[Senate Report 106-490]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 939
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-490

======================================================================



 
          POWDER RIVER BASIN RESOURCE DEVELOPMENT ACT OF 1999

                                _______
                                

 October 5 (legislative day September 22), 2000.--Ordered to be printed

                                _______
                                

  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany S. 1950]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1950) 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, having considered 
the same, reports favorably thereon with an amendment and an 
amendment to the title and recommends that the bill, as 
amended, do pass.
    The amendments, are as follows:
    1. Strike out all after the enacting clause and insert in 
lieu thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Powder River Basin Resource 
Development Act of 2000''.

SEC. 2. FINDINGS AND PURPOSE.

    (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 lessees 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 those 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 deep 
        natural gas, oil, or coal.
          (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) The Federal law under which most of the coal and much of 
        the gas and oil in the Powder River Basin are made available 
        for development should be amended to 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) amend the Mineral Leasing Act to 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 or 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) determines fair and just compensation owed for the loss, 
        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. AMENDMENT TO THE MINERAL LEASING ACT.

    The Mineral Leasing Act (30 U.s.C. 181 et seq.) is amended by 
renumbering section 44 as section 45 and inserting the following new 
section.

``SEC. 44. DEVELOPMENT OF COAL, NATURAL GAS, AND OIL IN THE POWDER 
                    RIVER BASIN.

