2008-07-16_REVISION - C1980007 (3)

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IBLA 2007213 Oso objects paragraph by paragraph to Vessels' SOR and defends BLM's stipulations. Oso challenges Vessels' standing to appeal, Oso refutes Vessels' claims that the stipulations stifle competition, noting that the private contract between UAE and Oso was negotiated at arms' length and "both parties had operated successfully under the pre-existing contract for some time and ... BLM had no authority to substitute its judgment for that of two private entities." Oso Answer at 14-15. Oso recognizes that the lease sale for the subject leases was not competitive but asserts that "BLM had to recognize the reality that the Aberdeen mine operators could not legally offer multiple contracts to capture and gather the same mine vent gas to more than one party" and that the lease contract "could uot, as a practical matter, be structured" so as to be acquired by multiple parties. Id at 15-16. Moreover, Oso excuses BLM from making the lease sale competitive, or conversely suggests it was as competitive as BLM could make it, because "BLM had no control over the disclosure of the terms of that contract between Oso and CUM)." Id. at 17. In Oso's view, BLM was bound by the terms of the private contract between Oso and UAE, and had no option but to structure leases to be acquired by other parties "consistent with the Rre- existing contractual arrangements made by [UAE], with Oso or any other party." 1 Id. at 19. Oso thus presumes that as mine operator UAE had the exclusive right to make arrangements for the sale of gas which was a byproduct of mining the Federal coal estate. In its Reply, Vessels objects to Oso's assertion regarding standing. Vessels relies for its party status, see 43 C.F.R. § 4.410, on Its protest against the sale itself and its explanation that it contacted both UAE and Oso and was told that it could not participate in the program, at the same time that the lease stipulations require UAB's approval of the lessee. Vessels contends that the other parties are wrong to suggest that the lease agreements at issue could have been issued under any authority but the MLA. Vessels portends that any suggestion that such leases could be issued under FLPMA would "throw the Federal gas leasing system into disarray." Reply at 29. Vessels asks the Board to reverse the State Director, but also to compel BLM to "reoffer" the leases at another competitive lease sale conducted pursuant to the MLA. Id. Analysis Given the exhaustive l?ti f n? A ? ir.a by Ve 5-1 46 and Oso, it WO lul be quite difficult to respond to every argument raised. And we are reluctant to do so, given a healthy respect for the disarray predicted by Vessels and the minefield through which any decision on the issues must travel without exploding well-settled principles of law. Our analysis begins with the troubling factual issues raised by the 11 The only record evidence of the private Operating Agreement is two pages from a contract between Oso and UAE, Vessels Ex. J. 175 IBLA 20 lZ/£! 'd £££1 'ON 4181 10S'n W,{RO:lf R()()7 •47 TM •- --- ---- 'I? VV.T no-OT onn7 /r 7 inn