[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 675 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 675
To ensure the orderly development of coal, coalbed methane, natural
gas, and oil in ``common areas'' of the Powder River Basin, Wyoming and
Montana, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 2 (legislative day, March 30), 2001
Mr. Enzi (for himself and Mr. Thomas) introduced the following bill;
which was read twice and referred to the Committee on Energy and
Natural Resources
_______________________________________________________________________
A BILL
To ensure the orderly development of coal, coalbed methane, natural
gas, and oil in ``common areas'' of the Powder River Basin, Wyoming and
Montana, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Powder River Basin Resource
Development Act of 2001''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that:
(1) The Powder River Basin in Wyoming and Montana is one of
the world's richest energy resource regions, possessing the
largest reserves of coal in the United States and significant
deposits of oil and natural gas, including coalbed methane.
(2) The coal is predominantly federally owned, either as
part of the public lands or reserved from public lands that
were sold under homestead laws enacted in 1909, 1910, and 1916,
and may be leased to coal producers by the Bureau of Land
Management, Department of the Interior, under the Mineral
Leasing Act.
(3) The gas and oil are owned by the Federal Government,
the States, and private parties.
(4) The federally owned gas and oil, like the coal, are
part of the public lands and may be leased to oil and gas
producers by the Bureau of Land Management under the Mineral
Leasing Act.
(5) The privately owned gas and oil were conveyed with the
public lands purchased under the three homestead laws and may
have been sold or leased to oil and gas producers by the
successors to those original purchasers.
(6) Development of these valuable energy resources is of
critical importance to the American public.
(7) These energy resources provide fuel to heat and light
our homes and power our industries.
(8) Extraction of these energy resources provides
royalties, taxes, and wages that contribute to national, State,
and local treasuries and economies.
(9) Development of both the coal and the gas and oil is
occurring in the Powder River Basin.
(10) In many locations the coal and the gas and oil have
been leased or sold to different parties. These resources are
frequently extracted sequentially, but for safety and
operational reasons typically cannot be extracted
simultaneously, in the same location. Where concurrent
development is impossible and even where it may be possible, in
certain of these locations disputes have arisen among the
different parties concerning plans for, and the course of,
development of these resources.
(11) The development of any one of these resources can
result in loss of another, either by making recovery impossible
in the case of coalbed methane or uneconomic in the case of
coal, oil, or deep gas.
(12) The nature, extent, and value of any loss or delay in
development of the gas, oil, or coal resource due to
development of another of these resources in the ``common
areas'' within the Powder River Basin in which disputes between
the resources' developers arise should be ascertained and fair
market value for the loss or delay should be provided by
agreement between the developers or by an expeditious
adjudication procedure.
(13) Federal law should provide a procedure that will
assure the orderly development of the energy resources, and
fair treatment to the resources' developers, in the ``common
areas'' within the Powder River Basin in which disputes between
the developers arise.
(b) Purposes.--The purposes of this Act are to--
(1) provide a consistent procedure to resolve disputes
between developers of coal and developers of natural gas and
oil in the ``common areas'' within the Powder River Basin to
which this Act applies concerning the sequence of development
of those resources in the same location, regardless of who owns
the resources;
(2) encourage maximum recovery of the resources prior to
the time at which such disputes are likely to occur on
thereafter until the procedure provided by this Act is
implemented;
(3) ensure that the procedure provided by this Act is
employed as a last resort if the disputes are not fully
resolved by voluntary agreements between the resources'
developers or administrative policies and actions;
(4) determine fair and just compensation owed for the loss
of, or delay in, the opportunity to develop a resource
resulting from implementation of the procedure provided by this
Act; and
(5) provide expressly that the procedure provided by this
Act will neither apply to nor set any precedent for resolution
of disputes between or among resource developers outside of the
``common areas'' within the Powder River Basin to which this Act
applies.
SEC. 3. DEFINITIONS.
As used in this Act, the term--
(1) ``Powder River Basin'' or ``Basin'' means the area
designated as ``Powder River Basin'' on a map entitled ``MLA
Section 44 Powder River Basin Area'', dated July 1, 1999, and
on file in the Wyoming and Montana State Offices of the Bureau
of Land Management, Department of the Interior;
(2) ``Section 21 Lands'' means the area designated as
``Section 21 Lands'' on the map described in paragraph (1);
(3) ``Secretary'' means the Secretary of the Interior;
(4) ``Mineral Leasing Act'' means the Act of February 25,
1920 (41 Stat. 437), as amended (30 U.S.C. 181 et seq.);
(5) ``Federal coal lease'' means a lease of Federal coal in
the Basin issued pursuant to the Mineral Leasing Act;
(6) ``Federal coal lessee'' means the holder of a Federal
coal lease;
(7) ``Federal oil and gas lease'' means a lease of Federal
oil and gas in the Basin issued pursuant to the Mineral Leasing
Act;
(8) ``oil and gas lease or right to develop'' means a
Federal oil and gas lease or a lease for or right to develop
oil and gas in the Basin provided by a State or private owner
of the resources;
(9) ``non-Federal oil and gas lease or right to develop''
means a lease for or right to develop oil and gas in the Basin
provided by a State or private owner of the resources;
(10) ``oil and gas developer'' means the holder of an oil
and gas lease or right to develop;
(11) ``oil and gas property means an area in the Basin
which is subject to an oil and gas lease or right to develop
held by an oil and gas developer;
(12) ``coalbed methane'' shall have the meaning given that
term in section 1339(p)(2) of the Energy Policy Act of 1992
(106 Stat. 2992, 42 U.S.C. 13368(p)(2));
(13) ``common area'' means an area in the Basin in which
all or a portion of a Federal coal lease (including any area of
State or private coal within a logical mining unit with the
Federal coal lease) overlaps all or a portion of an oil and gas
property;
(14) ``approved or proposed mining plan'' means a mining
plan that is approved by, or has been submitted for the
approval of, the Secretary;
(15) ``owners of any interest in the oil and gas property''
means persons who own the working interest, lease interest,
operating interest, mineral interest, royalty interest, or any
other interest in the oil and gas property, and any other
persons who might receive compensation for unavoidable fixed
expenses under an order concerning the oil and gas property
issued pursuant to section 11(d);
(16) ``owners of any non-Federal interest in the oil and
gas property'' means all owners of any interest in the oil and
gas property except the Federal Government or any agency or
department thereof; and
(17) ``develop'' or ``development'' means to develop or to
produce, or both, or the development or production, or both,
respectively, including all incidental operations.
