I

107TH CONGRESS

1ST SESSION H. R. 1710

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.

IN THE HOUSE OF REPRESENTATIVES

MAY 3, 2001

Mrs. CUBIN introduced the following bill; which was referred to the Committee

on Resources

A BILL

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.

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

3 SECTION 1. SHORT TITLE.

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

5 Resource Development Act of 2001’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds that—
2

•HR 1710 IH

1 (1) The Powder River Basin in Wyoming and

2 Montana is one of the world’s richest energy re3 source regions, possessing the largest reserves of

4 coal in the United States and significant deposits of

5 oil and natural gas, including coalbed methane.

6 (2) The coal is predominantly federally owned,

7 either as part of the public lands or reserved from

8 public lands that were sold under homestead laws

9 enacted in 1909, 1910, and 1916, and may be leased

10 to coal producers by the Bureau of Land Manage11 ment, Department of the Interior, under the Mineral

12 Leasing Act.

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

14 Government, the States, and private parties.

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

16 coal, are part of the public lands and may be leased

17 to oil and gas producers by the Bureau of Land

18 Management under the Mineral Leasing Act.

19 (5) The privately owned gas and oil were con20 veyed with the public lands purchased under the

21 three homestead laws and may have been sold or

22 leased to oil and gas producers by the successors to

23 those original purchasers.
3

•HR 1710 IH

1 (6) Development of these valuable energy re2 sources is of critical importance to the American

3 public.

4 (7) These energy resources provide fuel to heat

5 and light our homes and power our industries.

6 (8) Extraction of these energy resources pro7 vides royalties, taxes, and wages that contribute to

8 national, State, and local treasuries and economies.

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

10 and oil is occurring in the Powder River Basin.

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

12 oil have been leased or sold to different parties.

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. Where concurrent development is im17 possible and even where it may be possible, in cer18 tain of these locations disputes have arisen among

19 the different parties concerning plans for, and the

20 course of, development of these resources.

21 (11) The development of any one of these re22 sources can result in loss of another, either by mak23 ing recovery impossible in the case of coalbed meth24 ane or uneconomic in the case of coal, oil, or deep

25 gas.
4

•HR 1710 IH

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

2 or delay in development of the gas, oil, or coal re3 source due to development of another of these re4 sources in the common areas within the Powder

5 River Basin in which disputes between the resources

6 developers arise should be ascertained and fair mar7 ket value for the loss or delay should be provided by

8 agreement between the developers or by an expedi9 tious adjudication procedure.

10 (13) Federal law should provide a procedure

11 that will assure the orderly development of the en12 ergy resources, and fair treatment to the resources

13 developers, in the common areas within the Powder

14 River Basin in which disputes between the devel15 opers arise.

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

17 (1) provide a consistent procedure to resolve

18 disputes between developers of coal and developers

19 of natural gas and oil in the common areas within

20 the Powder River Basin to which this Act applies

21 concerning the sequence of development of those re22 sources in the same location, regardless of who owns

23 the resources;

24 (2) encourage maximum recovery of the re25 sources prior to the time at which such disputes are
5

•HR 1710 IH

1 likely to occur or thereafter until the procedure pro2 vided by this Act is implemented;

3 (3) ensure that the procedure provided by this

4 Act is employed as a last resort if the disputes are

5 not fully resolved by voluntary agreements between

6 the resources developers or administrative policies

7 and actions;

8 (4) determine fair and just compensation owed

9 for the loss of, or delay in, the opportunity to de10 velop a resource resulting from implementation of

11 the procedure provided by this Act; and

12 (5) provide expressly that the procedure pro13 vided by this Act will neither apply to nor set any

14 precedent for resolution of disputes between or

15 among resource developers outside of the common

16 areas within the Powder River Basin to which this

17 Act applies.

18 SEC. 3. DEFINITIONS.

19 As used in this Act:

20 (1) APPROVED OR PROPOSED MINING PLAN.—

21 The term ‘‘approved or proposed mining plan’’

22 means a mining plan that is approved by, or has

23 been submitted for the approval of, the Secretary.

24 (2) COALBED METHANE.—The term ‘‘coalbed

25 methane’’ shall have the meaning given that term in
6

•HR 1710 IH

1 section 1339(p)(2) of the Energy Policy Act of 1992

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

3 (3) COMMON AREA.—The term ‘‘common area’’

4 means an area in the Basin in which all or a portion

5 of a Federal coal lease (including any area of State

6 or private coal within a logical mining unit with the

7 Federal coal lease) overlaps all or a portion of an oil

8 and gas property.

9 (4) DEVELOP OR DEVELOPMENT.—The term

10 ‘‘develop’’ or ‘‘development’’ means to develop or to

11 produce, or both, or the development or production,

12 or both, respectively, including all incidental oper13 ations.

14 (5) FEDERAL COAL LEASE.—The term ‘‘Fed15 eral coal lease’’ means a lease of Federal coal in the

16 Basin issued pursuant to the Mineral Leasing Act.

17 (6) FEDERAL COAL LESSEE.—The term ‘‘Fed18 eral coal lessee’’ means the holder of a Federal coal

19 lease.

20 (7) FEDERAL OIL AND GAS LEASE.—The term

21 ‘‘Federal oil and gas lease’’ means a lease of Federal

22 oil and gas in the Basin issued pursuant to the Min23 eral Leasing Act.

24 (8) MINERAL LEASING ACT.—The term ‘‘Min25 eral Leasing Act’’ means the Act of February 25,
7

•HR 1710 IH

1 1920 (41 Stat. 437), as amended (30 U.S.C. 181 et

2 seq.).

3 (9) NON-FEDERAL OIL AND GAS LEASE OR

4 RIGHT TO DEVELOP.—The term ‘‘non-Federal oil

5 and gas lease or right to develop’’ means a lease for

6 or right to develop oil and gas in the Basin provided

7 by a State or private owner of the resources.

8 (10) OIL AND GAS DEVELOPER.—The term ‘‘oil

9 and gas developer’’ means the holder of an oil and

10 gas lease or right to develop.

11 (11) OIL AND GAS LEASE OR RIGHT TO DE12 VELOP.—The term ‘‘oil and gas lease or right to de13 velop’’ means a Federal oil and gas lease or a lease

14 for or right to develop oil and gas in the Basin pro15 vided by a State or private owner of the resources.

