MULTIPLE MINERAL DEVELOPMENT CONFLICTS IN COALBED METHANE OPERATIONS
| Jurisdiction | United States |
(Apr 1992)
MULTIPLE MINERAL DEVELOPMENT CONFLICTS IN COALBED METHANE OPERATIONS
Van Cott, Bagley, Cornwall & McCarthy
Salt Lake City, Utah
§ 4A.01 Introduction
§ 4A.02 Origins of Conflict
§ 4A.03 Classic Conflicts
[1] Commingled Minerals: Underground Coal v. Coalbed Methane
[2] Physically Separated Beds
[a] Underground Coal Mining v. Oil and Gas
[b] Underground Gas Storage Reservoirs v. Coal
[c] Other Minerals
§ 4A.04 Mineral Development Conflict Issues
§ 4A.05 Federal Lands
[1] Gas in Coal Seams—The Federal Position
[2] Statutes: An Overview
[a] Multiple Mineral Development Act of 1954
[b] Classification and Multiple Use Act of 1964
[c] Federal Land Policy and Management Act of 1976
[3] Departmental Regulations
[a] Overview
[b] Mineral Location Regulations
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[c] Leasing Regulations
[d] Operating Regulations
[4] Lease Terms
[a] Current Lease Forms
[b] Existing, Superseded Lease Forms
[5] Conflict Resolution on Federal Lands
[a] Special Stipulations
[i] Lease Stipulations
[ii] Operating Stipulations
[b] Lease and Operating Suspensions
[c] Cooperative Agreements
[6] Other Statutes
[a] Federal Combined Hydrocarbons Act
[b] Coal Mine Health and Safety Act of 1969
[c] Surface Mining Control and Reclamation Act of 1977
[d] Geothermal Steam Act of 1970
[7] Underground Gas Storage
[8] Conflicts with State Minerals
[9] Conflicts with Privately Owned Minerals
§ 4A.06 Indian Lands
[1] Gas in Coal Seams—The Federal Position
[2] Statutes
[3] Regulations
[a] Bureau of Indian Affairs
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[b] Bureau of Land Management
[4] Lease Terms
[5] Stipulations
§ 4A.07 State Lands
[1] General Overview
[a] Land Administration
[b] Conservation Administration
[2] Survey of Coalbed Methane Laws and Practices
[a] Colorado
[b] Montana
[c] New Mexico
[d] Utah
§ 4A.08 Private Lands
[1] Underground Mining
[2] Surface Mining
[a] Doctrine of Alternative Means
[b] Doctrine of Accommodation
[3] Damages
[4] Special Situation-Methane Gas in Coal Seams
§ 4A.09 Recommendations and Solutions
[1] Policy Considerations
[2] Title Examinations
§ 4A.10 Conclusion
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[Coalbed methane] is a gas...[having]...a close affinity for and association with coal seams. In its original state it permeates and penetrates the coalbed, is its alter ego, its constant companion, its geological handmaiden, and is sometimes viewed as its contumacious free-spirited bride, but more generally regarded as its ill-chosen bridesmaid. It is found with the coal when they come to mine it, stays with the coal as it leaves, and remains in the space after the mining has been done. Its past has been filled with peril and tragedy, its present is seen as having a modest commercial attractiveness, and its future as a fuel potential has become increasing brighter. Judge Toothman1
§ 4A.01 INTRODUCTION 2
Judge Toothman's dicta provides the legal literature with the most poetic, if not the most accurate, modern description of operational conflicts posed by the development of coalbed methane. It is most fitting that a Pennsylvania judge so adroitly addressed a problem that arises commonly in Pennsylvanian age geology. His description of the gas and its origins aptly sets the stage for this paper.
Current estimates give the co-terminous United States between 700 and 850 trillion cubic feet of coalbed methane reserves.3 This exceeds the known reserves of natural gas. Historically, methane in coal seams represented a hazard to coal miners. Operators ventilated it to the atmosphere to render coal mines safe for operations. Today, however, coalbed methane is seen as an important alternative source of pipeline quality natural gas.
Coalbed methane occurs, as its name implies, in coal seams. Important, albeit not always fully appreciated, is the fact that coal seams appear in Pennsylvanian and Cretaceous age formations in the same lands as known and developing oil and gas fields. On the western scene, coal seams are also found in the same lands as other bedded energy minerals such as oil shale, native asphalt, and other oil impregnated rock. The coexistence of methane in the coal seams, coupled with the stratigraphic presence of other energy
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minerals in the same lands as coalbed methane give rise to operational conflicts to extract the diverse minerals.