SEC. 4. PARTIES ENCOURAGED TO ENTER INTO WRITTEN AGREEMENT.
In any common area, the Federal coal lessee and oil and gas
developer, subject to applicable Federal and State laws, regulations,
and lease terms, may and are encouraged to enter into a written
agreement that details operations and assigns or assesses costs or
compensation for the concurrent or sequential development of those
resources.
SEC. 5. MINERAL CONSERVATION.
The Secretary shall employ any authority the Secretary possesses to
encourage expedited development of any oil or gas resources and any
coal resource that--
(1) are leased pursuant to the Mineral Leasing Act;
(2) are within common areas; and
(3) otherwise may be lost or bypassed due to the
development of another of the resources.
SEC. 6. NEGOTIATIONS CONCERNING DEVELOPMENT PRIORITY FOR CERTAIN
OPERATIONS IN THE BASIN.
(a) Obligation To Provide Written Notice Of Conflict.--Whenever a
Federal coal lessee or an oil and gas developer determines that its
Federal coal lease (or a logical mining unit including the Federal coal
lease) or its oil and gas property is located in a common area, and,
pursuant to an approved or proposed mining plan, mining operations or
facilities in support of mining for coal on the Federal coal lease or
the logical mining unit will be located within the common area, the
Federal coal lessee or the oil and gas developer shall deliver written
notice of the determination to the other party and the Secretary no
later than 240 days prior to the date on which the mining operations or
construction of the mine support facilities is projected by the
approved or proposed mining plan to commence in the common area.
(b) Obligation To Negotiate.--Promptly after providing the notice
referred to in subjection (a), the party which provided the notice
shall seek to negotiate a written agreement with the other party that
resolves any conflict between the development of gas or oil and
development of coal in the common area.
SEC. 7. PETITION FOR RELIEF.
(a) Submission of Petition.--
(1) If notice is submitted timely pursuant to section 6(a)
and the Federal coal lessee and the oil and gas developer
engage in negotiations, but do not reach agreement, pursuant to
section 6(b), the Federal coal lessee or the oil and gas
developer may file a petition for relief as described in
paragraph (3) in the United States district court for the
district in which the common area is located on any date which
is not less than 180 days prior to the date on which the mining
operations or construction of the mine support facilities is
projected by the approved or proposed mining plan to commence
in the common area.
(2) The petitioner shall serve the oil and gas developer or
the Federal coal lessee, as the case may be, and the Secretary
with a copy of the petition for relief on the same date upon
which the petition is filed with the court pursuant to
paragraph (1).
(3) The petition for relief shall include the following:
(A) A description and map of the Federal coal
lease, oil and gas property, and the common area.
(B) A list containing the names and addresses of
all owners of any non-Federal interest in the oil and
gas property and all owners of any non-Federal interest
in the Federal coal lease or logical mining unit. The
petitioner shall list those owners of any non-Federal
interest in the oil and gas property and of the Federal
coal lease or logical mining unit whom the petitioner
is able to ascertain from the properly indexed records
of the county recorder of the county or counties in
which the oil and gas property and Federal coal lease
or logical mining unit are located, and the respondent
shall file with the court and serve on the petitioner
and the Secretary any corrections of, additions to, or
deletions from the list known to the respondent within
10 days of the date of service of the petition for
relief pursuant to paragraph (2). Thereafter, whenever
any correction of, addition to, or deletion from the
list becomes known to either the petitioner or the
respondent, that party shall promptly file with the
court and serve on the other party and the Secretary
the addition, correction, or deletion. Any person who
believes he or she is an owner of any non-Federal
interest in the oil and gas property or in the Federal
coal lease or logical mining unit and is omitted from
the list may file a motion in the court to be added to
the list at any time prior to the issuance of an order
pursuant to section 11(d) or section 12(d).
(C) A certified copy of the notice described in
section 6(a).