    ``(a) Definitions.--As used in this section:
          ``(1) The term `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) The term `Subsection (g) Lands' means the area 
        designated as `Subsection (g) Lands' on the map described in 
        paragraph (1).
          ``(3) The term `Secretary' means the Secretary of the 
        Interior.
          ``(4) The term `Federal coal lease' means a lease of Federal 
        coal in the Basin issued pursuant to this Act.
          ``(5) The term `Federal coal lessee' means the holder of a 
        Federal coal lease.
          ``(6) The term `Federal oil and gas lease' means a lease of 
        Federal oil and gas in the Basin issued pursuant to the Act.
          ``(7) The term `oil an 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.
          ``(8) The term `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.
          ``(9) The term `oil and gas developer' means the holder of an 
        oil or gas lease or right to develop.
          ``(10) The term `oil and gas property' means an area in the 
        Basin which is subject to an oil or gas lease or right to 
        develop held by an oil or gas developer.
          ``(11) The term `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.
          ``(12) The term `approved or proposed mining plan' means a 
        mining plan that is approved by, or has been submitted for the 
        approval, of the Secretary.
          ``(13) The term `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)).
          ``(14) the term `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 subsection (e)(10(E).
          ``(15) The term `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.
          ``(16) The term `develop' or `development' means to develop 
        or to produce, or both, or the development or production, or 
        both, respectively, including all incidental operations.
    ``(b) 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.
    ``(c) Mineral Conservation.--The Secretary shall employ any 
authority the Secretary possesses to encourage expedited development of 
any oil and gas resources and any coal resource that--
          ``(1) are leased pursuant to this Act;
          ``(2) are within common areas; and
          ``(3) otherwise may be lost or bypassed due to the 
        development of another of the resources.
    ``(d) Negotiations Concerning Development Priority for Certain 
Operations in the Basin.--
          ``(1) 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.
          ``(2) Obligation to negotiate.--Promptly after providing the 
        notice referred to in paragraph (1), 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.
    ``(e) Compensation Procedures for Assignment of Development 
Priority.--
          ``(1) Petition for relief.--
                  ``(A) If notice is submitted timely pursuant to 
                subsection (d)(1) and the Federal coal lessee and the 
                oil and gas developer engage in negotiations, but do 
                not reach agreement, pursuant to subsection (d)(2), the 
                Federal coal lessee or the oil and gas developer may 
                file a petition for relief as described in subparagraph 
                (C) 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.
                  ``(B) 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 subparagraph (A).
                  ``(C) The petition for relief shall include the 
                following:
                          ``(i) A description and map of the Federal 
                        coal lease, the oil and gas property, and the 
                        common area.
                          ``(ii) 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 subparagraph (B). 
                        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 paragraph (10)(E) or 
                        paragraph (11)(C).
                          ``(iii) A certified copy of the notice 
                        described in subsection (d)(1).
                          ``(iv) a sworn statement by a senior officer 
                        of the petitioner with authority to commit the 
                        petitioner in any negotiation under subsection 
                        (d)(2) stating, and all documents 
                        demonstrating, that the petitioner negotiated 
                        or attempted to negotiate in good faith with 
                        the respondent a voluntary agreement, pursuant 
                        to subsection (d)(2).
                  ``(D) 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--
                          ``(i) with the petition for relief if the 
                        Federal coal lessee is the petitioner; or
                          ``(ii) within 5 days of the date of service 
                        of the petition for relief pursuant to 
                        subparagraph (B) if the Federal coal lessee is 
                        the respondent.
          ``(2) 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 paragraph (1)(C)(ii) shall be joined in the proceedings 
        established pursuant to this subsection.
          ``(3) 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 paragraph (1)(A). 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.
          ``(4) Secretary's initial response to petition.--Within 90 
        days of the date of filing of the petition for relief pursuant 
        to paragraph (1)(A) the Secretary shall take the following 
        actions:
                  ``(A) The Secretary shall determine, with petitioner 
                having the burden of proof--
                          ``(i) whether a common area exists; and
                          ``(ii) whether the approved or proposed 
                        mining plan submitted pursuant to paragraph 
                        (3)(D) provides for the mining operations to 
                        intersect, or the mine support facilities to be 
                        constructed in, any portion of the common area.
                  ``(B)(i) If existence of the common area and 
                intersection of, or construction in, the common area 
                are determined pursuant to subparagraph (A), the 
                Secretary shall determine whether the public interest 
                is best realized by delaying or foregoing development 
                of either--
                          ``(I) 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
                          ``(II) 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 
                        of construction of the mine support facilities 
                        is projected by the approved or proposed mining 
                        plan to commence in the common area.
                  ``(ii) The Secretary shall make the public interest 
                determination described in clause (i) 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.
                  ``(C)(i) If any portion of the resource for which 
                delayed or foregone development is determined to be in 
                the public interest pursuant to subparagraph (B) is 
                subject to a lease issued pursuant to this 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 development of the 
                other resource in the common area during the period 
                beginning on a date no later than the commencement date 
                referred to in paragraph (1)(A) and provided in the 
                notice submitted pursuant to paragraph (1)(C)(iii) and 
                ending on the date on which an order is issued pursuant 
                to paragraph (10)(E) or paragraph (11)(C).
                  ``(ii) The Secretary may refrain from either making 
                the determinations required by subparagraphs (A) and 
                (B) or suspending all or any portion of a lease issued 
                pursuant to this Act as required by clause (i) only if 
                the Secretary determines that--
                          ``(I) no common area exists; or
                          ``(II) 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.
                  ``(D) The Secretary shall--
                          ``(i) report the determinations made pursuant 
                        to subparagraphs (A) and (B) or subparagraph 
                        (C)(ii) and any suspension made pursuant to 
                        subparagraph (C)(i), including the 
                        administrative record therefor, with the court 
                        in which the petition for relief is filed 
                        pursuant to paragraph (1)(A); and
                          ``(ii) provide the petitioner and respondent 
                        or respondents with copies of the report and 
                        record.
          ``(5) Court's initial response to petition.--
                  ``(A)(i) The court in which the petition is filed 
                pursuant to paragraph (1)(A) shall have exclusive 
                jurisdiction to receive and review the report of the 
                Secretary required by paragraph (4)(D), and the 
                determinations made and any action taken by the 
                Secretary pursuant to paragraph (4).
                  ``(ii) 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 
                paragraph (4)(D) in which to file with the court any 
                objection to any determination of the Secretary 
                required by paragraph (4).
                  ``(iii) If any objection is filed pursuant to clause 
                (ii), the court shall, within 60 days of receipt of the 
                report of the Secretary pursuant to paragraph (4)(D), 
                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 subparagraph 
                (A) or subparagraph (B) of paragraph (4).
                  ``(iv) Any determination made by the court pursuant 
                to clause (iii) shall be an independent judicial 
                determination that is de novo, without regard to the 
                prior determination of the Secretary.
                  ``(v) If no objection is filed pursuant to clause 
                (ii), the determinations of the Secretary required by 
                paragraph (4) shall be final and approved by the court 
                in the order issued pursuant to subparagraph (B) or 
                subparagraph (E).
                  ``(B) Within 90 days of the date of receipt of the 
                report of the Secretary pursuant to paragraph (4)(D), 
                the court, except as provided in subparagraph (E), 
                shall issue an order that--
                          ``(i) suspends all or any part of, including 
                        any geographical area 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 include the Federal 
                        coal lease, in the common area in accordance 
                        with the determination of the Secretary 
                        pursuant to subclause (I) or subclause (II), 
                        respectively, of paragraph (4)(B)(i) or in 
                        accordance with the determination of the court 
                        pursuant to subparagraph (A)(iii), and
                          ``(ii) if required by a determination of the 
                        court pursuant to subparagraph (A)(iii), 
                        terminates a suspension of a lease issued 
                        pursuant to this Act imposed by the Secretary 
                        pursuant to paragraph (4)(C)(i), or imposes a 
                        suspension of a lease issued pursuant to this 
                        Act, or both, in accordance with the 
                        determination; and
                          ``(iii) if all or any part of the oil and gas 
                        lease or right to develop is suspended pursuant 
                        to paragraph (4)(C)(i) or this subparagraph, 
                        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 paragraph 
                        (1)(A) and provided in the notice submitted 
                        pursuant to paragraph (1)(C)(iii), except for 
                        good cause shown; and
                          ``(iv) 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 paragraph 
                        (4)(C)(i) or this subparagraph, prohibits the 
                        mining operations from intersecting, or the 
                        support facilities from being constructed in, 
                        all or a portion of the common area.
                          ``(C) The order of the court issued pursuant 
                        to subparagraph (B) shall expire upon the 
                        issuance of an order pursuant to paragraph 
                        (10)(E) or paragraph (11)(C).
                  ``(D) The court may refrain from issuing the order 
                required by subparagraph (B), only if--
                          ``(i) the Secretary makes a determination 
                        described in paragraph (4)(C)(ii); or
                          ``(ii) the court, acting on an objection 
                        filed pursuant to subparagraph (A)(ii), 
                        determines that--
                                  ``(I) no common area exists; or
                                  ``(II) the approved or proposed 
                                mining plan submitted pursuant to 
                                paragraph (1)(D) does not provide for 
                                the mining operations to intersect, or 
                                the mine support facilities to be 
                                constructed in, the common area.
                  ``(E) If the Secretary makes a determination 
                described in paragraph (4)(C)(ii) or the court makes a 
                determination described in subparagraph (D)(ii), the 
                court shall issue an order terminating the proceeding 
                under this subsection.
          ``(6) Valuation procedure: appointment of experts.--
                  ``(A) Within 30 days of the date of issuance of an 
                order pursuant to paragraph (5)(B), to assist the court 
                in making the determinations pursuant to paragraph (10) 
                or paragraph (11), 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 paragraph (4)(C) and/or paragraph (5)(B), 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) 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.
          ``(7) Information and data.--
                  ``(A) 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 paragraph (6) all information and data in 
                the possession of such party that is pertinent to the 
                determinations to be made pursuant to paragraph (10) or 
                paragraph (11), 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.
                  ``(B) Except as provided in subparagraph (C), the 
                court shall ensure that any information and data 
                submitted to the panel of experts pursuant to 
                subparagraphs (A) and (D) 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.
                  ``(C) All information and data submitted to the panel 
                of experts pursuant to subparagraphs (A) and (D) shall 
                be available for review by all parties unless an ex 
                parte order is issued by the court.
                  ``(D)(i) 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 clause (ii).
                  ``(ii) The drilling or collection of data or 
                information authorized by clause (i) shall be for the 
                sole purpose of submission of information and data 
                pursuant to this paragraph.
                  ``(iii) The Federal coal lessee shall not produce any 
                coalbed methane as a result of any drilling authorized 
                by clause (i) and shall comply with any Federal or 
                State requirements applicable to such activity.
                  ``(iv) The Federal coal lessee shall submit to the 
                Secretary an exploration plan to conduct any drilling 
                pursuant to clause (i). 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.
          ``(8) Submission of briefs and hearing.--
                  ``(A) Within 45 days of the date of appointment of 
                the panel of experts pursuant to paragraph (6), all 
                parties may submit briefs concerning the determinations 
                to be made pursuant to paragraph (10) or paragraph 
                (11).
                  ``(B) Within 60 days of the date of appointment of 
                the panel of experts pursuant to paragraph (6), 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 
                paragraph (10) or paragraph (11).
          ``(9) Experts' report.--Within 120 days of the date of 
        appointment of the panel of experts pursuant to paragraph (6), 
        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 paragraph (10) or paragraph (11).
          ``(10) Court's final response to petition: valuation 
        concerning economically recoverable oil or gas resources lost 
        or delayed, suspension or termination, and payment order.--
        Within 210 days of the date of issuance of an order pursuant to 
        paragraph (5)(B), by which, or by any action of the Secretary 
        pursuant to paragraph (4)(C)(i), all or any part of the oil and 
        gas lease or right to develop is suspended, the court shall 
        take the following actions:
                  ``(A)(i) 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.
                  ``(ii) Any determination to suspend pursuant to 
                clause (i) 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.
                  ``(iii) Any determination to terminate pursuant to 
                clause (i) shall be made only if the court finds that 
                the economically recoverable oil and gas resources 
                subject to compensation pursuant to subparagraph (E) 
                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.
                  ``(B) If the court makes a determination to suspend 
                pursuant to subparagraph (A), the court shall 
                determine--
                          ``(i) 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 common 
                        area, whether or not such development has 
                        commenced;
                          ``(ii) 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 
                                resource is established to the 
                                satisfaction of the court; and
                          ``(iii) 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.
                  ``(C) The determinations made pursuant to 
                subparagraph (B) 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 paragraph 
                (4)(A)(i).
                  ``(D) If the court makes a determination to terminate 
                pursuant to subparagraph (A), 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 subparagraph (B).
                  ``(E) The court shall issue an order that--
                          ``(i) 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 subparagraph (A); and
                          ``(ii) awards to the oil and gas developer 
                        and all other owners of any interest in the oil 
                        and gas property, as their interests may 
                        appear, a sum of money from the Federal coal 
                        lessee equal to the net income amount and 
                        damages determined pursuant to subparagraph (B) 
                        or subparagraph (D).
                  ``(F) In determining the amount of net income that 
                will not be realized pursuant to subparagraph (B) or 
                subparagraph (D) and the sum of money to be awarded 
                pursuant to subparagraph (E), the court shall ensure to 
                the best of its ability that the Federal coal lessee is 
                not required to pay for the same gas lost, delayed in 
                development, or rendered impracticable to develop to 
                more than one oil and gas developer or the owners of 
                any interest in more than one oil and gas property.
          ``(11) Court's final response to petition; Valuation 
        concerning economically recoverable coal resources lost or 
        delayed, suspension or termination and payment order.--Within 
        210 days of the date of issuance of an order pursuant to 
        paragraph (5)(B) by which or by any action by the Secretary 
        pursuant to paragraph (4)(C)(i), the Federal coal lease and/or 
        any non-Federal interest in the logical mining unit is 
        suspended, the court--
                  ``(A) 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; and
                  ``(B) 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; and
                  ``(C) shall issue an order that--
                          ``(i) suspends, in accordance with the 
                        determination made pursuant to subparagraph 
                        (A), all or any part of the Federal coal lease 
                        and/or any non-Federal interested 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
                          ``(ii) 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 subparagraph 
                        (B).
          ``(12) Review of experts' report.--
                  ``(A) The court shall make the determinations 
                required by paragraph (10) or paragraph (11) after 
                reviewing the report of the panel of experts submitted 
                pursuant to paragraph (9) and the hearing required by 
                subparagraph (B).
                  ``(B) After submission of the report of the panel of 
                experts pursuant to paragraph (9) and prior to making 
                the determinations required by paragraph (10) or 
                paragraph (11), 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.
          ``(13) Disbursement of payments.--
                  ``(A)(i) At the election of the oil and gas 
                developer, the sum of money awarded by the court 
                pursuant to paragraph (10)(E) shall be--
                          ``(I) paid in full within 60 days of the date 
                        of issuance of the order pursuant to paragraph 
                        (10)(E); or
                          ``(II) 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 clause (ii) and subparagraph 
                        (C).
                  ``(ii) The Federal coal lessee shall make the payment 
                required by clause (i)(II) 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)(i) At the election of the Federal coal lessee, 
                the sum of money awarded by the court pursuant to 
                paragraph (11)(C) shall be:
                          ``(I) paid in full within 60 days of the date 
                        of issuance of the order pursuant to paragraph 
                        (11)(C); or
                          ``(II) 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 clause (ii) and 
                        subparagraph (C).
                  ``(ii) The oil and gas developer shall make the 
                payments required by clause (i)(II) 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) If the mining or production necessary to make 
                full payment of the sum of money awarded by the court 
                in accordance with subparagraph (A)(i)(II) or 
                subparagraph (B)(i)(II) does not occur within 5 years 
                of the date of issuance of the court order pursuant to 
                paragraph (10(E) or paragraph (11)(C), the unpaid 
                balance shall be paid within 60 days thereafter.
          ``(14) Termination of oil and gas lease suspension.--
                  ``(A) If the court issues an order to suspend all or 
                any part of the oil and gas lease or right to develop 
                pursuant to paragraph (10(E)--
                          ``(i) 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 paragraph (10)(E) is 
                        no longer required for mining operations or 
                        support facilities; and
                          ``(ii) within 120 days of the date of receipt 
                        by the court of the notification pursuant to 
                        clause (i) or within 60 days prior to the date 
                        on which the period established by the court in 
                        the order issued pursuant to paragraph (10)(E) 
                        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 lessee may resume 
                        operations within the portion of the common 
                        area subject to the order issued pursuant to 
                        paragraph (10)(E).
                  ``(B) The court shall issue the order sought under 
                subparagraph (A)(ii) within 30 days of the date of 
                receipt of the petition pursuant to subparagraph 
                (A)(ii).
                  ``(C)(i) If the oil and gas developer determines 
                that, as a consequence of the order of the court issued 
                pursuant to paragraph (5)(B) and an order to suspend 
                all or any part of the oil and gas lease or right to 
                develop pursuant to paragraph (10)(E), the conditions 
                described in paragraph (10)(A)(iii) exist, the oil and 
                developer may petition the court to terminate the oil 
                and gas and lease or right to develop.
                  ``(ii) The petition referred to in clause (i) may be 
                filed any time after issuance of the order of the court 
                pursuant to paragraph (10)(E) but not later than 120 
                days after the date of receipt by the court of the 
                notification pursuant to subparagraph (A)(i).
                  ``(iii) Upon receipt of a petition pursuant to clause 
                (i), 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 or 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 
                paragraphs (1) and (6) through (13).
          ``(15) Termination of coal lease suspension.--
                  ``(A) 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 
                paragraph (11)(C)--
                          ``(i) 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 paragraph (11)(C) is no 
                        longer required for gas or oil production from 
                        such portion; and
                          ``(ii) within 120 days of the date of receipt 
                        by the court of the notification pursuant to 
                        clause (i) or within 60 days prior to the date 
                        on which the period established by the court in 
                        the order issued pursuant to paragraph (11)(C) 
                        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 
                        paragraph (11)(C) 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) The court shall issue the order sought under 
                subparagraph (a)(ii) within 30 days of the date of 
                receipt of the petition pursuant to subparagraph 
                (A)(ii).
                  ``(C)(i) If the Federal coal lessee determines that, 
                as a consequence of the order of the court issued 
                pursuant to paragraph (11)(C), 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.
                  ``(ii) The petition referred to in clause (i) may be 
                filed any time after issuance of the order of the court 
                pursuant to paragraph (11)(C) but not later than 120 
                days after the date of receipt by the court of the 
                notification pursuant to subparagraph (A)(i).
                  ``(iii) Upon receipt of a petition pursuant to clause 
                (i), 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 paragraphs (1) and (6) 
                through (13).
          ``(16) Supplemental petition for relief.--
                  ``(A) If, at any time after the issuance of an order 
                pursuant to paragraph (10(E) or paragraph (11)(C), 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 local 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 subsection (d), file a supplemental 
                petition of relief with the court to amend the order.
                  ``(B) The requirements of paragraphs (1) and (6) 
                through (13) shall apply to the supplemental petition 
                submitted pursuant to subparagraph (A).
                  ``(C)(i) Upon completion of the process required by 
                subparagraph (B), 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, paragraph (10) or 
                paragraph (11).
                  ``(ii) The court shall issue any order resulting from 
                the determinations made pursuant to clause (i) within 
                90 days of the date of filing of the supplemental 
                petition for relief.
                  ``(iii) Any award of an additional sum of money shall 
                be paid in accordance with paragraph (13).
          ``(17) Appeal of court orders.--
                  ``(A) Any order issued pursuant to paragraph (5)(B), 
                paragraph (5)(E), paragraph (14(B), or paragraph 
                (15)(B) is final and may not be appealed.
                  ``(B) Any order issued pursuant to paragraph (10)(E), 
                paragraph (11)(C), paragraph (14)(C)(iii), paragraph 
                (15)(C)(iii), or paragraph (16)(C)(ii) may be appealed, 
                but the appeal, and any disposition thereof, may not 
                disturb any order referred to in subparagraph (A).
          ``(18) Suspension term.--
                  ``(A) If all or any part of any lease issued pursuant 
                to this Act is suspended in whole or in part by the 
                Secretary or the court under this subsection--
                          ``(i) the lessee shall not be required to pay 
                        any rental for the lease for the period of the 
                        suspension; and
                          ``(ii) 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
                          ``(iii) the lease shall not terminate due to 
                        lack of production for the period of the 
                        suspension plus one year.
                  ``(B) 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 subsection, the court shall establish 
                terms for the suspension comparable to the terms set 
                forth in subparagraph (A).
    ``(f) Liability Limitation.--
          ``(1) Federal coal lessee--Except as provided in a written 
        agreement reached pursuant to subsection (d)(2) or reached on 
        or after September 1, 1999, and before the date of enactment of 
        this section, or as provided by an order of the court pursuant 
        to subsection (e), 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.
          ``(2) Oil and gas developer.--Except as provided in a written 
        agreement reached pursuant to subsection (d)(2) or reached on 
        or after September 1, 1999, and before the date of enactment of 
        this section, or as provided by an order of the court pursuant 
        to subsection (e), 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.
    ``(g) Credit Against Royalties.--
          ``(1) In general.--
                  ``(A) Whenever a holder of a Federal coal lease is 
                required by a written agreement reached pursuant to 
                subsection (d)(2) and approved by the Bureau of Land 
                Management or reached prior to the date of enactment of 
                this section and approved by the Bureau of Land 
                Management on or after September 1, 1999, or by a court 
                order issued pursuant to paragraph (10(E), paragraph 
                (14)(C)(iii), or paragraph (16)(C)(ii) of subsection 
                (e), 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 Subsection (g) 
                Lands, the amount so paid shall be credited against any 
                royalties on production required by section 7(a) or any 
                other provision of this Act from any lease of Federal 
                coal issued under this Act to such holder or any 
                affiliate thereof.
                  ``(B) Whenever a holder of a Federal oil and gas 
                lease is required by a written agreement reached 
                pursuant to subsection (d)(2) and approved by the 
                Bureau of Land Management or reached prior to the date 
                of enactment of this section and approved by the Bureau 
                of Land Management on or after September 1, 1999, or by 
                a court order issued pursuant to paragraph (11)(C), 
                paragraph (15)(C)(iii), or paragraph (16)(C)(ii) of 
                subsection (e), to pay an amount for suspension or 
                termination of all or part of a Federal coal lease 
                located within the Subsection (g) 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 this Act from any lease of Federal oil and gas 
                issued under this Act to such holder or any affiliate 
                thereof.
          ``(2) 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 paragraph (1)(A) or paragraph 
        (1)(B), respectively, is located 50 percent of the amount of 
        any credit against royalties provided under paragraph (1)(A) or 
        paragraph (1)(B), respectively,--
                  ``(A) in the same manner as if the credit against 
                royalties had been paid in money as royalties and 
                distributed under section 35(a) of this Act; and
                  ``(B) 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 this Act.
                  ``(B) 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 this Act.
    ``(h) Denial of Use as Precedent.--Nothing in this section shall be 
applicable to any lease under this 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 
subsection (a)(11), within or outside of the Powder River Basin, as 
defined in subsection (a)(1).''.

