shall present their report and the peti15 tioner and respondents shall have the oppor16 tunity to pose questions to the panel and pro17 vide to the court any evidence or arguments

18 they may have to support or contravene the rec19 ommendations of the report.

20 ‘‘(13) DISBURSEMENT OF PAYMENTS.—

21 ‘‘(A)(i) The sum of money awarded by the

22 court pursuant to paragraph (10)(C) shall be

23 divided into the number of tons of recoverable

24 coal in the common area and–shall be paid in

25 per ton increments as the coal is mined.
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1 ‘‘(ii) The Federal coal lessee shall make

2 the payments required by clause (i) on a quar3 terly basis in advance based on the Federal coal

4 lessee’s estimate of the number of tons of coal

5 to be mined in the common area during the fol6 lowing quarter, –and shall add or subtract an

7 amount to or from the advance payment for the

8 next quarter to reflect the coal actually sold or

9 transferred.

10 ‘‘(B)(i) The sum of money awarded by the

11 court pursuant to paragraph (11)(C) shall be

12 divided into the number of barrels of recover13 able oil or cubic feet of recoverable gas in the

14 common area and shall be paid in per –––barrel

15 or cubic feet increments as the oil or gas is pro16 duced.

17 ‘‘(ii) The oil and gas lessee shall make the

18 payments required by clause (i) on a quarterly

19 basis in advance based on the oil and gas les20 see’s estimate of the number of barrels of oil or

21 cubic feet of gas to be produced in the common

22 area during the following quarter, and shall add

23 or subtract an amount to or from the advance

24 –payment for the next quarter to reflect the oil

25 or gas actually produced.
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1 ‘‘(C) If the mining or production necessary

2 to make full payment of the sum of money

3 awarded by the court does not occur within 5

4 years of the date of issuance of the court order

5 pursuant to paragraph (10)(C) or paragraph

6 (11)(C), the unpaid balance shall be paid within

7 60 days thereafter.

8 ‘‘(14) TERMINATION OF OIL AND GAS LEASE

9 SUSPENSION.—

10 ‘‘(A) If the court issues an order to sus11 pend all or any part of the oil and gas lease or

12 right to develop pursuant to paragraph

13 (10)(C)—

14 ‘‘(i) the Federal coal lessee shall no15 tify the court and the oil and gas lessee

16 when the portion of the common area sub17 ject to the order issued pursuant to para18 graph (10)(C) is no longer required for

19 mining operations or support facilities; and

20 (ii) within 120 days of the date of re21 ceipt by the court of the notification pursu22 ant to clause (i) or within 60 days prior to

23 the date on which the period established by

24 the court in the order issued pursuant to

25 paragraph (10)(C) concludes, the oil and
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1 gas lessee may petition the court for an

2 order that terminates the suspension and

3 fixes the date and terms on which the oil

4 and gas lessee may resume operations

5 within the portion of the common area

6 subject to the order issued pursuant to

7 paragraph (10)(C).

8 ‘‘(B) The court shall issue the order

9 sought under subparagraph (A)(ii) within 30

10 days of receipt of the petition pursuant to sub11 paragraph (A)(ii).

12 ‘‘(C)(i) If the oil and gas lessee determines

13 that, as a –consequence of the orders of the

14 court issued pursuant to paragraph (4)(C) and

15 paragraph (10)(C), further development of the

16 portion of the common area subject to the order

17 issued pursuant to paragraph (10)(C) is im18 practicable, the oil and gas lessee may petition

19 the court to terminate in whole or in part the

20 oil and gas lease or right to develop.

21 ‘‘(ii) The petition referred to in clause (i)

22 may be filed any time after issuance of the

23 order of the court pursuant to paragraph

24 (10)(C) but not later than 120 days after the
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1 date of receipt by the court of the notification

2 pursuant to subparagraph (A)(i).

3 ‘‘(iii) Upon receipt of a petition pursuant

4 to clause (i), the court shall make a determina5 tion whether to issue an order to terminate in

6 whole or in part the oil and gas lease or right

7 to develop and award an additional amount

8 from the Federal coal lessee to the oil or gas

9 lessee and all other owners of any non-Federal

10 interest in the oil and gas property, as their in11 terests may appear, in accordance with the pro12 cedures and deadlines established in paragraphs

13 (6) through (13).

14 ‘‘(15) TERMINATION OF COAL LEASE SUSPEN15 SION.—

16 ‘‘(A) If the court issues an order requiring

17 suspension of the Federal coal lease pursuant to

18 paragraph (11)(C)—

19 ‘‘(i) the oil and gas lessee shall notify

20 the court and the Federal coal lessee when

21 the portion of the common area subject to

22 the order issued pursuant to paragraph

23 (11)(C) is no longer required for gas or oil

24 production from such portion; and
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1 ‘‘(ii) within 120 days of the receipt by

2 the court of the notification pursuant to

3 clause (i) or within 60 days prior to the

4 date on which the period established by the

5 court in the order issued pursuant to para6 graph (11)(C) concludes, the Federal coal

7 lessee may petition the court for an order

8 that fixes the date and terms on which the

9 Federal coal lessee may commence mining

10 operations or construction of support facili11 ties in the portion of the common area

12 subject to the order issued pursuant to

13 paragraph (11)(C) and, if the Federal coal

14 lease is suspended, terminates the suspen15 sion.

16 ‘‘(B) The court shall issue the order

17 sought under subparagraph (A)(ii) within 30

18 days of receipt of the petition pursuant to sub19 paragraph (A)(ii).

20 ‘‘(C)(i) If the Federal coal lessee deter21 mines that, as a consequence of the orders of

22 the court issued pursuant to paragraph (4)(D)

23 and paragraph (11)(C), further development of

24 all or any part of the Federal coal lease is im25 practicable, the Federal coal lessee may petition
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1 the court to terminate all or any part of the

2 Federal coal lease.

3 ‘‘(ii) The petition referred to in clause (i)

4 may be filed any time after issuance of the

5 order of the court pursuant to paragraph

6 (11)(C) but not later than 120 days after the

7 date of receipt by the court of the notification

8 pursuant to subparagraph (A)(i).

9 ‘‘(iii) Upon receipt of a petition pursuant

10 to clause (i), the court shall make a determina11 tion whether to issue an order to terminate all

12 or any part of the Federal coal lease and award

13 an additional amount from the oil and gas les14 see to the Federal coal lessee and all other own15 ers of any interest in the Federal coal lease or

16 logical mining unit, as their interests may ap17 pear, in accordance with the procedures and

18 deadlines established in paragraphs (6) through

19 (13).

20 ‘‘(16) SUPPLEMENTAL PETITION FOR RE21 LIEF.—

22 ‘‘(A) If, at any time after the issuance of

23 an order pursuant to paragraph (10)(C) or

24 paragraph (11)(C), the mining plan that is the

25 basis of the order is altered in a manner that
27

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1 may warrant suspension or termination of an

2 additional part or all of the oil and gas lease or

3 right to develop or suspension or termination of

4 the Federal coal lease and/or an increase in the

5 sum of money that was awarded under the

6 order, either the Federal coal lessee or the oil

7 and gas lessee may file a supplemental petition

8 for relief with the court to amend the order.

9 ‘‘(B) The petitioner shall take such steps

10 as are required by subparagraphs (B) and (C)

11 of paragraph (1) and the supplemental–petition

12 for relief shall contain any information required

13 by subparagraph (C) of paragraph (1) that was

14 not submitted with the petition for relief filed

15 with the court prior to the issuance of the order

16 pursuant to paragraph (10)(C) or paragraph

17 (11)(C).

18 ‘‘(C)(i) If any respondent disputes any in19 formation contained in the supplemental peti20 tion for relief, the respondent shall, within 10

21 days of the date of service of the petition, file

22 with the court a response setting forth the

23 grounds of dispute.

24 ‘‘(ii) The court may receive such briefs

25 and/or testimony it deems appropriate within
28

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1 30 days of the date of filing of the supple2 mental petition for relief, but may refrain from

3 issuing the order required by subparagraph

4 (D)(ii) only if the court makes either deter5 mination set forth in paragraph (5)(A).

