[Congressional Record Volume 147, Number 46 (Monday, April 2, 2001)]
[Senate]
[Pages S3278-S3279]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ENZI (for himself and Mr. Thomas):
  S. 675. 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; to the Committee on 
Energy and Natural Resources.
  Mr. ENZI. Mr. President, I rise today to introduce the ``Powder River 
Basin Resource Development Act of 2001.'' This legislation will 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.
  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 ever-
increasing role in the development of coalbed methane as Wyoming 
continues to help meet the growing needs for natural gas in the Rocky 
Mountain region and the country as a whole. The Powder River Basin and 
the State of Wyoming as a whole provide many of the resources that heat 
our homes, fuel our cars, generate electricity for our computers, 
microwaves, and televisions. In short, there is very little that any 
one of us does in a day that is not affected by the resources of coal, 
oil, and natural gas.
  The production of these natural resources represents a vital part of 
the economy of my home state of Wyoming. The coal and oil and gas 
industries employ more than 21,000 people in Wyoming. We in Wyoming 
educate our students, build our roads, and provide our citizens with 
many of their social services through property taxes, severance taxes, 
and mineral royalties collected from the development of these energy 
resources. Since Wyoming has no state income tax, our State relies very 
heavily on revenues from the minerals extraction industries for our tax 
base.

[[Page S3279]]

  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 provides a procedure for the fair and 
expeditious resolution of conflicts between oil and gas producers and 
coal producers who have conflicting mineral interests on land in the 
Powder River Basin in Wyoming and southern Montana.
  This legislation establishes a specific procedure to resolve 
conflicts between coal producers and oil and gas producers when their 
mineral development rights come into conflict because of overlapping 
leases. First, this proposal requires that once a potential conflict is 
identified, the affected 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 receiving a 
petition, 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 of the parties in conflict would appoint one of the three 
experts. The third expert would be chosen jointly from the two parties. 
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 for this compensation price for limited number of situations 
where neither the existence of the conflict nor compensation to the 
conflicting mineral owner was foreseen in the original federal lease 
bid.

  The ``Powder River Basin Resource Development Act of 2001'' has 
several benefits over the present system. First, it requires parties 
whose mineral interests come into conflict to attempt to negotiate an 
agreement among themselves before either one of them avails himself 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 that (1) are leased pursuant to the 
federal Mineral Leasing Act; (2) exist in conflict areas; and (3) which 
may otherwise be lost or bypassed. As such, this legislation encourages 
full and expeditious development of federally leased resources in this 
narrow conflict area where it is economically feasible and safe to do 
so. Third and finally, this bill provides a fair and expeditious 
procedure to resolve conflicts which cannot be resolved between the two 
parties themselves and it does so by ensuring that any mineral owner 
will be fully compensated for any suspension or loss of his mineral 
rights. In turn, this proposal will prevent the serious economic 
hardship to thousands 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.
  This legislation is the result of over two years of work and 
represents the input of all the stakeholders: coalbed methane 
producers, deep oil and gas developers, the coal industry, landowners, 
the State of Wyoming, and the Department of the Interior. It is nearly 
identical to legislation that was favorably reported out of the Senate 
Energy Committee last summer by a voice vote. By providing a fair, 
expeditious, cost-effective and certain method to resolve conflicts 
between mineral producers in one of the most bountiful energy regions 
in the world, the ``Powder River Basin Resource Development Act of 
2001'' represents an important chapter in the continuing effort to 
develop a comprehensive national energy policy for the 21st century.
                                 ______