CHAPTER 13 LAND USE AND MINERAL DEVELOPMENT: A SUMMING UP

• Jurisdiction: United States

Mineral Development and Land Use
(May 1995)
CHAPTER 13
LAND USE AND MINERAL DEVELOPMENT: A SUMMING UP
Lawrence J. MacDonnell
Sustainability Initiatives
Boulder, Colorado

What are we to make of the fact that the Rocky Mountain Mineral Law Foundation is holding a special institute on land use and mineral development? Is mineral development just another land use? Should mineral development uses be subject to limitations in the same manner as other land uses? Or is mineral development different in some fundamental way — different enough to warrant different treatment?

As a practical matter, mineral development tends to be a very intensive use of land. It is a use that transforms the land, perhaps permanently. It is a land use activity that can have significant offsite impacts. In many — perhaps most — cases, mineral development is likely to be the highest immediate economic value for that particular piece of land.

Such characteristics of mineral development as a land use are distinctive in many ways, but hardly unique. Many other kinds of land use development share these same traits. What is distinctive about mineral development, in my view, is the property interest that is considered to exist in the minerals themselves — a property interest that is regarded as including a legal right to develop the minerals. The existence of the property (i.e. minerals) seems to dictate a particular use of the property or at least gives the owner of the property the choice of whether or not to use the property for the enjoyment of this interest.

Unique as this property right is, it would not be so remarkable if we already knew the existence of minerals and could organize other land uses in anticipation of development of those minerals. But, of course, we have only limited information about the quality and extent of mineralization underlying the land surface. Other surface uses grow up in the absence of that knowledge (and sometimes even in the face of it). Different kinds of minerals gain economic value over time, and mineral concentrations once regarded as uneconomic can become valuable.

Life obviously used to be simpler for the mineral developer holding rights to develop minerals within a piece of property. If the developer owned full fee simple title he or she simply used the land surface as he or she saw fit. If the developer owned or had legal rights to only the mineral estate he or she used as much of the surface as was reasonably necessary for developing the minerals. For the most part the mineral owner/developer decided what was "reasonably necessary."

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From a purely property rights perspective — that is, the perspective of a legal system designed to promote an individual's right to make essentially unfettered use of his property (implicitly assuming that an individual would use that property in a manner that maximizes its economic value to him) — particularly a legal system developing at a time in which minerals were increasingly important for the booming industrial revolution that was underway, such simple rules made sense.

Land use decisions have become more complex all around — mineral developers are far from the only would-be developers of land facing this reality. One difference perhaps is that mineral developers are less accustomed to dealing with some of these land use constraints because of the historical breadth of deference accorded to the owner of the mineral estate to develop the mineral values of that estate. The erosion of this deference in recent years is what brings us to a two-day meeting like this. Another important difference is that the inherent property value, development of the minerals underlying the land, is not transferable in most cases and may not be modifiable in a manner that would be regarded as compatible with other interests. It is this difference that makes these issues so difficult.

There are at least three types of potential land use conflicts that mineral developers need to anticipate: those involving the nuisance and property concerns of adjacent landowners and the health and safety concerns of others in the area, generally represented by the local land use planning and zoning authorities; those involving the surface owner of a split estate property; and now potentially, those involving the habitat interests of threatened and endangered plant and animal species, generally represented by the U.S. Fish and Wildlife Service or an equivalent state agency. In all three instances, the laws are evolving in a manner that provides enlarged protections for the non-mineral interests. For the mineral developer it's not a happy picture. But it is a reality.

My objective in this summary paper is not to introduce new substantive material but to try to pull together the legal directions outlined in previous papers (without having seen those papers!) and to suggest where things seem to be going. I will take each of the three general conflict areas in turn and conclude with some more general observations.

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I. Land Use Regulation

The notion that government has a role in land use decisions did not gain widespread legitimacy until 1926.¹ This role derives from that mysterious source of authority known as the Police Power, "the power to govern men and things."² It is regarded as an inherent authority of the sovereign — state government in our system. It is a role that virtually all states have delegated to local government, and it is exercised most prominently through the zoning of lands into different classifications of uses.

The interest of cities and counties in zoning the use of lands within their jurisdictions has come into conflict with the interests of mineral developers for many years. Zoning is about attempting to make land uses reasonably compatible — residential uses in some areas, commercial and mixed uses in some areas, industrial uses in other areas, agricultural uses in still other areas. Mineral development generally tends to be incompatible with at least residential and commercial uses. Minerals, however, are where you find them — they can only be developed where they are...