Lawsuit over Montana Leases Poses Implications for Entire Mountain West

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Land Letter Update for Thursday August 5, 2004 COALBED METHANE Page 1 of 3 Lawsuit over Montana leases poses implications for entire Mountain West Michael Burnham, Land Letter reporter Montana rancher urned to a federal judge in Seattle this mB towalidate leases underlying more than 300,000 acres of land atop rich gas deposits. Should the ranchers win their appeal, the court case could have sweeping implications throughout the Mountain West. Sixteen energy companies now lease the land in Montana's portion of the Powder River Basin from the B�uMa_u of Lartd Management. By law, the surface land is owned privately, But the su_ b rface mineral rights are owned �the federal governm` nt. The split-estate testate ownership is at the center of a legal dispute between those who use the basin's water -- namely farmers and ranchers -- and energy companies seeking to extract gas from -UFRFerground coalbed methane deposits. Companies access coalbed methane using a shallow - drilling technique that taps into gas- and water - filled fractures that permeate coalbeds. Large amounts of saline water must be pumped to the surface in order to free up the gas -- a process some irrigators fear could foul surface streams and wells. On Tuesday, Judge Andrew Kleinfeld, of the 9th U Cim i ['Dort of annPa�G in Seattle, heard oral arguments from the Northern Plains Resource Council, which is asking the court to invalidate BLM leases for more than 00,000 acres in southeastern Montana. Northern Plains Plains is appealing a December 2003 ruling from the U.S. Di t ' t Court for ict of Montana that said B M ac:t d_r o _rly when it issued lea§es for coalbed methane development before it conducted a comorehensive environmental s . The ruling from District Court Judge Jack a_n rom codified a magistrate judge's recommendations and granted summary judgment in favor of BLM (Greenwire, Dec. 11, 2003). Northern Plains initially sued the federal government in 2001 on behalf of basin farmers and ranchers, charging that BLM failed to prepare an environmental impact statement outlining the potential effects of drilling for coalbed methane before issuing leases between 1997 and 2001. As a result, such leases should be deemed invalid, the group argued. "Had the BLM evaluated the possible impacts of development before issuing leases, it would have realized that some parcels are not suitable for development," charged Amy Frykman, a Northern Plains spokeswoman in Bozeman, Mont. "At the very least, the BLM could have attached 'no surface occupy' in lations to some leases to avoid rnnflicts with surface owners." The National Environmental Policy Act (NEPA) requires BLM to consider the effects of oil and gas development in an environmental impact statement prior to issuing permits. However, in both the 2001 lawsuit and the appeals case, BLM contends that a 1994 resource management plan and http: / /www.eenews. net / Landletter /Backissues /080504/08050403.htm 8/5/2004