Could 2007 be the year that US Congress addresses the split estates question? The idea that another entity-often the federal government-could hold subsurface rights to an individual’s property is incomprehensible in most of the US. It’s a part of life in the West, however, and it can lead to conflicts.
It’s remarkable that it hasn’t done so more often. Energy and mineral lessees say it’s because they’ve learned to operate with minimal disruptions to surface activities. Some surface land owners respond that they have no choice but to cooperate, and that they are tired of it.
The conflict quickly surfaced (for lack of a better term) as two House Natural Resources Committee subcommittees held a hearing on Apr. 26 about land use issues created by onshore oil and gas resource development.
Rep. Mark Udall (D-Colo.), a member of one of the subcommittees who introduced a bill addressing split estates and other Western land issues in February, asked Henri Bisson, deputy director for operations at the US Bureau of Land Management, how much advance notice surface land owners receive of subsurface leasing.
“The first place where leasing decisions are made is in development of the land use plans. We have instructed our field offices to advertise this extensively,” Bisson replied.
Negotiated agreements
“We have about 19,500 wells currently on split estates. Of these, the operators have moved about 20 to the bonding process. The others have negotiated agreements with the surface land holders,” Bisson said.
Rancher Steve Adami of Sheridan, Wyo., said he is intimately acquainted with 12 of those 20 wells. When he learned that several of his neighbors had reached agreements with producers, he asked them what they had learned. Then he tried to obtain conditions when a producer told him that he held subsurface leases on his land.
“When we asked for some changes in the language ensuring proper reclamation, restrictions on water disposal, and $1.37/day more money than was being offered...what we received was nothing. The initial offer was withdrawn and the operator ‘bonded on,’” Adami said at the hearing.
Grazing value
Although they invited him to the meetings, the operator and BLM then made the development decisions, Adami said. “The BLM’s response to my protest that they allowed industry to post a $2,176 bond against a reasonable reclamation estimate of $3 million or more was that they were only required to collect a bond for loss of grazing value.”
In most other instances, energy producers and surface land owners have good relationships, maintained Claire M. Moseley of the Public Lands Advocacy in Denver.
“BLM has done a good job of soliciting feedback from land owners and industry alike to determine how best to address the split estate issue,” Moseley said. When the federal agency held nine public meetings on the issue, it found that very few actual conflicts exist and the current process is working well, she said.