16 (12) OIL AND GAS PROPERTY.—The term ‘‘oil

17 and gas property’’ means an area in the Basin which

18 is subject to an oil and gas lease or right to develop

19 held by an oil and gas developer.

20 (13) OWNERS OF ANY INTEREST IN THE OIL

21 AND GAS PROPERTY.—The term ‘‘owners of any in22 terest in the oil and gas property’’ means persons

23 who own the working interest, lease interest, oper24 ating interest, mineral interest, royalty interest, or

25 any other interest in the oil and gas property, and
8

•HR 1710 IH

1 any other persons who might receive compensation

2 for unavoidable fixed expenses under an order con3 cerning the oil and gas property issued pursuant to

4 section 11(d).

5 (14) OWNERS OF ANY NON-FEDERAL INTEREST

6 IN THE OIL AND GAS PROPERTY.—The term ‘‘own7 ers of any non-Federal interest in the oil and gas

8 property’’ means all owners of any interest in the oil

9 and gas property except the Federal Government or

10 any agency or department thereof.

11 (15) POWDER RIVER BASIN OR BASIN.—The

12 term ‘‘Powder River Basin’’ or ‘‘Basin’’ means the

13 area designated as Powder River Basin on a map

14 entitled MLA Section 44 Powder River Basin Area,

15 dated July 1, 1999, and on file in the Wyoming and

16 Montana State Offices of the Bureau of Land Man17 agement, Department of the Interior.

18 (16) SECRETARY.—The term ‘‘Secretary’’

19 means the Secretary of the Interior.

20 (17) SECTION 21 LANDS.—The term ‘‘Section

21 21 Lands’’ means the area designated as Section 21

22 Lands on the map described in paragraph (1).
9

•HR 1710 IH

1 SEC. 4. PARTIES ENCOURAGED TO ENTER INTO WRITTEN

2 AGREEMENT.

3 In any common area, the Federal coal lessee and oil

4 and gas developer, subject to applicable Federal and State

5 laws, regulations, and lease terms, may and are encour6 aged to enter into a written agreement that details oper7 ations and assigns or assesses costs or compensation for

8 the concurrent or sequential development of those re9 sources.

10 SEC. 5. MINERAL CONSERVATION.

11 The Secretary shall employ any authority the Sec12 retary possesses to encourage expedited development of

13 any oil or gas resource and any coal resource that—

14 (1) are leased pursuant to the Mineral Leasing

15 Act;

16 (2) are within common areas; and

17 (3) otherwise may be lost or bypassed due to

18 the development of another of the resources.

19 SEC. 6. NEGOTIATIONS CONCERNING DEVELOPMENT PRI20 ORITY FOR CERTAIN OPERATIONS IN THE

21 BASIN.

22 (a) OBLIGATION TO PROVIDE WRITTEN NOTICE OF

23 CONFLICT.—Whenever a Federal coal lessee or an oil and

24 gas developer determines that its Federal coal lease (or

25 a logical mining unit including the Federal coal lease) or

26 its oil and gas property is located in a common area, and,
10

•HR 1710 IH

1 pursuant to an approved or proposed mining plan, mining

2 operations or facilities in support of mining for coal on

3 the Federal coal lease or the logical mining unit will be

4 located within the common area, the Federal coal lessee

5 or the oil and gas developer shall deliver written notice

6 of the determination to the other party and the Secretary

7 no later than 240 days prior to the date on which the

8 mining operations or construction of the mine support fa9 cilities is projected by the approved or proposed mining

10 plan to commence in the common area.

11 (b) OBLIGATION TO NEGOTIATE.—Promptly after

12 providing the notice referred to in subsection (a), the party

13 which provided the notice shall seek to negotiate a written

14 agreement with the other party that resolves any conflict

15 between the development of gas or oil and development

16 of coal in the common area.

17 SEC. 7. PETITION FOR RELIEF.

18 (a) SUBMISSION OF PETITION.—

19 (1) If notice is submitted timely pursuant to

20 section 6(a) and the Federal coal lessee and the oil

21 and gas developer engage in negotiations, but do not

22 reach agreement, pursuant to section 6(b), the Fed23 eral coal lessee or the oil and gas developer may file

24 a petition for relief as described in paragraph (3) in

25 the United States district court for the district in
11

•HR 1710 IH

1 which the common area is located on any date which

2 is not less than 180 days prior to the date on which

3 the mining operations or construction of the mine

4 support facilities is projected by the approved or

5 proposed mining plan to commence in the common

6 area.

7 (2) The petitioner shall serve the oil and gas

8 developer or the Federal coal lessee, as the case may

9 be, and the Secretary with a copy of the petition for

10 relief on the same date upon which the petition is

11 filed with the court pursuant to paragraph (1).

12 (3) The petition for relief shall include the fol13 lowing:

14 (A) A description and map of the Federal

15 coal lease, oil and gas property, and the com16 mon area.

17 (B) A list containing the names and ad18 dresses of all owners of any non-Federal inter19 est in the oil and gas property and all owners

20 of any non-Federal interest in the Federal coal

21 lease or logical mining unit. The petitioner shall

22 list those owners of any non-Federal interest in

23 the oil and gas property and of the Federal coal

24 lease or logical mining unit whom the petitioner

25 is able to ascertain from the properly indexed
12

•HR 1710 IH

1 records of the county recorder of the county or

2 counties in which the oil and gas property and

3 Federal coal lease or logical mining unit are lo4 cated, and the respondent shall file with the

5 court and serve on the petitioner and the Sec6 retary any corrections of, additions to, or dele7 tions from the list known to the respondent

8 within 10 days of the date of service of the peti9 tion for relief pursuant to paragraph (2).

10 Thereafter, whenever any correction of, addition

11 to, or deletion from the list becomes known to

12 either the petitioner or the respondent, that

13 party shall promptly file with the court and

14 serve on the other party and the Secretary the

15 addition, correction, or deletion. Any person

16 who believes he or she is an owner of any non17 Federal interest in the oil and gas property or

18 in the Federal coal lease or logical mining unit

19 and is omitted from the list may file a motion

20 in the court to be added to the list at any time

21 prior to the issuance of an order pursuant to

22 section 11(d) or section 12(d).

