2008-07-16_REVISION - C1980007 (2)

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IBI A. 2007-213 potential FLPMA leases and not MLA leases, he had no basis for maintaining that the lease sale was properly conducted for such leases guider the MIA's competitive bidding proce ss. The consequences of his conclusion.are fairly weighty and go beyond consequences to Vessels. if, in fact, the State Director believes BLM issued FLPMA leases, then the bidding process for a MLA. lease sale would not apply. Moreover, udder the MLA, the State receives a 50% share of bonuses, rentals, and royalties. 30 U.S.C. § 191(x) (2000). It is fairly difficult to follow the terms of the leases at Vessels' SOR Ex. V, given that they appear to grant rights authorized under the MLA, and then, by stipulation to take away all of those rights. But, to the extent MIA provisions remain and purport to subject the lessee to MLA regulations, some of these provisions may not be enforceable, BLM finds itself taking the contradictory positloms that (a) it properly conducted aicompetitive MLA lease sale (b) for leases its attorneys now contend are FLPMA leasds, while at the same time (c) BLM, Oso, and UAE all apparently concede that the leases at issue here could not have been competitively issued under the MLA because UA? could only contract with a single entity that it had already chosen, UAE, at least, directly acknowledges that Oso had the competitive advantage by virtue of its Operating Agreement with UAE, UAE Answer at 8. Thus, at least UAE and Oso cor icede Oso's competitive advantage in the lease sale, while arguing that it was not an `?unlawful advantage," a murky distinction under the MLA, and an irrelevant oaie if there was no need for an MLA lease sale. 11 Rvetwal of the state Director's Decision Rejecting the Protest. For all of these reasons, we reverse the State Director's decision. This was not a lease for VAM. The methane being emitted is undoubtedly "gas" under 43 G.F.R. § 3000.0-5(a) and it is being captured because it is methane gas. There are plenty of reasons, found merely by reading the parties' concessions, to conclude that the lease offer for there leases that eschewed all MLA standard form lease rights with respect to oil and gds deposits but granted the rights to capture the gob vent gas, was not `°competitivd." Oso and UAE were in the possession of contract information relevant to die bidding process that they concede was outside the possession of, and therefore disclosure by, BLM. 111 14sscCpt'e oquest or- a Second Campedtiye A4T ?(lil and-Gas Lease Sale ?ccrG rrr?srvcr But simply reversing the State Director's decision does not resolve the parties' disputes. Vessels asserts that once the decision is reversed, it is entitled to relief in the form of a new "competitive" lease sale under the MLA, presumably for leases with amended stipulations to avoid the terms of the Offending Special Stipulations, with disclosure of details of the contract between Oso and UAE, and a requirement that UAE enter into contracts with other parties either for the service to be provided by 175 ZBLA 22 'd EEEL 'ON dlsf JaRn VVU!:Zl AW W 'NAP v .r AT.-PT annT I. 17 /an