CHAPTER 10 COAL SURFACE MINING ON INDIAN LANDS: FROM CHECKERBOARD TO CRAZY QUILT
| Jurisdiction | United States |
(Feb 1989)
COAL SURFACE MINING ON INDIAN LANDS: FROM CHECKERBOARD TO CRAZY QUILT
Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Albuquerque, New Mexico
Coal surface mining on and around Indian lands presents a case study in the interaction between federal, Tribal, State, and private interests in the development of an important natural resource. Federal officials, charged with multiple and often conflicting responsibilities arising from duties to foster energy development, to protect tribal interests, and to manage the environmental effects of coal surface mining, seek to preserve federal primacy. State governments seek to control, and often to foster, coal development primarily on the "checkerboard" of privately and governmentally owned lands that often border Indian reservations. Indian tribes have begun to take it upon themselves to assert their proprietary, pecuniary, and governmental interests in coal development on an ever widening array of land classes. Amidst this governmental cross-fire, coal companies seek to preserve the autonomy and stability needed to wring profits from the substantial investments sunk into large, Western coal mines.
The efficient resolution of these conflicts may be important to development of national coal resources. According to the federal government's most recent study of coal mining on Indian lands, Indian tribes own and control approximately fifteen percent of the nation's coal resources, including one-third the low-sulphur strippable coal in the western United States.1 In 1984, 20.5 million tons of coal were produced from five then-active coal mines located on Crow lands in Montana and Navajo and Hopi lands in Arizona and New Mexico.2 As many as twenty-five Indian tribes, predominantly located in eleven western states, own potentially mineable coal resources and, according to the Bureau of Land Management, these resources total 710 billion tons of coal and represent the largest block of non-federally owned coal in the United
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States.3 The regulation of Indian lands may impact additional reserves because they often are "checkerboarded" with federal, private, or state-owned coal lands in patterns resulting from early federal grants to railroads of alternating sections of lands, land exchanges, patents, allotment to individual Indians, and federal and tribal leasing.
This paper seeks to describe the regulatory environment affecting coal exploration, mining and reclamation on Indian lands. Its focus is the applicability of regulatory provisions affecting coal exploration, mining, and reclamation on Indian lands. I leave to others detailed analysis of SMCRA's regulatory and environmental standards,4 as well as other matters directly affecting coal mining economics, such as taxation and product valuation for royalty purposes. Hence, this paper first will summarize briefly the statutes, regulations, and legal concepts governing leases or contracts for Indian-owned coal.5 It will then trace the development of coal surface mining regulation on Indian lands, including the evolution of Indian lands regulation under the Surface Mining Control and Reclamation Act of 1977 (SMCRA)6 by the Office of Surface Mining Reclamation and Enforcement (OSM). It will examine Bureau of Indian Affairs (BIA) and Bureau of Land Management (BLM) regulations governing coal exploration on Indian-owned lands.7 The paper then will review the OSM regulations governing coal mining operations and reclamation.8 It will then outline the allocation of regulatory authority over coal surface mining on lands arguably defined as "Indian lands," as framed by controversy surrounding SMCRA's statutory definition of "Indian lands."9 Finally, it
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will suggest ideas for coal miners and regulatory authorities to implement practical measures to comply with this multitude of statutory constraints.10
