2008-07-16_REVISION - C1980007 (3)

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IBLA 2007-213 maintenance of the ventilation system or far any other purpose deemed necessary to mine operation. The coal lessee or mine operator is not responsible for the quality or quantity of the mine vent gas. 6. Because the lessee does not have the right to drill a well or conduct oil and gas production operations, the bonding requirement provided for in section 3 of this lease may be waived. Vessels Ex. V, Lease UTU-85441, Stipulations (emphasis added). On February 5, 2007, Vessels protested the lease sale with respect to the three parcels. Vessels Ex. B. Vessels objected Co the portions of stipulations 3, 4, and S italicized above, and to the fact that those stipulations authorize UAWs operational control of the gob vents, and therefore of the leases. Vessels claimed that the stipulation terms prohibited any company except Oso from competing for the leases, are anti-competitive and inconsistent with the terms and requirements of the MLA, and constitute an improper delegation to UAE of BLWs regulatory authority for wells under MLA all and gas leases. Vessels claimed that under MLA oil and gas leases, only BLM has the authority to make decisions delegated to UAE in stipulations 3, 4 and S. Vessels also objected to stipulation terms regarding unitization, and to the bonding provision cited above in stipulaidon 6. BLM proceeded with the lease sale. According to BLM, it received bids from Oso for all three leases, and from another company for two of the leases. (This latter fact is not verified in the record.) Vessels did not bid for the three leases, asserting that it did not have mfficienti information regarding the terms UAE would impose in any private contract that the lease required as a condition of obtaining the lease and that in any event UAE already had refused such a contract with Vessels. The leases were issued to Oso as UTU-85441, UTU-85442, and UTU-85443. 4so paid a bonus bid totalling $17,000 for the three leases. The State Director issued his decision denying the protest on April 23, 2007. In background information, the State Director explained correedy that the leases are issued for mine vent gas, He proceeded, however, to describe the leases as if they had been issued to capture VAM with its substantially lower methane content than the hynroduct at -__?__the CrHVs__;__Apr-23, 2007, State-Director Decision at 9- T- hP State Director concIuded that BLM properly included the stipulations giving UAE the power to control operations because the "paramount concern not only for BLM but also for the operator of the Aberdeen Mine is mine safety ... ," M. He went on to explain that the remainder of the stipulations were designed to "negate those clauses of the printed farm lease that grant oil and gas development rights." Id The State Director denied that the stipulations rendered the lease sale anti-competitive, explaining that "other bidders actively participated." dd. at 3. 175 IBLA 17 IZ10I 'J £££L 'ON vest I6,n N816:1,1 ('(i0UgUNnr --- ---- `•? ^^^ ^^*^ Vwd 1 P' QT onn7 / 17 /OA