THE BLM'S MANAGEMENT OF FLUID MINERAL DEVELOPMENT ON SPLIT ESTATE: ACCESS ISSUES AND FEE-FEE-FED WELLS

• Jurisdiction: United States

Oil and Gas Agreements: Surface Use in the 21st Century (May 2017)
CHAPTER 4A
THE BLM'S MANAGEMENT OF FLUID MINERAL DEVELOPMENT ON SPLIT ESTATE: ACCESS ISSUES AND FEE-FEE-FED WELLS
Philip C. Lowe ¹
Attorney, Advisor
U.S. Department of the Interior Office of the Solicitor
Lakewood, CO

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PHILIP C. LOWE is an attorney advisor with the Department of the Interior's Office of the Regional Solicitor, Rocky Mountain Region. Formerly a hydrogeologist and environmental scientist, he advises Interior agency clients on legal and policy issues related to leasing and development of oil and gas, coal, coalbed natural gas, oil shale, uranium, wind, and geothermal resources, as well as multi-state electrical transmission lines. Phil also provides guidance to Bureau of Land Management clients on air quality and climate change issues associated with energy development projects, and on NEPA and FLPMA issues associated with resource management plans, amendments, and records of decision. He received his B.S. with honors in 1981 from Rutgers University, where he won several athletic and academic awards, and in 1989 earned a law degree from the University of Texas at Austin.

Drilling and well production technologies for fluid mineral development have been advancing at a remarkable rate over the past decade.² At the same time, the Bureau of Land Management's regulations for oil and gas development have not kept pace with these technical advances. The BLM resolves issues associated with federal oversight over non-federal surface locations during federal mineral development on a case-by-case basis. While BLM has issued guidance to address how existing regulations apply to non-federal surface locations, there is still uncertainty associated with BLM supervision of off-lease operations.

BLM is in the process of issuing additional guidance to address these issues and in accordance with the Executive Order on Promoting Energy Independence and Economic Growth,³ the Department of the Interior will be reviewing existing regulations and moving to "appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law."⁴

This paper will describe generally BLM's authority over non-federal surface locations on split estate when developing federal minerals. It will address in more detail some of the recent access issues that arise when split estate federal minerals are developed. And finally, it will provide an overview of "fee-fee-fed" wells, where federal minerals are developed from off-lease, non-federal surface locations.

Split Estate

BLM manages about 245 million acres of federal surface, and about 700 million acres of federal minerals. Of the 700 million acres of federal minerals, more than 58 million acres are overlain by privately owned surface, known as split estate.⁵ Other federal surface management agencies, such as the United States Forest Service, manage surface uses over federal minerals. A separate paper for this Institute will discuss the

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Forest Service's role in working with BLM when federal minerals are leased and developed.

When BLM issues fluid mineral leases on split estate private surface, it adds stipulations that are not intended to dictate private surface management, but instead are added to include protection of important resources that may be impacted by federal actions. General Crude Oil Company, 28 IBLA 214 (1976). BLM's recent Greater Sage-Grouse Land Use Plan Amendment all include an Appendix K, which although not part of the BLM's land use decisions for the Resource Management Plan, summarize the BLM's procedures for considering proposals to conduct exploration and production operations on split estate federal oil and gas leases. The appendix restates the general principle that while the BLM does not have the authority to regulate a surface owner's use of the surface estate, it has the authority to regulate the activities of federal mineral lessees when developing federal minerals.

Much of the split estate federal minerals in the western United resulted from land grants under the 1916 Stock Raising and Homestead Act, where the United States retained federal ownership of minerals beneath land grant tracts. Section 9(a) of the Stock Raising and Homestead Act, as amended provides that:

Any person who has acquired from the United States the coal or other mineral deposits in any such land, or the right to mine and remove the same, may reenter and occupy so much of the surface thereof as may be required for all purposes reasonably incident to the mining or removal of the coal or other minerals, first, upon securing the written consent or waiver of the homestead entryman or patentee; second, upon payment of the damages to crops or other tangible improvements to the owner thereof, where agreement may be had as to the amount thereof; or, third, in lieu of either of the foregoing provisions, upon the execution

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