(D) A sworn statement by a senior officer of the
petitioner with authority to commit the petitioner in
any negotiation under section 6(b) stating, and all
documents demonstrating, that the petitioner negotiated
or attempted to negotiate in good faith with the
respondent a voluntary agreement, pursuant to section
6(b).
(4) The Federal coal lessee shall submit a copy of the
approved or proposed mining plan for the mining operations or
support facilities that are the subject of the petition for
relief--
(A) with the petition for relief if the Federal
coal lessee is the petitioner; or
(B) within 5 days of the date of service of the
petition for relief pursuant to paragraph (2) if the
Federal coal lessee is the respondent.
(b) Joinder of Parties.--The Secretary and all owners of any non-
Federal interest in the oil and gas property and in the Federal coal
lease or logical mining unit identified pursuant to subsection
(a)(3)(B) shall be joined in the proceedings established pursuant to
this Act.
(c) Parties' Response to Petition.--The non-Federal respondent or
respondents may provide to the Secretary a response to the petition
within 30 days from the date of filing of the petition for relief
pursuant to subsection (a)(1). The Secretary may require the petitioner
and the respondent or respondents to submit such documents and/or
provide such testimony as the Secretary deems appropriate within 60
days of such date of filing.
SEC. 8. SECRETARY'S RESPONSE TO PETITION.
(a) In General.--Within 90 days of the date of filing of the
petition for relief pursuant to section 7(a)(1) the Secretary shall
take the actions required by this section.
(b) Initial Determinations.--The Secretary shall determine, with
petitioner having the burden of proof--
(1) whether a common area exists; and
(2) whether the approved or proposed mining plan submitted
pursuant to section 7(a)(4) provides for the mining operations
to intersect, or the mine support facilities to be constructed
in, any portion of the common area.
(c) Public Interest Determination.--(1) If existence of the common
area and intersection of, or construction in, the common area are
determined pursuant to subsection (b), the Secretary shall determine
whether the public interest is best realized by delaying or foregoing
development of either--
(A) the oil or gas resource to permit the mining operations
to intersect, or the mine support facilities to be constructed
in, the common area in accordance with the approved or proposed
mining plan; or
(B) the coal resource to permit commencement or
continuation of the development of the oil or gas resource in
the common area after the date on which the mining operations
or construction of the mine support facilities is projected by
the approved or proposed mining plan to commence in the common
area.
(2) The Secretary shall make the public interest determination
described in paragraph (1) solely by the calculation of the greater
economic benefit to be realized by comparison, on a net present value
basis, of the Federal and State revenues from royalties and severance
taxes likely to be generated from each resource underlying the common
area to which the petition for relief applies.
(d) Lease Suspension.--If any portion of the resource for which
delayed or foregone development is determined to be in the public
interest pursuant to subsection (c) is subject to a lease issued
pursuant to the Mineral Leasing Act, the Secretary shall suspend all or
any portion of, including any geographical area of or zone or reservoir
subject to, the lease to accommodate develoment of the other resource
in the common area during the period beginning on a date no later than
the commencement date referred to in section 7(a)(1) and provided in
the notice submitted pursuant to section 7(a)(3)(C) and ending on the
date on which an order is issued pursuant to section 11(d) or section
12(d).
(e) Exceptions.--The Secretary may refrain from either making the
determinations required by subsections (b) and (c) or suspending all or
any portion of a lease issued pursuant to the Mineral Leasing Act as
required by subsection (d) if the Secretary determines that--
(1) no common areas exists; or
(2) the approved or proposed mining plan does not provide
for the mining operations to intersect, or the mine support
facilities to be constructed in, the common area.
(f) Secretarial Report.--The Secretary shall--
(1) not delegate the determinations made pursuant to this
section;
(2) report the determinations made pursuant to subsections
(b) and (c) or subsection (e) and any suspension made pursuant
to subsection (d), including the administrative record
therefor, with the court in which the petition for relief is
filed pursuant to section 7(a)(1); and
(3) provide the petitioner and respondent or respondents
with copies of the report and record.
SEC. 9. COURT'S INITIAL RESPONSE TO PETITION.
(a) Receipt of Secretarial Report.--The court in which the petition
is filed pursuant to section 7(a)(1) shall have exclusive jurisdiction
to receive and review the report of the Secretary required by section
8(f), and the determinations made and any action taken by the Secretary
pursuant to section 8.
(b) Parties' Objections to Report.--(1) The petitioner and
respondent or respondents shall have 30 days from the date upon which
the report of the Secretary is filed with the court pursuant to section
8(f) in which to file with the court any objection to any determination
of the Secretary required by section 8.
(2) If any objection is filed pursuant to paragraph (1), the court
shall, within 60 days of receipt of the report of the Secretary
pursuant to section 8(f), make the determination that is the subject of
the objection on the basis of the administrative record filed with the
report and in accordance with the applicable requirements or standards
of subsection (b) or subsection (c) of section 8.
(3) Any determination made by the court pursuant to paragraph (3)
shall be an independent judicial determination that is de novo, without
regard to the prior determination of the Secretary.
(4) If no objection if filed pursuant to paragraph (1), the
determinations of the Secretary required by section 8 shall be final
and approved by the court in the order issued pursuant to subsection
(c) or subsection (f).
