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IBLA 2007-213 <br />compensation by terms of the private agreement, presumably to recover its <br />investment in the vertical wells. The arrangement appears to be unique in BLM's <br />experience in managing Federal coal leases; the parties agree that, if not unique, the <br />gob gas recovery operation is highly unusual. <br />By letter dated April 5, 2006, Oso contacted the Utah State Office, BLM, on <br />behalf of UAE and Oso, regarding "our proposed gob gas capture project in Carbon <br />County, Utah." Oso explained the project's background and requested that it-be given <br />a license `issued tinder the broad Secretarial powers -granted to the BLM under.. the <br />Federal :Land Policy and Managerrent Act ("FLPMA") to capture the federal portion <br />of :thegob::gas that would -otherwise be vented into the atmosphere from, the Andaiex <br />vertical gob.,.gag ventilation program:" Vessels Ex. F, Apr. 5, 2006, letter from Oso to <br />BLM, "Request for Compensatory Royalty Agreement to Capture and Market Vented <br />Gob Gas," at 2. Oso stated that it had entered into an agreement with UAE by which <br />"Oso was responsible to obtain leases from the private oil and gas owners [of lands <br />associated with the mine], Oso has done this and the owners are unanimous in their <br />desire to stop the waste of their resources and to collect royalties, to the extent <br />possible, from Oso." <br />Oso explained that UAE was mining in a direction that would soon mine coal <br />and vent gas from GHV #4 in the gob area of panel #6, which is located on Federal <br />minerals and private fee surface. Id. Oso explained that the Federal mineral estate <br />was "currently not under oil and gas lease in accordance with the policy of the BLM <br />to not issue leases for oil and gas within a known coal mining area." id. Oso also <br />noted that in other areas UAE intended to mine, "there are both leased and unleased <br />oil and gas interests managed by BLM_" Id at 3. Oso described the processing and <br />gathering system and proffered a return, which it called a compensatory royalty, <br />equal to the standard 12.5% oil and gas royalty on coalbed methane found in Federal <br />oil and gas leases issued pursuant to the MLA. Id. at 2. <br />The main impediment to moving forward was that the situation was new to <br />BLM's experience; consequently, BLM employees were unsure of the proper legal <br />authority for Oso's proposal. BLM employees explained that the situation was unique <br />and required "a new kind of agreement:" Apr. 28, 2006, Briefing Paper for Utah <br />State Director prepared by Cook, BLM, BLM considered permits and a `hew form of <br />agmement" using existing BLM regulations Id The record r .weals both the curiosity ' <br />of a unique legal arrangement and an urgency based on the opportunity to stop the <br />venting of methane into the environment. For example, in his August 21, 2006, <br />e-mail, Cook, BLM, explained to Spisak, BLM, that "there really is no precedent (I am <br />familiar with a couple other attempts to do something similar, but they really didn't <br />get off the ground) and we may be building on sand. The quicker we get an <br />approvable document the better, because considerable gas volumes are being vented <br />daily." Later, the two discussed the fact that "the gob gas only lasts until the mining <br />175 IBLA 13 <br />1Z/4 'd EM 'ON V181 I01Qii NdgO:ZI A667 '97. 'M' <br />vas ee :eT Qnn71 ?7iQn