Leasing and Development of Split Estate
When the surface rights to a piece of land and the subsurface rights (such as the rights to develop minerals) are owned by different parties, the mineral rights often take precedence over other rights. The BLM’s split-estate policy commonly applies to situations where the surface rights are in private ownership and the rights to development of the mineral resources are publicly held and managed by the Federal Government. This originate back to the Stock raising Homestead Act of 1916 (43 CFR § 3814).
A variety of mixed estate situations occur because most wells are drilled directionally thousands of feet below the surface in targeted geological formations and often proceed for a mile, two, or sometimes even 3 miles underground. To read more about the BLM policy on Directional Drilling into Federal Mineral Estate from Well Pads on Non Federal Locations read PIM No. 2018-014.
The Oil and Gas Gold Book and BLM’s Onshore Order #1 (Federal Register / Vol. 72, No. 44 / March 7, 2007 (2017 amendment) provide guidance for surface management. The BLM must fulfill the requirements of the National Environmental Policy Act (NEPA), the National Historic Preservation Act (NHPA), the Endangered Species Act (ESA), the Clean Water Act (CWA), and other applicable laws regarding surface resources.
Split Estate – Cultural Resource Requirements
Before the BLM approves an Application for Permit to Drill (APD) on split estate lands, the BLM must determine if the development is going to affect cultural resources located on the surface. Professional archaeologists typically conduct a cultural resource survey by walking on the private surface and looking for cultural artifacts. Depending on what the survey finds, the proposed location of the well or other facilities may be modified to avoid damaging important cultural resources belonging to the surface owner.
Several BLM policies (Instruction Memorandum – IM) pertain to split estate situations:
- Approval of Notice of Intent to Conduct Geophysical Exploration to Federal Oil and Gas Lessee on Split Estate WO IM 2009-121
- Cultural Resources Requirements for Split Estate Oil & Gas Development WO IM-2009-027
- Split Estate Report to Congress--Implementation of Fluid Mineral Leasing and Land Use Planning Recommendations WO IM 2007-165
- Permitting Oil & Gas on Split Estate Lands… WO IM 2003-131
- Legal Responsibilities on Split Estate Lands IM 1989-201
Per the Memorandum of Understanding with the Forest Service the BLM assists with permitting wells on Forest Service lands.
In rare situations sometime leasing of oil and gas deposits in or under railroads and other right-of-way can occur and are bound by regulations. Per the statutory authorities “The Secretary of the Interior, or for National Forest lands, the Secretary of Agriculture, shall regulate all surface-disturbing activities conducted pursuant to any lease issued under this chapter, and shall determine reclamation and other actions as required in the interest of conservation of surface resources…” ......“The Secretary concerned shall, by rule or regulation, establish such standards as may be necessary to ensure… the complete and timely reclamation of the lease tract, and the restoration of any lands or surface waters adversely affected by lease operations after the abandonment or cessation of oil and gas operations on the lease.” (30 U.S.C. §226(g))