23 (C) A certified copy of the notice described

24 in section 6(a).
13

•HR 1710 IH

1 (D) A sworn statement by a senior officer

2 of the petitioner with authority to commit the

3 petitioner in any negotiation under section 6(b)

4 stating, and all documents demonstrating, that

5 the petitioner negotiated or attempted to nego6 tiate in good faith with the respondent a vol7 untary agreement, pursuant to section 6(b).

8 (4) The Federal coal lessee shall submit a copy

9 of the approved or proposed mining plan for the

10 mining operations or support facilities that are the

11 subject of the petition for relief—

12 (A) with the petition for relief if the Fed13 eral coal lessee is the petitioner; or

14 (B) within 5 days of the date of service of

15 the petition for relief pursuant to paragraph (2)

16 if the Federal coal lessee is the respondent.

17 (b) JOINDER OF PARTIES.—The Secretary and all

18 owners of any non-Federal interest in the oil and gas prop19 erty and in the Federal coal lease or logical mining unit

20 identified pursuant to subsection (a)(3)(B) shall be joined

21 in the proceedings established pursuant to this Act.

22 (c) PARTIES’ RESPONSE TO PETITION.—The non23 Federal respondent or respondents may provide to the

24 Secretary a response to the petition within 30 days from

25 the date of filing of the petition for relief pursuant to sub-
14

•HR 1710 IH

1 section (a)(1). The Secretary may require the petitioner

2 and the respondent or respondents to submit such docu3 ments and/or provide such testimony as the Secretary

4 deems appropriate within 60 days of such date of filing.

5 SEC. 8. SECRETARY’S RESPONSE TO PETITION.

6 (a) IN GENERAL.—Within 90 days of the date of fil7 ing of the petition for relief pursuant to section 7(a)(1)

8 the Secretary shall take the actions required by this sec9 tion.

10 (b) INITIAL DETERMINATIONS.—The Secretary shall

11 determine, with petitioner having the burden of proof—

12 (1) whether a common area exists; and

13 (2) whether the approved or proposed mining

14 plan submitted pursuant to section 7(a)(4) provides

15 for the mining operations to intersect, or the mine

16 support facilities to be constructed in, any portion of

17 the common area.

18 (c) PUBLIC INTEREST DETERMINATION.—

19 (1) If existence of the common area and inter20 section of, or construction in, the common area are

21 determined pursuant to subsection (b), the Secretary

22 shall determine whether the public interest is best

23 realized by delaying or forgoing development of

24 either—
15

•HR 1710 IH

1 (A) the oil or gas resource to permit the

2 mining operations to intersect, or the mine sup3 port facilities to be constructed in, the common

4 area in accordance with the approved or pro5 posed mining plan; or

6 (B) the coal resource to permit commence7 ment or continuation of the development of the

8 oil or gas resource in the common area after

9 the date on which the mining operations or con10 struction of the mine support facilities is pro11 jected by the approved or proposed mining plan

12 to commence in the common area.

13 (2) The Secretary shall make the public interest

14 determination described in paragraph (1) solely by

15 the calculation of the greater economic benefit to be

16 realized by comparison, on a net present value basis,

17 of the Federal and State revenues from royalties and

18 severance taxes likely to be generated from each re19 source underlying the common area to which the pe20 tition for relief applies.

21 (d) LEASE SUSPENSION.—If any portion of the re22 source for which delayed or forgone development is deter23 mined to be in the public interest pursuant to subsection

24 (c) is subject to a lease issued pursuant to the Mineral

25 Leasing Act, the Secretary shall suspend all or any portion
16

•HR 1710 IH

1 of, including any geographical area of or zone or reservoir

2 subject to, the lease to accommodate development of the

3 other resource in the common area during the period be4 ginning on a date no later than the commencement date

5 referred to in section 7(a)(1) and provided in the notice

6 submitted pursuant to section 7(a)(3)(C) and ending on

7 the date on which an order is issued pursuant to section

8 11(d) or section 12(d).

9 (e) EXCEPTIONS.—The Secretary may refrain from

10 either making the determinations required by subsections

11 (b) and (c) or suspending all or any portion of a lease

12 issued pursuant to the Mineral Leasing Act as required

13 by subsection (d) if the Secretary determines that—

14 (1) no common area exists; or

15 (2) the approved or proposed mining plan does

16 not provide for the mining operations to intersect, or

17 the mine support facilities to be constructed in, the

18 common area.

19 (f) SECRETARIAL REPORT.—The Secretary shall—

20 (1) not delegate the determinations made pur21 suant to this section;

22 (2) report the determinations made pursuant to

23 subsections (b) and (c) or subsection (e) and any

24 suspension made pursuant to subsection (d), includ25 ing the administrative record therefor, with the
17

•HR 1710 IH

1 court in which the petition for relief is filed pursuant

2 to section 7(a)(1); and

3 (3) provide the petitioner and respondent or re4 spondents with copies of the report and record.

5 SEC. 9. COURT’S INITIAL RESPONSE TO PETITION.

6 (a) RECEIPT OF SECRETARIAL REPORT.—The court

7 in which the petition is filed pursuant to section 7(a)(1)

8 shall have exclusive jurisdiction to receive and review the

9 report of the Secretary required by section 8(f), and the

10 determinations made and any action taken by the Sec11 retary pursuant to section 8.

12 (b) PARTIES’ OBJECTIONS TO REPORT.—

13 (1) The petitioner and respondent or respond14 ents shall have 30 days from the date upon which

15 the report of the Secretary is filed with the court

16 pursuant to section 8(f) in which to file with the

17 court any objection to any determination of the Sec18 retary required by section 8.

19 (2) If any objection is filed pursuant to para20 graph (1), the court shall, within 60 days of receipt

21 of the report of the Secretary pursuant to section

22 8(f), make the determination that is the subject of

23 the objection on the basis of the administrative

24 record filed with the report and in accordance with
18

•HR 1710 IH

1 the applicable requirements or standards of sub2 section (b) or subsection (c) of section 8.

3 (3) Any determination made by the court pur4 suant to paragraph (3) shall be an independent judi5 cial determination that is de novo, without regard to

6 the prior determination of the Secretary.