6 ‘‘(D)(i) Based on the supplemental petition

7 for relief and any response, briefs, or testimony

8 received pursuant to paragraph (C), and after

9 review of the report of the panel of experts sub10 mitted pursuant to paragraph (9) prior to the

11 issuance of the order pursuant to paragraph

12 (10)(C) or paragraph (11)(C), the court shall

13 make a determination whether to suspend or

14 terminate an additional part or all of the oil

15 and gas lease or right to develop or to suspend

16 or terminate the Federal coal lease as described

17 in, and award an additional sum of money cal18 culated in accordance with, paragraph (10) or

19 paragraph (11).

20 ‘‘(ii) The court shall issue any order result21 ing from the determinations made pursuant to

22 clause (i) within 90 days of the date of filing

23 of the supplemental petition for relief.
29

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1 ‘‘(iii) Any award of an additional sum of

2 money shall be paid in accordance with para3 graph (13).

4 ‘‘(17) APPEAL OF COURT ORDERS.—

5 ‘‘(A) Any order issued pursuant to para6 graph (4)(C), paragraph (4)(D), paragraph

7 (5)(B), paragraph (14)(B), or paragraph

8 (15)(B) is final and may not be appealed.

9 ‘‘(B) Any order issued pursuant to para10 graph (10)(C), paragraph (11)(C), paragraph

11 (14)(C)(iii), paragraph (15)(C)(iii), or para12 graph (16)(D) may be appealed, but the appeal,

13 and any disposition thereof, may not disturb

14 any order referred to in subparagraph (A).

15 ‘‘(e) LIABILITY LIMITATION.—

16 ‘‘(1) FEDERAL COAL LESSEE.—Except as pro17 vided in a written agreement reached pursuant to

18 subsection (c)(2) or reached on or after September

19 1, 1999, and before the date of enactment of this

20 section, or as provided by an order of the court pur21 suant to subsection (d), the holder of a Federal coal

22 lease subject to the agreement or order shall not be

23 liable to the oil and gas lessee of, or any owner of

24 an interest in, any oil and gas property subject to

25 the agreement or order for any decrease in or deple-
30

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1 tion of, or any impairment of the ability to recover,

2 any gas or oil from the property that may result

3 from the mining of any coal on the Federal coal

4 leasehold or within a logical mining unit with the

5 Federal coal lease.

6 ‘‘(2) OIL AND GAS LESSEE.—Except as pro7 vided in a written agreement reached pursuant to

8 subsection (c)(2) or reached on or after September

9 1, 1999, and before the date of enactment of this

10 section, or as provided by an order of the court pur11 suant to subsection (d), the oil and gas lessee of an

12 oil and gas property subject to the agreement or

13 order shall not be liable to a holder of a Federal coal

14 lease subject to the agreement or order, the United

15 States, or any owner of an interest in private or

16 State coal within a logical mining unit with the Fed17 eral coal lease, for any impairment of the ability to

18 recover coal from the Federal coal leasehold or log19 ical mining unit that may result from the production

20 of gas or oil from the property.

21 ‘‘(f) APPLICABILITY LIMITATION.—Nothing in this

22 section shall be applicable to, or supersede any statutory

23 or common law otherwise applicable in, any proceeding in

24 any Federal or State court involving development of oil,
31

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1 gas, or coal outside of any common area as defined in sub2 section (c)(1).

3 ‘‘(g) CREDIT AGAINST ROYALTIES.—

4 ‘‘(1) IN GENERAL.—

5 ‘‘(A) Whenever a holder of a coal lease

6 issued under this Act is required by a written

7 agreement reached pursuant to subsection

8 (c)(2) and ratified by the Bureau of Land Man9 agement or reached prior to the date of enact10 ment of this section and ratified by the Bureau

11 of Land Management on or after September 1,

12 1999, or by a court order issued pursuant to

13 paragraph (10)(C), paragraph (14)(C)(iii), or

14 paragraph (16)(D) of subsection (d), to pay an

15 amount for termination or suspension of all or

16 part of an oil and gas lease of, or right to de17 velop, coalbed methane, as defined in section

18 1339(p)(2) of the Energy Policy Act of 1992

19 (106 Stat. 2992, 42 U.S.C. 13368(p)(2)), on

20 any oil and gas property located within the area

21 designated as ‘‘Subsection (g) Lands’’ on the

22 map described in subsection (a)(1), the amount

23 so paid shall be credited against any royalties

24 on production required by section 7(a) or any
32

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1 other provision of this Act from any Federal

2 coal lease of such holder or any affiliate thereof.

3 ‘‘(B) Whenever a holder of an oil and gas

4 lease issued under this Act is required by a

5 written agreement reached pursuant to sub6 section (c)(2) and ratified by the Bureau of

7 Land Management or reached prior to the date

8 of enactment of this section and ratified by the

9 Bureau of Land Management on or after Sep10 tember 1, 1999, or by a court order issued pur11 suant to paragraph (11)(C), paragraph

12 (15)(C)(iii), or paragraph (16)(D) of subsection

13 (d), to pay an amount for suspension or termi14 nation of a Federal coal lease located within the

15 area designated as ‘‘Subsection (g) Lands’’ on

16 the map described in subsection (a)(1), the

17 amount so paid shall be credited against any

18 royalties on production required by subsection

19 (b)(1)(A) or subsection (c)(1) of section 17 or

20 any other provision of this Act from any Fed21 eral oil and gas lease of such holder or any af22 filiate thereof.

23 ‘‘(2) TREATMENT OF ROYALTIES TO STATES.—

24 The Secretary shall pay to the State in which a lease
33

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1 is located 50 percent of the amount of any credit

2 against royalties provided under paragraph (1)—

3 ‘‘(A) in the same manner as if the credit

4 against royalties had been paid in money as

5 royalties and distributed under section 35(a) of

6 this Act; and

7 ‘‘(B) from amounts received as royalties,

8 rentals, or bonuses derived from leases issued

9 under this Act that otherwise would be depos10 ited to miscellaneous receipts under section

11 35(a) of this Act.

12 ‘‘(h) MINERAL CONSERVATION.—The Secretary shall

13 employ such authority as the Secretary may possess under

14 this Act to encourage expedited development of Federal

15 minerals that—

16 ‘‘(1) are leased pursuant to this Act;

17 ‘‘(2) are within common areas; and

18 ‘‘(3) otherwise may be lost or bypassed under

19 agreements entered into, or orders issued, pursuant

20 to this section.’’

21 SEC. 4. EFFECTIVE DATE.

22 This Act shall be effective upon the date of its enact23 ment.
34

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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Powder River Basin

3 Resource Development Act of 2000’’.

4 SEC. 2. FINDINGS AND PURPOSE.

5 (a) FINDINGS.—The Congress finds the following:

6 (1) The Powder River Basin in Wyoming and

7 Montana is one of the world’s richest energy resource

8 regions, possessing the largest reserves of coal in the

9 United States and significant deposits of oil and nat10 ural gas, including coalbed methane.

11 (2) The coal is predominantly federally owned—

12 either as part of the public lands or reserved from

13 public lands that were sold under homestead laws en14 acted in 1909, 1910, and 1916—and may be leased

15 to coal producers by the Bureau of Land Manage16 ment, Department of the Interior, under the Mineral

17 Leasing Act.

18 (3) The gas and oil are owned by the Federal

19 Government, the States, and private parties.

20 (4) The federally owned gas and oil, like the coal,

21 are part of the public lands and leased to oil and gas

22 lessees by the Bureau of Land Management under the

23 Mineral Leasing Act.

24 (5) The privately owned gas and oil were con25 veyed with the public lands purchased under the three

26 homestead laws and may have been sold or leased to
35

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1 oil and gas producers by the successors to those origi2 nal purchasers.

3 (6) Development of these valuable energy re4 sources is of critical importance to the American pub5 lic.

6 (7) These energy resources provide fuel to heat

7 and light our homes and power our industries.

8 (8) Extraction of these energy resources provides

9 royalties, taxes, and wages that contribute to na10 tional, State, and local treasuries and economies.

11 (9) Development of the coal and the gas and oil

12 is occurring in the Powder River Basin.