SEC. 4. EFFECTIVE DATE.

    This Act shall be effective upon the date of its enactment.

    2. Amend the title so as to read:

    To Amend the Mineral Leasing Act of 1920 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.

                         Purpose of the Measure

    S. 1950 would amend the Mineral Leasing Act by establishing 
a procedure for resolving disputes over the development of coal 
and coalbed methane where the development rights are held by 
different parties.

                          Background and Need

    The energy-rich Powder River Basin is located in Wyoming 
and Montana. It contains the largest reserves of coal in the 
United States and significant deposits of oil and natural gas. 
Some of the gas, known as coalbed methane, is captured within 
the coal seams.
    The coal is predominately federally owned and managed by 
the Bureau of Land Management (BLM), Department of the 
Interior, either as part of the public domain or reserved by 
the Government when public domain lands were sold into private 
ownership under homestead laws enacted in 1909, 1910, and 1916. 
The oil and gas are under mixed Federal, State, and private 
ownership. The Federal coal, oil, and gas may be leased for 
development by the BLM under the Mineral Leasing Act. The 
State-owned oil and gas are also made available by leasing 
rights that were conveyed under the three homestead acts. These 
rights are typically sold or leased to oil and gas developers 
by successors to the original homesteaders. Last year, the 
Supreme Court ruled that coalbed methane underlying the 
homestead lands was conveyed with them as part of the oil and 
gas estate and not retained by the federal government in the 
reserved coal estate. Accordingly, rights to develop this 
privately-owned coalbed methane are leased or sold in the same 
manner as the development rights for private oil and deep gas.
    Production of all three minerals, coal, gas, and oil, is 
occurring in the Basin. The BLM frequently has issued both coal 
leases and oil and gas leases for the same locations, allowing 
the minerals to be developed without restrictions or guidance 
as to the timing of their respective development processes. 
Although these minerals are frequently developed sequentially, 
for safety and operational reasons they typically cannot be 
developed concurrently. The order of development of the 
minerals can be important because production of any one of them 
can result in the loss of another. For example, the coalbed 
methane will be vented if the coal is mined first; the coal may 
be bypassed if the coalbed methane owner fails to produce the 
gas before the mine face progresses past the gas lease. Even if 
the one resource is not lost, costs can be incurred due to the 
delay or interruption in its development to accommodate the 
earlier production of the other resource. In such 
circumstances, disputes have arisen between the coal developers 
and the oil and gas developers over their resource development 
plans.
    No clear statutory or regulatory direction to resolve these 
disputes exists. The Federal lessor, the BLM, historically has 
taken the position that the disputes must be settled by the 
lessees. In some situations, the two resources' developers have 
been able to reach agreement on the timing of development of 
the multiple minerals in the same location and the equitable 
compensation the first developer will pay to the second for its 
losses. There are, however, situations in which the resource 
developers have not been able to reach an accord. These 
unresolved disputes create business uncertainties, may make 
conservation of the resource difficult or impossible, and 
reduce Federal and State revenues. The legislation is intended 
to provide statutory direction and establish procedures for 
resolution of these disputes within a well defined period of 
time.

                          Legislative History

    S. 1950 was introduced by Senator Enzi for himself and 
Senator Thomas and referred to the Committee on Energy and 
Natural Resources on November 17, 1999. The Subcommittee on 
Forests and Public Land Management held a hearing on S. 1950 on 
February 24, 2000.
    During the consideration of S. 1950 on June 7, 2000, the 
Committee on Energy and Natural Resources adopted an amendment 
in the nature of a substitute offered by Senator Thomas after 
rejecting a substitute to the Thomas amendment offered by 
Senator Bingaman. The Committee on Energy and Natural Resources 
then ordered S. 1950, as amended by the Thomas Substitute, 
favorably reported.

            Committe Recommendations and Tabulation of Votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on June 7, 2000, by a majority voice vote 
of a quorum present recommends that the Senate pass S. 1950 if 
amended as described herein.
    The rollcall vote on the Bingaman substitute to the Thomas 
substitute was not agreed to by a vote of 9 yeas, 11 nays as 
follows:

        YEAS                          NAYS
Mr. Bingaman                        Mr. Murkowski
Mr. Akaka \1\                       Mr. Domenici \1\
Mr. Dorgan                          Mr. Nickles \1\
Mr. Graham                          Mr. Craig
Mr. Wyden                           Mr. Campbell
Mr. Johnson \1\                     Mr. Thomas
Ms. Landrieu \1\                    Mr. Smith
Mr. Bayh \1\                        Mr. Bunning
Ms. Lincoln                         Mr. Fitzgerald
                                    Mr. Gorton
                                    Mr. Burns
    \1\ Indicates vote by proxy.

    The Committee adopted the Thomas substitute by voice vote, 
and ordered S. 1950, as amended, favorably reported by voice 
vote, with Senator Bingaman asking that his vote against the 
bill as ordered reported by the Committee be recorded.

                          Committee Amendments

    During the consideration of S. 1950, the Committee adopted 
an amendment in the nature of a substitute offered by Senator 
Thomas. The major changes made by the Thomas substitute are 
described in the section-by-section analysis.