7 (4) If no objection is filed pursuant to para8 graph (1), the determinations of the Secretary re9 quired by section 8 shall be final and approved by

10 the court in the order issued pursuant to subsection

11 (c) or subsection (f).

12 (c) COURT ORDER.—Within 90 days of the date of

13 receipt of the report of the Secretary pursuant to section

14 8(f), the court, except as provided in subsection (f), shall

15 issue an order that—

16 (1) suspends all or any part of, including any

17 geographical area of or reservoir subject to, any non18 Federal oil and gas lease or right to develop, or any

19 non-Federal interest in any logical mining unit that

20 includes the Federal coal lease, in the common area

21 in accordance with the determination of the Sec22 retary pursuant to subparagraph (A) or subpara23 graph (B), respectively, of section 8(c)(1) or in ac24 cordance with the determination of the court pursu25 ant to subsection (b)(2);
19

•HR 1710 IH

1 (2) if required by a determination of the court

2 pursuant to subsection (b)(2), terminates a suspen3 sion of a lease issued pursuant to the Mineral Leas4 ing Act imposed by the Secretary pursuant to sec5 tion 8(d), or imposes a suspension of a lease issued

6 pursuant to the Mineral Leasing Act, or both, in ac7 cordance with the determination;

8 (3) if all or any part of the oil and gas lease

9 or right to develop is suspended pursuant to section

10 8(d) or this subsection, fixes the date upon which

11 the Federal coal lessee may commence mining oper12 ations or construction of mine support facilities in

13 the common area, which may be no later than the

14 commencement date referred to in section 7(a)(1)

15 and provided in the notice submitted pursuant to

16 section 7(a)(3)(C), except for good cause shown; and

17 (4) if all or any part of the Federal coal lease

18 and/or any non-Federal interest in the logical mining

19 unit that includes the Federal coal lease is sus20 pended pursuant to section 8(d) or this subsection,

21 prohibits the mining operations from intersecting, or

22 the support facilities from being constructed in, all

23 or a portion of the common area.

24 (d) EXPIRATION OF ORDER.—The order of the court

25 issued pursuant to subsection (c) shall expire upon the
20

•HR 1710 IH

1 issuance of an order pursuant to section 11(d), or section

2 12(d).

3 (e) EXCEPTIONS.—The court may refrain from

4 issuing the order required by subsection (c), only if—

5 (1) the Secretary makes a determination de6 scribed in section 8(e); or

7 (2) the court, acting on an objection filed pur8 suant to subsection (b), concurs in a determination

9 made by the Secretary pursuant to section 8(e), or

10 determines that—

11 (A) no common area exists; or

12 (B) the approved or proposed mining plan

13 submitted pursuant to section 7(a)(4) does not

14 provide for the mining operations to intersect,

15 or the mine support facilities to be constructed

16 in, the common area.

17 (f) TERMINATION OF PROCEEDING.—If the Secretary

18 makes a determination described in section 8(e) or the

19 court makes a determination described in subsection

20 (e)(2), the court shall issue an order terminating the pro21 ceeding under this Act.

22 SEC. 10. APPOINTMENT OF EXPERTS.

23 (a) APPOINTMENT PROCEDURE.—Within 30 days of

24 the date of issuance of an order pursuant to section 9(c),

25 to assist the court in making the determinations pursuant
21

•HR 1710 IH

1 to section 11 or section 12, the Federal coal lessee and

2 the oil and gas developer shall each appoint a person who

3 is an expert in appraising the value of, and right to de4 velop, gas or oil if all or any part of the oil and gas lease

5 or right to develop is suspended, or coal if all or any part

6 of the Federal coal lease and/or any non-Federal interest

7 in the logical mining unit that includes the Federal coal

8 lease is suspended, pursuant to section 8(d) and/or section

9 9(c), and these persons shall agree upon and appoint a

10 third person with such expertise. If no agreement is

11 reached on the date of appointment of a third person, the

12 court shall make the appointment.

13 (b) COMPENSATION.—The Federal coal lessee shall

14 be responsible for compensation of the expert appointed

15 by it; the oil and gas developer shall be responsible for

16 compensation of the expert appointed by it; and the Fed17 eral coal lessee and oil and gas developer shall each pay

18 one-half of the compensation for the third expert.

19 (c) INFORMATION AND DATA.—

20 (1) The Federal coal lessee, oil and gas devel21 oper, and Secretary shall each submit to the panel

22 of experts within 30 days of the date of appointment

23 of the panel pursuant to subsection (a) all informa24 tion and data in the possession of such party that

25 is pertinent to the determinations to be made pursu-
22

•HR 1710 IH

1 ant to section 11 or section 12, and shall each sub2 mit to the panel of experts thereafter any additional

3 pertinent information and data in the possession of

4 such party that the panel requests of such party in

5 writing.

6 (2) Except as provided in paragraph (3), the

7 court shall ensure that any information and data

8 submitted to the panel of experts pursuant to para9 graphs (1) and (4) shall have the protection of con10 fidentiality that is applicable, and may be accorded,

11 to them by law and the Federal rules of civil proce12 dure and evidence.

13 (3) All information and data submitted to the

14 panel of experts pursuant to paragraphs (1) and (4)

15 shall be available for review by all parties unless an

16 ex parte order is issued by the court.

17 (4)(A) The Federal coal lessee may drill for and

18 otherwise collect data or information on coalbed

19 methane at any site or sites within the common area

20 that are not within a spacing unit containing a well

21 that is producing or capable of producing coalbed

22 methane under the conditions set forth in subpara23 graph (B).

24 (B) The drilling or collection of data or infor25 mation authorized by subparagraph (A) shall be for
23

•HR 1710 IH

1 the sole purpose of submission of information and

2 data pursuant to this paragraph.

3 (C) The Federal coal lessee shall not produce

4 any coalbed methane as a result of any drilling au5 thorized by subparagraph (A) and shall comply with

6 any Federal or State requirements applicable to such

7 activity.