13 (10) In many locations the coal and the gas and

14 oil have been leased or sold to different parties. These

15 resources are frequently extracted sequentially, but for

16 safety and operational reasons typically cannot be ex17 tracted simultaneously, in the same location. Where

18 concurrent development is impossible and even where

19 it may be possible, in certain of these locations dis20 putes have arisen among the different parties con21 cerning plans for, and the course of, development of

22 these resources.

23 (11) The development of any one of those re24 sources can result in loss of another, either by making

25 recovery impossible in the case of coalbed methane or
36

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1 uneconomic in the case of deep natural gas, oil, or

2 coal.

3 (12) The nature, extent, and value of any loss or

4 delay in development of the gas, oil, or coal resource

5 due to development of another of these resources in the

6 ‘‘common areas’’ within the Powder River Basin in

7 which disputes between the resources’ developers arise

8 should be ascertained and fair market value for the

9 loss or delay should be provided by agreement between

10 the developers or by an expeditious adjudication pro11 cedure.

12 (13) The Federal law under which most of the

13 coal and much of the gas and oil in the Powder River

14 Basin are made available for development should be

15 amended to provide a procedure that will assure the

16 orderly development of the energy resources, and fair

17 treatment to the resources’ developers, in the ‘‘common

18 areas’’ within the Powder River Basin in which dis19 putes between the developers arise.

20 (b) PURPOSES.—The purposes of this Act are to—

21 (1) amend the Mineral Leasing Act to provide a

22 consistent procedure to resolve disputes between devel23 opers of coal and developers of natural gas and oil in

24 the ‘‘common areas’’ within the Powder River Basin

25 to which this Act applies concerning the sequence of
37

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1 development of those resources in the same location,

2 regardless of who owns the resources;

3 (2) encourage maximum recovery of the resources

4 prior to the time at which such disputes are likely to

5 occur or thereafter until the procedure provided by

6 this Act is implemented;

7 (3) ensure that the procedure provided by this

8 Act is employed as a last resort if the disputes are not

9 fully resolved by voluntary agreements between the re10 sources’ developers or administrative policies and ac11 tions;

12 (4) determine fair and just compensation owed

13 for the loss of, or delay in, the opportunity to develop

14 a resource resulting from implementation of the pro15 cedure provided by this Act; and

16 (5) provide expressly that the procedure provided

17 by this Act will neither apply to nor set any prece18 dent for resolution of disputes between or among re19 source developers outside of the ‘‘common areas’’ with20 in the Powder River Basin to which this Act applies.

21 SEC. 3. AMENDMENT TO THE MINERAL LEASING ACT.

22 The Mineral Leasing Act (30 U.S.C. 181 et seq.) is

23 amended by renumbering section 44 as section 45 and in24 serting the following new section:
38

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1 ‘‘SEC. 44. DEVELOPMENT OF COAL, NATURAL GAS, AND OIL

2 IN THE POWDER RIVER BASIN.

3 ‘‘(a) DEFINITIONS.—As used in this section:

4 ‘‘(1) The term ‘Powder River Basin’ or ‘Basin’

5 means the area designated as ‘Powder River Basin’

6 on a map entitled ‘MLA Section 44 Powder River

7 Basin Area’, dated July 1, 1999, and on file in the

8 Wyoming and Montana State Offices of the Bureau of

9 Land Management, Department of the Interior.

10 ‘‘(2) The term ‘Subsection (g) Lands’ means the

11 area designated as ‘Subsection (g) Lands’ on the map

12 described in paragraph (1).

13 ‘‘(3) The term ‘Secretary’ means the Secretary of

14 the Interior.

15 ‘‘(4) The term ‘Federal coal lease’ means a lease

16 of Federal coal in the Basin issued pursuant to this

17 Act.

18 ‘‘(5) The term ‘Federal coal lessee’ means the

19 holder of a Federal coal lease.

20 ‘‘(6) The term ‘Federal oil and gas lease’ means

21 a lease of Federal oil and gas in the Basin issued

22 pursuant to the Act.

23 ‘‘(7) The term ‘oil and gas lease or right to de24 velop’ means a Federal oil and gas lease or a lease

25 for or right to develop oil and gas in the Basin pro26 vided by a State or private owner of the resources.
39

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1 ‘‘(8) The term ‘non-Federal oil and gas lease or

2 right to develop’ means a lease for or right to develop

3 oil and gas in the Basin provided by a State or pri4 vate owner of the resources.

5 ‘‘(9) The term ‘oil and gas developer’ means the

6 holder of an oil or gas lease or right to develop.

7 ‘‘(10) The term ‘oil and gas property’ means an

8 area in the Basin which is subject to an oil or gas

9 lease or right to develop held by an oil or gas devel10 oper.

11 ‘‘(11) The term ‘common area’ means an area in

12 the Basin in which all or a portion of a Federal coal

13 lease (including any area of State or private coal

14 within a logical mining unit with the Federal coal

15 lease) overlaps all or a portion of an oil and gas

16 property.

17 ‘‘(12) The term ‘approved or proposed mining

18 plan’ means a mining plan that is approved by, or

19 has been submitted for the approval of, the Secretary.

20 ‘‘(13) The term ‘coalbed methane’ shall have the

21 meaning given that term in section 1339(p)(2) of the

22 Energy Policy Act of 1992 (106 Stat. 2992, 42 U.S.C.

23 13368(p)(2)).

24 ‘‘(14) The term ‘owners of any interest in the oil

25 and gas property’ means persons who own the work-
40

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1 ing interest, lease interest, operating interest, mineral

2 interest, royalty interest, or any other interest in the

3 oil and gas property, and any other persons who

4 might receive compensation for unavoidable fixed ex5 penses under an order concerning the oil and gas

6 property issued pursuant to subsection (e)(10)(E).

7 ‘‘(15) The term ‘owners of any non-Federal in8 terest in the oil and gas property’ means all owners

9 of any interest in the oil and gas property except the

10 Federal government or any agency or department

11 thereof.

12 ‘‘(16) The term ‘develop’ or ‘development’ means

13 to develop or to produce, or both, or the development

14 or production, or both, respectively, including all in15 cidental operations.

16 ‘‘(b) PARTIES ENCOURAGED TO ENTER INTO WRITTEN

17 AGREEMENT.—In any common area, the Federal coal lessee

18 and oil and gas developer, subject to applicable Federal and

19 State laws, regulations, and lease terms, may and are en20 couraged to enter into a written agreement that details op21 erations and assigns or assesses costs or compensation for

22 the concurrent or sequential development of those resources.

23 ‘‘(c) MINERAL CONSERVATION.—The Secretary shall

24 employ any authority the Secretary possesses to encourage
41

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1 expedited development of any oil and gas resources and any

2 coal resource that—

3 ‘‘(1) are leased pursuant to this Act;

4 ‘‘(2) are within common areas; and

5 ‘‘(3) otherwise may be lost or bypassed due to the

6 development of another of the resources.

7 ‘‘(d) NEGOTIATIONS CONCERNING DEVELOPMENT PRI8 ORITY FOR CERTAIN OPERATIONS IN THE BASIN.—

9 ‘‘(1) OBLIGATION TO PROVIDE WRITTEN NOTICE

10 OF CONFLICT.—Whenever a Federal coal lessee or an

11 oil and gas developer determines that its Federal coal

12 lease (or a logical mining unit including the Federal

13 coal lease) or its oil and gas property is located in

14 a common area, and, pursuant to an approved or

15 proposed mining plan, mining operations or facilities

16 in support of mining for coal on the Federal coal

17 leases or the logical mining unit will be located with18 in the common area, the Federal coal lessee or the oil

19 and gas developer shall deliver written notice of the

20 determination to the other party and the Secretary no

21 later than 240 days prior to the date on which the

22 mining operations or construction of the mine sup23 port facilities is projected by the approved or pro24 posed mining plan to commence in the common area.
42

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1 ‘‘(2) OBLIGATION TO NEGOTIATE.—Promptly

2 after providing the notice referred to in paragraph

3 (1), the party which provided the notice shall seek to

4 negotiate a written agreement with the other party

5 that resolves any conflict between the development of

6 gas or oil and development of coal in the common

7 area.

