[Congressional Record Volume 145, Number 163 (Wednesday, November 17, 1999)]
[Senate]
[Pages S14733-S14734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ENZI (for himself and Mr. Thomas):
  S. 1950. A bill to amend the Mineral Leasing Act of 1920 to ensure 
the orderly development of coal, coalbed methane, natural gas, and oil 
in the Powder River Basin, Wyoming and Montana, and for other purposes; 
to the Committee on Energy and Natural Resources.


            the powder river basin resource development act

  Mr. ENZI. Mr. President, I rise today to introduce the ``Powder River 
Basin Resource Development Act of 1999.'' This legislation is designed 
to provide a procedure for the orderly and timely resolution of 
disputes between coal producers and oil and gas operators in the Powder 
River Basin in north-central Wyoming and southern Montana. This 
legislation is cosponsored by my colleague from Wyoming, Senator 
Thomas.
  Mr. President, the Powder River Basin in Wyoming and southern Montana 
is one of the richest energy resource regions in the world. This area 
contains the largest coal reserves in the United States, providing 
nearly thirty percent of America's total coal production. This region 
also contains rich reserves of oil and gas, including coalbed methane. 
Wyoming is the fifth largest producer of natural gas in the county and 
the sixth largest producer of crude oil. The Powder River Basin plays 
an important role in the Wyoming's oil and gas production, and this 
role promises to grow as the exploration and production of coalbed 
methane increases over the next several years. This region, and the 
State of Wyoming as a whole, provides many of the resources that heat 
our homes, fuel our cans, generate electricity for our computers, 
microwaves, and televisions. In short, there is very little that any of 
us do in a day that is not affected by the resources of coal, oil, and 
natural gas.
  The production of these natural resources is a vital part of the 
economy of my home state of Wyoming. The production of coal and oil and 
gas employs more than 21,000 people in Wyoming. The property taxes, 
severance taxes, and state and federal royalties fund our schools, our 
roads, and many of the other services that are essential for the 
functioning of our state. Since Wyoming has no state income tax, our 
State relies heavily on the minerals industry for our tax base.
  Given the great importance both the coal and oil and gas industries 
have to Wyoming's economy, the State of Wyoming and the Federal 
Government have tried to encourage concurrent development in areas 
where it is feasible and safe to do so. Unfortunately, this is not 
always possible. This legislation is designed to provide a procedure 
for the fair and expeditious resolution of conflicts between oil and 
gas producers and coal producers who have interests on federal land in 
the Powder River Basin in Wyoming and southern Montana.
  Mr. President, this legislation sets forth a reasonable procedure to 
resolve conflicts between coal producers and oil and gas producers when 
their mineral rights come into conflict because of overlapping federal 
leasing. First, this proposal requires that once a potential conflict 
is identified, the parties must attempt to negotiate an agreement 
between themselves to resolve this conflict. Second, if the parties are 
unable to come to an agreement between themselves, either of the 
parties may file a petition for relief in U.S. district court in the 
district in which the conflict is located. Third, after such a petition 
is filed, the court would determine whether an actual conflict exists. 
Fourth, if the court determines that a conflict does in fact exist, the 
court would determine whether the public interest, as determined by the 
greater economic benefit of each mineral, is best served by suspension 
of the federal coal lease or suspension or termination of all or part 
of the oil and gas lease. Fifth, a panel of three experts would be 
assembled to determine the value of the mineral of lesser economic 
value. Each party to the action; the oil and gas interest, the coal 
interest, and the federal government, would each appoint one of the 
three experts. Finally, after the panel issues its final valuation 
report, the court would enter an order setting the compensation that is 
due the developer who had to temporarily or permanently forgo his 
development rights. This compensation would be paid by the owner of the 
mineral of greater economic value. A credit against federal royalties 
would also be available against the compensation price in a limited 
number of situations where the value of such compensation was not 
foreseen in the original federal lease bid.

  Mr. President, the ``Powder River Basin Resource Development Act of 
1999'' has several benefits over the present system. First, it requires 
parties whose mineral interests may come into conflict to attempt to 
negotiate an agreement among themselves before either one of them may 
avail themselves of the expedited resolution mechanism. No such 
requirement exists today. Second, it directs the Secretary of the 
Interior to encourage expedited development of federal minerals and 
that are leased pursuant to the federal Mineral Leasing Act, that exist 
in conflict areas, and which may otherwise be lossed or bypassed. As 
such, this legislation encourages full and expeditious development of 
federal resources in this narrow conflict area where it is economically 
feasible and safe to do so. Third and finally, this bill provides an 
expeditious procedure to resolve conflicts that cannot be solved by the 
two parties alone, and it does so in a manner that ensures that any 
mineral owner will be fairly compensated for any suspension or loss of 
his mineral rights. In turn, this proposal will prevent the serious 
economic hardship to hundreds of families and the State treasury that 
could occur if mineral development is stalled for an indefinite amount 
of time due to protracted litigation under the current system.
  Mr. President, this legislation builds on legislation I introduced 
last year with Senators Thomas and Bingaman, which passed Congress and 
was signed into law last November. That bill, S. 2500, ensured that 
existing lease and contract rights to coalbed methane would not be 
terminated by a decision from the 10th Circuit Court of Appeals which 
concluded that coalbed methane gas was reserved to the federal 
government under earlier coal reservation Acts. As it turned out, the 
Supreme Court earlier this year realized we got in right in our bill 
and held that the coalbed methane was in fact a gas and not a solid, 
and therefore was not reserved to the government under earlier coal 
reservation Acts. As such, the protections we provided in S. 2500 were 
guaranteed to future as well as past oil and gas leaseholders.
  Mr. President, S. 2500 was an important step in providing certainty 
and resolution to the question of mineral ownership in Wyoming, and 
throughout the country. This bill, builds on last year's work by 
providing a means to

[[Page S14734]]

resolve ongoing development conflicts between owners of coal and oil 
and gas in the Powder River Basin. It represents the result of nearly a 
year of negotiations between the coal and coalbed producers, as well as 
the deep oil and gas interests, on a method to fairly reconcile mineral 
development disputes when they occur because of multiple leasing by the 
federal government. This bill has also incorporated recommendations 
made by the Bureau of Land Management. I look forward to working with 
all the affected parties during the second session of the 106th 
Congress to pass legislation that will put into place a reasonable, 
balanced method to ensure that we receive the best return on our 
valuable natural resources in the Powder River Basin.
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