II 

110TH CONGRESS 

1ST SESSION S. 1931 

To amend the Mineral Leasing Act to ensure that development of certain 

Federal oil and gas resources will occur in a manner that protects 

water resources and respects the rights of surface owners, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2007 

Mr. TESTER introduced the following bill; which was read twice and referred 

to the Committee on Energy and Natural Resources 

A BILL 

To amend the Mineral Leasing Act to ensure that development of certain Federal oil and gas resources will occur 

in a manner that protects water resources and respects 

the rights of surface owners, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Surface Owner Protection Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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TITLE I—PROTECTION OF WATER RESOURCES 

Sec. 101. Mineral Leasing Act requirements. 

Sec. 102. Relationship to State law. 

TITLE II—SURFACE OWNER PROTECTION 

Sec. 201. Definitions. 

Sec. 202. Post-lease surface use agreement. 

Sec. 203. Authorized exploration and drilling operations. 

Sec. 204. Surface owner notification. 

TITLE III—RECLAMATION AND BONDING 

Sec. 301. Reclamation requirements and bond. 

1 TITLE I—PROTECTION OF 

2 WATER RESOURCES 

3 SEC. 101. MINERAL LEASING ACT REQUIREMENTS. 

4 Section 17 of the Mineral Leasing Act (30 U.S.C. 

5 226) is amended by adding at the end the following: 

6 ‘‘(q) WATER REQUIREMENTS.— 

7 ‘‘(1) IN GENERAL.—An operator producing oil 

8 or gas (including coalbed methane) under a lease 

9 issued under this Act shall— 

10 ‘‘(A) replace the water supply of a water 

11 user who obtains all or part of the supply of the 

12 user of water for domestic, agricultural, or 

13 other purposes from an underground or surface 

14 source that has been affected by contamination, 

15 diminution, or interruption proximately result16 ing from drilling operations for the production; 

17 and 


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1 ‘‘(B) comply with all applicable require2 ments of Federal and State law for discharge of 

3 any water produced under the lease. 

4 ‘‘(2) WATER MANAGEMENT PLAN.—An applica5 tion for a lease under this subsection shall be accom6 panied by a proposed water management plan in7 cluding provisions— 

8 ‘‘(A) to protect the quantity and quality of 

9 surface and ground water systems, both on-site 

10 and off-site, from adverse effects of the explo11 ration, development, and reclamation processes 

12 or to provide alternative sources of water if the 

13 protection cannot be ensured; 

14 ‘‘(B) to protect the rights of present users 

15 of water that would be affected by operations 

16 under the lease, including the discharge of any 

17 water produced in connection with the oper18 ations that is not reinjected; and 

19 ‘‘(C) to identify any agreements with other 

20 parties for the beneficial use of produced waters 

21 and the steps that will be taken to comply with 

22 Federal and State laws relating to the use.’’. 

23 SEC. 102. RELATIONSHIP TO STATE LAW. 

24 Nothing in this Act or an amendment made by this 

25 Act— 


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1 (1) impairs or affects any right or jurisdiction 

2 of any State with respect to the waters of the State; 

3 or 

4 (2) limits, alters, modifies, or amends any of 

5 the interstate compacts or equitable apportionment 

6 decrees that apportion water among and between 

7 States. 

8 TITLE II—SURFACE OWNER 

9 PROTECTION 

10 SEC. 201. DEFINITIONS. 

11 In this title: 

12 (1) LEASE.—The term ‘‘lease’’ means a lease 

13 issued by the Secretary under the Mineral Leasing 

14 Act (30 U.S.C. 181 et seq.) or any other law, pro15 viding for development of oil and gas resources (in16 cluding coalbed methane) owned by the United 

17 States. 

18 (2) LESSEE.—The term ‘‘lessee’’ means the 

19 holder of a lease. 

20 (3) OPERATOR.—The term ‘‘operator’’ means 

21 any person that is responsible under the terms and 

22 conditions of a lease for the operations conducted on 

23 leased land or any portion of the land. 

24 (4) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of the Interior. 


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1 SEC. 202. POST-LEASE SURFACE USE AGREEMENT. 

2 (a) IN GENERAL.—Except as provided in section 203, 

3 the Secretary may not authorize any operator to conduct 

4 exploration and drilling operations on land with respect 

5 to which title to oil and gas resources is held by the United 

6 States but title to the surface estate is not held by the 

7 United States, until the operator has filed with the Sec8 retary a document, signed by the operator and the 1 or 

9 more surface owners, indicating that the operator has se10 cured a written surface use agreement between the oper11 ator and the 1 or more surface owners that meets the re12 quirements of subsection (b). 