                      Section-by-Section Analysis

    Section 1 contains the short title.
    Section 2 presents findings and purpose.
    Section 3 amends the Mineral Leasing Act by renumbering 
section 44 as section 45 and adding a new section 44.
    New section 44(a) defines terms used in the Act.
    New subsection (b) contains provisions which emphasize that 
the bill's dispute resolution proceeding is to be considered 
and employed as a last resort.
    New subsection (c) urges the Secretary of the Interior to 
use the mineral conservation authorities he possesses to 
encourage expedited development in the common areas of any 
federally leased minerals that otherwise may be lost or 
bypassed due to the development of another mineral.
    New subsection (d) obligates both the coal developer and 
the oil and gas developer to give written notice to each other 
and the Secretary if either determines that a common area 
exists and that coal mining operations are planned in the 
common area. The subsection also requires the party which 
provided the notice to attempt to negotiate a written 
settlement with the other party of any conflicts regarding 
development in the common area.
    New subsection (e) establishes the judicial dispute 
resolution process that must be used if the negotiations 
required by subsection (d) do not result in the voluntary 
settlement of differences between the coal developer and the 
oil and gas developer.
    Paragraph (e)(1) provides that, if the negotiations 
required under subsection (d) do not result in an agreement 
regarding priority of mineral development, either the coal 
developer or the oil and gas developer may file a petition 
asking the United States District Court to resolve the 
conflict. The mineral developer which is the petitioner is 
required to serve the petition on the Secretary and on other 
mineral developer and any other owners of interests in the 
lease or development right for that mineral.
    Paragraph (e)(2) provides that all parties affected by the 
petition are automatically joined in the proceedings.
    Paragraph (e)(3) allows non-federal respondents to file 
their responses to the petition within 30 days after receipt of 
service.
    Paragraph (e)(4) provides that within 90 days after the 
filing of the petition, the Secretary will: (i) verify that a 
common area exists; (ii) determine that coal mining operations 
are planned in the common area; and (iii) make an initial 
determination whether the public interest is best served by 
delaying or foregoing the oil and gas development or the coal 
development in the common area. The Secretary will make this 
decision solely on the basis of which mineral (coal or oil/gas) 
will generate federal royalties and state severance taxes 
having the largest net present value. If the mineral which will 
incur delayed or forgone development is subject to a federal 
lease, the Secretary will suspend all or any portion of, 
including any geographical area of or zone or reservoir subject 
to, the lease to accommodate the development of the other 
mineral in the common area. The Secretary will report to the 
Federal district court his determinations and any lease 
suspension ordered under this paragraph.
    Paragraph (e)(5) provides for the District Courts response 
to the Secretary's determination. If no objection to the 
Secretary's report is made by the parties to the proceeding, 
the court shall approve the Secretary's decision. The Court 
will also suspend all or part of any non-Federal lease or 
development right necessary to accommodate development of the 
prevailing mineral interest. If an objection is filed to any 
determination or lease suspension decision of the Secretary, 
then the Court shall make an independent determination. If the 
Secretary's and/or the court's suspension order suspends oil 
and gas development, that order will set a date on which the 
coal developer may commence activities in the common area. That 
date must not be later than the date that the coal developer 
plans to commence activities in the common area in accordance 
with the developer's mining plan approved, or submitted for 
approval, by the BLM. The suspension will last until the court 
has determined compensation for lost or foregone oil and gas 
development and issued its second order in the dispute 
resolution proceeding under paragraph (10). If the Secretary's 
and/or the court's order suspends coal development in the 
common area, that order will prohibit coal mining activities in 
the common area until compensation is determined for the lost 
or foregone coal development and a second court order is issued 
under paragraph (11). The court may receive briefs and/or 
testimony from the parties to assist it in these 
determinations.
    The Secretary may refrain from issuing a suspension order 
and the court may refrain from issuing its first order only if 
either finds that no common area exists or that the coal 
developer plans no mining operations in the common area. In 
such a case, the court will dismiss the petition and the 
dispute resolution proceeding terminates.
    Paragraph (e)(6) provides that where all or part of leases 
are suspended or terminated by order of the Court, the oil and 
coal developers shall appoint a panel of three experts in the 
valuation of mineral properties to advise the court in the 
preparation of the order under paragraph (10) or paragraph 
(11). Each party must compensate its own selected panel member 
and share the cost of the third member,
    Paragraph (e)(7) requires the mineral developers to submit 
all relevant data to the expert panel within 30 days of the 
panel's appointment. It also ensures confidentiality for the 
data outside of the dispute resolution proceeding. Finally, it 
allows the coal developer to drill for (but not develop) 
coalbed methane in spacing units in the common area that have 
not been drilled by the oil and gas developer, and to submit 
the drilling information to the panel.
    Paragraph (e)(8) provide that, all parties (including the 
Secretary) may submit briefs and give testimony to the court on 
the valuation issues described in paragraph (10) or (11) within 
45 days and 60 days, respectively, after appointment of the 
expert panel.
    Paragraph (e)(9) requires that within 120 days after the 
appointment of the expert panel, the panel must issue a report 
to the court with recommendations regarding the valuation 
issues described in paragraph (10) or paragraph (11).
    Paragraph (e)(10) provides that the court issued an initial 
order to suspend or terminate the oil and gas lease or 
development right under paragraph (5), within 210 days the 
court must make a final determination whether to suspend 
further or terminate all or part of the oil and gas lease or 
development right while the coal developers's mining operations 
occur in the common area. If the court decides to suspend 
further or terminate all or part of the oil and gas lease or 
development right, the court must issue a second order to that 
effect and award to the oil and gas developer and all other 
owners of interests in the oil and gas property a sum of money 
from the coal developer equal to the net income lost and 
unavoidable fixed expenses incurred by the oil/gas interests 
owners and certain other parties.
    Paragraph (e)(11) states that if the court issued an 
initial order to suspend the Federal coal lease under paragraph 
(5), within 210 days the court must make a final determination 
whether to suspend further the Federal coal lease to 
accommodate oil or gas production in the common area. If the 
court decides to suspend further the Federal coal lease in the 
common area, the court must issue the second order to that 
effect and award to the coal developer and all other owners of 
interests in the Federal coal lease a sum of money from the oil 
and gas developer equal to the net income lost and unavoidable 
fixed expenses incurred by the Federal coal lease interest 
owners.
    Paragraph (e)(12) specifies that prior to making the 
determinations required by paragraph (10) or paragraph (11), 
the court will receive the report of the panel of experts and 
hold a hearing at which the petitioner and the respondents may 
question the panel report.
    Paragraph (e)(13) provides that the money awarded by the 
court under paragraph (10) or paragraph (11) will be provided 
in either of two manners, at the option of the mineral 
developer which receives the payment. The first manner is full 
payment within 60 days of the court's order under paragraph 
(10) or paragraph (11). The second manner is quarterly payments 
over a five-year period (i) to the oil and gas developer and 
the other owners of interests in the oil and gas lease or 
development right in per ton increments as coal is mined, if 
coal is to be developed first, or (ii) to the to the coal 
developer and other owners of interests in the Federal coal 
lease in per barrel or cubic feet increments as oil or gas is 
extracted, if coal development is delayed.
    Paragraphs (e)(14) and (15) provide for conclusion of the 
development of the economically superior mineral, and lifting 
of the suspension for development of the other mineral.
    If the court has suspended the oil and gas lease or 
development right in the common area, when the developer 
determines that it no longer needs the common area for coal 
mining operations, it must notify the court. The oil and gas 
developer may then petition the court to terminate the 
suspension of the oil and gas lease or development right. The 
court will issue an order granting the petition to terminate 
the suspension. If the oil and gas developer believes that the 
court's suspension of the oil and gas lease or development 
right in the common area has made development of the oil or gas 
impracticable, the oil and gas developer may petition the court 
to terminate its lease or development right in the common area.
    Conversely, if the court has suspended a Federal coal lease 
in the common area, when the oil and gas developer determines 
that it no longer needs the common area for oil or gas 
extraction activities, it must so notify the court. The coal 
developer may then petition the court to terminate the 
suspension of the Federal coal lease. The court will issue an 
order granting the petition to terminate the suspension of the 
Federal coal lease. If the coal developer believes that the 
court's suspension of the lease in the common area makes 
development impracticable, the developer may petition the court 
to terminate all or part of the lease.
    Paragraph (e)(16) provides that if there is a change in the 
mine plan that was the basis for the court's order under 
paragraph (10) or paragraph (11), either party may petition the 
court for additional relief using procedures similar to those 
employed in the original petition for relief.
    Paragraph (e)(17) provides that lease suspension and 
termination orders, or orders approving commencement of 
operations or prohibiting operations, or terminating 
proceedings, are final and may not be appealed.
    New subsection (f) states that, except for certain pre-
existing agreements, the liability of the United States and oil 
and gas and coal developers for depletion or impairment in the 
ability to recover the resource in question shall be limited to 
amounts ordered by the Court under subsection (e).
    New subsection (g) provides that when a court order issued 
under subsection (e) or an agreement reached under subsection 
(d) which the BLM ratifies requires a Federal coal lessee to 
pay an amount of money to the owners of any interest in a 
Federal oil and gas lease for termination or suspension of 
coalbed methane rights, the Federal coal lessee, or any of its 
affiliates, will be allowed to take credits in the same amount 
against Federal coal royalty payments otherwise due. Likewise, 
when a court order or an agreement ratified by BLM requires a 
Federal oil and gas lessee to pay an amount of money to owners 
of any interest in a Federal coal lease for suspension of the 
Federal coal lease, the oil and gas lessee, or any of its 
affiliates, shall be entitled to a credit in the same amount 
against Federal oil and gas royalty payments otherwise due.
    New subsection (h) makes it clear that Congress does not 
intend that this legislation apply to or affect any other 
mineral development dispute, or to affect how a court should 
rule concerning the application of the common law in any such 
dispute, that is not subject to the bill's dispute resolution 
procedure or that concerns minerals located outside of the 
common areas in the Basin.
    Section 4 is the effective date and is self explanatory.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.
                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 14, 2000.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1950, the Powder 
River Basin Resource Development Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Megan 
Carroll (for federal costs), Marjorie Miller and Susan Van 
Deventer (for the impact on state, local and tribal 
governments), and Gail Cohen (for the impact on the private 
sector).
            Sincerely,
                                          Barry B. Anderson
                                              (For Dan L. Crippen.)
    Enclosure.

               Congressional Budget Office Cost Estimate


S. 1950--Powder River Basin Resource Development Act of 2000--As 
        ordered reported by the Senate Committee on Energy and Natural 
        Resources on June 7, 2000

                                SUMMARY

    S. 1950 would establish a process for resolving disputes 
over the development of coal and coalbed methane in cases where 
the rights to develop those resources underlying the same piece 
of land are owned by different parties. The bill would apply 
only to certain disputes within the Powder River Basin, located 
in Wyoming and Montana and depicted on a map identified in the 
bill. CBO estimates that enacting this legislation would reduce 
offsetting receipts from royalties on federal resources by at 
least $13 million over the 2001-2010 period. Because the bill 
would affect direct spending (including offsetting receipts), 
pay-as-you-go procedures would apply.
    S. 1950 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA). The bill could 
benefit the states of Wyoming and Montana and some tribal 
governments within those states if the process for revolving 
disputes allows for the timely development of coal, oil, and 
gas resources, thereby protecting, and possibly increasing, 
revenues collected by those governments. Enactment of this 
legislation would have no impact on the budgets of other state, 
local and tribal governments.
    S. 1950 would impose a private-sector mandate as defined by 
UMRA on certain developers of mineral resources involved in 
disputes over the sequence of coal and oil or gas development 
in the Powder River Basin. CBO estimates that the cost of 
complying with the mandate would be well below the threshold 
established by UMRA ($109 million in 2000, adjusted annually 
for inflation) for any of the first five years that the mandate 
is in effect.

                               BACKGROUND

    In the Powder River Basin, as in many parts of the west, 
ownership of the subsurface estate is split: the coal estate, 
oil and gas estate, and hardrock mineral estate may all be 
separately owned. Thus, conflicts may arise when overlapping 
rights to develop those resources are owned by different 
parties. Historically, lessees of coal rights and lessees of 
oil and gas rights have been able to develop both resources 
without significant loss of either resource because traditional 
oil and gas deposits lie far below the coal resources.
    In the past several years conflicts have developed, 
however, between those who own the right to develop coal 
resources and those who own the right to develop oil and gas 
resources, including coalbed methane, underlying the same piece 
of land. These conflicts mostly concern a recent increase in 
oil and gas producers' interest in developing coalbed methane, 
a type of natural gas that is found within coal reserves. Coal 
and coalbed methane cannot be produced simultaneously, and 
initial development of one resource can make recovery of the 
other more expensive, or even impossible.
    In response to these types of conflicts between federal 
lessees, the Bureau of Land Management (BLM) developed a 
policy, in February 2000, aimed at optimizing the development 
of both resources. Historically, conflicts between federal 
lessees tended to be resolved by allowing the lessee with the 
older lease to proceed with production ahead of junior lease. 
In the Powder River Basin, such a policy would tend to favor 
oil and gas, and hence, coalbed methane producers, whose leases 
were issued before many federal coal leases. Under BLM's new 
policy, however, the agency uses its authority under existing 
law and lease terms to require the optimal sequential recovery 
of coalbed methane and coal.