(c) Court Order.--Within 90 days of the date of receipt of the
report of the Secretary pursuant to section 8(f), the court, except as
provided in subsection (f), shall issue an order that--
(1) suspends all or any part of, including any geographical
areas of or reservoir subject to, any non-Federal oil and gas
lease or right to develop, or any non-Federal interest in any
logical mining unit that includes the Federal coal lease, in
the common area in accordance with the determination of the
Secretary pursuant to subparagraph (A) or subparagraph (B),
respectively, of section 8(c)(1) or in accordance with the
determination of the court pursuant to subsection (b)(2);
(2) if required by a determination of the court pursuant to
subsection (b)(2), terminates a suspension of a lease issued
pursuant to the Mineral Leasing Act imposed by the Secretary
pursuant to section 8(d), or imposes a suspension of a lease
issued pursuant to the Mineral Leasing Act, or both, in
accordance with the determination;
(3) if all or any part of the oil and gas lease or right to
develop is suspended pursuant to section 8(d) or this
subsection, fixes the date upon which the Federal coal lease
may commence mining operations or construction of mine support
facilities in the common area, which may be no later than the
commencement date referred to in section 7(a)(1) and provided
in the notice submitted pursuant to section 7(a)(3)(C), except
for good cause shown; and
(4) if all or any part of the Federal coal lease and/or any
non-Federal interest in the logical mining unit that includes
the Federal coal lease is suspended pursuant to section 8(d) or
this subsection, prohibits the mining operations for
intersecting, or the support facilities from being constructed
in, all or a portion of the common area.
(d) Expiration of Order.--The order of the court issued pursuant to
subsection (c) shall expire upon the issuance of an order pursuant to
section 11(d), or section 12(d).
(e) Exceptions.--The court may refrain from issuing the order
required by subsection (c), only if--
(1) the Secretary makes a determination described in
section 8(e); or
(2) the court, acting on an objection filed pursuant to
subsection (b), concurs in a determination made by the
Secretary pursuant to section 8(e), or determines that--
(A) no common area exists; or
(B) the approved or proposed mining plan submitted
pursuant to section 7(a)(4) does not provide for the
mining operations to intersect, or the mine support
facilities to be constructed in, the common area.
(f) Termination of Proceeding.--If the Secretary makes a
determination described in section 8(e) or the court makes a
determination described in subsection (e)(2), the court shall issue an
order terminating the proceeding under this Act.
SEC. 10. APPOINTMENT OF EXPERTS.
(a) Appointment Procedure.--Within 30 days of the date of issuance
of an order pursuant to section 9(c), to assist the court in making the
determinations pursuant to section 11 or section 12, the Federal coal
lessee and the oil and gas developer shall each appoint a person who is
an expert in appraising the value of, and right to develop, gas or oil
if all or any part of the oil and gas lease or right to develop is
suspended, or coal if all or any part of the Federal coal lease and/or
any non-Federal interest in the logical mining unit that includes the
Federal coal lease is suspended, pursuant to section 8(d) and/or
section 9(c), and these persons shall agree upon and appoint a third
person with such expertise. If no agreement is reached on the date of
appointment of a third person, the court shall make the appointment.
(b) Compensation.--The Federal coal lessee shall be responsible for
compensation of the expert appointed by it; the oil and gas developer
shall be responsible for compensation of the expert appointed by it;
and the Federal coal lessee and oil and gas developer shall each pay
one-half of the compensation for the third expert.
(c) Information and Data.--
(1) The Federal coal lessee, oil and gas developer, and
Secretary shall each submit to the panel of experts within 30
days of the date of appointment of the panel pursuant to
subsection (a) all information and data in the possession of
such party that is pertinent to the determinations to be made
pursuant to section 11 or section 12, and shall each submit to
the panel of experts thereafter any additional pertinent
information and data in the possession of such party that the
panel requests of such party in writing.
(2) Except as provided in paragraph (3), the court shall
ensure that any information and data submitted to the panel of
experts pursuant to paragraphs (1) and (4) shall have the
protection of confidentiality that is applicable, and may be
accorded, to them by law and the Federal rules of civil
procedure and evidence.
(3) All information and data submitted to the panel of
experts pursuant to paragraphs (1) and (4) shall be available
for review by all parties unless an ex parte order is issued by
the court.
(4)(A) The Federal coal lessee may drill for and otherwise
collect data or information on coalbed methane at any site or
sites within the common area that are not within a spacing unit
containing a well that is producing or capable of producing
coalbed methane under the conditions set forth in subparagraph
(B).
(B) The drilling or collection of data or information
authorized by subparagraph (A) shall be for the sole purpose of
submission of information and data pursuant to this paragraph.
(C) The Federal coal lessee shall not produce any coalbed
methane as a result of any drilling authorized by subparagraph
(A) and shall comply with any Federal or State requirements
applicable to such activity.
(D) The Federal coal lessee shall submit to the Secretary
an exploration plan to conduct any drilling pursuant to
subparagraph (A). The Secretary shall approve, approve as
modified, or reject the plan, within 15 days of the date of its
submission. The Secretary may modify or reject the plan only
for good cause fully set forth in writing and provided to the
Federal coal lessee. The Federal coal lessee shall adhere to
the plan, as approved by the Secretary.
