CHAPTER 12 SPECIAL LAND USE AND RECLAMATION PROBLEMS RELATED TO OIL AND GAS PRODUCTION AND PIPELINE CONSTRUCTION AND OPERATION

• Jurisdiction: United States

Western Land Use Regulation and Mined Land Reclamation
(Nov 1979)
CHAPTER 12
SPECIAL LAND USE AND RECLAMATION PROBLEMS RELATED TO OIL AND GAS PRODUCTION AND PIPELINE CONSTRUCTION AND OPERATION
Lawrence L. Waggoner
Northwest Energy Company
and Barney R. Saunders
Northwest Pipeline Corporation
Salt Lake City, Utah

This paper is divided into two parts. Part I deals with land use and reclamation problems in oil and gas drilling and operations. Part II covers the same type of problems in pipeline construction and operations.

PART I

Land use and reclamation problems in the area of oil and gas operation are expanding at an almost alarming rate. The past ten years have seen these areas develop from a minor consideration in such operations to one of the more significant problem areas. This part of the paper shall attempt, briefly, to indicate in a general manner the types of problems faced by oil and gas operators in the area of land use and reclamation. Because of limitations of space and time, the paper will necessarily be very broad in focus. An attempt will be made also to suggest or indicate possible solutions to some of the problems and to make an educated guess as to which direction the law and the industry are moving in these areas. The paper is written on the premise that the reader has little knowledge in this area and has had little contact with these types of problems. The paper is intended to be more in the nature of a primer rather than an exhaustive work.

This part of the paper will first look at the pre-drilling activities and the problems that can arise during that period. The focus will then shift to the period of time during drilling and will attempt to point out potential problem areas. Next, attention will turn to the post-drilling period and indicate problems concerned mainly with reclamation. Finally, this part of the paper will focus on attempts to provide solutions in this area.

THE PRE-DRILLING PERIOD

This period of activity is the most significant in terms of controlling land use and reclamation problems in the development of oil and gas properties. The first problems involving land use and reclamation that the operator usually faces are the problems created by the documents wherein the right to drill is obtained. The lease, the farm-in agreement, the assignment and the pooling or unitization agreements all may contain clauses pertaining to land use and reclamation.

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The clauses may run from the very mild, standard type of clause such as one allowing the operator to lay pipe lines, build roads, tanks, power stations, telephone lines and other structures on the land,¹ to the very severe, such as leases granting no use of the surface at all. Special attention should be paid to the terms and provisions of Federal and Indian Leases. Those leases reserve control of the surface in the Lessor. Both the Indian and Federal Leases usually have a set of stipulations attached which pertain to surface use.

Generally, each party involved, the landowner or lessor, the operator, the drilling contractor and the governmental bodies, has a concept of how the work should progress and how land use and reclamation problems will be handled. Initially those concepts may be widely divergent. The challenge consists of taking those divergent concepts and marshalling them so that at least in the significant areas they do not conflict. In some instances this may involve a great deal of work; however, such work during this period will reap benefits later on.

In order to handle this area correctly, the attorney should be aware of these potential conflicts and prepare accordingly. The land people are of significant help in this area. They are responsible for negotiating and obtaining the documents mentioned above. If these people are well trained and aware of the types of problems that may arise, they can be of significant help in minimizing them in the pre-drilling phase. Therefore, the attorney must take every effort to help educate and train the land people. Any significant developments in the law should be brought to their attention. They also should be instructed that if a problem arises in which they have not had any previous experience or which is beyond their knowledge and training they should immediately contact the attorney.

The use of good forms is essential in this area. Many forms enter into the pre-drilling period. Most of those forms usually contain provisions pertaining to land use and reclamation. The conscientious attorney will familiarize himself or herself with those provisions and make certain that they are consistent or, if inconsistencies exist, will resolve them prior to the commencement of drilling operations. Once the attorney has made the determination of such conditions and resolved any inconsistencies therein, his or her next responsibility is to make certain that the operational people are fully apprised as to the conditions regarding land use and reclamation and that they carefully observe them during the process of operations on the land.

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Of course the best solution, but not always the most practical one, is to develop a set of standard forms and make certain that they all contain identical or at least compatible land use and reclamation clauses. When dealing with Federal, Indian or State lands, use of their forms is required without exception. Careful attention should be given to leasing² and pooling and unitization³ procedures under the various regulations. As part of these leasing procedures, the agency involved may and usually does attach stipulations that may include provisions pertaining to surface use and reclamation.

One very troublesome area in the pre-drilling activities is the case in which there has been a separation of the surface estate and the mineral estate. During the title examination a thorough review of the documents separating the surface and mineral estates should be made in order to determine what sort of restrictions may be placed upon the use of the surface by the mineral owner. Generally the title examination should bring to light any special or extraordinary land use and reclamation problems. The general rule is that without any contractual obligations the mineral owner has a right to ingress and egress and use of portions of the surface in order to capture and remove oil and gas. However, a careful purchaser of surface rights can protect his interest by inserting into the transfer document certain conditions regarding the use of the surface.

Again, the requirement encountered in this area should be brought to the attention of the operating and drilling personnel.

In some instances a severed surface estate owner will attempt to deny the operator access and surface use. Absent a contractual, statutory or regulatory right to do so, he cannot legally do that; but, a court action in the form of a request for an injunction may be required in order to obtain entry and conduct surface operations. If there is reason to believe that a surface owner may attempt to deny access, a request should be made that the sheriff or a deputy or other local law enforcement officer accompany the drilling and operating people when they attempt to enter upon the property. The purpose of this is not to have the law enforcement officer force entry, but to have the officer there as a witness to the denial of access. Then, when a court action is filed, there is an impartial witness who can testify that access was indeed denied. Most states, while allowing access and use...