8 ‘‘(e) COMPENSATION PROCEDURES FOR ASSIGNMENT

9 OF DEVELOPMENT PRIORITY.—

10 ‘‘(1) PETITION FOR RELIEF.—

11 ‘‘(A) If notice is submitted timely pursuant

12 to subsection (d)(1) and the Federal coal lessee

13 and the oil and gas developer engage in negotia14 tions, but do not reach agreement, pursuant to

15 subsection (d)(2), the Federal coal lessee or the

16 oil and gas developer may file a petition for re17 lief as described in subparagraph (C) in the

18 United States district court for the district in

19 which the common area is located on any date

20 which is not less than 180 days prior to the date

21 on which the mining operations or construction

22 of the mine support facilities is projected by the

23 approved or proposed mining plan to commence

24 in the common area.
43

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1 ‘‘(B) The petitioner shall serve the oil and

2 gas developer or the Federal coal lessee, as the

3 case may be, and the Secretary with a copy of

4 the petition for relief on the same date upon

5 which the petition is filed with the court pursu6 ant to subparagraph (A).

7 ‘‘(C) The petition for relief shall include the

8 following:

9 ‘‘(i) A description and map of the Fed10 eral coal lease, the oil and gas property,

11 and the common area.

12 ‘‘(ii) A list containing the names and

13 addresses of all owners of any non-Federal

14 interest in the oil and gas property and all

15 owners of any non-Federal interest in the

16 Federal coal lease or logical mining unit.

17 The petitioner shall list those owners of any

18 non-Federal interest in the oil and gas

19 property and of the Federal coal lease or

20 logical mining unit whom the petitioner is

21 able to ascertain from the properly indexed

22 records of the county recorder of the county

23 or counties in which the oil and gas prop24 erty and Federal coal lease or logical min25 ing unit are located, and the respondent
44

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1 shall file with the court and serve on the pe2 titioner and the Secretary any corrections

3 of, additions to, or deletions from the list

4 known to the respondent within 10 days of

5 the date of service of the petition for relief

6 pursuant to subparagraph (B). Thereafter,

7 whenever any correction of, addition to, or

8 deletion from the list becomes known to ei9 ther the petitioner or the respondent, that

10 party shall promptly file with the court and

11 serve on the other party and the Secretary

12 the addition, correction, or deletion. Any

13 person who believes he or she is an owner

14 of any non-Federal interest in the oil and

15 gas property or in the Federal coal lease or

16 logical mining unit and is omitted from the

17 list may file a motion in the court to be

18 added to the list at any time prior to the

19 issuance of an order pursuant to paragraph

20 (10)(E) or paragraph (11)(C).

21 ‘‘(iii) A certified copy of the notice de22 scribed in subsection (d)(1).

23 ‘‘(iv) A sworn statement by a senior of24 ficer of the petitioner with authority to

25 commit the petitioner in any negotiation
45

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1 under subsection (d)(2) stating, and all doc2 uments demonstrating, that the petitioner

3 negotiated or attempted to negotiate in good

4 faith with the respondent a voluntary agree5 ment, pursuant to subsection (d)(2).

6 ‘‘(D) The Federal coal lessee shall submit a

7 copy of the approved or proposed mining plan

8 for the mining operations or support facilities

9 that are the subject of the petition for relief—

10 ‘‘(i) with the petition for relief if the

11 Federal coal lessee is the petitioner; or

12 ‘‘(ii) within 5 days of the date of serv13 ice of the petition for relief pursuant to sub14 paragraph (B) if the Federal coal lessee is

15 the respondent.

16 ‘‘(2) JOINDER OF PARTIES.—The Secretary and

17 all owners of any non-Federal interest in the oil and

18 gas property and in the Federal coal lease or logical

19 mining unit identified pursuant to paragraph

20 (1)(C)(ii) shall be joined in the proceedings estab21 lished pursuant to this subsection.

22 ‘‘(3) PARTIES’ RESPONSE TO PETITION.—The

23 non-Federal respondent or respondents may provide

24 to the Secretary a response to the petition within 30

25 days from the date of filing of the petition for relief
46

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1 pursuant to paragraph (1)(A). The Secretary may re2 quire the petitioner and the respondent or respondents

3 to submit such documents and/or provide such testi4 mony as the Secretary deems appropriate within 60

5 days of such date of filing.

6 ‘‘(4) SECRETARY’S INITIAL RESPONSE TO PETI7 TION.—Within 90 days of the date of filing of the pe8 tition for relief pursuant to paragraph (1)(A) the Sec9 retary shall take the following actions:

10 ‘‘(A) The Secretary shall determine, with

11 petitioner having the burden of proof—

12 ‘‘(i) whether a common area exists;

13 and

14 ‘‘(ii) whether the approved or proposed

15 mining plan submitted pursuant to para16 graph (3)(D) provides for the mining oper17 ations to intersect, or the mine support fa18 cilities to be constructed in, any portion of

19 the common area.

20 ‘‘(B)(i) If existence of the common area and

21 intersection of, or construction in, the common

22 area are determined pursuant to subparagraph

23 (A), the Secretary shall determine whether the

24 public interest is best realized by delaying or

25 foregoing development of either—
47

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1 ‘‘(I) the oil or gas resource to permit

2 the mining operations to intersect, or the

3 mine support facilities to be constructed in,

4 the common area in accordance with the

5 approved or proposed mining plan; or

6 ‘‘(II) the coal resource to permit com7 mencement or continuation of the develop8 ment of the oil or gas resource in the com9 mon area after the date on which the min10 ing operations or construction of the mine

11 support facilities is projected by the ap12 proved or proposed mining plan to com13 mence in the common area.

14 ‘‘(ii) The Secretary shall make the public

15 interest determination described in clause (i)

16 solely by the calculation of the greater economic

17 benefit to be realized by comparison, on a net

18 present value basis, of the Federal and State rev19 enues from royalties and severance taxes likely to

20 be generated from each resource underlying the

21 common area to which the petition for relief ap22 plies.

23 ‘‘(C)(i) If any portion of the resource for

24 which delayed or foregoing development is deter25 mined to be in the public interest pursuant to
48

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1 subparagraph (B) is subject to a lease issued

2 pursuant to this Act, the Secretary shall suspend

3 all or any portion of, including any geographical

4 areas of or zone or reservoir subject to, the lease

5 to accommodate development of the other resource

6 in the common area during the period beginning

7 on a date no later than the commencement date

8 referred to in paragraph (1)(A) and provided in

9 the notice submitted pursuant to paragraph

10 (1)(C)(iii) and ending on the date on which an

11 order is issued pursuant to paragraph (10)(E) or

12 paragraph (11)(C).

13 ‘‘(ii) The Secretary may refrain from either

14 making the determination required by subpara15 graphs (A) and (B) or suspending all or any

16 portion of a lease issued pursuant to this Act as

17 required by clause (i) only if the Secretary deter18 mines that—

19 ‘‘(I) no common area exists; or

20 ‘‘(II) the approved or proposed mining

21 plan does not provide for the mining oper22 ations to intersect, or the mine support fa23 cilities to be constructed in, the common

24 area.

25 ‘‘(D) The Secretary shall—
49

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1 ‘‘(i) report the determinations made

2 pursuant to subparagraphs (A) and (B) or

3 subparagraph (C)(ii) and any suspension

4 made pursuant to subparagraph (C)(i), in5 cluding the administrative record therefor,

6 with the court in which the petition for re7 lief is filed pursuant to paragraph (1)(A);

8 and

9 1‘‘(ii) provide the petitioner and re10 spondent or respondents with copies of the

11 report and record.

12 ‘‘(5) COURT’S INITIAL RESPONSE TO PETITION.—

13 ‘‘(A)(i) The court in which the petition is

14 filed pursuant to paragraph (1)(A) shall have ex15 clusive jurisdiction to receive and review the re16 port of the Secretary required by paragraph

17 (4)(D), and the determinations made and any

18 action taken by the Secretary pursuant to para19 graph (4).

20 ‘‘(ii) The petitioner and respondent or re21 spondents shall have 30 days from the date upon

22 which the report of the Secretary is filed with the

23 court pursuant to paragraph (4)(D) in which to

24 file with the court any objection to any deter-
50

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1 mination of the Secretary required by paragraph

2 (4).

