[Congressional Record Volume 144, Number 142 (Saturday, October 10, 1998)]
[Senate]
[Pages S12283-S12284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 PASSAGE OF COALBED METHANE LEGISLATION

  Mr. ENZI. Mr. President, I want to take a minute before the Senate 
adjourns to thank a few Members who have been very helpful on an issue 
of critical importance to my state.
  Yesterday evening, the Senate adopted by unanimous consent, S. 2500, 
a bill to preserve the sanctity of existing leases and contracts for 
production of methane gas from coal beds. An affirmative U.S. 
Government policy has been the legal basis for these contracts for 
nearly eighteen years and it was the intent of this bill to preserve 
the existing rights of all the parties in light of legal uncertainties 
cast by a July 20, 1998, 10th Circuit Court of Appeals decision.
  On September 18, I introduced the bill to protect these people, with 
my colleagues, Senator Jeff Bingaman of New Mexico and Senator Craig 
Thomas of Wyoming. The affected people live all across America, but 
most of the actual lands are in the western states, primarily New 
Mexico, Utah, Colorado, Wyoming, and Montana.
  The circumstances faced by interest owners would be severe. Personal 
and corporate bankruptcies would have led to local bank insolvencies 
and the multiplying effect on unemployment and loss of confidence in 
western states would have been devastating. In this time when Congress 
is working to offer a $4-7 billion aid package to provide certainty for 
crop farmers, I am pleased that we have been able to reach agreement to 
provide some certainty for people in the oil patch--and we did it 
without spending a single federal dime.
  The 1998 Circuit Court decision has clouded all existing lease and 
royalty agreements for production of gas out of coal where the 
ownership of the oil and gas estate differs from ownership of the coal 
estate. This uncertainty jeopardizes the expected income of all royalty 
owners and the planned investment and development of all existing 
lessees.
  The legislation we passed yesterday addresses that problem faced by 
owners and lessees by preserving the policy status quo for valid 
contracts in effect on or before the date of enactment. The legislation 
applies only to leases and contracts for ``coalbed methane'' production 
out of federally-owned coal. It does not apply to leases and contracts 
for gas production out of coal that has been conveyed, restored, or 
transferred to a third party, including to a federally recognized 
Indian tribe.
  It is important to note that many older leases and contracts for gas 
production on coal lands were negotiated prior to ``coalbed methane'' 
becoming a term of art. It is, therefore, necessary to clarify that we 
do not mean to exclude those valid leases and contracts that convey 
rights to explore for, extract and sell ``natural gas'' from applicable 
lands simply because they do not include the term ``coalbed methane.'' 
That is a possible ambiguity that arose very late in the process, after 
the time when we could have reasonably perfected the bill, but it is 
important to note because before this year, ``coalbed methane'' has 
been considered in the field, to be part of the gas estate. We chose 
the term ``coalbed methane'' because using the term ``natural gas from 
the coalbed,'' left uncertainty about the gas rights in light of the 
10th Circuit ruling. The Department of Interior suggested we use 
``coalbed methane'' so as to be very clear regardless of whether the 
Courts rule ``coalbed methane'' to be part of the coal estate or part 
of the natural gas estate in the future.
  While the bill has yet to be completed in the House, I want to thank 
some of the members who have helped us craft legislation that addresses 
what we intended to cover. Without any of them, we would not have been 
able to go forward. Because of very limited time, we had to expedite 
the process, and we could not have done it without an enormous amount 
of help. Senator Campbell, and his Indian Affairs Committee staff, were 
supportive in working out the provisions covering the tribes. Senator 
Murkowski, and his Energy Committee staff, were very helpful in working 
out the details of the bill and moving it through that Committee. 
Senator Bumpers, and his com-

[[Page S12284]]

mittee staff, were very cooperative and provided many helpful 
suggestions.
  The Department of Interior Solicitor's office provided good counsel 
and worked with us through the process. And the people out in the 
field, the coal companies, who have valid concerns about their existing 
and future leases to main federal coal, were great to work with. 
Nothing in this bill should be construed to limit their ability to mine 
federal coal under valid leases, nor should anything be construed to 
expand their liabilities to coalbed methane owners covered by the bill. 
The gas producers and land owners really came together and proposed 
reasonable solutions to solve the problems. Without their cooperative 
effort, this bill would not have happened.
  So again, my appreciation goes out to all the people who helped us 
remove the possibility of devastating situation--extensive private 
property takings, retroactive liabilities, and mountains of combative 
litigation. On behalf of thousands of Wyomingites, thank you.
  Mr. President, I yield the floor.

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