                            MAJOR PROVISIONS

    S. 1950 would establish a process for resolving disputes 
over the development of coal and coalbed methane in cases where 
the rights to develop those resources underlying the same land 
are owned by different parties. The bill would apply only to 
disputes that occur in ``common areas'' within the Powder River 
Basin as defined by the bill.
    Under S. 1950, coal and oil and gas developers within 
common areas would be required, at least 240 days prior to the 
date when their operations are expected to intersect, to notify 
each other and the Secretary of the Interior of the anticipated 
conflict. If the parties cannot negotiate a voluntary agreement 
to settle the conflict, either party could file a petition 
asking the U.S. District Court to resolve it. The Secretary of 
the Interior would have 90 days to recommend to the court 
whether either lease should be suspended to allow production 
under the other lease to proceed. Within 90 days of receiving 
the Secretary's recommendations, the District Court would 
review any objections to those recommendations and, if 
necessary, issue an order to suspend any federal or nonfederal 
lease. S. 1950 would require the Secretary and the District 
Court to make such decisions on the basis of maximizing the net 
present value of the federal and state income from royalties 
and severance taxes that would be generated from the production 
of both resources.
    Once the District Court orders or confirms an initial 
suspension of a lease, S. 1950 would require the court, within 
210 days, to determine the amount of compensation to be awarded 
to the lessee (and all other owners of any interest in the 
resource) whose lease is suspended or terminated. A panel of 
experts would advise the court on that amount, which would be 
based on the amount of net income that would be forgone by 
owners of any interest in the resource whose production would 
be delayed as well as the amount of any unavoidable fixed costs 
incurred by those parties. Decisions regarding compensation 
awards would be subject to appeal. Under the bill, compensation 
costs must be paid by the lessee who is permitted to proceed to 
develop a resource within 62 months of the court order to pay 
such costs.
    S. 1950 would allow certain federal lessees who are ordered 
by the court to pay compensation to credit such compensation 
costs against federal royalty payments that would otherwise be 
due under current law. That provision of the bill also would 
apply to federal lessees who must pay compensation costs 
pursuant to certain voluntarily negotiated settlement 
agreements ratified by BLM on or after September 1, 1999. The 
royalty credit provision would apply only to conflicts 
involving federally owned resources that occur within areas 
identified in the bill.

                estimated cost to the federal government

    For this estimate, CBO assumes that S. 1950 will be enacted 
near the start of fiscal year 2001. The estimated budgetary 
impact of S. 1950 on direct spending is shown in the following 
table. The legislation also would affect spending subject to 
appropriation, but CBO estimates that any such changes would be 
less than $500,000 a year. The costs of this legislation fall 
within budget function 300 (natural resources and environment).


----------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, in millions of dollars
                                                                    --------------------------------------------
                                                                       2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
                                         CHANGES IN DIRECT SPENDING \1\
Estimated Budget Authority.........................................        3        4        1        2        2
Estimated Outlays..................................................        3        4        1        2        2
----------------------------------------------------------------------------------------------------------------
\1\ Implementing S. 1950 also would increase discretionary spending by less than $500,000 a year to conduct the
  new dispute resolution process.

                           basis of estimate

    CBO estimates that allowing certain federal lessees to 
credit their compensation costs against federal royalty 
payments would reduce federal receipts from those payments. The 
provisions allowing for royalty credits to pay compensation 
costs in S. 1950 would apply to a major settlement agreement 
between a coal operator and an oil and gas operator that has 
already been resolved. Based on information from BLM and 
parties to that agreement, CBO estimates that enactment of the 
bill would allow the operator to claim royalty credits 
amounting to about $13 million over the 2001-2006 period.
    Forgone royalty payments under S. 1950 could be higher over 
the next 10 years if additional disputes arise between 
different resource developers, and more compensation costs must 
be paid. However, the cost of any future compensation paid 
through royalty credits could be at least partially offset, on 
a net present value basis, by an increase in receipts from 
bonus bids paid by companies to secure new leases for federal 
resources. According to BLM and industry experts, there is 
considerable uncertainty regarding the number of disputes that 
may occur in the future. Hence, CBO has no basis for predicting 
the amount of compensation that may be ordered to be paid in 
the future, or the effect this might have on bonus bids for 
land that has not yet been leased.

Royalty payments and compensation credits

    Under current law, when federally owned resources are 
produced, the federal government collects royalty payments from 
those who lease the right to develop those resources. States 
generally receive about 50 percent of those receipts. S. 1950 
would allow certain federal lessees to take as a credit against 
royalties due to the federal government the costs of 
compensation pursuant to a court order issued under S. 1950 or 
a settlement agreement approved by BLM on or after September 1, 
1999. That provision would apply only to conflicts between 
federal lessees operating within lands referenced in the bill. 
S. 1950 provides that subsequent payments to states would not 
be reduced as a result of that provision.
    Under S. 1950, certain producers that already have paid 
bonus bids to secure leases for federal resources within the 
Powder River Basin could qualify for credits against federal 
royalty payments. CBO estimates that allowing those lessees to 
credit their compensation costs against federal royalties would 
result in forgone offsetting receipts totaling at least $13 
million over the 2001-2010 period. That amount is based on 
information provided by parties to one major recently 
negotiated settlement agreement that would be included under 
the royalty credit provisions in S. 1950. Under that agreement, 
we estimate that the amount of compensation costs that could be 
credited against royalty payments would be about $3 million in 
2001, and $10 million over the 2002-2006 period.
    The total amount of forgone receipts from S. 1950's royalty 
credit provision could be greater depending on whether other 
eligible settlement agreements or court orders involving 
existing or future federal leases occur. Because any such 
effects depend on the outcome of court proceedings or 
negotiations in involving nonfederal parties, CBO cannot 
estimate the timing or magnitude of any additional forgone 
receipts under S. 1950. Although the number of conflicts that 
might occur is uncertain, we expect that, on average, there 
would be a couple such conflicts each year. Based on 
information from BLM and industry representatives, we expect 
that few, if any, of those conflicts would result in 
compensation costs as large as those that resulted from the 
settlement agreement referenced above. Other recent settlement 
agreements in the region have involved compensation payments of 
less than $1 million.

Bonus bids

    CBO estimates that allowing some federal lessees to take 
royalty credits could affect bonus bids paid by producers to 
secure new leases for federal resources, particularly for coal. 
A bonus bid reflects a company's willingness to pay for the 
right to develop a federal resource, based on the estimated net 
present value of that lease to that company. Under current law, 
coal companies typically take the estimated cost of resolving 
conflicts with oil and gas producers that may arise into 
consideration when preparing bonus bids. We expect that 
allowing certain producers to credit those costs against 
royalty payments under some future leases would increase the 
value of those leases to the companies that would bid on them.
    Enacting S. 1950 could result in an increase in offsetting 
receipts from higher bonus bids for coal lease within the areas 
of the Powder River Basin where the bill's royalty credit 
provisions would apply. Any higher bonus bids would partially 
offset, on a present value basis, the cost to the government of 
forgone royalty payments from those provisions. CBO cannot 
estimate the timing or magnitude of any increases in bonus bids 
because such a change would depend on the judgments of resource 
developers about the likelihood of any future disputes in the 
Powder River Basin and the outcomes of such disputes. As 
mentioned above, and based on information from BLM and industry 
experts, we expect that any increases to bonus bids under S. 
1950 would involve leases where compensation costs are likely 
to range from less than $1 million to no more than $13 million 
per conflict.

                      pay-as-you-go considerations

    The Balanced Budget and Emergency Deficit Control Act sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or recipes. Because S. 1950 would affect federal 
offsetting receipts from royalties and bonus bids, pay-as-you-
go procedures would apply. The changes in outlays that are 
subject to pay-as-you-go procedures are shown in the following 
table. For the purposes of enforcing pay-as-you-go procedures, 
only the effects in the current year, the budget year, and the 
succeeding four years are counted.


----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year (in millions of dollars)
                                    ----------------------------------------------------------------------------
                                      2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................      0      3      4      1      2      2      1      0      0      0      0
Changes in receipts................                                 Not applicable
----------------------------------------------------------------------------------------------------------------

        estimated impact on state, local, and tribal governments

    S. 1950 contains no intergovernmental mandates as defined 
in UMRA. Coal, oil and gas development generates revenues for 
state and tribal governments from bonus bids, rents, royalties, 
and taxes. States received revenues from the development of 
state-owned resources and share in bonus bids, rentals, and 
royalties paid to the federal government for federally owned 
resources. CBO expects that enactment of this legislation could 
benefit the states of Wyoming, Montana, and some tribal 
governments within those states insofar as it promotes the 
timely development of coal, oil, and gas resources in the 
Powder River Basin.
    In a few specific cases, S. 1950 could result in a decrease 
in revenues to state or tribal governments. Such a decrease 
could occur if mining of resources owned by states or tribes 
were delayed or forgone in order to allow mining under a 
federal lease to proceed, and if the compensation the states or 
tribal governments received failed to cover their litigation 
costs.

                 estimated impact on the private sector

    S. 1950 would impose a private-sector mandate as defined by 
UMRA on certain developers of mineral resources involved in 
disputes over the sequence of coal and oil or gas development 
in the Powder River Basin. CBO estimates that the cost of 
complying with the mandate would be well below the threshold 
established by UMRA ($109 million in 2000, adjusted annually 
for inflation) for any of the first five years that the mandate 
is in effect.
    The bill would require certain resource developers to 
participate in a new dispute resolution process when a resource 
developer with interests that conflict with another developer 
files a written notice of conflict with the Secretary of the 
Interior. Typically, conflicts that arise in the Powder River 
Basin occur when different parties own overlapping rights to 
develop coal and oil or gas and the two resources cannot be 
developed simultaneously. Currently, such conflicts between 
resource developers are settled (with a negotiated settlement 
or by a court judgment) with one developer compensating the 
other for lost production or delays in production. The bill's 
dispute resolution process would require the parties involved 
in such a dispute to adhere to time lines, procedures, and 
compensation mechanisms that differ from practices under 
current law. Moreover, under the new resolution process, 
developers would not be able to appeal a court order to suspend 
or terminate their right to develop a resource. According to 
most industry experts, the amount of compensation under the 
bill's dispute resolution process would tend to be less than it 
would be in the absence of the bill. The cost of the mandate 
would be the difference between the settlements or judgments 
(net compensation) that certain developers of mineral resources 
would be able to obtain under current law and under S. 1950.
    Based on information from various industry representatives 
and state and private geologists, CBO estimates that the 
current net income of developers of mineral resources who would 
most likely be subject to compensation under the bill is less 
than $20 million annually. Further, CBO estimates that net 
income of those developers would be less than the private-
sector threshold even if production and prices of those mineral 
were to increase significantly over the next five years as some 
industry observers predict. CBO expects that only a subset of 
those developers would be affected by the mandate and thus, the 
cost of the mandate would be some fraction of the net income of 
the group as a whole. Consequently, CBO estimates that the 
direct costs of the mandate would be well below the private-
sector threshold for at least the first five years that the 
mandate is in effect. Over time, the potential area of conflict 
under the bill would expand as mineral producers continue to 
develop in more areas of the Powder River Basin. Thus, to the 
extent that conflicts among developers arise in those expanded 
areas, more developers in those areas would be subject to the 
bill's dispute resolution process.

