Applications for permission to drill decline more than 50 percent in past year

Official: Split Estates Act working

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LARAMIE -- By allowing private ownership of minerals such as coal and oil, the United States and Canada are outside the vast majority of the world's nations in which the governments retain ownership of minerals in the public interest, a visiting professor at the University of Wyoming said at a mineral law conference Friday.

Dennis Stickley is a Laramie native and UW law graduate who has since represented energy clients all over the world. He said the U.S. is also among a minority of nations which give the owners of subsurface minerals the legal right to use the surface to extract the minerals, even if the surface owner refuses permission.

"In Australia and New Zealand, for example, there is no right of access that follows upon ownership of minerals," Stickley said. "You must reach whatever accommodation you can with the landowner."

Until the passage of the Wyoming Split Estates Act in 2005, which controls procedures for oil and gas development when the mineral ownership has been split from the surface, the law in Wyoming was that the mineral developer's right of access was "primary and fundamental," Stickley said. The 2005 law requires the developer to make reasonable accommodation of existing surface uses, he said.

The Act also for the first time gave the Wyoming Oil and Gas Conservation Commission the authority to require oil and gas developers to post bond or other surety to protect the surface owner from damages. Lynne Boomgaarden, who sits as an ex-officio member of the commission by virtue of her position as director of the State Lands Board, told the conference that fears that the commission would be "buried" with appeals of its rulings on the amount of the bonds to be required have not materialized.

"During the first three years under the statute we have had only 11 objections filed and five of those were withdrawn," she said. "It seems to be working on the ground."

Boomgaarden said the number of applications to the commission for permission to drill has declined by more than half during the past year. Applications where a private owner owns the surface and the federal government owns the minerals -- the largest type of ownership arrangement -- declined 56 percent over that year, her figures showed.

Jim Magagna of the Wyoming Stockgrowers Association and David Brown, an official from BP America Production Co., agreed Friday that early and full communication between the mineral developer and the surface owner was essential to avoid conflicts.

Magagna said the majority of private surface owners believe the 2005 legislation has succeeded in promoting better relations with mineral developers. But he said the law should be changed to give landowners more time to challenge the compliance of the drillers with surface reclamation requirements. He said the responsibility for reclamation should extend long enough to require more work if climatic conditions limit the effectiveness of the initial reclamation.

Magagna also said Wyoming real estate laws should be amended to provide for recording of severed estates. "Often we have out-of-state people buying land in Wyoming and they are shocked to learn later that they don't own the minerals," he said.

Casper attorney Craig Newman noted that the energy law area is much more varied today. On one large ranch owned by the same family for generations, he said, only one dry oil well had been drilled prior to 2004, but since then the owners have been involved not only with oil drilling and production but also issues with pipelines, power lines, a uranium mine and wind turbines.

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