Bureau of Land Management
IM2003-131 - Permitting Oil and Gas on Split Estate Lands and Guidance for Onshore Oil and Gas Order No. 1
BLM Vows To Protect Rights of Surface Owners on Split-Estate Lands
The Bureau of Land Management (BLM) reaffirmed today its commitment to involving private surface owners of split-estate lands early in the process of developing the minerals underlying their lands.
Split-estate lands are those on which the surface of the land has been patented, that is, transferred to private ownership, while the mineral interests are retained by the United States.
In an announcement today, the BLM said it is issuing a new directive to its State and field offices to ensure that agency procedures on split-estate mineral development are consistently applied and that they protect the rights of surface owners.
The directive states that the BLM “will not consider an Application for Permit to Drill (APD) or a Sundry Notice (SN) on oil and gas leases administratively or technically complete until the federal lessee or its operator certifies the existence of an agreement with the surface owner, or until the lessee or its operator complies with Onshore Oil and Gas Order No.1.”
The Order requires that the lessee or its operator enter into good-faith negotiations with the private surface owner to reach an agreement to compensate for any loss of crops or any damages to tangible improvements. If those good-faith negotiations do not produce an agreement with the surface owner, the BLM will require an adequate bond from the lessee or its operator in an amount sufficient to indemnify the surface owner against the reasonable and foreseeable damages for loss of crops and tangible improvements caused by the proposed operations. The BLM will provide training to ensure that its field personnel understands the policy and how it is to be implemented.
Under the Mineral Leasing Act of 1920, the United States grants the right to develop the oil and gas resources to third parties. Onshore Oil and Gas Order No. 1 – Approval of Operations on Onshore Federal and Indian Oil and Gas Leases 48 FR 48916 (1983), requires that lessees or their operators make a good-faith effort to reach an access agreement with private surface owners as required in the Stock Raising Homestead Act (SRHA) 43 CFR 3814. Onshore Orders have the force and effect of Departmental regulations when those orders were adopted during the Notice and Comment procedures of 5 USC 553. The new BLM directive reemphasizes that Onshore Oil and Gas Order No. 1 extends the requirements of 43 CFR 3814 to all split-estate lands.
The BLM, an agency of the U.S. Department of the Interior, manages more land – 261 million surface acres -- than any other Federal agency. Most of this public land is located in 12 Western states, including Alaska. The Bureau, with a budget of about $1.9 billion and a workforce of some 10,000 full-time, permanent employees, also administers 700 million acres of sub-surface mineral estate throughout the nation. The BLM’s multiple-use mission is to sustain the health and productivity of the public lands for the use and enjoyment of present and future generations. The Bureau accomplishes this by managing such activities as outdoor recreation, livestock grazing, mineral development, and energy production, and by conserving natural, historical, cultural, and other resources on the public lands.