(d) Submission of Briefs and Hearing.--(1) Within 45 days of the
date of appointment of the panel of experts pursuant to subsection (a),
all parties may submit briefs concerning the determinations to be made
pursuant to section 11 or section 12.
(2) Within 60 days of the date of appointment of the panel of
experts pursuant to subsection (a), the panel may, or if requested by
the petitioner or a respondent shall, receive testimony from all
parties concerning the determinations to be made pursuant to section 11
or section 12.
(e) Expert's Report.--Within 120 days of the date of appointment of
the panel of experts pursuant to subsection (a), the panel shall submit
a written report to the court providing in detail the panel's
recommendations on the determinations to be made pursuant to section 11
or section 12.
SEC. 11. COURT'S FINAL RESPONSE TO PETITION: VALUATION CONCERNING
ECONOMICALLY RECOVERABLE OIL OR GAS RESOURCES LOST OR
DELAYED, SUSPENSION OR TERMINATION, AND PAYMENT ORDER.
(a) In General.--Within 210 days of the date of issuance of an
order pursuant to section 9(c), by which, or by any action of the
Secretary pursuant to section 8(d), all or any part of the oil and gas
lease or right to develop is suspended, the court shall take the
actions required by this section.
(b) Suspension or Termination Determination.--(1) The court shall
determine whether, as a result of the order or any action of the
Secretary, all or any part of, including any geographical area of or
zone or reservoir subject to, the oil and gas lease or right to develop
should be suspended during any remaining period in which the mining
operations or support facilities occupy the common area or whether the
oil and gas lease or right to develop should be terminated.
(2) Any determination to suspend pursuant to paragraph (1) shall,
wherever possible or appropriate, limit the suspension or phase the
suspension to permit the optimum development of the oil or gas prior to
the time at which the mining operations would reach the area within the
common area that is subject to the suspension or particular phase of
the suspension.
(3) Any determination to terminate pursuant to paragraph (1) shall
be made only if the court finds that the economically recoverable oil
and gas resources subject to compensation pursuant to subsection (d)
would be entirely lost or rendered impracticable to produce as a
consequence of the mining operations in the common area and that such
resources constitute all of the economically recoverable resources
within the oil and gas property.
(c) Compensation Determination.--(1) If the court makes a
determination to suspend pursuant to subsection (b), the court shall
determine--
(A) the amount of any net income that will not be realized
due to delay in development of economically recoverable
resources of oil or gas, other than coalbed methane, from the common
area, whether or not such development has commenced;
(B) the amount of any net income that will not be realized,
whether or not development of coalbed methane has commenced,
that is due to--
(i) delay in development of economically
recoverable resources of coalbed methane in the common
area; and
(ii) the loss of any economically recoverable
resources of coalbed methane from the coal to be
extracted by the mining operations in the common area;
and
(iii) the loss of any economically recoverable
resources of coalbed methane underlying any area that
is within the oil and gas property associated with the
common area and that extends outward from each exposed
coal face of the mining operations for a distance from
which drainage of such resources is established to the
satisfaction of the court; and
(C) any of the following damages that will be incurred by
the owners of any interest in the oil and gas property as a
consequence of the suspension: any unavoidable fixed expenses
(including, but not limited to, the expenses of shutting in
production from, maintenance of, testing of, and redrilling or
reconnecting an existing well; relaying pipeline; and all other
expenses reasonably related to reestablishing any existing oil
or gas production); expenses associated with stranded costs of
drilling equipment and facilities; any lost royalties on oil or
gas not produced by the oil and gas developer; and any lost
income associated with temporarily shutting in production from
wells outside of the common area as needed for reconnection to
a gathering system or pipeline to market.
If the court determines that the unavoidable fixed expenses to achieve
post-suspension recovery of all or certain economically recoverable
resources of oil or gas in the common area will exceed the net income
to be derived from the resources, the court shall determine the amount
of the net income and lost royalties in lieu of the unavoidable fixed
expenses.
(2) The determinations made pursuant to paragraph (1) shall not
include any decrease in net income or damages resulting from loss of
any oil or gas resources that occurred before the date of the
determinations and is caused by mining within or outside of the common
area on the Federal coal lease or logical mining unit that is the
subject of the common area determination made pursuant to section
8(b)(1) or section 9(b)(2).
(3) If the court makes a determination to terminate pursuant to
subsection (b), the court shall determine the amount of any net income
that will not be realized and any damages due to the loss of, or
impracticability to produce, the economically recoverable resources of
oil or gas in the oil and gas property in the same manner as provided
in paragraph (1).
(4) In determining the amount of net income that will not be
realized pursuant to paragraph (1) or paragraph (3) and the sum of
money to be awarded pursuant to subsection (d), the court shall ensure
to the best of its ability that the Federal coal lessee is not required
to pay for the same gas or oil lost, delayed in development, or
rendered impractical to develop to more than one oil and gas developer
or the owners of any interest in more than one oil and gas property.