13 (b) CONTENTS.—A surface use agreement shall pro14 vide for— 

15 (1) the use of only the portion of the surface 

16 estate that is reasonably necessary for exploration 

17 and drilling operations based on site-specific condi18 tions, as determined by the Secretary; 

19 (2) the accommodation of the surface estate 

20 owner, to the maximum extent practicable, including 

21 the location, use, timing, and type of exploration and 

22 drilling operations, consistent with the right of the 

23 operator to develop the oil and gas estate; 

24 (3) the reclamation of the site to a condition ca25 pable of supporting the uses which the land was caVerDate Aug 31 2005 21:15 Aug 06, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1931.IS S1931

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1 pable of supporting prior to exploration and drilling 

2 operations; and 

3 (4) compensation for damages as a result of ex4 ploration and drilling operations, including— 

5 (A) loss of income and increased costs in6 curred; 

7 (B) damage to or destruction of personal 

8 property, including crops, forage, and livestock; 

9 and 

10 (C) failure to reclaim the site in accord11 ance with paragraph (3). 

12 (c) PROCEDURE.— 

13 (1) NOTICE.—An operator shall notify each 

14 surface estate owner of the desire of the operator to 

15 conclude an agreement under this section. 

16 (2) ARBITRATION.— 

17 (A) IN GENERAL.—If the surface estate 

18 owner and the operator do not reach an agree19 ment within 90 days after the date on which 

20 the operator provided the notice, the matter 

21 shall be referred to third party arbitration for 

22 resolution within a period of 90 days. 

23 (B) COST.—The cost of the arbitration 

24 shall be the responsibility of the operator. 

25 (C) ARBITRATORS.—The Secretary shall— 


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1 (i) identify persons with experience in 

2 conducting arbitrations; and 

3 (ii) make the information available to 

4 operators. 

5 (D) REFERRALS.—Referral of a matter for 

6 arbitration by a person identified by the Sec7 retary pursuant to subparagraph (C) shall con8 stitute compliance with paragraph (1). 

9 (d) ATTORNEYS FEES.—If action is taken to enforce 

10 or interpret any of the terms and conditions contained in 

11 a surface use agreement, the prevailing party shall be re12 imbursed by the other party for reasonable attorneys fees 

13 and actual costs incurred, in addition to any other relief 

14 that a court or arbitration panel may grant. 

15 SEC. 203. AUTHORIZED EXPLORATION AND DRILLING OP16 ERATIONS. 

17 (a) IN GENERAL.—The Secretary may authorize an 

18 operator to conduct exploration and drilling operations on 

19 land covered by section 202 in the absence of an agree20 ment with each surface estate owner, if— 

21 (1) the Secretary makes a determination, in 

22 writing, that the operator made a good faith attempt 

23 to conclude such an agreement, including referral of 

24 the matter to arbitration pursuant to section 


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1 202(c)(2), but that no agreement was concluded 

2 within 90 days after the referral to arbitration; 

3 (2) the operator submits a plan of operations 

4 that covers the matters specified in section 202(b) 

5 and for compliance with all other applicable require6 ments of Federal and State law; and 

7 (3) the operator posts a bond or other financial 

8 assurance in an amount the Secretary determines to 

9 be adequate to ensure compensation to the surface 

10 estate owner for any damage to the site, in the form 

11 of a surety bond, trust fund, letter of credit, govern12 ment security, certificate of deposit, cash, or equiva13 lent. 

14 (b) SURFACE OWNER PARTICIPATION.—The Sec15 retary shall provide surface estate owners with an oppor16 tunity— 

17 (1) to comment on plans of operations in ad18 vance of a determination of compliance with this 

19 title; 

20 (2) to participate in bond level determinations 

21 and bond release proceedings under this section; 

22 (3) to attend an on-site inspection during the 

23 determinations and proceedings; 

24 (4) to file written objections to a proposed bond 

25 release; and 


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1 (5) to request and participate in an on-site in2 spection if the owners have reason to believe there 

3 is a violation of the terms and conditions of a plan 

4 of operations. 

5 (c) PAYMENT OF FINANCIAL GUARANTEE.— 

6 (1) IN GENERAL.—A surface estate owner, with 

7 respect to any land subject to a lease, may petition 

8 the Secretary for payment of all or part of a bond 

9 or other financial assurance required under this sec10 tion as compensation for any damage as a result of 

11 exploration and drilling operations. 

12 (2) COMPENSATION.—Pursuant to the petition, 

13 the Secretary may use the bond or other guarantee 

14 to provide compensation to the surface estate owner 

15 for the damage. 

16 (d) BOND RELEASE.—On request and after inspec17 tion and opportunity for surface estate owner review, the 

18 Secretary may release the financial assurance required 

19 under this section if the Secretary determines that— 

20 (1) exploration and drilling operations have 

21 ended; and 

22 (2) all damage has been fully compensated. 

23 SEC. 204. SURFACE OWNER NOTIFICATION. 

24 The Secretary shall— 


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1 (1) notify surface estate owners of lease sales in 

2 writing at least 45 days in advance; 

3 (2) not later than 10 working days after the 

4 date on which a lease is issued, notify surface estate 

5 owners regarding the identity of the lessee; 

6 (3) notify surface estate owners in writing con7 cerning any subsequent decisions regarding a lease, 

8 such as modifying or waiving stipulations and ap9 proving rights of way; and 

10 (4) notify surface estate owners not later than 

11 5 business days after the date of issuance of a drill12 ing permit under a lease. 