8 (D) The Federal coal lessee shall submit to the

9 Secretary an exploration plan to conduct any drilling

10 pursuant to subparagraph (A). The Secretary shall

11 approve, approve as modified, or reject the plan,

12 within 15 days of the date of its submission. The

13 Secretary may modify or reject the plan only for

14 good cause fully set forth in writing and provided to

15 the Federal coal lessee. The Federal coal lessee shall

16 adhere to the plan, as approved by the Secretary.

17 (d) SUBMISSION OF BRIEFS AND HEARING.—

18 (1) Within 45 days of the date of appointment

19 of the panel of experts pursuant to subsection (a),

20 all parties may submit briefs concerning the deter21 minations to be made pursuant to section 11 or sec22 tion 12.

23 (2) Within 60 days of the date of appointment

24 of the panel of experts pursuant to subsection (a),

25 the panel may, or if requested by the petitioner or
24

•HR 1710 IH

1 a respondent shall, receive testimony from all parties

2 concerning the determinations to be made pursuant

3 to section 11 or section 12.

4 (e) EXPERTS’ REPORT.—Within 120 days of the date

5 of appointment of the panel of experts pursuant to sub6 section (a), the panel shall submit a written report to the

7 court providing in detail the panel’s recommendations on

8 the determinations to be made pursuant to section 11 or

9 section 12.

10 SEC. 11. COURT’S FINAL RESPONSE TO PETITION: VALU11 ATION CONCERNING ECONOMICALLY RECOV12 ERABLE OIL OR GAS RESOURCES LOST OR

13 DELAYED, SUSPENSION OR TERMINATION,

14 AND PAYMENT ORDER.

15 (a) IN GENERAL.—Within 210 days of the date of

16 issuance of an order pursuant to section 9(c), by which,

17 or by any action of the Secretary pursuant to section 8(d),

18 all or any part of the oil and gas lease or right to develop

19 is suspended, the court shall take the actions required by

20 this section.

21 (b) SUSPENSION OR TERMINATION DETERMINA22 TION.—

23 (1) The court shall determine whether, as a re24 sult of the order or any action of the Secretary, all

25 or any part of, including any geographical area of or
25

•HR 1710 IH

1 zone or reservoir subject to, the oil and gas lease or

2 right to develop should be suspended during any re3 maining period in which the mining operations or

4 support facilities occupy the common area or wheth5 er the oil and gas lease or right to develop should

6 be terminated.

7 (2) Any determination to suspend pursuant to

8 paragraph (1) shall, wherever possible or appro9 priate, limit the suspension or phase the suspension

10 to permit the optimum development of the oil or gas

11 prior to the time at which the mining operations

12 would reach the area within the common area that

13 is subject to the suspension or particular phase of

14 the suspension.

15 (3) Any determination to terminate pursuant to

16 paragraph (1) shall be made only if the court finds

17 that the economically recoverable oil and gas re18 sources subject to compensation pursuant to sub19 section (d) would be entirely lost or rendered im20 practicable to produce as a consequence of the min21 ing operations in the common area and that such re22 sources constitute all of the economically recoverable

23 resources within the oil and gas property.

24 (c) COMPENSATION DETERMINATION.—
26

•HR 1710 IH

1 (1) If the court makes a determination to sus2 pend pursuant to subsection (b), the court shall

3 determine—

4 (A) the amount of any net income that will

5 not be realized due to delay in development of

6 economically recoverable resources of oil or gas,

7 other than coalbed methane, from the common

8 area, whether or not such development has

9 commenced;

10 (B) the amount of any net income that will

11 not be realized, whether or not development of

12 coalbed methane has commenced, that is due

13 to—

14 (i) delay in development of economi15 cally recoverable resources of coalbed

16 methane in the common area; and

17 (ii) the loss of any economically recov18 erable resources of coalbed methane from

19 the coal to be extracted by the mining op20 erations in the common area; and

21 (iii) the loss of any economically re22 coverable resources of coalbed methane un23 derlying any area that is within the oil and

24 gas property associated with the common

25 area and that extends outward from each
27

•HR 1710 IH

1 exposed coal face of the mining operations

2 for a distance from which drainage of such

3 resources is established to the satisfaction

4 of the court; and

5 (C) any of the following damages that will

6 be incurred by the owners of any interest in the

7 oil and gas property as a consequence of the

8 suspension: any unavoidable fixed expenses (in9 cluding, but not limited to, the expenses of

10 shutting in production from, maintenance of,

11 testing of, and redrilling or reconnecting an ex12 isting well; relaying pipeline; and all other ex13 penses reasonably related to reestablishing any

14 existing oil or gas production); expenses associ15 ated with stranded costs of drilling equipment

16 and facilities; any lost royalties on oil or gas

17 not produced by the oil and gas developer; and

18 any lost income associated with temporarily

19 shutting in production from wells outside of the

20 common area as needed for reconnection to a

21 gathering system or pipeline to market. If the

22 court determines that the unavoidable fixed ex23 penses to achieve post-suspension recovery of all

24 or certain economically recoverable resources of

25 oil or gas in the common area will exceed the
28

•HR 1710 IH

1 net income to be derived from the resources, the

2 court shall determine the amount of the net in3 come and lost royalties in lieu of the unavoid4 able fixed expenses.

5 (2) The determinations made pursuant to para6 graph (1) shall not include any decrease in net in7 come or damages resulting from loss of any oil or

8 gas resources that occurred before the date of the

9 determinations and is caused by mining within or

10 outside of the common area on the Federal coal

11 lease or logical mining unit that is the subject of the

12 common area determination made pursuant to sec13 tion 8(b)(1) or section 9(b)(2).

14 (3) If the court makes a determination to ter15 minate pursuant to subsection (b), the court shall

16 determine the amount of any net income that will

17 not be realized and any damages due to the loss of,

18 or impracticability to produce, the economically re19 coverable resources of oil or gas in the oil and gas

20 property in the same manner as provided in para21 graph (1).

22 (4) In determining the amount of net income

23 that will not be realized pursuant to paragraph (1)

24 or paragraph (3) and the sum of money to be

25 awarded pursuant to subsection (d), the court shall
29

•HR 1710 IH

1 ensure to the best of its ability that the Federal coal

2 lessee is not required to pay for the same gas or oil

3 lost, delayed in development, or rendered impracti4 cable to develop to more than one oil and gas devel5 oper or the owners of any interest in more than one

6 oil and gas property.