(d) Court Order.--The court shall issue an order that--
(1) suspends all or any part of, suspends in phases parts
of, or terminates the oil and gas lease or right to develop,
including any applicable payment or production obligations, in
accordance with the determination made pursuant to subjection
(b); and
(2) awards to the oil and gas developer and all other
owners of any interest in the oil and gas property, as their
interest may appear, a sum of money from the Federal coal
lessee equal to the net income amount and damages determined
pursuant to subsection (c).
SEC. 12. COURT'S FINAL RESPONSE TO PETITION: VALUATION CONCERNING
ECONOMICALLY RECOVERABLE COAL RESOURCES LOST OR DELAYED,
SUSPENSION OR TERMINATION AND PAYMENT ORDER.
(a) In General.--Within 210 days of the date of issuance of an
order pursuant to section 9(c) by which, or by any action by the
Secretary pursuant to section 8(d), the Federal coal lease and/or any
non-Federal interest in the logical mining unit is suspended, the court
shall take the actions required by this section.
(b) Suspension Determination.--The court shall determine whether,
as a result of the order or any action of the Secretary, the Federal
coal lease and/or any non-Federal interest in the logical mining unit
shall be suspended in whole or in part to further accommodate oil or
gas development in the common area.
(c) Compsenation Determination.--If the court makes a determination
to suspend pursuant to subsection (b), the court shall determine the
amount of any net income that will not be realized from the loss or
delay in development of economically recoverable resources of coal, and
the unavoidable fixed expenses (including, but not limited to,
additional expenses associated with reclamation, expenses associated
with stranded costs of mining equipment and facilities, a proportionate
refund of the lease bonus, and any lost royalties on coal not produced
by the Federal coal lessee) that will be incurred, by the Federal coal
lessee as a consequence of the suspension.
(d) Court Order.--The court shall issue an order that--
(1) suspends, in accordance with the determination made
pursuant to subsection (b), all or any part of the Federal coal
lease and/or any non-Federal interest in the logical mining
unit, including any applicable payment or production
obligations on the lease or logical mining unit, for the period
necessary for expeditious development in the common area of the
gas or oil that is the subject of the petition for relief as
demonstrated to the court in a production plan submitted by the
oil and gas developer; and
(2) awards to the Federal coal lessee and all other owners
of any interest in the Federal coal lease or logical mining
unit, as their interests may appear, a sum of money equal to
the net income amount and unavoidable fixed expenses determined
pursuant to subsection (c).
SEC. 13. REVIEW OF EXPERTS' REPORT AND HEARING.
(a) The court shall make the determinations required by section 11
or section 12 after reviewing the report of the panel of experts
submitted pursuant to section 10(e) and the hearing required by
subsection (b).
(b) After submission of the report of the panel of experts pursuant
to section 10(e) and prior to making the determinations required by
section 11 or section 12, the court shall hold a hearing in which the
panel of experts shall present their report and the parties to the
proceeding shall have the opportunity to examine the panel and provide
to the court any evidence or arguments they may have to support or
contravene the recommendations of the report.
SEC. 14. DISBURSEMENT OF PAYMENTS.
(a) Payment to Oil and Gas Developer.--(1) At the election of the
oil and gas developer, the sum of money awarded by the court pursuant
to section 11(d)(2) shall be--
(A) paid in full within 60 days of the date of issuance of
the order pursuant to section 11(d); or
(B) divided into the number of tons of recoverable coal in
the common area and paid in per ton increments as the coal is
mined in accordance with paragraph (2) and subsection (c).
(2) The Federal coal lessee shall make the payments required by
paragraph (1)(B) on a quarterly basis in advance based on the Federal
coal lessee's estimate of the number of tons of coal to be mined in the
common area during the following quarter, and shall add or subtract an
amount to or from the advance payment for the next quarter to reflect
the coal actually sold or transferred.
(b) Payment to Federal coal Lessee.--(1) At the election of the
Federal coal lessee, the sum of money awarded by the court pursuant to
section 12(d)(2) shall be--
(A) paid in full within 60 days of the date of issuance of
the order pursuant to section 12(d); or
(B) divided into the number of barrels of recoverable oil
or cubic feet of recoverable gas in the common area and paid in
per barrel or cubic feet increments as the oil or gas is
produced in accordance with paragraph (2) and subsection (c).
(2) The oil and gas developer shall make the payments required by
paragraph (1)(B) on a quarterly basis in advance based on the oil and
gas developer's estimate of the number of barrels of oil or cubic feet
of gas to be produced in the common area during the following quarter,
and shall add or subtract an amount to or from the advance payment for
the next quarter to reflect the oil or gas actually produced.
(c) Final Payment.--If the mining or production necessary to make
full payment of the sum of money awarded by the court in accordance
with subsection (a)(1)(B) or subsection (b)(1)(B) does not occur within
5 years of the date of issuance of the court order pursuant to section
11(d) or section 12(d), the unpaid balance shall be paid within 60 days
thereafter.
SEC. 15. TERMINATION OF OIL AND GAS LEASE SUSPENSION.
