2008-07-16_REVISION - C1980007 (2)

Home Browse Search

IBL.A 2007-213 dispose of methane released from coal mining. The extent to.which LMU agreements addressed this issue may have some bearing on what UAE is permitted to contract for, consistent with the R2P2.. See 30 U.S.C. § 202a (2000). We cannot validate Oso's presumption that BLM was necessarily bound by a contract between Oso and UAE for the sale of Federal gas if UAE had no authority to sell it. We further reject Oso's inference that BLM had no option to structure MLA leases as ocher than "consistent with the pre-existing contractual arrangements made by Andalex." With respect to any oil and gas deposits associated with the parcels of Federal land ]eased for coal, BLM was free to lease them under the MLA, consistent with the MLA, for rights available to MLA lessees, without UAE's authority or approval. Nothing UAL does as a private contractual matter changes that authority. Oso, at most a private contractor to UAE, would have even less say over the terms of an MLA lease for Federal oil and gas. Such leases would be issued under 30 U.S.C. § 226 (2000) at a competitive lease sale for which bidders would, with data available to all, competitively bid. But the practical reality here is that, because of the many problems presented by an active and authorized underground coal mine operation causing methane to be released during Elie mining process and because of existing BLM Utah State Office policy, BLM had not issued such MLA leases for oil and gas deposits. It bore no obligation, either to Oso or to Vessels, to do so. Vessels' suggestion that BL M- must conduct a competitive MLA oil and gas lease sale because coal mining is occurring, is entirely without foundation la any law or rule. Thus it does not follow, from our conclusion reversing the State Director's decision, that an MLA. lease sate is required. Despite our inability to endorse Oso's conceptual positions regarding BLM's authority in the face of Oses private contract with UAE, in reality such dilenunas brought 0sa to BLM in the first place, prior to UAE's mining of the Federal coal estate, to enter into some sort of arrangement with BLM so that Oso could perform its private contract with UAE when Federal coal was mined. Clearly, that was in the best interest of both Oso and UAE. But that does not mean, as Vessels would infer, that there was anything improper about it. The two companies had entered into a private contract to capture vent gas missions from non-Federal coal' and they were free. to, and wise to, contact the Governm. ent to determine what arrangements were possible when UAE reached the point of minino Fddee ik,?-Ieased coal. This brings us to the crux of the matter - whether BLM was obligated, once coal mining was releasing methane gas and it was determined that such enussions, which were going to be released to the atmosphere during the mining process, might be marketable, to issue to some party an oil and gas lease under the MLA.. As Vessels presents the issue in its last articulated issue F, BLiIiI's decision must be reversed 175 IBLA 24 iZ/1I 'd UH 'ON V19i (asp gnat;+1:7.i M7 V 'NAP .___r.,. .. _.. .... YWJ Tf,!(fT OnA7/17/0A