3 ‘‘(iii) If any objection is filed pursuant to

4 clause (ii), the court shall, within 60 days of re5 ceipt of the report of the Secretary pursuant to

6 paragraph (4)(D), make the determination that

7 is the subject to the objection on the basis of the

8 administrative record filed with the report and

9 in accordance with the applicable requirements

10 or standards of subparagraph (A) or subpara11 graph (B) of paragraph (4).

12 ‘‘(iv) Any determination made by the court

13 pursuant to clause (iii) shall be an independent

14 judicial determination that is de novo, without

15 regard to the prior determination of the Sec16 retary.

17 ‘‘(v) If no objection is filed pursuant to

18 clause (ii), the determinations of the Secretary

19 required by paragraph (4) shall be final and ap20 proved by the court in the order issued pursuant

21 to subparagraph (B) or subparagraph (E).

22 ‘‘(B) Within 90 days of the date of receipt

23 of the report of the Secretary pursuant to para24 graph (4)(D), the court, except as provided in

25 subparagraph (E), shall issue an order that—
51

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1 ‘‘(i) suspends all or any part of, in2 cluding any geographical area of or res3 ervoir subject to, any non-Federal oil and

4 gas lease or right to develop, or any non5 Federal interest in any logical mining unit

6 that includes the Federal coal lease, in the

7 common area in accordance with the deter8 mination of the Secretary pursuant to sub9 clause (I) or subclause (II), respectively, of

10 paragraph (4)(B)(i) or in accordance with

11 the determination of the court pursuant to

12 subparagraph (A)(iii); and

13 ‘‘(ii) if required by a determination of

14 the court pursuant to subparagraph

15 (A)(iii), terminates a suspension of a lease

16 issued pursuant to this Act imposed by the

17 Secretary pursuant to paragraph (4)(C)(i),

18 or imposes a suspension of a lease issued

19 pursuant to this Act, or both, in accordance

20 with the determination; and

21 ‘‘(iii) if all or any part of the oil and

22 gas lease or right to develop is suspended

23 pursuant to paragraph (4)(C)(i) or this

24 subparagraph, fixes the date upon which the

25 Federal coal leesee may commence mining
52

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1 operations or construction of mine support

2 facilities in the common area, which may be

3 no later than the commencement date re4 ferred to in paragraph (1)(A) and provided

5 in the notice submitted pursuant to para6 graph (1)(C)(iii), except for good cause

7 shown; and

8 ‘‘(iv) if all or any part of the Federal

9 coal lease and/or any non-Federal interest

10 in the logical mining unit that includes the

11 Federal coal lease is suspended pursuant to

12 paragraph (4)(C)(i) or this subparagraph,

13 prohibits the mining operations from inter14 secting, or the support facilities from being

15 constructed in, all or a portion of the com16 mon area.

17 ‘‘(C) The order of the court issued pursuant

18 to subparagraph (B) shall expire upon the

19 issuance of an order pursuant to paragraph

20 (10)(E) or paragraph (11)(C).

21 ‘‘(D) The court may refrain from issuing

22 the order required by subparagraph (B), only

23 if—

24 ‘‘(i) the Secretary makes a determina25 tion described in paragraph (4)(C)(ii); or
53

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1 ‘‘(ii) the court, acting on an objection

2 filed pursuant to subparagraph (A)(ii), de3 termines that—

4 ‘‘(I) no common area exists; or

5 ‘‘(II) the approval or proposed

6 mining plan submitted pursuant to

7 paragraph (1)(D) does not provide for

8 the mining operations to intersect, or

9 the mine support facilities to be con10 structed in, the common area.

11 ‘‘(E) If the Secretary makes a determina12 tion described in paragraph (4)(C)(ii) or the

13 court makes a determination described in sub14 paragraph (D)(ii), the court shall issue an order

15 terminating the proceeding under this subsection.

16 ‘‘(6) VALUATION PROCEDURE: APPOINTMENT OF

17 EXPERTS.—

18 ‘‘(A) Within 30 days of the date of issuance

19 of an order pursuant to paragraph (5)(B), to as20 sist the court in making the determinations pur21 suant to paragraph (10) or paragraph (11), the

22 Federal coal lessee and the oil and gas developer

23 shall each appoint a person who is an expert in

24 appraising the value of, and right to develop, gas

25 or oil if all or any part of the oil and gas lease
54

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1 or right to develop is suspended, or coal if all or

2 any part of the Federal coal lease and/or any

3 non-Federal interest in the logical mining unit

4 that includes the Federal coal lease is suspended,

5 pursuant to paragraph (4)(C) and/or paragraph

6 (5)(B), and these persons shall agree upon and

7 appoint a third person with such expertise. If

8 no agreement is reached on the date of appoint9 ment of a third person, the court shall make the

10 appointment.

11 ‘‘(B) The Federal coal lessee shall be respon12 sible for compensation of the expert appointed by

13 it; the oil and gas developer shall be responsible

14 for compensation of the expert appointed by it;

15 and the Federal coal lessee and oil and gas devel16 oper shall each pay one-half of the compensation

17 for the third expert.

18 ‘‘(7) INFORMATION AND DATA.—

19 ‘‘(A) The Federal coal lessee, oil and gas de20 veloper, and Secretary shall each submit to the

21 panel of experts within 30 days of the date of ap22 pointment of the panel pursuant to paragraph

23 (6) all information and data in the possession of

24 such party that is pertinent to the determina25 tions to be made pursuant to paragraph (10) or
55

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1 paragraph (11), and shall each submit to the

2 panel of experts thereafter any additional perti3 nent information and data in the possession of

4 such party that the panel requests of such party

5 in writing.

6 ‘‘(B) Except as provided in subparagraph

7 (C), the court shall ensure that any information

8 and data submitted to the panel of experts pur9 suant to subparagraphs (A) and (D) shall have

10 the protection of confidentiality that is applica11 ble, and may be accorded, to them by law and

12 the federal rules of civil procedure and evidence.

13 ‘‘(C) All information and data submitted to

14 the panel of experts pursuant to subparagraphs

15 (A) and (D) shall be available for review by all

16 parties unless an ex parte order is issued by the

17 court.

18 ‘‘(D)(i) The Federal coal lessee may drill for

19 and otherwise collect data or information on

20 coalbed methane at any site or sites within the

21 common area that are not within a spacing unit

22 containing a well that is producing or capable of

23 producing coalbed methane under the conditions

24 set forth in clause (ii).
56

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1 ‘‘(ii) The drilling or collection of data or

2 information authorized by clause (i) shall be for

3 the sole purpose of submission of information

4 and data pursuant to this paragraph.

5 ‘‘(iii) The Federal coal lessee shall not

6 produce any coalbed methane as a result of any

7 drilling authorized by clause (i) and shall com8 ply with any Federal or State requirements ap9 plicable to such activity.

10 ‘‘(iv) The Federal coal lessee shall submit to

11 the Secretary an exploration plan to conduct

12 any drilling pursuant to clause (i). The Sec13 retary shall approve, approve as modified, or re14 ject the plan, within 15 days of the date of its

15 submission. The Secretary may modify or reject

16 the plan only for good cause fully set forth in

17 writing and provided to the Federal coal lessee.

18 The Federal coal lessee shall adhere to the plan,

19 as approved by the Secretary.

20 ‘‘(8) SUBMISSION OF BRIEFS AND HEARING.—

21 ‘‘(A) Within 45 days of the date of appoint22 ment of the panel of experts pursuant to para23 graph (6), all parties may submit briefs con24 cerning the determinations to be made pursuant

25 to paragraph (10) or paragraph (11).
57

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1 ‘‘(B) Within 60 days of the date of appoint2 ment of the panel of experts pursuant to para3 graph (6), the panel may, or if requested by the

4 petitioner or a respondent shall, receive testi5 mony from all parties concerning the determina6 tions to be made pursuant to paragraph (10) or

7 paragraph (11).