Western coalbed methane reserves are found in Cretaceous to early Tertiary coals seam, in contrast to the East where they are found in Pennsylvanian age rocks. Western coal seams are deep compared to the shallower beds of the East, and may be located as deep as 10,000 feet and are typically underpressured or overpressured. Eastern coals are found in thin, multiple seams with extensive lateral continuity. Western beds, on the other hand, are thick, multiple-seam deposits with diminished continuity. In the East, landblocking is more difficult, as ownership is defuse. In the West, the majority of coal and hence coalbed methane deposits are found on public domain lands4 and Indian reservations.5
§ 4A.02 ORIGINS OF CONFLICT
Multiple mineral development conflicts in coalbed methane operations are likely to occur for two reasons. First, operational conflicts arise in the context of commingled or associated minerals, as with methane gas in coals seams. Oil and gas exploration geologists, who originally searched for coalbeds as source rock for natural gas (seeking really the overlying conventional sands or carbonate layers as host rock), now look to the coalbeds as the reservoirs themselves.6 Second, they arise in the context of stratigraphically separated mineral deposits in the same lands, as with oil and gas and coal. Oil and gas operators necessarily need to penetrate the shallower coalbeds to search for and develop the deeper oil and gas. Resolution of the stratigraphically separated bed problem involves balancing of land use priorities. Resolution of the commingled minerals problem requires determination of ownership before contending with multiple use questions. The developmental conflicts can be appreciated only after one has achieved an understanding of the scientific and legal underpinnings.
It has been suggested that multiple mineral development conflicts had their origins in man's first recognition that diverse minerals in the same lands could be separately
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owned and individually leased.7 But subjacent fees were created only because minerals were found in subjacent strata. Subjacent strata resulted from depositional processes over geologic time. The potential for conflict, therefore, existed long before man attempted to apply common law property concepts to stratigraphic intervals or associated minerals.
Attempts to draw the infinitely more complex product of sedimentary deposition into the framework of the common law rules governing real property law served only to define the problem. The inchoate conflict, buried in subterranean layers, matures first to full-blown confrontation as mining technology is applied. It can be said that the origins of conflict lie in sedimentary deposition, in the application of legal concepts to stratigraphic layers, and in methods of extraction. The analysis of these origins, though illuminating, is beyond the scope of this chapter, but may be found in the legal literature.8
Initially conflicts on the more cosmic scale involved the ownership of stratigraphic fees or the statutory conflict between locatable minerals and leasable minerals. Now, with the application of conservation principles and policies of multiple use, development conflicts between simultaneous extraction operations are coming into sharper focus.
Multiple mineral development is but one facet of the broader classification of multiple use, involving conflicts between surface owners, conflicts between surface and mineral owners, and conflicts between ecologists and developers in the land use planning sense. These latter areas of conflict are beyond the scope of this chapter and are addressed in existing literature.9 They are referred to only insofar as the law pertaining to such conflicts is useful to resolution of problems between mineral developers.
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Oil and Gas Fields Map
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§ 4A.03 CLASSIC CONFLICTS
The vast majority of coalbed methane deposits are found in thirteen large basins in the co-terminous United States. Eight of these basins are in the West. Seven of the eight are located in the Rocky Mountain West; namely, the Powder River, Wind River, Greater Green River, Uinta, Piceance, San Juan, and Raton Basins.10 All are found in oil and gas producing provinces, provinces from which minable coal is also produced or has been found in producible quantities.
[1] Commingled Minerals: Underground Coal Mining v. Coalbed Methane
Methane is the primary constituent of natural gas11 and is denominated variously as methane gas, firedamp, and coal or coalbed gas,12 identifying that gas which is emitted from underground coal deposits. It constitutes a separate category of conflict from that posed by coal and oil and gas. Issues involve first, ownership and second, extraction.13
Typically, coal mines ventilate methane gas to the atmosphere as a safety measure.14 Approximately 100 billion cubic feet of gas each year is ventilated in the
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Gob Diagrams
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Borehole Diagrams
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United States.15 However, in an era of energy consciousness, technological efforts to capture the methane are being made. Three possible methods have been utilized to date. One method calls for the drilling of small diameter vertical...
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