7 (d) COURT ORDER.—The court shall issue an order

8 that—

9 (1) suspends all or any part of, suspends in

10 phases parts of, or terminates the oil and gas lease

11 or right to develop, including any applicable payment

12 or production obligations, in accordance with the de13 termination made pursuant to subsection (b); and

14 (2) awards to the oil and gas developer and all

15 other owners of any interest in the oil and gas prop16 erty, as their interests may appear, a sum of money

17 from the Federal coal lessee equal to the net income

18 amount and damages determined pursuant sub19 section (c).
30

•HR 1710 IH

1 SEC. 12. COURT’S FINAL RESPONSE TO PETITION: VALU2 ATION CONCERNING ECONOMICALLY RECOV3 ERABLE COAL RESOURCES LOST OR DE4 LAYED, SUSPENSION OR TERMINATION AND

5 PAYMENT ORDER.

6 (a) IN GENERAL.—Within 210 days of the date of

7 issuance of an order pursuant to section 9(c) by which,

8 or by any action by the Secretary pursuant to section 8(d),

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

10 the logical mining unit is suspended, the court shall take

11 the actions required by this section.

12 (b) SUSPENSION DETERMINATION.—The court shall

13 determine whether, as a result of the order or any action

14 of the Secretary, the Federal coal lease and/or any non15 Federal interest in the logical mining unit shall be sus16 pended in whole or in part to further accommodate oil or

17 gas development in the common area.

18 (c) COMPENSATION DETERMINATION.—If the court

19 makes a determination to suspend pursuant to subsection

20 (b), the court shall determine the amount of any net in21 come that will not be realized from the loss or delay in

22 development of economically recoverable resources of coal,

23 and the unavoidable fixed expenses (including, but not lim24 ited to, additional expenses associated with reclamation,

25 expenses associated with stranded costs of mining equip26 ment and facilities, a proportionate refund of the lease
31

•HR 1710 IH

1 bonus, and any lost royalties on coal not produced by the

2 Federal coal lessee) that will be incurred, by the Federal

3 coal lessee as a consequence of the suspension.

4 (d) COURT ORDER.—The court shall issue an order

5 that—

6 (1) suspends, in accordance with the determina7 tion made pursuant to subsection (b), all or any part

8 of the Federal coal lease and/or any non-Federal in9 terest in the logical mining unit, including any appli10 cable payment or production obligations on the lease

11 or logical mining unit, for the period necessary for

12 expeditious development in the common area of the

13 gas or oil that is the subject of the petition for relief

14 as demonstrated to the court in a production plan

15 submitted by the oil and gas developer; and

16 (2) awards to the Federal coal lessee and all

17 other owners of any interest in the Federal coal

18 lease or logical mining unit, as their interests may

19 appear, a sum of money equal to the net income

20 amount and unavoidable fixed expenses determined

21 pursuant to subsection (c).

22 SEC. 13. REVIEW OF EXPERTS’ REPORT AND HEARING.

23 (a) The court shall make the determinations required

24 by section 11 or section 12 after reviewing the report of
32

•HR 1710 IH

1 the panel of experts submitted pursuant to section 10(e)

2 and the hearing required by subsection (b).

3 (b) After submission of the report of the panel of ex4 perts pursuant to section 10(e) and prior to making the

5 determinations required by section 11 or section 12, the

6 court shall hold a hearing in which the panel of experts

7 shall present their report and the parties to the proceeding

8 shall have the opportunity to examine the panel and pro9 vide to the court any evidence or arguments they may have

10 to support or contravene the recommendations of the re11 port.

12 SEC. 14. DISBURSEMENT OF PAYMENTS.

13 (a) PAYMENT TO OIL AND GAS DEVELOPER.—

14 (1) At the election of the oil and gas developer,

15 the sum of money awarded by the court pursuant to

16 section 11(d)(2) shall be—

17 (A) paid in full within 60 days of the date

18 of issuance of the order pursuant to section

19 11(d); or

20 (B) divided into the number of tons of re21 coverable coal in the common area and paid in

22 per ton increments as the coal is mined in ac23 cordance with paragraph (2) and subsection (c).

24 (2) The Federal coal lessee shall make the pay25 ments required by paragraph (1)(B) on a quarterly
33

•HR 1710 IH

1 basis in advance based on the Federal coal lessee’s

2 estimate of the number of tons of coal to be mined

3 in the common area during the following quarter,

4 and shall add or subtract an amount to or from the

5 advance payment for the next quarter to reflect the

6 coal actually sold or transferred.

7 (b) PAYMENT TO FEDERAL COAL LESSEE.—

8 (1) At the election of the Federal coal lessee,

9 the sum of money awarded by the court pursuant to

10 section 12(d)(2) shall be—

11 (A) paid in full within 60 days of the date

12 of issuance of the order pursuant to section

13 12(d); or

14 (B) divided into the number of barrels of

15 recoverable oil or cubic feet of recoverable gas

16 in the common area and paid in per barrel or

17 cubic feet increments as the oil or gas is pro18 duced in accordance with paragraph (2) and

19 subsection (c).

20 (2) The oil and gas developer shall make the

21 payments required by paragraph (1)(B) on a quar22 terly basis in advance based on the oil and gas devel23 oper’s estimate of the number of barrels of oil or

24 cubic feet of gas to be produced in the common area

25 during the following quarter, and shall add or sub-
34

•HR 1710 IH

1 tract an amount to or from the advance payment for

2 the next quarter to reflect the oil or gas actually

3 produced.

4 (c) FINAL PAYMENT.—If the mining or production

5 necessary to make full payment of the sum of money

6 awarded by the court in accordance with subsection

7 (a)(1)(B) or subsection (b)(1)(B) does not occur within

8 5 years of the date of issuance of the court order pursuant

9 to section 11(d) or section 12(d), the unpaid balance shall

10 be paid within 60 days thereafter.