8 ‘‘(9) EXPERTS’ REPORT.—Within 120 days of the

9 date of appointment of the panel of experts pursuant

10 to paragraph (6), the panel shall submit a written re11 port to the court providing in detail the panel’s rec12 ommendations on the determinations to be made pur13 suant to paragraph (10) or paragraph (11).

14 ‘‘(10) COURT’S FINAL RESPONSE TO PETITION:

15 VALUATION CONCERNING ECONOMICALLY RECOVER16 ABLE OIL OR GAS RESOURCES LOST OR DELAYED,

17 SUSPENSION OR TERMINATION, AND PAYMENT

18 ORDER.—Within 210 days of the date of issuance of

19 an order pursuant to paragraph (5)(B), by which, or

20 by any action of the Secretary pursuant to paragraph

21 (4)(C)(i), all or any part of the oil and gas lease or

22 right to develop is suspended, the court shall take the

23 following actions:

24 ‘‘(A)(i) The court shall determine whether,

25 as a result of the order or any action of the Sec-
58

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1 retary, all or any part of, including any geo2 graphical area of or zone or reservoir subject to,

3 the oil and gas lease or right to develop should

4 be suspended during any remaining period in

5 which the mining operations or support facilities

6 occupy the common area or whether the oil and

7 gas lease or right to develop should be termi8 nated.

9 ‘‘(ii) Any determination to suspend pursu10 ant to clause (i) shall, wherever possible or ap11 propriate, limit the suspension or phase the sus12 pension to permit the optimum development of

13 the oil or gas prior to the time at which the min14 ing operations would reach the area within the

15 common area that is subject to the suspension or

16 particular phase of the suspension.

17 ‘‘(iii) Any determination to terminate pur18 suant to clause (i) shall be made only if the

19 court finds that the economically recoverable oil

20 and gas resources subject to compensation pursu21 ant to subparagraph (E) would be entirely lost

22 or rendered impracticable to produce as a con23 sequence of the mining operations in the common

24 area and that such resources constitute all of the
59

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1 economically recoverable resources within the oil

2 and gas property.

3 ‘‘(B) If the court makes a determination to

4 suspend pursuant to subparagraph (A), the court

5 shall determine—

6 ‘‘(i) the amount of any net income that

7 will not be realized due to delay in develop8 ment of economically recoverable resources

9 of oil or gas, other than coalbed methane,

10 from the common area, whether or not such

11 development has commenced;

12 ‘‘(ii) the amount of any net income

13 that will not be realized, whether or not de14 velopment of coalbed methane has com15 menced, that is due to—

16 ‘‘(I) delay in development of eco17 nomically recoverable resources of coal18 bed methane in the common area; and

19 ‘‘(II) the loss of any economically

20 recoverable resources of coalbed meth21 ane from the coal to be extracted by the

22 mining operations in the common

23 area; and

24 ‘‘(III) the loss of any economically

25 recoverable resources of coalbed meth-
60

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1 ane underlying any area that is within

2 the oil and gas property associated

3 with the common area and that ex4 tends outward from each exposed coal

5 face of the mining operations for a dis6 tance from which drainage of such re7 sources is established to the satisfaction

8 of the court; and

9 ‘‘(iii) any of the following damages

10 that will be incurred by the owners of any

11 interest in the oil and gas property as a

12 consequence of the suspension: any unavoid13 able fixed expenses (including, but not lim14 ited to, the expenses of shutting in produc15 tion from, maintenance of, testing of, and

16 redrilling or reconnecting an existing well;

17 relaying pipeline; and all other expenses

18 reasonably related to reestablishing any ex19 isting oil or gas production); expenses asso20 ciated with stranded costs of drilling equip21 ment and facilities; any lost royalties on oil

22 or gas not produced by the oil and gas de23 veloper; and any lost income associated

24 with temporarily shutting in production

25 from wells outside of the common area as
61

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1 needed for reconnection to a gathering sys2 tem or pipeline to market.

3 ‘‘(C) The determinations made pursuant to

4 subparagraph (B) shall not include any decrease

5 in net income or damages resulting from loss of

6 any oil or gas resources that occurred before the

7 date of the determinations and is caused by min8 ing within or outside of the common area on the

9 Federal coal lease or logical mining unit that is

10 the subject of the common area determination

11 made pursuant to paragraph (4)(A)(i).

12 ‘‘(D) If the court makes a determination to

13 terminate pursuant to subparagraph (A), the

14 court shall determine the amount of any net in15 come that will not be realized and any damages

16 due to the loss of, or impracticability to produce,

17 the economically recoverable resources of oil or

18 gas in the oil and gas property in the same

19 manner as provided in subparagraph (B).

20 ‘‘(E) The court shall issue an order that—

21 ‘‘(i) suspends all or any part of, sus22 pends in phases parts of, or terminates the

23 oil and gas lease or right to develop, includ24 ing any applicable payment or production

25 obligations, in accordance with the deter-
62

S 1950 RS

1 mination made pursuant to subparagraph

2 (A); and

3 ‘‘(ii) awards to the oil and gas devel4 oper and all other owners of any interest in

5 the oil and gas property, as their interests

6 may appear, a sum of money from the Fed7 eral coal lessee equal to the net income

8 amount and damages determined pursuant

9 to subparagraph (B) or subparagraph (D).

10 ‘‘(F) In determining the amount of net in11 come that will not be realized pursuant to sub12 paragraph (B) or subparagraph (D) and the

13 sum of money to be awarded pursuant to sub14 paragraph (E), the court shall ensure to the best

15 of its ability that the Federal coal lessee is not

16 required to pay for the same gas lost, delayed in

17 development, or rendered impracticable to de18 velop to more than one oil and gas developer or

19 the owners of any interest in more than one oil

20 and gas property.

21 ‘‘(11) COURT’S FINAL RESPONSE TO PETITION:

22 VALUATION CONCERNING ECONOMICALLY RECOVER23 ABLE COAL RESOURCES LOST OR DELAYED, SUSPEN24 SION OR TERMINATION AND PAYMENT ORDER.—With25 in 210 days of the date of issuance of an order pursu-
63

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1 ant to paragraph (5)(B) by which, or by any action

2 by the Secretary pursuant to paragraph (4)(C)(i), the

3 Federal coal lease and/or any non-Federal interest in

4 the logical mining unit is suspended, the court—

5 ‘‘(A) shall determine whether, as a result of

6 the order or any action of the Secretary, the Fed7 eral coal lease and/or any non-Federal interest

8 in the logical mining unit shall be suspended in

9 whole or in part to further accommodate oil or

10 gas development in the common area; and

11 ‘‘(B) shall determine the amount of any net

12 income that will not be realized from the loss or

13 delay in development of economically recoverable

14 resources of coal, and the unavoidable fixed ex15 penses (including, but not limited to, additional

16 expenses associated with reclamation, expenses

17 associated with stranded costs of mining equip18 ment and facilities, a proportionate refund of the

19 lease bonus, and any lost royalties on coal not

20 produced by the Federal coal lessee) that will be

21 incurred, by the Federal coal lessee as a con22 sequence of the suspension; and

23 ‘‘(C) shall issue an order that—

24 ‘‘(i) suspends, in accordance with the

25 determination made pursuant to subpara-
64

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1 graph (A), all or any part of the Federal

2 coal lease and/or any non-Federal interest

3 in the logical mining unit, including any

4 applicable payment or production obliga5 tions on the lease or logical mining unit, for

6 the period necessary for expeditious develop7 ment in the common area of the gas or oil

8 that is the subject of the petition for relief

9 as demonstrated to the court in a produc10 tion plan submitted by the oil and gas de11 veloper; and

12 ‘‘(ii) awards to the Federal coal lessee

13 and all other owners of any interest in the

14 Federal coal lease or logical mining unit, as

15 their interests may appear, a sum of money

16 equal to the net income amount and un17 avoidable fixed expenses determined pursu18 ant to subparagraph (B).

