MINERAL LEASING ACT

The primary statute governing oil and gas development on  public lands is the Mineral Leasing Act of 1920 (MLA), as amended by the Federal Onshore Oil and Gas Leasing Reform Act of 1987 (FOOGLRA). Where the federal government owns the mineral rights to federal land, this statute authorizes the Secretary of the Interior to issue leases to private individuals and corporations to extract oil and gas from the public lands.  In some cases, private parties own the underlying mineral rights to the federally owned surface land and those private parties may seek to develop their mineral rights.  This guide focuses on the process for making decisions about federal mineral development on national forest land, but development of privately owned minerals can also negatively effect our eastern national forests. The prime example is the Allegheny National Forest in Pennsylvania.

Initially enacted in 1920, the primary objective of the Mineral Leasing Act was to ensure that the federal government received royalties for the sale of these resources. Until that time, the extraction of oil and gas had been governed by the General Mining Law of 1872, under which no compensation is paid to the federal government for the value of minerals removed from the public lands (Unbelievably, this still remains the case to the present day for hard rock minerals including, but not limited to, gold, silver and copper). The Mineral Leasing Act contained no provisions for protection of other natural resources, but the range of modern environmental laws generally applies to oil and gas leasing and production operations. However the Energy Policy Act of 2005 created categorical exclusions from NEPA for certain oil and gas development on public lands.

Like the Mineral Leasing Act, which was driven primarily by economic concerns, FOOGLRA was passed in order to ensure a greater return to the federal treasury from the issuance of oil and gas leases. Under the MLA, most leases were issued on a “first come, first served” basis for a minimal fee. FOOGLRA mandated that all federal lands must first be offered for lease at auction. The hope was that a competitive bidding process would increase the money received for federal leases. In developing onshore leasing rules to implement the FOOGLRA changes, the Department of Interior admitted that:

The Reform Act also required BLM to post a notice of the lands it proposed to include in a lease sale, as well as maps of those leases and other leases in the surrounding area. At the drilling stage, it required BLM to post a notice of proposed drilling operations to allow the public and environmental groups an opportunity to comment before BLM made a final determination. Congress dealt with fraud and abuse by making it unlawful to be involved with any plan to defeat the purposes of the Reform Act or its implementing regulations. The Reform Act also provided for severe penalties for violating these fraud provisions. FOOGLRA also contains some important provisions directed specifically at protection of other natural resources on the public lands. Procedurally, it requires BLM to provide the public 45 days advance notice of all oil and gas lease sales and 30 days notice prior to approval of Application for Permits to Drill. 30 U.S.C. § 226(f).FOOGLRA also codifies the requirement that permission to drill hinges on submission of an acceptable plan of operations and a reclamation bond.

It is important to remember that while the Mineral Leasing Act authorizes BLM to issue oil and gas leases, it does not require that leases be issued. Unlike the law that governs mining on the public lands, the Mineral Leasing Act does not mandate that all public land be available for oil and gas development. BLM and the Forest Service retain discretion to preclude such development to protect other public land values, such as fish and wildlife habitat, water quality, scenic values, and recreation. In fact, both agencies operate under a mandate of “multiple use” of the public lands, meaning that these areas must be managed not only for oil and gas, but also for aesthetics, recreation, grazing, watershed values and fisheries, although every acre of public land need not support all multiple uses. As the activist knows all too well, BLM often seems to put oil and gas development ahead of these other multiple uses at the other uses’ expense. This Guide aims to provide the reader with an opportunity to preserve these other natural resource values on our public lands.