11 SEC. 15. TERMINATION OF OIL AND GAS LEASE SUSPEN12 SION.

13 (a) NOTIFICATION OF COURT.—If the court issues an

14 order to suspend all or any part of the oil and gas lease

15 or right to develop pursuant to section 11(d)—

16 (1) the Federal coal lessee shall notify the court

17 and the oil and gas developer when the portion of

18 the common area subject to the order issued pursu19 ant to section 11(d) is no longer required for mining

20 operations or support facilities; and

21 (2) within 120 days of the date of receipt by

22 the court of the notification pursuant to paragraph

23 (1) or within 60 days prior to the date on which the

24 period established by the court in the order issued

25 pursuant to section 11(d) concludes, the oil and gas
35

•HR 1710 IH

1 lessee may petition the court for an order that ter2 minates the suspension and fixes the date and terms

3 on which the oil and gas developer may resume oper4 ations within the portion of the common area subject

5 to the order issued pursuant to section 11(d).

6 (b) COURT ORDER TO TERMINATE SUSPENSION OF

7 LEASE OR RIGHT TO DEVELOP.—The court shall issue

8 the order sought under subsection (a)(2) within 30 days

9 of the date of receipt of the petition pursuant to subsection

10 (a)(2).

11 (c) TERMINATION OF LEASE OR RIGHT TO DE12 VELOP.—

13 (1) If the oil and gas developer determines that,

14 as a consequence of the order of the court issued

15 pursuant to section 9(c) and an order to suspend all

16 or any part of the oil and gas lease or right to de17 velop pursuant to section 11(d), the conditions de18 scribed in section 11(b)(3) exist, the oil and gas de19 veloper may petition the court to terminate the oil

20 and gas lease or right to develop.

21 (2) The petition referred to in paragraph (1)

22 may be filed any time after issuance of the order of

23 the court pursuant to section 11(d) but not later

24 than 120 days after the date of receipt by the court

25 of the notification pursuant to subsection (a)(1).
36

•HR 1710 IH

1 (3) Upon receipt of a petition pursuant to para2 graph (1), the court shall make a determination

3 whether to issue an order to terminate the oil and

4 gas lease or right to develop and award an addi5 tional amount from the Federal coal lessee to the oil

6 and gas developer and all other owners of any inter7 est in the oil and gas property, as their interests

8 may appear, in accordance with the procedures and

9 deadlines established in section 7(a) and sections 10

10 through 14.

11 SEC. 16. TERMINATION OF COAL LEASE SUSPENSION.

12 (a) NOTIFICATION OF COURT.—If the court issues an

13 order requiring suspension of all or any part of the Fed14 eral coal lease and/or any non-Federal interest in the log15 ical mining unit that includes the Federal coal lease pursu16 ant to section 12(d)—

17 (1) the oil and gas developer shall notify the

18 court and the Federal coal lessee when the portion

19 of the common area subject to the order issued pur20 suant to section 12(d) is no longer required for gas

21 or oil production from such portion; and

22 (2) within 120 days of the date of receipt by

23 the court of the notification pursuant to paragraph

24 (1) or within 60 days prior to the date on which the

25 period established by the court in the order issued
37

•HR 1710 IH

1 pursuant to section 12(d) concludes, the Federal

2 coal lessee may petition the court for an order that

3 fixes the date and terms on which the Federal coal

4 lessee may commence mining operations or construc5 tion of support facilities in the portion of the com6 mon area subject to the order issued pursuant to

7 section 12(d) and, if all or any part of the Federal

8 coal lease and/or any non-Federal interest in the log9 ical mining unit is suspended, terminates the sus10 pension.

11 (b) COURT ORDER TO TERMINATE LEASE SUSPEN12 SION.—The court shall issue the order sought under sub13 section (a)(2) within 30 days of the date of receipt of the

14 petition pursuant to subsection (a)(2).

15 (c) TERMINATION OF LEASE.—

16 (1) If the Federal coal lessee determines that,

17 as a consequence of the order of the court issued

18 pursuant to section 12(d), further development of all

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

20 non-Federal interest in the logical mining unit is im21 practicable, the Federal coal lessee may petition the

22 court to terminate all or any part of the Federal coal

23 lease and/or any non-Federal interest in the logical

24 mining unit.
38

•HR 1710 IH

1 (2) The petition referred to in paragraph (1)

2 may be filed any time after issuance of the order of

3 the court pursuant to section 12(d) but not later

4 than 120 days after the date of receipt by the court

5 of the notification pursuant to subsection (a)(1).

6 (3) Upon receipt of a petition pursuant to para7 graph (1), the court shall make a determination

8 whether to issue an order to terminate all or any

9 part of the Federal coal lease and/or any non-Fed10 eral interest in the logical mining unit and award an

11 additional amount from the oil and gas developer to

12 the Federal coal lessee and all other owners of any

13 interest in the Federal coal lease or logical mining

14 unit, as their interests may appear, in accordance

15 with the procedures and deadlines established in sec16 tion 7(a) and sections 10 through 14.

17 SEC. 17. SUPPLEMENTAL PETITION FOR RELIEF.

18 (a) PETITION SUBMITTAL.—

19 (1) If, at any time after the issuance of an

20 order pursuant to section 11(d) or section 12(d), the

21 mining plan that is the basis of the order is altered

22 in a manner that may warrant suspension of an ad23 ditional part or all of, or termination of, the oil and

24 gas lease or right to develop or suspension of an ad25 ditional part of the Federal coal lease and/or any
39

•HR 1710 IH

1 non-Federal interest in the logical mining unit that

2 includes the Federal coal lease and/or an increase in

3 the sum of money that was awarded under the

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

5 gas developer may, if necessary after compliance

6 with the requirements of section 6, file a supple7 mental petition for relief with the court to amend

8 the order.

9 (2) The requirements of section 7(a) and sec10 tions 8 through 14 shall apply to the supplemental

11 petition submitted pursuant to paragraph (1).

12 (b) COURT ORDER.—

13 (1) Upon completion of the process required by

14 subsection (a)(2), the court shall make a determina15 tion whether to suspend an additional part or all of,

16 or terminate, the oil and gas lease or right to de17 velop or to suspend an additional part of the Federal

18 coal lease and/or any non-Federal interest in the log19 ical mining unit as described in, and to award an

20 additional sum of money calculated in accordance

21 with, section 11 or section 12.

22 (2) The court shall issue any order resulting

23 from the determinations made pursuant to para24 graph (1) within 90 days of the date of filing of the

25 supplemental petition for relief.
40

•HR 1710 IH

1 (3) Any award of an additional sum of money

2 shall be paid in accordance with section 14.