13 TITLE III—RECLAMATION AND 

14 BONDING 

15 SEC. 301. RECLAMATION REQUIREMENTS AND BOND. 

16 (a) IN GENERAL.—Section 17 of the Mineral Leasing 

17 Act (30 U.S.C. 226) (as amended by section 101) is 

18 amended by adding at the end the following: 

19 ‘‘(r) RECLAMATION REQUIREMENTS AND BOND.— 

20 ‘‘(1) REQUIREMENTS.—An operator producing 

21 oil or gas (including coalbed methane) under a lease 

22 issued pursuant to this Act shall— 

23 ‘‘(A) at a minimum, restore the land af24 fected to a condition capable of supporting the 

25 uses that the land was capable of supporting 


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1 prior to any drilling, or higher or better uses if 

2 there is reasonable likelihood that— 

3 ‘‘(i) the 1 or more uses do not— 

4 ‘‘(I) present any actual or prob5 able hazard to public health or safety; 

6 or 

7 ‘‘(II) pose any actual or probable 

8 threat of water diminution or pollu9 tion; and 

10 ‘‘(ii) the declared proposed land use of 

11 the permit applicant following reclama12 tion— 

13 ‘‘(I) is not impractical or unrea14 sonable, inconsistent with applicable 

15 land use policies and plans, or involve 

16 unreasonable delay in implementation; 

17 and 

18 ‘‘(II) does not violate Federal, 

19 State, or local law; 

20 ‘‘(B) ensure that all reclamation efforts 

21 proceed in an environmentally sound manner 

22 and as contemporaneously as practicable with 

23 the oil and gas drilling operations; and 

24 ‘‘(C) submit, with the plan of operations, a 

25 reclamation plan that describes in detail the 


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1 methods and practices that will be used to en2 sure complete and timely restoration of all land 

3 affected by oil and gas operations. 

4 ‘‘(2) RECLAMATION BOND.— 

5 ‘‘(A) IN GENERAL.—An operator pro6 ducing oil or gas (including coalbed methane) 

7 under a lease issued under this Act shall post 

8 a bond that covers the area of land within the 

9 permit area on which the operator will initiate 

10 and conduct oil and gas drilling and reclama11 tion operations within the initial term of the 

12 permit. 

13 ‘‘(B) ADDITIONAL BONDS.—As succeeding 

14 increments of oil and gas drilling and reclama15 tion operations are initiated and conducted 

16 within the permit area, the lessee shall file with 

17 the regulatory authority 1 or more additional 

18 bonds to cover the increments in accordance 

19 with this section. 

20 ‘‘(C) AMOUNT.—The amount of the bond 

21 required for each bonded area shall— 

22 ‘‘(i) meet the reclamation require23 ments of the approved permit; 

24 ‘‘(ii) reflect the probable difficulty of 

25 reclamation considering factors such as toVerDate Aug 31 2005 21:15 Aug 06, 2007 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1931.IS S1931

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1 pography, the geology of the site, hydrol2 ogy, and revegetation potential; 

3 ‘‘(iii) be determined by the Secretary; 

4 and 

5 ‘‘(iv) be sufficient to ensure the com6 pletion of the reclamation plan if the work 

7 had to be performed by the Secretary in 

8 the event of forfeiture. 

9 ‘‘(3) REGULATIONS.—No later than 1 year 

10 after the date of enactment of this subsection, the 

11 Secretary shall promulgate regulations to implement 

12 the requirements of this subsection.’’. 

13 (b) REVIEW AND REPORT.— 

14 (1) REVIEW.—The Comptroller General of the 

15 United States shall conduct a review of the adequacy 

16 of the regulations promulgated by the Secretary of 

17 the Interior pursuant to subsection (r)(3) of section 

18 17 of the Mineral Leasing Act (30 U.S.C. 226) (as 

19 added by subsection (a)) to ensure that operators 

20 will meet the requirements of subsection (r) of that 

21 section. 

22 (2) REPORT.—Not later than 180 days after 

23 the date on which the Secretary promulgates regula24 tions pursuant to subsection (r)(3) of section 17 of 

25 the Mineral Leasing Act (30 U.S.C. 226) (as added 


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1 by subsection (a)), the Comptroller General of the 

2 United States shall submit to the Committee on 

3 Natural Resources of the House of Representatives 

4 and the Committee on Energy and Natural Re5 sources of the Senate a report that describes the re6 sults of the review conducted under paragraph (1), 

7 including— 

8 (A) any findings and conclusions of the 

9 Comptroller General of the United States; and 

10 (B) any recommendations the Comptroller 

11 General may make with respect to any legisla12 tion or administrative actions the Comptroller 

13 General of the United States determines would 

14 be appropriate to ensure compliance with the 

15 requirements of subsection (r) of that section. 

Æ 


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