                          estimate prepared by

    Federal Costs: Megan Carroll.
    Impact on State, Local, and Tribal Governments: Susan Van 
Deventer and Marjorie Miller.
    Impact on the Private Sector: Gail Cohen.

                          estimate approved by

    Peter H. Fontaine, Deputy Assistant Director for Budget 
Analysis

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1950.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1950, as ordered reported.

                        Executive Communications

    On June 7, 2000 the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Office of Management and budget setting 
forth Executive agency recommendations on S. 1950. These 
reports had not been received at the time the report on S. 1950 
was filed. When the reports become available, the Chairman will 
request that they be printed in the Congressional Record for 
the advice of the Senate. The testimony provided by the Bureau 
of Land Management at the Subcommittee hearing follows:

 Statement of John Northington, Senior Advisor to the Director, Bureau 
             of Land Management, Department of the Interior

    Mr. Chairman, Members of the Committee, thank you for the 
opportunity to come before you to provide the Administration's 
views on S. 1950, another amendment to the Mineral Leasing Act 
which seeks to ensure the orderly development of coal, coalbed 
methane, natural gas, and oil in the Powder River Basin of 
Wyoming and Montana.
    Regarding S. 1950, the Bureau of Land Management (BLM) has 
sought to address the increasing demand for coalbed methane 
gas. We thank the Members for their assistance as we have dealt 
with various aspects of this issue. While we appreciate the 
Committee's interest and effort in attempting to resolve the 
conflicts between federal oil and gas, coal and coalbed methane 
interests through S. 1950, we believe this legislation does not 
provide the most effective remedy to resolve these issues. 
Consequently, the Department of the Interior cannot support 
this bill.
    Conflicts between federal oil and gas and Federal coal 
lessees have historically involved oil and gas resources 
contained in reservoirs much deeper than the coal, thereby 
allowing for development of one resource without loss of the 
other. Heightened interest in coalbed methane development has 
prompted the BLM to take a second look at these conflicts and 
put into place a policy which coincides with our mandate to 
maximize recovery of all the resources. The BLM has existing 
authority under the Mineral Leasing Act and federal regulations 
to resolve the conflicts presented in such instances. In 
rectifying these disputes, we have three goals in mind--(1) 
protect the rights of its lessee under the terms of its lease 
and the Mineral Leasing Act, including implementing regulations 
and those concerning conservation of natural resources; (2) 
optimize the recovery of both resources, thereby maximizing the 
return to the public; and, (3) optimize the return to the 
public while protecting public safety and the environment and 
minimizing impacts on local communities.
    Our policy provides that the initial course of action is to 
facilitate an agreement between the lessees. However, absent a 
settlement, we can and will utilize existing law and 
regulations in conjunction with the lease provisions to 
optimize recovery of both resources. We expect a vast number of 
oil and gas operators will readily comply with the BLM's 
regulatory and statutory orders. As a reinforcement measure, we 
would not oppose legislation which seeks to strengthen our 
sanctioning power in cases where such operators fail to comply. 
The BLM believes this approach will allow for needed 
flexibility and use of judgment in individual circumstances. 
While the BLM has sought to work diligently with Committee 
staff to craft legislation to appropriately address this issue, 
S. 1950 deprives the Bureau and industry of these options.
    First, the bill is limited to the Powder River Basin of 
Wyoming and Montana. As noted in the bill, the Powder River 
Basin is indeed one of the world's richest energy resource 
regions with significant deposits of oil and natural gas, 
including coalbed methane. However, it is not the only area of 
potential conflict. As development occurs in coalbed methane 
basins throughout the United States--specifically, Utah, 
Colorado and New Mexico, the potential for conflict remains. 
These disputes can be resolved by BLM under our current 
regulatory and statutory authority. Were S. 1950 to become law, 
unwarranted and unnecessary precedent could be set for 
additional legislation to resolve similar conflicts in other 
areas.
    Second, the legislation usurps the regulatory authority of 
the Secretary of the Interior and the BLM with regard to such 
matters as suspension of leases, termination of leases, and 
public interest determinations and diligence, by placing these 
responsibilities under the jurisdiction of the courts. Further, 
any financial loss incurred by the dominant coal or oil and gas 
lessee as a result of the court's decision or an agreed upon 
settlement rests with the American taxpayer. The prevailing 
party can recapture any costs incurred through credit against 
future royalty. In addition, the bill mandates that the 
taxpayer bears the cost of compensating the state for its share 
of loss royalties--requiring the Secretary to compensate the 
state for 50% of any credit against royalties provided. 
Fundamental fairness dictates that the state share equally in 
the risk associated with such conflicts by sharing in the 
expense of compensating one of the lessees. For taxpayers to 
bear these costs while states remain financially whole is 
neither a standard nor a precedent we wish to set.
    Finally, Federal laws, regulations and lease terms 
applicable to federal mineral development provide authority to 
the Secretary, upon determination that it is in the public 
interest, to conserve natural resources, to encourage the 
greatest ultimate recovery, and to protect the interests of the 
United States. Accordingly, the BLM is vested with authority to 
require cooperative development and the power to suspend 
operations of oil and gas leases, and to direct the rate of oil 
and gas development. Likewise for coal, BLM has authority to 
suspend lease operations, to ensure Maximum Economic Recovery 
through approval of a Resource Recovery and Protection Plan, 
and to order immediate cessation of mining operations for non-
compliance with the regulations or lease terms. Under these 
existing laws and authorities, the BLM is able to promote 
orderly, environmentally sound development of all of the 
resources in the Powder River Basin and elsewhere without 
detriment to the others.
    The best case scenario provides that both coal and oil and 
gas producers will converge and develop a production agreement 
which promotes the greatest recovery of the coalbed methane, 
coal, natural gas and oil resources. The BLM stands ready to 
assist and foster this effort. However, in cases where these 
entities cannot agree, the BLM is also poised to exercise its 
existing authority to ensure optimized production of each 
resource.
    Coalbed methane development and production has increased at 
an unprecedented rate, and we appreciate the Committee's 
support and assistance as the BLM has sought to address the 
many issues surrounding this boom. We look forward to 
continuing to work with you as we operate within our current 
authorities to promote orderly development of these resources 
in conflict areas.
    Thank you for the opportunity to testify before you today. 
I welcome any questions the Committee may have.

             MINORITY VIEWS OF SENATOR BINGAMAN ON S. 1950

    S. 1950 turns over the Federal Government's power of 
eminent domain to private mining companies so that they might 
take the private property rights of other mining companies. To 
the best of my knowledge, this measure is unprecedented. While 
some of the states have extended state eminent domain authority 
to mining companies, I am not aware of any instance in which 
Congress has farmed out the federal eminent domain power to 
private mining company to use for its economic advantage.
    To make matters worse, the bill abandons the traditional, 
constitutional ``public interest'' test for when the United 
States may take private property in favor of a new economic 
test that simply measures which source is more valuable. It 
replaces the traditional fair market value measure of just 
compensation with a new loss of income plus consequential 
damages standard and passes the entire expense on to the 
Federal Treasure and, ultimately, the taxpayers. And, instead 
of relying on traditional condemnation law and procedures, it 
erects a complex and cumbersome new system.
    Although I strongly disagree with the approach taken in S. 
1950, I recognize that the bill is a well intended effort to 
resolve a serious conflict between the owners of coal beds in 
the Powder River Basin and the owners of the coalbed methane 
imbedded with in the coal. Ownership of the two resources often 
lies in separate hands and one resource cannot be extracted 
without loss of interference with the other.
    The Supreme Court recognized the possibility of this 
conflict when it ruled little more than a year ago that coalbed 
methane was not part of the coal estate. ``Were a case arise in 
which there are two commercially valuable estates and one is to 
be damaged in the course of extracting the other,'' the Court 
said, ``a dispute might result, but it could be resolved in the 
ordinary course of negotiation or adjudication.'' Time has 
proved the Court correct. The two major conflicts between coal 
and coalbed methane producers in the Powder River Basin have 
been resolved by the parties without legislation, without the 
use of eminent domain, and without taxpayer subsidies.
    Even so, I was willing in Committee to agree to a 
reasonable legislation solution to the problem. I offered a 
substitute to Senator Thomas's substitute, which would have 
allowed the Secretary of the Interior to begin eminent domain 
proceedings to acquire the rights to coalbed methane deposits 
on behalf of the coal owner where the Secretary determined that 
the public interest in the timely and orderly development of 
the coal outweighed the public interest in the development of 
the coalbed methane. Unlike S. 1950 and Senator Thomas's 
substitute, my proposal would have made use of existing 
condemnation law and procedures. Regrettably, the Committee 
voted down my substitute on a party-line vote and adopted 
Senator Thomas's substitute, which retains the serious problems 
inherent in S. 1950 as originally introduced.

                                   Jeff Bingaman.  
                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1950, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

MINERAL LEASING ACT

           *       *       *       *       *       *       *



SEC. 44. DEVELOPMENT OF COAL, NATURAL GAS, AND OIL IN THE POWDER RIVER 
                    BASIN.