3 SEC. 18. APPEAL OF COURT ORDERS.

4 (a) NONAPPEALABLE ORDERS.—Any order issued

5 pursuant to section 9(c), section 9(f), section 15(b), or

6 section 16(b) is final and may not be appealed.

7 (b) APPEALABLE ORDERS.—Any order issued pursu8 ant to section 11(d), section 12(d), section 15(c)(3), sec9 tion 16(c)(3), or section 17(b)(2) may be appealed, but

10 the appeal, and any disposition thereof, may not disturb

11 any order referred to in subsection (a).

12 SEC. 19. SUSPENSION TERMS.

13 (a) FEDERAL LEASE SUSPENSION TERMS.—If all or

14 any part of any lease issued pursuant to the Mineral Leas15 ing Act is suspended in whole or in part by the Secretary

16 or the court under this Act—

17 (1) the lessee shall not be required to pay any

18 rental for the lease for the period of the suspension;

19 and

20 (2) if the lease is a Federal oil or gas lease and

21 is in the primary term or if the lease is a Federal

22 coal lease, the term of the lease shall be extended by

23 the length of the period of the suspension plus one

24 year; or
41

•HR 1710 IH

1 (3) the lease shall not terminate due to lack of

2 production for the period of the suspension plus one

3 year.

4 (b) OTHER.—If any non-Federal oil and gas lease or

5 right to develop or any non-Federal interest in a logical

6 mining unit is suspended in whole or in part by the court

7 under this Act, the court shall establish terms for the sus8 pension comparable to the terms set forth in subsection

9 (a).

10 SEC. 20. LIABILITY LIMITATION.

11 (a) FEDERAL COAL LESSEE.—Except as provided in

12 a written agreement reached pursuant to section 6(b) or

13 reached on or after September 1, 1999, and before the

14 date of enactment of this Act, or as provided by an order

15 of the court pursuant to this Act, neither the holder of

16 a Federal coal lease subject to the agreement or order nor

17 the United States shall be liable to the oil and gas devel18 oper of, or any owner of an interest in, any oil and gas

19 property subject to the agreement or order for any de20 crease in or depletion of, or any impairment of the ability

21 to recover, any gas or oil from the property that may re22 sult from the development of any coal on the Federal coal

23 leasehold or within a logical mining unit that includes the

24 Federal coal lease.
42

•HR 1710 IH

1 (b) OIL AND GAS DEVELOPER.—Except as provided

2 in a written agreement reached pursuant to section 6(b)

3 or reached on or after September 1, 1999, and before the

4 date of enactment of this Act, or as provided by an order

5 of the court pursuant to this Act, neither the oil and gas

6 developer of an oil and gas property subject to the agree7 ment or order nor the United States shall be liable to a

8 holder of a Federal coal lease subject to the agreement

9 or order, or any owner of any non-Federal interest in a

10 logical mining unit that includes the Federal coal lease,

11 or the United States for any impairment of the ability to

12 recover coal from the Federal coal leasehold or logical min13 ing unit that may result from the development of gas or

14 oil on the property.

15 SEC. 21. CREDIT AGAINST ROYALTIES.

16 (a) IN GENERAL.—

17 (1) Whenever a holder of a Federal coal lease

18 is required by a written agreement reached pursuant

19 to section 6(b) and approved by the Bureau of Land

20 Management or reached prior to the date of enact21 ment of this Act and approved by the Bureau of

22 Land Management on or after September 1, 1999,

23 or by a court order issued pursuant to section 11(d),

24 section 15(c)(3), or section 17(b)(2), to pay an

25 amount for suspension of all or part of, or termi-
43

•HR 1710 IH

1 nation of, a Federal oil and gas lease for coalbed

2 methane located within the Section 21 Lands, the

3 amount so paid shall be credited against any royal4 ties on production required by section 7(a) or any

5 other provision of the Mineral Leasing Act from any

6 lease of Federal coal issued under the Mineral Leas7 ing Act to such holder or any affiliate thereof.

8 (2) Whenever a holder of a Federal oil and gas

9 lease is required by a written agreement reached

10 pursuant to section 6(b) and approved by the Bu11 reau of Land Management or reached prior to the

12 date of enactment of this Act and approved by the

13 Bureau of Land Management on or after September

14 1, 1999, or by a court order issued pursuant to sec15 tion 12(d), section 16(c)(3), or section 17(b)(2), to

16 pay an amount for suspension or termination of all

17 or part of a Federal coal lease located within the

18 Section 21 Lands, the amount so paid shall be cred19 ited against any royalties on production required by

20 subsection (b)(1)(A) or subsection (c)(1) of section

21 17 or any other provision of the Mineral Leasing Act

22 from any lease of Federal oil and gas issued under

23 the Mineral Leasing Act to such holder or any affil24 iate thereof.
44

•HR 1710 IH

1 (b) TREATMENT OF ROYALTIES TO STATES.—The

2 Secretary shall pay to the State in which the Federal coal

3 lease or Federal oil and gas lease referred to in subsection

4 (a)(1) or subsection (a)(2), respectively, is located 50 per5 cent of the amount of any credit against royalties provided

6 under subsection (a)(1) or subsection (a)(2),

7 respectively—

8 (1) in the same manner as if the credit against

9 royalties had been paid in money as royalties and

10 distributed under section 35(a) of the Mineral Leas11 ing Act; and

12 (2) from amounts received as royalties, rentals,

13 or bonuses derived from leases issued under this Act

14 that otherwise would be deposited to miscellaneous

15 receipts under section 35(a) of the Mineral Leasing

16 Act.

17 SEC. 22. DENIAL OF USE AS PRECEDENT.

18 Nothing in this Act shall be applicable to any lease

19 under the Mineral Leasing Act for any mineral, or shall

20 be applicable to, or supersede any statutory or common

21 law otherwise applicable in, any proceeding in any Federal

22 or State court involving development of any mineral, out23 side of any common area, as defined in section 3(13),

24 within or outside of the Powder River Basin, as defined

25 in section 3(1).
45

•HR 1710 IH

1 SEC. 23. EFFECTIVE DATE.

2 This Act shall be effective upon the date of its enact3 ment.

Æ