(a) Notification of Court.--If the court issues an order to suspend
all or any part of the oil and gas lease or right to develop pursuant
to section 11(d)--
(1) the Federal coal lessee shall notify the court and the
oil and gas developer when the portion of the common area
subject to the order issued pursuant to section 11(d) is no
longer required for mining operations or support facilities;
and
(2) within 120 days of the date of receipt by the court of
the notification pursuant to paragraph (1) or within 60 days
prior to the date on which the period established by the court
in the order issued pursuant to section 11(d) concludes, the
oil and gas lessee may petition the court for an order that
terminates the suspension and fixes the date and terms on which
the oil and gas developer may resume operations within the
portion of the common area subject to the order issued pursuant
to section 11(d).
(b) Court Order To Terminate Suspension of Lease or Right To
Develop.--The court shall issue the order sought under subsection
(a)(2) within 30 days of the date of receipt of the petition pursuant
to subsection (a)(2).
(c) Termination of Lease or Right To Develop.--(1) If the oil and
gas developer determines that, as a consequence of the order of the
court issued pursuant to section 9(c) and an order to suspend all or
any part of the oil and gas lease or right to develop pursuant to
section 11(d), the conditions described in section 11(b)(3) exist, the
oil and gas developer may petition the court to terminate the oil and
gas lease or right to develop.
(2) The petition referred to in paragraph (1) may be filed any time
after issuance of the order of the court pursuant to section 11(d) but
not later than 120 days after the date of receipt by the court of the
notification pursuant to subsection (a)(1).
(3) Upon receipt of a petition pursuant to paragraph (1), the court
shall make a determination whether to issue an order to terminate the
oil and gas lease or right to develop and award an additional amount
from the Federal coal lessee to the oil and gas developer and all other
owners of any interest in the oil and gas property, as their interests
may appear, in accordance with the procedures and deadlines established
in section 7(a) and sections 10 through 14.
SEC. 16. TERMINATION OF COAL LEASE SUSPENSION.
(a) Notification of Court.--If the court issues an order requiring
suspension of all or any part of the Federal coal lease and/or any non-
Federal interest in the logical mining unit that includes the Federal
coal lease pursuant to section 12(d)--
(1) the oil and gas developer shall notify the court and
the Federal coal lessee when the portion of the common area
subject to the order issued pursuant to section 12(d) is no
longer required for gas or oil production from such portion;
and
(2) within 120 days of the date of receipt by the court of
the notification pursuant to paragraph (1) or within 60 days
prior to the date on which the period established by the court
in the order issued pursuant to section 12(d) concludes, the
Federal coal lessee may petition the court for an order that
fixes the date and terms on which the Federal coal lessee may commence
mining operations or construction of support facilities in the portion
of the common area subject to the order issued pursuant to section
12(d) and, if all or any part of the Federal coal lease and/or any non-
Federal interest in the logical mining unit is suspended, terminates
the suspension.
(b) Court Order To Terminate Lease Suspension.--The court shall
issue the order sought under subsection (a)(2) within 30 days of the
date of receipt of the petition pursuant to subsection (a)(2).
(c) Termination of Lease.--(1) If the Federal coal lessee
determines that, as a consequence of the order of the court issued
pursuant to section 12(d), further development of all or any part of
the Federal coal lease and/or any non-Federal interest in the logical
mining unit is impracticable, the Federal coal lessee may petition the
court to terminate all or any part of the Federal coal lease and/or any
non-Federal interest in the logical mining unit.
(2) The petition referred to in paragraph (1) may be filed any time
after issuance of the order of the court pursuant to section 12(d) but
not later than 120 days after the date of receipt by the court of the
notification pursuant to subsection (a)(1).
(3) Upon receipt of a petition pursuant to paragraph (1), the court
shall make a determination whether to issue an order to terminate all
or any part of the Federal coal lease and/or any non-Federal interest
in the logical mining unit and award an additional amount from the oil
and gas developer to the Federal coal lessee and all other owners of
any interest in the Federal coal lease or logical mining unit, as their
interests may appear, in accordance with the procedures and deadlines
established in section 7(a) and sections 10 through 14.
SEC. 17. SUPPLEMENTAL PETITION FOR RELIEF.
(a) Petition Submittal.--(1) If, at any time after the issuance of
an order pursuant to section 11(d) or section 12(d), the mining plan
that is the basis of the order is altered in a manner that may warrant
suspension of an additional part or all of, or termination of, the oil
and gas lease or right to develop or suspension of an additional part
of the Federal coal lease and/or any non-Federal interest in the
logical mining unit that includes the Federal coal lease and/or an
increase in the sum of money that was awarded under the order, either
the Federal coal lessee or the oil and gas developer may, if necessary
after compliance with the requirements of section 6, file a
supplemental petition for relief with the court to amend the order.
(2) The requirements of section 7(a) and sections 8 through 14
shall apply to the supplemental petition submitted pursuant to
paragraph (1).
(b) Court Order.--(1) Upon completion of the process required by
subsection (a)(2), the court shall make a determination whether to
suspend an additional part or all of, or terminate, the oil and gas
lease or right to develop or to suspend an additional part of the
Federal coal lease and/or any non-Federal interest in the logical
mining unit as described in, and to award an additional sum of money
calculated in accordance with, section 11 or section 12.
(2) The court shall issue any order resulting from the
determinations made pursuant to paragraph (1) within 90 days of the
date of filing of the supplemental petition for relief.
(3) Any award of an additional sum of money shall be paid in
accordance with section 14.
