Any mineral lessee, mining claimant, or operator (i.e., any person who has acquired from the United States the mineral deposits in such land) may enter and occupy as much of the private surface (patented) as may be required for the purpose of prospecting for, mining, or removal of minerals upon completion of any one of the following options (43 CFR 3814, 1994):
“Upon securing a written consent or waiver of the surface owner(s) for lands covered by the federal lease and/or access to such lease over patented lands covered by the SRHA or HA estate or a single estate unified from several parcels originally patented under the above subject acts.
Upon payment of damages for crops, tangible improvements, and the value of the land for grazing purposes to the owner of the lands referenced in (1) above.
Upon the execution of a good and sufficient bond or undertaking to the United States for the use and benefit of the owner of the land referenced in (1) above, and to secure the payment of such damages for the crops, tangible improvements and the value of the land for grazing purposes of the owner as may be determined and fixed in an action brought upon the land or undertaken in a court of competent jurisdiction against the principles and sureties thereon.”
For options one and two mentioned above, the BLM will require, at a minimum, a signed statement from the approved operator representative or the landowner that the operator or lessee and the landowner have reached an agreement for surface disturbance damages. The BLM also may require the operator or lessee to furnish any additional agreement with the surface owner for the protection of surface resources and the reclamation of disturbed areas for incorporation into conditions of approval for authorizing the action. If the agreement is not deemed adequate to protect both onsite and offsite damage to the lands, additional measures and mitigation will be required. If an agreement is not reached, then the method according to option 3 must be followed. Under this method, a good and sufficient bond for not less than $1,000 according to 43 CFR 3814, must be posted by the lessee or operator payable to the United States for damages, specifically for crops, tangible improvements, and the value of the land for grazing purposes. This surface-owner bond is separate and not part of the bond obligations for leases under 43 CFR 3104. According to the procedures for this option, the lessee/operator must serve this bond on the impacted landowner; along with notification of their rights to object to the sufficiency of the bond in accordance with the procedure under 43 CFR 3814, and serve proof to the appropriate BLM office that they have done so. This then prompts the BLM authorized officer to independently notify the surface owner(s) in writing of their rights under the procedures regarding protests and appeals to the sufficiency of the bond. The protest period runs for 30 days from date of service of the bond and rights to protest and appeal the bond.
The emphasis in this section is on access to federal minerals within SRHA and HA patented land. This process for access also pertains to patents with the minerals reserved to the United States issued pursuant to Section 203 (sales) and Section 206 (exchanges) of the FLPMA.
The right to access an oil and gas lease includes all the land within the original patent where the minerals were reserved to the United States, even if that land is not within the lease. If an oil company wishes to cross one portion of a patent that has been subdivided into two portions to drill in the other portion, they have that right. In Kinney Coastal Oil Co. v. Kieffer, 277 US 488, 544 (1928), Coastal Oil, who held a federal oil and gas lease, sued the surface owner for subdividing the surface and erecting buildings for a town. The Supreme Court agreed with the oil company and ruled to prevent the use of the area as a commercial or residential area. Thus, the mineral owner’s dominant servitude applies anywhere within the limits of the original patent no matter how far or often the surface estate has been subdivided. In another landmark case, Mountain Fuel Supply Co. v. Smith, 471 F. 2d (10th Cir. 1973), an oil company wished to cross 10 parcels to drill a well on the 11th parcel. All of the parcels had been patented at different times to different parties. At a later date, the defendant in the case had obtained all of these parcels. The court made no less than three important holdings in this case. One, if the parcels had remained separately owned, the oil company would not have access rights across the 10 parcels to drill a well on the 11th; however, the company does have access rights on the 11th parcel on which they were to drill their well (471 F. 2d at 596,597). Two, where the surface ownership of all the parcels had been unified under a single ownership, the oil company would indeed have access across all the parcels (471 F. 2d at 597). Three, the approved unitization of the area by the appropriate authority was simply irrelevant (471 F. 2d at 597). The lessees were restricted to the development of their leases, or, if appropriate, within a unit. The SRHA or HA access rights to develop federal mineral lands are dictated by the patented surface or a combination of patents unified by a single owner.
Following are four decision options that may evolve during the protest period.
If no objections are received from the landowner within the protest period, the authorized officer will issue and serve a final decision of approval of the sufficient bond coverage to the landowner with a copy going to the lessee or operator. The lessee or operator can then enter onto the surface of the patented land(s) impacted by the lease, provided all applicable federal and state laws are met.
