Independents oppose coalbed methane bill

Independents said Thursday that legislation to resolve leasing conflicts between Wyoming coal and coalbed methane producers is flawed. The dispute primarily involves methane producers RIM Operating Inc. and Barrett Resources Corp. and coal mining firm Arch Coal Inc., which hold leases covering the same lands.

July 24, 2000

2 min read

Washington, DC�Independent producers said Thursday that legislation to resolve leasing conflicts between Wyoming coal and coalbed methane producers is flawed. The dispute primarily involves methane producers RIM Operating Inc. and Barrett Resources Corp. and coal mining firm Arch Coal Inc., which hold leases covering the same lands.

The methane producers say their rights to produce deep methane gas are being infringed by advancing surface mining of coal.

RIM Pres. Vernon Isaacs Jr. testified for the Independent Producers Association of Mountain States at a hearing of the House Resources Committee�s energy and minerals subcommittee. Pending before the subcommittee is HR 4297, a bill designed to resolve the conflict. It is similar to legislation that the Senate energy committee approved in June.

Isaacs said the legislation �grants coal producers the right to condemn lands containing coalbed methane and to mine through and vent coalbed methane into the atmosphere, thereby wasting a precious natural resource and causing damage to the environment. The bill would allow a junior lessee to condemn the rights of a senior lessee based solely on the value of each resource and ignore the first-in-time, first-in-right principle.�

He said the bill defines the potential conflict area as 3 million acres but the problem is only with about 300,000 mineable acres along the Powder River basin�s eastern boundary of the outcropping Wyodak coal seams.

Terry O�Connor, an Arch Coal vice-president for external affairs, said the firm is faced with �exorbitant payments to oil and gas operators� and needs a �last resort� mechanism to resolve disputes. He said the bill would �merely establish that, if an oil or gas well is in conflict with imminent coal production, the oil and gas developer will receive full and fair market value for his well, even if his lease is junior in time to the coal operator�s.�

Pete Culp, the Bureau of Land Management�s assistant director for minerals, said his agency opposes the legislation. He said BLM has existing legal authority to resolve coal-methane lease conflicts and has launched a program to settle such disputes.