I. OVERVIEW OF STATUTES AND REGULATIONS APPLICABLE TO SURFACE COAL DEVELOPMENT ON INDIAN LANDS.
A. Statutes and Regulations Authorizing Coal Leases or Development Contracts.
A brief review of the major statutes and regulations applicable to contracting for surface coal development rights, with emphasis on matters affecting surface disturbance, will lay necessary groundwork for this discussion.11 The statutory authority underlying most outstanding coal leases of tribal lands is the Omnibus Indian Mineral Leasing Act of 1938, which authorizes leases "for mining purposes" to be made by tribes with the approval of the Secretary of the Interior (Secretary).12 The Supreme Court has found that the major purposes of the 1938 Leasing Act were to achieve uniformity in the leasing of tribal lands for mining purposes and to ensure that Indians receive "the greatest return from their property."13 Leases of allotted lands with approval of the Secretary are authorized under a 1909 statute.14
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The tribal and allotted lands leasing statutes and their implementing regulations reflect a high degree of similarity.15 The Bureau of Indian Affairs handles leasing, enforcement, and communication with landowners; while the regulations still name the United States Geological Survey (USGS) as responsible for land management and technical advice to BIA, those functions were transferred to BLM effective April 3, 1983. The implementing regulations for both tribal and allotted lands, which date from 1957, provide that leases for minerals other than oil and gas, such as coal, be advertised for competitive bid, unless the Commissioner of Indian Affairs grants to the Indian owners written permission to negotiate for lease.16 Both the tribal and allotted lands leasing regulations require the posting of adequate bond and empower the Secretary to initiate lease cancellation proceedings for breach of lease provisions or applicable regulations.17 The tribal lands leasing regulations, however, specifically provide for prospecting permits for minerals other than oil and gas18 and require surrender of the leased premises in "satisfactory condition."19 No comparable provisions appear in the allotted land regulations.
On December 22, 1982, Congress supplemented the authority provided by the leasing acts by enacting the Indian Mineral Development Act of 1982.20 The IMDA authorizes tribes, with approval of the Secretary, to enter into "any joint venture, operating, production sharing, service, managerial, lease or other agreement ... providing for the exploration for, or extraction, processing, or other development" of coal or other minerals.21 An IMDA agreement can combine
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tribal and allotted lands under a single agreement and provide flexibility to adapt provisions beneficial to economic interests of tribes and the mining company.22
Overlaying the Interior Department's duties prescribed by statute or regulation is the notion that the Secretary is charged with certain statutorily grounded trust obligations to protect the interests of tribes and individual Indians in their mineral properties. The Supreme Court has sought to require a clear indication that Congress has imposed upon the Secretary's specific duties before implying a trust obligation.23 Recently, a divided en banc Court of Appeals for the Tenth Circuit found that the United States was subjected to trust responsibilities in accounting for oil and gas royalties under leases issued pursuant to the Indian Mineral Leasing Act of 1938.24 The high standard suggested in Supron cautions coal lessees of Indian tribes to consider that questions pertaining to their compliance with applicable lease terms or regulations may be presented to administrative agencies or courts under a presumption that, on close questions, the Indian lessor will prevail.25 Careful attention to details of applicable statutes, regulations, and contract terms is critical to successful mining operations for Indian-owned minerals.
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B. The Surface Mining Control and Reclamation Act of 1977 and Companion Provisions.
The regulatory scheme now governing surface exploration, mining, and reclamation of Indian coal is a blend of BIA regulations pre-dating SMCRA and SMCRA-based regulatory provisions. The Indian leasing statutes and implementing regulations discussed above do not specifically address controlling the environmental consequences of surface mining. However, the Interior Department had promulgated regulations in 1969 addressing the impacts of mining by surface methods.26 Until SMCRA was enacted in 1977, BIA employed these surface mining regulations and, usually, the environmental assessment or impact statement requirements of the National Environmental Policy Act of 196927 to regulate surface mining on Indian-owned lands.28
The Surface Mining Control and Reclamation Act of 1977 (SMCRA)29 is the central federal statute affecting surface coal mining. SMCRA was enacted, after having twice suffered Presidential vetoes, on August 3, 1977.30 It established the Office of Surface Mining Reclamation and Enforcement.31 SMCRA established two programs of principal significance to coal on Indian lands: SMCRA Title V created a regulatory program for the control of environmental impacts of surface coal mining occurring after SMCRA's effective date. SMCRA Title IV sought to reclaim old mines abandoned before SMCRA's August 3, 1977 effective date.32 SMCRA required OSM to adopt interim
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environmental protection standards for Title V within 135 days of August 3, 1977, to be supplanted by permanent standards within thirty months from that date.33
SMCRA established three major classes of lands for jurisdictional purposes: "Lands within any State", "Federal lands", and "Indian lands."34 However, SMCRA provided for regulation only under federal and State programs. SMCRA's distribution of regulatory authority between Federal and State regulators was patterned generally after its predecessor statutes, the...
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