If the surface owner files a protest (objection) to the bond within the protest period, the authorized officer will review the bond coverage, accompanying papers, and objections to determine whether the bond should be approved or disapproved. If the bond is disapproved, a decision will be served on the lessee/operator with a copy going to the landowner. The lessee or operator will have 30 days to appeal to the Director of the BLM. Some of these cases have been appealed to the Interior Board of Land Appeals (IBLA); however, this is not the process according to the regulations contained in 43 CFR 3814. If the bond is approved, the decision will be served to the surface owner with a copy going to the lessee or operator. The application for permit to drill (APD) on Sundry Notice will be approved concurrently with the bond approval decision; the lessee or operator can then enter onto the land as specified above. The surface owner will be given 30 days to appeal the decision to the Director or the IBLA. If no appeal is filed, the authorized officer will serve a second final decision to the landowner approving the bond with no further right of appeal.
In no instances will lease action such as an APD be approved in the absence of the surface owner’s consent without first satisfying the requirements of 43 CFR 3814. The purpose of these requirements is to ensure that the surface owners are treated fairly, and the mineral lessee or operators are allowed to enjoy the full privileges of their leases.
In instances in which landowner demands become unreasonable or excessive, the lessee or operator is protected by 43 CFR 3814 regulations. Conversely, the BLM is assuring the landowners of the opportunity to protect themselves and ensure just compensation via the 43 CFR 3814 regulations.
If the landowner and lessee or operator cannot agree or settle on a payment for damages within the lifespan of the authorization(s), especially if the lease is to be abandoned, then the landowner should take his/her action to a court of competent jurisdiction to secure payment of such damages. The lessee or operator also has the option to go to court to settle for payment of damages to the landowner. This may be true particularly if a lessee or landowner would want his or her bond released from any lease obligations, including termination. If an agreement cannot be reached for settlement for the payment of damages, either party may go to court at anytime in this above-mentioned process to have the court set the amount of damages, which are to be paid at that time. Another option that could be pursued by a lessee or operator for access to develop federal minerals is via state condemnation procedures.
Access to develop all federal minerals follow these procedures with the following exception; for federal coal reserved to the United States on split-estate lands, an agreement must be reached with the “qualified” landowner prior to developing federal coal. For a surface owner to be considered qualified, that person, persons, or corporation must (1) hold legal or equitable title to the surface of the split-estate lands; (2) have their principal place of residence on the land or personally conduct farming or ranching operations on the farm or ranch unit impacted by surface mining operations or receive a substantial portion of their income, if any, directly from such farming and ranching operations; and (3) have met the conditions of point 1 and 2 above for a period of not less than 3 years. If a surface owner has been found to be “unqualified,” then access for development of the federal coal would follow the procedures of 43 CFR 3814 discussed above. Prior to posting a coal lease sale notice, the BLM requires the consent of all surface owners who meet the criteria of a ‘qualified surface owner’ and whose lands overlie coal deposits to determine a preference for or against mining by other than underground mining techniques (43 CFR 3427).
The SRHA was amended on April 16, 1993, Pub. L. 103-23a. The amendment to the Act requires special procedures that must be complied with by individuals or companies prior to locating mining claims on land where the surface is patented and the minerals are reserved under the SRHA. A key change that came about from this amendment that pertains only to locatable minerals is that if the operations are located on lands patented under the SRHA and the claimant does not have written consent from the surface owner, then the claimant or operator must submit a plan of operation and obtain BLM approval. Where the surface owner has signed a consent agreement, a plan of operation is not required by the BLM and the claimant does not need BLM approval to start operations on that land.
Mineral materials including sand and gravel underlying SRHA lands or lands exchanged under Section 8 of the Taylor Grazing Act of 1934 were retained to the United States in the original patents. Therefore, the unauthorized removal of sand, gravel, and other common variety minerals is considered a trespass. The use, however, of mineral materials from SRHA lands for improvement and maintenance of those same lands, is not to be considered a trespass (Watt v. Western Nuclear, Inc., 103 S. Ct. 2218, June 6, 1983). Generally, the owners of the surface estate where the federal government owns the mineral estate may use without the benefit of a sales contract or permit, minimal amounts of mineral material for personal use within the boundaries of the surface estate.
It is not the BLM’s position to encourage the practice of payment of damages in lieu of restoration, nor does the BLM question the terms and dollar amounts under which an agreement is made. The BLM’s position merely is to ensure that an agreement is reached that is acceptable to both parties. The BLM, however, does have the right according to the MLA to require additional surface reclamation measures on all lease actions, although they must be reasonable, justifiable, and in compliance with all pertinent laws. The goal should be to restore these areas disturbed by lease activities and operations to their original condition or to a reasonable environmentally sound condition. The surface owner should be compensated for all damages created by lease development.