    (a) Definitions.--As used in this section:
          (1) The term ``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) The term ``Subsection (g) Lands'' means the area 
        designated as ``Subsection (g) Lands'' on the map 
        described in paragraph (1).
          (3) The term ``Secretary'' means the Secretary of the 
        Interior.
          (4) The term ``Federal coal lease'' means a lease of 
        Federal coal in the Basin issued pursuant to this Act.
          (5) The term ``Federal coal lessee'' means the holder 
        of a Federal coal lease.
          (6) The term ``Federal oil and gas lease'' means a 
        lease of Federal oil and gas in the Basin issued 
        pursuant to the Act.
          (7) The term ``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.
          (8) The term ``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.
          (9) The term ``oil and gas developer'' means the 
        holder of an oil or gas lease or right to develop.
          (10) The term ``oil and gas property'' means an area 
        in the Basin which is subject to an oil or gas lease or 
        right to develop held by an oil or gas developer.
          (11) The term ``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.
          (12) The term ``approved or proposed mining plan'' 
        means a mining plan that is approved by, or has been 
        submitted for the approval of, the Secretary.
          (13) The term ``coalbed methane'' shall be 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)).
          (14) The term ``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 
        expense under an order concerning the oil and gas 
        property issued pursuant to subsection (e)(10)(E).
          (15) The term ``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.
          (16) The term ``develop'' or ``development'' means to 
        develop or to produce, or both, or the development or 
        production, or both, respectively, including all 
        incidental operations.
    (b) 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.
    (c) Mineral Conservation.--The Secretary shall employ any 
authority the Secretary possesses to encourage expedited 
development of any oil and gas resources and any coal resource 
that--
          (1) are leased pursuant to this Act;
          (2) are within common areas; and
          (3) otherwise may be lost or bypassed due to the 
        development of another of the resources.
    (d) Negotiations Concerning Development Priority for 
Certain Operations in the Basin.--
          (1) 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.
          (2) Obligation to negotiate.--Promptly after 
        providing the notice referred to in paragraph (1), 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.
    (e) Compensation Procedures for Assignment of Development 
Priority.--
          (1) Petition for relief.--
                  (A) If notice is submitted timely pursuant to 
                subsection (d)(1) and the Federal coal lessee 
                and the oil and gas developer engage in 
                negotiations, but do not reach agreement, 
                pursuant to subsection (d)(2), the Federal coal 
                lessee or the oil and gas developer may file a 
                petition for relief as described in 
                subparagraph (C) 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.
                  (B) 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 subparagraph (A).
                  (C) The petition for relief shall include the 
                following:
                          (i) A description and map of the 
                        Federal coal lease, the oil and gas 
                        property, and the common area.
                          (ii) 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 
                        subparagraph (B). 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 
                        paragraph (10)(E) or paragraph (11)(C).
                          (iii) A certified copy of the notice 
                        described in subsection (d)(1).
                          (iv) A sworn statement by a senior 
                        officer of the petitioner with 
                        authority to commit the petitioner in 
                        any negotiation under subsection (d)(2) 
                        stating, and all documents 
                        demonstrating, that the petitioner 
                        negotiated or attempted to negotiate in 
                        good faith with the respondent a 
                        voluntary agreement, pursuant to 
                        subsection (d)(2).
                  (D) 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--
                          (i) with the petition for relief if 
                        the Federal coal lessee is the 
                        petitioner; or
                          (ii) within 5 days of the date of 
                        service of the petition for relief 
                        pursuant to subparagraph (B) if the 
                        Federal coal lessee is the respondent.
          (2) 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 paragraph (1)(C)(ii) shall be 
        joined in the proceedings established pursuant to this 
        subsection.
          (3) 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 
        paragraph (1)(A). 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.
          (4) Secretary's initial response to petition.--Within 
        90 days of the date of filing of the petition for 
        relief pursuant to paragraph (1)(A) the Secretary shall 
        take the follow actions:
                  (A) The Secretary shall determine, with 
                petitioner having the burden of proof--
                          (i) whether a common area exists; and
                          (ii) whether the approved or proposed 
                        mining plan submitted pursuant to 
                        paragraph (3)(D) provides for the 
                        mining operations to intersect, or the 
                        mine support facilities to be 
                        constructed in, any portion of the 
                        common area.
                  (B)(i) If existence of the common area and 
                intersection of, or construction in, the common 
                area are determined pursuant to subparagraph 
                (A), the Secretary shall determine whether the 
                public interest is best realized by delaying or 
                forgoing development of either--
                          (I) 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
                          (II) 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.
                  (ii) The Secretary shall make the public 
                interest determination described in clause (i) 
                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.
                  (C)(i) If any portion of the resource for 
                which delayed or forgone development is 
                determined to be in the public interest 
                pursuant to subparagraph (B) is subject to a 
                lease issued pursuant to this 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 
                development of the other resource in the common 
                area during the period beginning on a date no 
                later than the commencement date referred to in 
                paragraph (1)(A) and provided in the notice 
                submitted pursuant to paragraph (1)(C)(iii) and 
                ending on the date on which an order is issued 
                pursuant to paragraph (10)(E) or paragraph 
                (11)(C).
                  (ii) The Secretary may refrain from either 
                making the determinations required by 
                subparagraphs (A) and (B) or suspending all or 
                any portion of a lease issued pursuant to this 
                Act as required by clause (i) only if the 
                Secretary determines that--
                          (I) no common area exists; or
                          (II) 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.
                  (D) The Secretary shall--
                          (i) report the determinations made 
                        pursuant to subparagraph (A) and (B) or 
                        subparagraph (C)(ii) and any suspension 
                        made pursuant to subparagraph (C)(i), 
                        including the administrative record 
                        therefor, with the court in which the 
                        petition for relief is filed pursuant 
                        to paragraph (1)(A); and
                          (ii) provide the petitioner and 
                        respondent or respondents with copies 
                        of the report and record.
          (5) Court initial response to petition.--
                  (A)(i) The court in which the petition is 
                filed pursuant to paragraph (1)(A) shall have 
                exclusive jurisdiction to receive and review 
                the report of the Secretary required by 
                paragraph (4)(D), and the determinations made 
                and any action taken by the Secretary pursuant 
                to paragraph (4).
                  (ii) 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 paragraph (4)(D) in 
                which to file with the court any objection to 
                any determination of the Secretary required by 
                paragraph (4).
                  (iii) If any objection is filed pursuant to 
                clause (ii), the court shall, within 60 days of 
                receipt of the report of the Secretary pursuant 
                to paragraph (4)(D), 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 
                subparagraph (A) or subparagraph (B) of 
                paragraph (4).
                  (iv) Any determination made by the court 
                pursuant to clause (iii) shall be an 
                independent judicial determination that is de 
                novo, without regard to the prior determination 
                of the Secretary.
                  (v) If no objection is filed pursuant to 
                clause (ii), the determinations of the 
                Secretary required by paragraph (4) shall be 
                final and approved by the court in the order 
                issued pursuant to subparagraph (B) or 
                subparagraph (E).
                  (B) Within 90 days of the date of receipt of 
                the report of the Secretary pursuant to 
                paragraph (4)(D), the court, except as provided 
                in subparagraph (E), shall issue an order 
                that--
                  (i) suspends all or any part of, including 
                any geographical area 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 subclause (I) or subclause (II), 
                respectively, of paragraph (4)(B)(i) or in 
                accordance with the determination of the court 
                pursuant to subparagraph (A)(iii); and
                  (ii) if required by a determination of the 
                court pursuant to subparagraph (A)(iii), 
                terminates a suspension of a lease issued 
                pursuant to this Act imposed by the Secretary 
                pursuant to paragraph (4)(C)(i), or imposes a 
                suspension of a lease issued pursuant to this 
                Act, or both, in accordance with the 
                determination; and
                  (iii) if all or any part of the oil and gas 
                lease or right to develop is suspended pursuant 
                to paragraph (4)(C)(i) or this subparagraph, 
                fixes the date upon which the Federal coal 
                lessee may commence mining operations or 
                construction of mine supported facilities in 
                the common area, which may be no later than the 
                commencement date referred to in paragraph 
                (1)(A) and provided in the notice submitted 
                pursuant to paragraph (1)(c)(iii), except for 
                good cause shown; and
                  (iv) 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 paragraph 
                (4)(C)(i) or this paragraph, prohibits the 
                mining operations from intersecting, or the 
                support facilities from being constructed in, 
                all or a portion of the common area.
                  (C) The order of the court issued pursuant to 
                subparagraph (B) shall expire upon the issuance 
                of an order pursuant to paragraph (10)(E) or 
                paragraph (11)(C).
                  (D) The court may refrain from issuing the 
                order required by subparagraph (B), only if--
                          (i) the Secretary makes a 
                        determination described in paragraph 
                        (4)(C)(ii); or
                          (ii) the court, acting on an 
                        objection filed pursuant to 
                        subparagraph (A)(ii), determines that--
                                  (I) no common area exists; or
                                  (II) the approved or proposed 
                                mining plan submitted pursuant 
                                to paragraph (1)(D) does not 
                                provide for the mining 
                                operations to intersect, or the 
                                mine support facilities to be 
                                constructed in, the common 
                                area.
                  (E) If the Secretary makes a determination 
                described in paragraph (4)(C)(ii) or the court 
                makes a determination described in subparagraph 
                (D)(ii), the court shall issue an order 
                terminating the proceeding under this 
                subsection.
          (6) Valuation procedure: appointment of experts.--
                  (A) Within 30 days of the date of issuance of 
                an order pursuant to paragraph (5)(B), to 
                assist the court in making the determinations 
                pursuant to paragraph (10) or paragraph (11), 
                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 paragraph (4)(C) and/or paragraph 
                (5)(B), 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) 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.
          (7) Information and data.--
                  (A) 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 
                paragraph (6) all information and data in the 
                possession of such party that is pertinent to 
                the determinations to be made pursuant to 
                paragraph (10) or paragraph (11), 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.
                  (B) Except as provided in subparagraph (C), 
                the court shall ensure that any information and 
                data submitted to the panel of experts pursuant 
                to subparagraphs (A) and (D) shall have the 
                protection of confidentiality that is 
                applicable, and may be accorded, to them by and 
                the federal rules of civil procedure and 
                evidence.
                  (C) All information and data submitted to the 
                panel of experts pursuant to subparagraphs (A) 
                and (D) shall be available for review by all 
                parties unless an ex parte order is issued by 
                the court.
                  (D)(i) The Federal coal lessee may drill for 
                an 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 clause (ii).
                  (ii) The drilling or collection of data or 
                information authorized by clause (i) shall be 
                for the sole purpose of submission of 
                information and data pursuant to this 
                paragraph.
                  (iii) The Federal coal lessee shall not 
                produce any coalbed methane as a result of any 
                drilling authorized by clause (i) and shall 
                comply with any Federal or State requirements 
                applicable to such activity.
                  (iv) The Federal coal lessee shall submit to 
                the Secretary an exploration plan to conduct 
                any drilling pursuant to clause (i). 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.
          (8) Submission of briefs and hearing.--
                  (A) Within 45 days of the date of appointment 
                of the panel of experts pursuant to paragraph 
                (6), all parties may submit briefs concerning 
                the determinations to be made pursuant to 
                paragraph (10) or paragraph (11).
                  (B) Within 60 days of the date of appointment 
                of the panel of experts pursuant to paragraph 
                (6), the panel may, or if requested by the 
                petitioner or a respondent shall, receive 
                testimony from all parties concerning the 
                determination to be made pursuant to paragraph 
                (10) or paragraph (11).
          (9) Experts report.--Within 120 days of the date of 
        appointment of the panel of experts pursuant to 
        paragraph (6), 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 paragraph (10) or paragraph (11).
          (10) Court's final response to petition: Valuation 
        concerning economically recoverable oil or gas 
        resources lost or delayed, suspension or termination, 
        and payment order.--Within 210 days of the date of 
