BLM's Retained Rights: How Requiring Environmental Protection Fulfills Oil and Gas Lease Obligations

Article excerpt

I.    INTRODUCTION
II.   OVERVIEW OF THE MINERAL LEASING ACT
III.  THE FEDERAL ONSHORE OIL AND GAS LEASING AND DEVELOPMENT PROCESS
      A. The Stages of BLM Oil and Gas Planning, Leasing, and
         Development
         1. Land-Use Planning
         2. Leasing
         3. Exploration
         4. Full-Field Development
         5. Application for Permit to Drill
      B. The BLM Onshore Oil and Gas Leasing Process
IV.   THE TERMS AND CONDITIONS OF BLM ONSHORE OIL AND GAS LEASES
      A. Versions of the BLM Oil and Gas Lease Form
      B. The Terms of Federal Onshore Oil and Gas Leases
      C. BLM's 43 C.F.R. [section]3101.1-2 Regulation
         1. The Provisions of the [section] 3101.1-2 Regulation
         2. Reasonable Measures
         3. Further BLM Guidance on the [section] 3101.1-2 Regulation
      D. Summary of Rights Granted and Rights Retained Under the Modern
         Lease Form and the [section] 3101.1-2 Regulation
V.    BLM's RETAINED RIGHTS UNDER A FEDERAL ONSHORE OIL AND GAS LEASE
      A. The Supreme Court's View of the Rights Granted and Rights
         Retained Under a Federal Onshore Oil and Gas Lease
      B. Applicable Laws and Specific, Nondiscretionary Statutes
         1. The Mineral Leasing Act
         2. The National Environmental Policy Act
         3. The Federal Land Policy and Management Act
         4. The Endangered Species Act
         5. Other Laws Applicable to Protection of the Public Lands
         6. Energy Policy Statutes
      C. Terms, Conditions, and Attached Stipulations of BLM Oil and
         Gas Leases
      D. Regulations and Formal Orders
         1. Regulations
            a. The Regulations at 43 C.F.R. Part 3100
            b. The Regulations at 43 C.F.R. Part 3160 and Other BLM
               Regulations
         2. Formal Orders
            a. Resource Management Plans
            b. Onshore Oil and Gas Orders
            c. Notices to Lessees
            d. The BLM Manual and Handbook
            e. BLM Instruction Memoranda
            f. The BLM "Gold Book"
            g. Executive Orders
            h. Solicitor Opinions and Secretarial Orders
      E. Reasonable Measures
VI.   GENERAL PRINCIPLES OF CONTRACT LAW WILL HELP DEFINE BLM's
      RETAINED RIGHTS
      A. Court Decisions Related to Federal Oil and Gas Leases Have
         Relied on General Principles of Contract Law
      B. Contract Principles Presented in the Restatement of Contracts
         and American Jurisprudence
VII.  POTENTIAL LIMITATIONS ON BLM's ABILITY TO EXERCISE ITS RETAINED
      RIGHTS
      A. The Lessee Has Been Granted the Right to Use as Much of the
         Leased Lands as Is Necessary to Remove All of the Oil and Gas
         and the Right to Build Necessary Improvements
      B. Breach and Repudiation of Contract Claims
      C. Reasonable Measures
      D. Courts Have Found BLM Cannot Completely Prohibit Development
         When It Issues a Non-No Surface Occupancy Lease, Which
         Represents an Irreversible and Irretrievable Commitment of
         Resources That Requires Compliance with NEPA
      E. Takings Claims
      F. Lessees Must Exercise Diligence to Develop Leases
      G. Split Estate Issues
VIII. MEANS BY WHICH BLM CAN EXERCISE ITS RETAINED RIGHTS
      A. Options Available for Regulating Oil and Gas Development on
         the Public Lands That Would Help Protect the Natural
         Environment
      B. Policy Changes
IX.  BLM HAS AN OBLIGATION TO FULLY ASSERT ITS RETAINED RIGHTS
X.   CONCLUSION

I. INTRODUCTION

There are large areas of the public lands in the western United States that are encumbered by federal oil and natural gas leases. In the eleven western states of New Mexico, Colorado, Wyoming, Montana, Idaho, Utah, Arizona, Nevada, California, Oregon, and Washington--where public lands are an important aspect of land use, economic development, and social structure and culture--there were 404,500,000 acres of federal mineral estate, and over 39,000,000 acres of that estate were subject to federal oil and gas leases in fiscal year 2008. …