SEC. 18. APPEAL OF COURT ORDERS.
(a) Non-Appealable Orders.--Any order issued pursuant to section
9(c), section 9(f), section 15(b), or section 16(b) is final and may
not be appealed.
(b) Appealable Orders.--Any order issued pursuant to section 11(d),
section 12(d), section 15(c)(3), section 16(c)(3), or section 17(c)(2)
may be appealed, but the appeal, and any disposition thereof, may not
disturb any order referred to in subsection (a).
SEC. 19. SUSPENSION TERMS.
(a) Federal Lease Suspension Terms.--If all or any part of any
lease issued pursuant to the Mineral Leasing Act is suspended in whole
or in part by the Secretary or the court under this Act--
(1) the lessee shall not be required to pay any rental for
the lease for the period of the suspension; and
(2) if the lease is a Federal oil or gas lease and is in
the primary term or if the lease is a Federal coal lease, the
term of the lease shall be extended by the length of the period
of the suspension plus one year; or
(3) the lease shall not terminate due to lack of production
for the period of the suspension plus one year.
(b) Other.--If any non-Federal oil and gas lease or right to
develop or any non-Federal interest in a logical mining unit is
suspended in whole or in part by the court under this Act, the court
shall establish terms for the suspension comparable to the terms set
forth in subsection (a).
SEC. 20. LIABILITY LIMITATION.
(a) Federal Coal Lessee.--Except as provided in a written agreement
reached pursuant to section 6(b) or reached on or after September 1,
1999, and before the date of enactment of this Act, or as provided by
an order of the court pursuant to this Act, neither the holder of a
Federal coal lease subject to the agreement or order nor the United
States shall be liable to the oil and gas developer of, or any owner of
an interest in, any oil and gas property subject to the agreement or
order for any decrease in or depletion of, or any impairment of the
ability to recover, any gas or oil from the property that may result
from the development of any coal on the Federal coal leasehold or
within a logical mining unit that includes the Federal coal lease.
(b) Oil and Gas Developer.--Except as provided in a written
agreement reached pursuant to section 6(b) or reached on or after
September 1, 1999, and before the date of enactment of this Act, or as
provided by an order of the court pursuant to this Act, neither the oil
and gas developer of an oil and gas property subject to the agreement
or order nor the United States shall be liable to a holder of a Federal
coal lease subject to the agreement or order, or any owner of any non-
Federal interest in a logical mining unit that includes the Federal
coal lease, or the United States for any impairment of the ability to
recover coal from the Federal coal leasehold or logical mining unit
that may result from the development of gas or oil on the property.
SEC. 21. CREDIT AGAINST ROYALTIES.
(a) In General.--
(1) Whenever a holder of a Federal coal lease is required
by a written agreement reached pursuant to section 6(b) and
approved by the Bureau of Land Management or reached prior to
the date of enactment of this Act and approved by the Bureau of
Land Management on or after September 1, 1999, or by a court
order issued pursuant to section 11(d), section 15(c)(3) or
section 17(b)(2), to pay an amount for suspension of all or
part of, or termination of, a Federal oil and gas lease for
coalbed methane located within the Section 21 Lands, the amount
so paid shall be credited against any royalties on production
required by section 7(a) or any other provision of the Mineral
Leasing Act from any lease of Federal coal issued under the
Mineral Leasing Act to such holder or any affiliate thereof.
(2) Whenever a holder of a Federal oil and gas lease is
required by a written agreement reached pursuant to section
6(b) and approved by the Bureau of land Management or reached
prior to the date of enactment of this Act and approved by the
Bureau of Land Management on or after September 1, 1999, or by
a court order issued pursuant to section 12(d), section
16(c)(3), or section 17(b)(2), to pay an amount for suspension
or termination of all or part of a Federal coal lease located
within the Section 21 Lands, the amount so paid shall be
credited against any royalties on production required by
subsection (b)(1)(A) or subsection (c)(1) of section 17 or any
other provision of the Mineral Leasing Act from any lease of
Federal oil and gas issued under the Mineral Leasing Act to
such holder or any affiliate thereof.
(b) Treatment of Royalties to States.--The Secretary shall pay to
the State in which the Federal coal lease or Federal oil and gas lease
referred to in subsection (a)(1) or subsection (a)(2), respectively, is
located 50 percent of the amount of any credit against royalties
provided under subsection (a)(1) or subsection (a)(2), respectively--
(1) in the same manner as if the credit against royalties
had been paid in money as royalties and distributed under
section 35(a) of the Mineral Leasing Act; and
(2) from amounts received as royalties, rentals, or bonuses
derived from leases issued under this Act that otherwise would
be deposited to miscellaneous receipts under section 35(a) of
the Mining Leasing Act.
SEC. 22. DENIAL OF USE AS PRECEDENT.
Nothing in this Act shall be applicable to any lease under the
Mineral Leasing Act for any mineral, or shall be applicable to, or
supersede any statutory or common law otherwise applicable in, any
proceeding in any Federal or State court involving development of any
mineral, outside of any common area, as defined in section 3(13),
within or outside of the Powder River Basin, as defined in section
3(1).
SEC. 23. EFFECTIVE DATE.
This Act shall be effective upon the date of its enactment.
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