        issuance of an order pursuant to paragraph (5)(B), by 
        which, or by any action of the Secretary pursuant to 
        paragraph (4)(C)(i), all or any part of the oil and gas 
        lease or right to develop is suspended, the court shall 
        take the following actions:
                  (A)(i) 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.
                  (ii) Any determination to suspend pursuant to 
                clause (i) 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.
                  (iii) Any determination to terminate pursuant 
                to clause (i) shall be made only if the court 
                finds that the economically recoverable oil and 
                gas resources subject to compensation pursuant 
                to subparagraph (E) 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.
                  (B) If the court makes a determination to 
                suspend pursuant to subparagraph (A), the court 
                shall determine--
                          (i) 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;
                          (ii) 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
                          (iii) 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 expense 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.
                  (C) The determinations made pursuant to 
                subparagraph (B) 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 paragraph 
                (4)(A)(i).
                  (D) If the court makes a determination to 
                terminate pursuant to subparagraph (A), 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 
                subparagraph (B).
                  (E) The court shall issue an order that--
                          (i) 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 
                        subparagraph (A); and
                          (ii) awards to the oil and gas 
                        developer and all other owners of any 
                        interest in the oil and gas property, 
                        as their interests may appear, a sum of 
                        money from the Federal coal lessee 
                        equal to the net income amount and 
                        damages determined pursuant to 
                        subparagraph (B) or subparagraph (D).
                  (F) In determining the amount of net income 
                that will not be realized pursuant to 
                subparagraph (B) or subparagraph (D) and the 
                sum of money to be awarded pursuant to 
                subparagraph (E), the court shall ensure to the 
                best of its ability that the Federal coal 
                lessee is not required to pay for the same gas 
                lost, delayed in development, or rendered 
                impracticable to develop to more than one oil 
                and gas developer or the owners of any interest 
                in more than one oil and gas property.
          (11) Court's final response to petition: valuation 
        concerning economically recoverable coal resources lost 
        or delayed, suspension or termination and payment 
        order.--Within 210 days of the date of issuance of an 
        order pursuant to paragraph (5)(B) by which, or by any 
        action by the Secretary pursuant to paragraph 
        (4)(C)(i), the Federal coal lease and/or any non-
        Federal interest in the logical mining unit is 
        suspended, the court--
                  (A) 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; and
                  (B) 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; and
                  (C) shall issue an order that--
                          (i) suspends, in accordance with the 
                        determination made pursuant to 
                        subparagraph (A), 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
                          (ii) 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 
                        subparagraph (B).
          (12) Review of experts' report.--
                  (A) The court shall make the determinations 
                required by paragraph (10) or paragraph (11) 
                after reviewing the report of the panel of 
                experts submitted pursuant to paragraph (9) and 
                the hearing required by subparagraph (B).
                  (B) After submission of the report of the 
                panel of experts pursuant to paragraph (9) and 
                prior to making the determinations required by 
                paragraph (10) or paragraph (11), 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.
          (13) Disbursement of payments.--
                  (A)(i) At the election of the oil and gas 
                developer, the sum of money awarded by the 
                court pursuant to paragraph (10)(E) shall be--
                          (I) paid in full within 60 days of 
                        the date of issuance of the order 
                        pursuant to paragraph (10)(E); or
                          (II) 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 clause 
                        (ii) and subparagraph (C).
                  (ii) The Federal coal lessee shall make the 
                payments required by clause (i)(II) 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)(i) At the election of the Federal coal 
                lessee, the sum of money awarded by the court 
                pursuant to paragraph (11)(C) shall be:
                          (I) paid in full within 60 days of 
                        the date of issuance of the order 
                        pursuant to paragraph (11)(C); or
                          (II) 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 clause (ii) 
                        and subparagraph (C).
                  (ii) The oil and gas developer shall make the 
                payments required by clause (i)(II) 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) If the mining or production necessary to 
                make full payment of the sum of money awarded 
                by the court in accordance with subparagraph 
                (A)(i)(II) or subparagraph (B)(i)(II) does not 
                occur within 5 years of the date of issuance of 
                the court order pursuant to paragraph (10)(E) 
                or paragraph (11)(C), the unpaid balance shall 
                be paid within 60 days thereafter.
          (14) Termination of oil and gas lease suspension.--
                  (A) If the court issues an order to suspend 
                all or any part of the oil and gas lease or 
                right to develop pursuant to paragraph 
                (10)(E)--
                          (i) 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 paragraph (10)(E) is no 
                        longer required for mining operations 
                        or support facilities; and
                          (ii) within 120 days of the date of 
                        receipt by the court of the 
                        notification pursuant to clause (i) or 
                        within 60 days prior to the date on 
                        which the period established by the 
                        court in the order issued pursuant to 
                        paragraph (10)(E) 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 lessee may 
                        resume operations within the portion of 
                        the common area subject to the order 
                        issued pursuant to paragraph (10)(E).
                  (B) The court shall issue the order sought 
                under subparagraph (A)(ii) within 30 days of 
                the date of receipt of the petition pursuant to 
                subparagraph (A)(ii).
                  (C)(i) If the oil and gas developer 
                determines that, as a consequence of the order 
                of the court issued pursuant to paragraph 
                (5)(B) and an order to suspend all or any part 
                of the oil and gas lease or right to develop 
                pursuant to paragraph (10)(E), the conditions 
                described in paragraph (10)(A)(iii) exist, the 
                oil and gas developer may petition the court to 
                terminate the oil and gas lease or right to 
                develop.
                  (ii) The petition referred to in clause (i) 
                may be filed any time after issuance of the 
                order of the court pursuant to paragraph 
                (10)(E) but not later than 120 days after the 
                date of receipt by the court of the 
                notification pursuant to subparagraph (A)(i).
                  (iii) Upon receipt of a petition pursuant to 
                clause (i), 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 mount from the 
                Federal coal lessee to the oil or 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 paragraphs (1) and (6) 
                through (13).
          (15) Termination of coal lease suspension.--
                  (A) 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 paragraph 
                (11)(C)--
                          (i) 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 paragraph (11)(C) is no 
                        longer required for gas or oil 
                        production from such portion; and
                          (ii) within 120 days of the date of 
                        receipt by the court of the 
                        notification pursuant to clause (i) or 
                        within 60 days prior to the date on 
                        which the period established by the 
                        court in the order issued pursuant to 
                        paragraph (11)(C) 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 
                        paragraph (11)(C) and, if all or any 
                        part of the Federal coal lease and/or 
                        non-Federal interest in the logical 
                        mining unit is suspended, terminates 
                        the suspension.
                  (B) The court shall issue the order sought 
                under subparagraph (A)(ii) within 30 days of 
                the date of receipt of the petition pursuant to 
                subparagraph (A)(ii).
                  (C)(i) If the Federal coal lessee determines 
                that, as a consequence of the order of the 
                court issued pursuant to paragraph (11)(C), 
                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 part of 
                the Federal coal lease and/or any non-Federal 
                interest in the logical mining unit.
                  (ii) The petition referred to in clause (i) 
                may be filed any time after issuance of the 
                order of the court pursuant to paragraph 
                (11)(C) but not later than 120 days after the 
                date of receipt by the court of the 
                notification pursuant to subparagraph (A)(i).
                  (iii) Upon receipt of a petition pursuant to 
                clause (i), 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 lease 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 paragraphs (1) and (6) through 
                (13).
          (16) Supplemental petition for relief.--
                  (A) If, at any time after the issuance of an 
                order pursuant to paragraph (10)(E) or 
                paragraph (11)(C), 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 subsection (d), file a 
                supplemental petition for relief with the court 
                to amend the order.
                  (B) The requirements of paragraphs (1) and 
                (6) through (13) shall apply to the 
                supplemental petition submitted pursuant to 
                subparagraph (A).
                  (C)(i) Upon completion of the process 
                required by subparagraph (B), 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, paragraph (10) or paragraph 
                (11).
                  (ii) The court shall issue any order 
                resulting from the determinations made pursuant 
                to clause (i) within 90 days of the date of 
                filing of the supplemental petition for relief.
                  (iii) Any award of an additional sum of money 
                shall be paid in accordance with paragraph 
                (13).
          (17) Appeal of court orders.--
                  (A) Any order issued pursuant to paragraph 
                (5)(B), paragraph (5)(E), paragraph (14)(B), or 
                paragraph (15)(B) is final and may not be 
                appealed.
                  (B) Any order issued pursuant to paragraph 
                (10)(E) paragraph (11)(C), paragraph 
                (14)(C)(iii), paragraph (15)(C)(iii), or 
                paragraph (16)(C)(ii) may be appealed, but the 
                appeal, and any disposition thereof, may not 
                disturb any order referred to in subparagraph 
                (A).
          (18) Suspension term.--
                  (A) If all or any part of any lease issued 
                pursuant to this Act is suspended in whole or 
                in part by the Secretary or the court under 
                this subsection--
                          (i) the lessee shall not be required 
                        to pay any rental for the lease for the 
                        period of the suspension; and
                          (ii) 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
                          (iii) the lease shall not terminate 
                        due to lack of production for the 
                        period of the suspension plus one year.
                  (B) 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 subsection, the 
                court shall establish terms for the suspension 
                comparable to the terms set forth in 
                subparagraph (A).
    (f) Liability Limitation.--
          (1) Federal coal lessee.--Except as provided in a 
        written agreement reached pursuant to subsection (d)(2) 
        or reached on or after September 1, 1999, and before 
        the date of enactment of this section, or as provided 
        by an order of the court pursuant to subsection (e), 
        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.
          (2) Oil and gas developer.--Except as provided in a 
        written agreement reached pursuant to subsection (d)(2) 
        or reached on or after September 1, 1999, and before 
        the date of enactment of this section, or as provided 
        by an order of the court pursuant to subsection (e), 
        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.
    (g) Credit Against Royalties.--
          (1) In general.--
                  (A) Whenever a holder of a Federal coal lease 
                is required by a written agreement reached 
                pursuant to subsection (d)(2) and approved by 
                the Bureau of Land Management or reached prior 
                to the date of enactment of this section and 
                approved by the Bureau of Land Management on or 
                after September 1, 1999, or by a court order 
                issued pursuant to paragraph (10)(E), paragraph 
                (14)(C)(iii), or paragraph (16)(C)(ii) of 
                subsection (e), to pay an amount of suspension 
                of all or part of, or termination of, a Federal 
                oil and gas lease for coalbed methane located 
                within the Subsection (g) Lands, the amount so 
                paid shall be credited against any royalties on 
                production required by section 7(a) or any 
                other provision of this Act from any lease of 
                Federal coal issued under this Act to such 
                holder or any affiliate thereof.
                  (B) Whenever a holder of a Federal oil and 
                gas lease is required by a written agreement 
                reached pursuant to subsection (d)(2) and 
                approved by the Bureau of Land Management or 
                reached prior to the date of enactment of this 
                section and approved by the Bureau of Land 
                Management on or after September 1, 1999, or by 
                a court order issued pursuant to paragraph 
                (11)(C), paragraph (15)(C)(iii), or paragraph 
                (16)(C)(ii) of subsection (e), to pay an amount 
                for suspension or termination of all or part of 
                a Federal coal lease located within the 
                Subsection (g) 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 
                this Act from any lease of Federal oil and gas 
                issued under this Act to such holder or any 
                affiliate thereof.
          (2) 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 paragraph 
        (1)(A) or paragraph (1)(B), respectively, is located 50 
        percent of the amount of any credit against royalties 
        provided under paragraph (1)(A) or paragraph (1)(B) 
        respectively,--
                  (A) in the same manner as if the credit 
                against royalties had been paid in money as 
                royalties and distributed under section 35(a) 
                of this Act; and
                  (B) 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 this Act.
    (h) Denial of use as precedent.--Nothing in this section 
shall be applicable to any lease under this 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 subsection (a)(11), 
within or outside of the Powder River Basin, as defined in 
subsection (a)(1).

[SEC. [44] 45. SHORT TITLE

                                
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