19 ‘‘(12) REVIEW OF EXPERTS’ REPORT.—

20 ‘‘(A) The court shall make the determina21 tions required by paragraph (10) or paragraph

22 (11) after reviewing the report of the panel of ex23 perts submitted pursuant to paragraph (9) and

24 the hearing required by subparagraph (B).
65

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1 ‘‘(B) After submission of the report of the

2 panel of experts pursuant to paragraph (9) and

3 prior to making the determinations required by

4 paragraph (10) or paragraph (11), the court

5 shall hold a hearing in which the panel of ex6 perts shall present their report and the parties to

7 the proceeding shall have the opportunity to ex8 amine the panel and provide to the court any

9 evidence or arguments they may have to support

10 or contravene the recommendations of the report.

11 ‘‘(13) DISBURSEMENT OF PAYMENTS.—

12 ‘‘(A)(i) At the election of the oil and gas de13 veloper, the sum of money awarded by the court

14 pursuant to paragraph (10)(E) shall be—

15 ‘‘(I) paid in full within 60 days of the

16 date of issuance of the order pursuant to

17 paragraph (10)(E); or

18 ‘‘(II) divided into the number of tons

19 of recoverable coal in the common area and

20 paid in per ton increments as the coal is

21 mined in accordance with clause (ii) and

22 subparagraph (C).

23 ‘‘(ii) The Federal coal lessee shall make the

24 payments required by clause (i)(II) on a quar25 terly basis in advance based on the Federal coal
66

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1 lessee’s estimate of the number of tons of coal to

2 be mined in the common area during the fol3 lowing quarter, and shall add or subtract an

4 amount to or from the advance payment for the

5 next quarter to reflect the coal actually sold or

6 transferred.

7 ‘‘(B)(i) At the election of the Federal coal

8 lessee, the sum of money awarded by the court

9 pursuant to paragraph (11)(C) shall be:

10 ‘‘(I) paid in full within 60 days of the

11 date of issuance of the order pursuant to

12 paragraph (11)(C); or

13 ‘‘(II) divided into the number of bar14 rels of recoverable oil or cubic feet of recov15 erable gas in the common area and paid in

16 per barrel or cubic feet increments as the oil

17 or gas is produced in accordance with

18 clause (ii) and subparagraph (C).

19 ‘‘(ii) The oil and gas developer shall make

20 the payments required by clause (i)(II) on a

21 quarterly basis in advance based on the oil and

22 gas developer’s estimate of the number of barrels

23 of oil or cubic feet of gas to be produced in the

24 common area during the following quarter, and

25 shall add or subtract an amount to or from the
67

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1 advance payment for the next quarter to reflect

2 the oil or gas actually produced.

3 ‘‘(C) If the mining or production necessary

4 to make full payment of the sum of money

5 awarded by the court in accordance with sub6 paragraph (A)(i)(II) or subparagraph (B)(i)(II)

7 does not occur within 5 years of the date of

8 issuance of the court order pursuant to para9 graph (10)(E) or paragraph (11)(C), the unpaid

10 balance shall be paid within 60 days thereafter.

11 ‘‘(14) TERMINATION OF OIL AND GAS LEASE SUS12 PENSION.—

13 ‘‘(A) If the court issues an order to suspend

14 all or any part of the oil and gas lease or right

15 to develop pursuant to paragraph (10)(E)—

16 ‘‘(i) the Federal coal lessee shall notify

17 the court and the oil and gas developer

18 when the portion of the common area sub19 ject to the order issued pursuant to para20 graph (10)(E) is no longer required for

21 mining operations or support facilities; and

22 ‘‘(ii) within 120 days of the date of re23 ceipt by the court of the notification pursu24 ant to clause (i) or within 60 days prior to

25 the date on which the period established by
68

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1 the court in the order issued pursuant to

2 paragraph (10)(E) concludes, the oil and

3 gas lessee may petition the court for an

4 order that terminates the suspension and

5 fixes the date and terms on which the oil

6 and gas lessee may resume operations with7 in the portion of the common area subject

8 to the order issued pursuant to paragraph

9 (10)(E).

10 ‘‘(B) The court shall issue the order sought

11 under subparagraph (A)(ii) within 30 days of

12 the date of receipt of the petition pursuant to

13 subparagraph (A)(ii).

14 ‘‘(C)(i) If the oil and gas developer deter15 mines that, as a consequence of the order of the

16 court issued pursuant to paragraph (5)(B) and

17 an order to suspend all or part of the oil and gas

18 lease or right to develop pursuant to paragraph

19 (10)(E), the conditions described in paragraph

20 (10)(A)(iii) exist, the oil and gas developer may

21 petition the court to terminate the oil and gas

22 lease or right to develop.

23 ‘‘(ii) The petition referred to in clause (i)

24 may be filed any time after issuance of the order

25 of the court pursuant to paragraph (10)(E) but
69

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1 not later than 120 days after the date of receipt

2 by the court of the notification pursuant to sub3 paragraph (A)(i).

4 ‘‘(iii) Upon receipt of a petition pursuant

5 to clause (i), the court shall make a determina6 tion whether to issue an order to terminate the

7 oil and gas lease or right to develop and award

8 an additional amount from the Federal coal les9 see to the oil or gas developer and all other own10 ers of any interest in the oil and gas property,

11 as their interests may appear, in accordance

12 with the procedures and deadlines established in

13 paragraphs (1) and (6) through (13).

14 ‘‘(15) TERMINATION OF COAL LEASE SUSPEN15 SION.—

16 ‘‘(A) If the court issues an order requiring

17 suspension of all or any part of the Federal coal

18 lease and/or any non-Federal interest in the log19 ical mining unit that includes the Federal coal

20 lease pursuant to paragraph (11)(C)—

21 ‘‘(i) the oil and gas developer shall no22 tify the court and the Federal coal lessee

23 when the portion of the common area sub24 ject to the order issued pursuant to para-
70

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1 graph (11)(C) is no longer required for gas

2 or oil production from such portion; and

3 ‘‘(ii) within 120 days of the date of re4 ceipt by the court of the notification pursu5 ant to clause (i) or within 60 days prior to

6 the date on which the period established by

7 the court in the order issued pursuant to

8 paragraph (11)(C) concludes, the Federal

9 coal lessee may petition the court for an

10 order that fixes the date and terms on which

11 the Federal coal lessee may commence min12 ing operations or construction of support

13 facilities in the portion of the common area

14 subject to the order issued pursuant to para15 graph (11)(C) and, if all or any part of the

16 Federal coal lease and/or any non-Federal

17 interest in the logical mining unit is sus18 pended, terminates the suspension.

19 ‘‘(B) The court shall issue the order sought

20 under subparagraph (A)(ii) within 30 days of

21 the date of receipt of the petition pursuant to

22 subparagraph (A)(ii).

23 ‘‘(C)(i) If the Federal coal lessee determines

24 that, as a consequence of the order of the court

25 issued pursuant to paragraph (11)(C), further
71

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1 development of all or any part of the Federal

2 coal lease and/or any non-Federal interest in the

3 logical mining unit is impracticable, the Federal

4 coal lessee may petition the court to terminate

5 all or any part of the Federal coal lease and/or

6 any non-Federal interest in the logical mining

7 unit.

8 ‘‘(ii) The petition referred to in clause (i)

9 may be filed any time after issuance of the order

10 of the court pursuant to paragraph (11)(C) but

11 not later than 120 days after the date of receipt

12 by the court of the notification pursuant to sub13 paragraph (A)(i).

14 ‘‘(iii) Upon receipt of a petition pursuant

15 to clause (i), the court shall make a determina16 tion whether to issue an order to terminate all

17 or any part of the Federal coal lease and/or any

18 non-Federal interest in the logical mining unit

19 and award an additional amount from the oil

20 and gas developer to the Federal coal lessee and

21 all other owners of any interest in the Federal

22 coal lease or logical mining unit, as their inter23 ests may appear, in accordance with the proce24 dures and deadlines established in paragraphs

25 (1) and (6) through (13).
72

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1 ‘‘(16) SUPPLEMENTAL PETITION FOR RELIEF.—

2 ‘‘(A) If, any time after the issuance of an

3 order pursuant to paragraph (10)(E) or para4 graph (11)(C), the mining plan that is the basis

5 of the order is altered in a manner that may

6 warrant suspension of an additional part or all

7 of, or termination of, the oil and gas lease or

8 right to develop or suspension of an additional

9 part of the Federal coal lease and/or any non10 Federal interest in the logical mining unit that

11 includes the Federal coal lease and/or increase in

12 the sum of money that was awarded under the

13 order, either the Federal coal lessee or the oil and

14 gas developer may, if necessary after compliance

15 with the requirements of subsection (d), file a

16 supplemental petition for relief with the court to

17 amend the order.

18 ‘‘(B) The requirements of paragraphs (1)

19 and (6) through (13) shall apply to the supple20 mental petition submitted pursuant to subpara21 graph (A).

22 ‘‘(C)(i) Upon completion of the process re23 quired by subparagraph (B), the court shall

24 make a determination whether to suspend an ad25 ditional part or all of, or terminate, the oil and
73

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1 gas lease or right to develop or to suspend an ad2 ditional part of the Federal coal lease and/or

3 any non-Federal interest in the logical mining

4 unit as described in, and to award an additional

5 sum of money calculated in accordance with,

6 paragraph (10) or paragraph (11).

7 ‘‘(ii) The court shall issue any order result8 ing from the determinations made pursuant to

9 clause (i) within 90 days of the date of filing of

10 the supplemental petition for relief.

11 ‘‘(iii) Any award of an additional sum of

12 money shall be paid in accordance with para13 graph (13).

14 ‘‘(17) APPEAL OF COURT ORDERS.—

15 ‘‘(A) Any order issued pursuant to para16 graph (5)(B), paragraph (5)(E), paragraph

17 (14)(B), or paragraph (15)(B) is final and may

18 not be appealed.

19 ‘‘(B) Any order issued pursuant to para20 graph (10)(E), paragraph (11)(C), paragraph

21 (14)(C)(iii), paragraph (15)(C)(iii), or para22 graph (16)(C)(ii) may be appealed, but the ap23 peal, and any disposition thereof, may not dis24 turb any order referred to in subparagraph (A).

25 ‘‘(18) SUSPENSION TERM.—
74

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1 ‘‘(A) If all or any part of any lease issued

2 pursuant to this Act is suspended in whole or in

3 part by the Secretary or the court under this

4 subsection—

5 ‘‘(i) the lessee shall not be required to

6 pay any rental for the lease for the period

7 of the suspension; and

8 ‘‘(ii) if the lease is a Federal oil or gas

9 lease and is in the primary term or if the

10 lease is a Federal coal lease, the term of the

11 lease shall be extended by the length of the

12 period of the suspension plus one year; or

13 ‘‘(iii) the lease shall not terminate due

14 to lack of production for the period of the

15 suspension plus one year.

16 ‘‘(B) If any non-Federal oil and gas lease

17 or right to develop or any non-Federal interest

18 in a logical mining unit is suspended in whole

19 or in part by the court under this subsection, the

20 court shall establish terms for the suspension

21 comparable to the terms set forth in subpara22 graph (A).

23 ‘‘(f) LIABILITY LIMITATION.—

24 ‘‘(1) FEDERAL COAL LESSEE.—Except as pro25 vided in a written agreement reached pursuant to
75

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1 subsection (d)(2) or reached on or after September 1,

2 1999, and before the date of enactment of this section,

3 or as provided by an order of the court pursuant to

4 subsection (e), neither the holder of a Federal coal

5 lease subject to the agreement or order nor the United

6 States shall be liable to the oil and gas developer of,

7 or any owner of an interest in, any oil and gas prop8 erty subject to the agreement or order for any decrease

9 in or depletion of, or any impairment of the ability

10 to recover, any gas or oil from the property that may

11 result from the development of any coal on the Fed12 eral coal leasehold or within a logical mining unit

13 that includes the Federal coal lease.

14 ‘‘(2) OIL AND GAS DEVELOPER.—Except as pro15 vided in a written agreement reached pursuant to

16 subsection (d)(2) or reached on or after September 1,

17 1999, and before the date of enactment of this section,

18 or as provided by an order of the court pursuant to

19 subsection (e), neither the oil and gas developer of an

20 oil and gas property subject to the agreement or order

21 nor the United States shall be liable to a holder of a

22 Federal coal lease subject to the agreement or order,

23 or any owner of any non-Federal interest in a logical

24 mining unit that includes the Federal coal lease, or

25 the United States for any impairment of the ability
76

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1 to recover coal from the Federal coal leasehold or log2 ical mining unit that may result from the develop3 ment of gas or oil on the property.

4 ‘‘(g) CREDIT AGAINST ROYALTIES.—

5 ‘‘(1) IN GENERAL.—

6 ‘‘(A) Whenever a holder of a Federal coal

7 lease is required by a written agreement reached

8 pursuant to subsection (d)(2) and approved by

9 the Bureau of Land Management or reached

10 prior to the date of enactment of this section and

11 approved by the Bureau of Land Management on

12 or after September 1, 1999, or by a court order

13 issued pursuant to paragraph (10)(E), para14 graph (14)(C)(iii), or paragraph (16)(C)(ii) of

15 subsection (e), to pay an amount for suspension

16 of all or part of, or termination of, a Federal oil

17 and gas lease for coalbed methane located within

18 the Subsection (g) Lands, the amount so paid

19 shall be credited against any royalties on pro20 duction required by section 7(a) or any other

21 provision of this Act from any lease of Federal

22 coal issued under this Act to such holder or any

23 affiliate thereof.

24 ‘‘(B) Whenever a holder of a Federal oil and

25 gas lease is required by a written agreement
77

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1 reached pursuant to subsection (d)(2) and ap2 proved by the Bureau of Land Management or

3 reached prior to the date of enactment of this sec4 tion and approved by the Bureau of Land Man5 agement on or after September 1, 1999, or by a

6 court order issued pursuant to paragraph

7 (11)(C), paragraph (15)(C)(ii), or paragraph

8 (16)(C)(ii) of subsection (e), to pay an amount

9 for suspension or termination of all or part of a

10 Federal coal lease located within the Subsection

11 (g) Lands, the amount so paid shall be credited

12 against any royalties on production required by

13 subsection (b)(1)(A) or subsection (c)(1) of sec14 tion 17 or any other provision of this Act from

15 any lease of Federal oil and gas issued under

16 this Act to such holder or any affiliate thereof.

17 ‘‘(2) TREATMENT OF ROYALTIES TO STATES.—

18 The Secretary shall pay to the State in which the

19 Federal coal lease or Federal oil and gas lease referred

20 to in paragraph (1)(A) or paragraph (1)(B), respec21 tively, is located 50 percent of the amount of any

22 credit against royalties provided under paragraph

23 (1)(A) or paragraph (1)(B), respectively—

24 ‘‘(A) in the same manner as if the credit

25 against royalties had been paid in money as
78

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1 royalties and distributed under section 35(a) of

2 this Act; and

3 ‘‘(B) from amounts received as royalties,

4 rentals, or bonuses derived from leases issued

5 under this Act that otherwise would be deposited

6 to miscellaneous receipts under section 35(a) of

7 this Act.

8 ‘‘(h) DENIAL OF USE AS PRECEDENT.—Nothing in

9 this section shall be applicable to any lease under this Act

10 for any mineral, or shall be applicable to, or supersede any

11 statutory or common law otherwise applicable in, any pro12 ceeding in any Federal or State court involving develop13 ment of any mineral, outside of any common area, as de14 fined in subsection (a)(11), within or outside of the Powder

15 River Basin, as defined in subsection (a)(1).’’.

16 SEC. 4. EFFECTIVE DATE.

17 This Act shall be effective upon the date of its enact18 ment.

Amend the title so as to read: ‘‘A bill to amend the

Mineral Leasing Act of 1920 to ensure the orderly development of coal, coalbed methane, natural gas, and oil in

‘common’ areas of the Powder River Basin, Wyoming

and Montana, and for other purposes.’’.

Calendar No. 939

106TH CONGRESS

2D SESSION S. 1950

[Report No. 106–490]

A BILL

To amend the Mineral Leasing Act of 1920 to ensure the orderly development of coal, coalbed

methane, natural gas, and oil in the PowderRiver Basin, Wyoming and Montana, and forother purposes.

OCTOBER 5 (legislative day, SEPTEMBER 22), 2000

Reported with an amendment and an amendment to the

title