Thursday, March 22, 2007

Animal, vegetable, mineral: conflicts of interest in Montana

Split estates: Mineral, agriculture surface rights clash in field

CHINOOK, Mont. - Herbert Vasseur has begun planning his spring farming activities while keeping a close eye on the Montana Legislature's split estate debates, specifically Senate Bill 19 in the current legislative session.

Senate Bill 19 is in the House Natural Resource committee and if passed will benefit the surface and landowners in split estates.

“Support is needed to pass this bill,” said Vasseur, a farmer, landowner and mineral owners form Chinook, Mont.

As a farmer, landowner and mineral owner, Vasseur is one of few Montanans who own both the surface and mineral rights on his farm on which he raises cereal grains. Most Montana landowners aren't as fortunate and live on split estates.

A split estates occurs when one person own the surface rights and another owns the mineral rights to a piece of land, explained Vasseur.

“There are a lot of ways split estates came about,” he said. “When the homesteaders came to Montana in the 1930s, they would get liens put against their mineral rights to pay their bills because they didn't think they would be worth anything. There were also a lot of split estates made with tax deeds and foreclosures where the counties sold the surface rights and maintained or sold the mineral rights.”

Working with another party on the development of the same land parcel can cause friction, especially when the parties have different interests, according to environmental geologist Stuart Jennings of Reclamation Research Group in Bozeman, Mont.

“Farmers and ranchers manage the land for sustainability, but miners don't,” he said. “Mining by definition isn't sustainable, harvesting the minerals and then leaving.”

Montana's mineral wealth is the reason it became known as the Treasure State, prior to being named the Big Sky State. The state has a history of mineral development, with the mining rush to Montana in the mid-1800s, about 1850 until 1900. There was a lot of small mine development until the stock market crashed in 1929, and the hard rock metal miners had no reclamation requirements, said Jennings, who specializes in land reclamation.

In addition, mineral rights owners can pursue mineral interests on land parcels with minimal to no consultation from the surface landowner.

“Mineral companies can come in and use the surface, taking land away from crop production, and many times are reluctant to give the producer compensation,” explained Vasseur. “There are companies that treat the surface owners fairly, but a lot of times the surface owners have to take the first step.”

Surface landowners have minimal rights in comparison to those who own mineral rights as a result of the 1916 Stockman Federal Act, which made mineral rights dominant over surface rights.

“That's where a lot of trouble got started,” said Vasseur. “In some places, the surface owners don't even get notification before the mining starts.”

Furthermore, surface owners are often neglected in terms of compensation for the damaged land surface, and the land itself is neglected in terms of reclamation.

Ideally, mining companies would return the disturbed salvage to pre-mining condition by replacing the topsoil and reseeding the forage, said Jennings.

“They don't always follow the rules,” he said, noting some mining companies perceive reclamation as an unnecessary cost they are unwilling to pay. “And, then weeds encroach on the property, which relates to agriculture by taking grazing land out of production.”

There are different reclamation laws for different types of mining, some of which differ on state and federal levels, explained Jennings, which makes reclamation enforcement tough.

“Federal coal reclamation law requires extensive reclamation practices to establish original conture versus the state's hard rock mining law, which is not as stringent as the federal coal law,” he said. “The state hardrock mining law doesn't require the mines to backfill open pits, but a 1972 amendment to the constitution states that all land disturbed by mining should be reclaimed. The coal mines would have to reclaim the land they disturbed, except the federal metal mine reclamation laws have failed over the years.”

Miners have patented the public land for mineral development according to an 1872 mineral law, and the state government has not quite gotten the law overturned. Proponents for more equal rights in split estates have written proposed legislation and testified to the Montana Legislature on behalf of the surface landowners.

The proposed legislation changes the terminology from “should” to “shall,” making it law for the mineral rights owners to give proper notification of mineral interest development and damages compensation to the surface landowners.

The outcome of such legislation will have an impact on the coal bed methane and coal mining development in Montana.

Coal bed methane mining involves drilling into coal streams and removing the methane by way of water and later extracting the methane gas from the water. Water quality is the limiting factor in coal bed methane development, said Jennings.

“There is wild development resistance from some landowners on coal bed methane development when in other places it may be welcomed,” he said. “In some cases, the water from coal bed methane development has been used for irrigation. Wyoming is the poster child for coal bed methane development. The amount of coal bed methane development in Montana is much smaller than in Wyoming, in which it has become a boom time for natural resources.”

Like other mining companies, methane mining companies' goal is to get the methane out of the ground with the least amount of cost, and reclamation costs are seen as additional costs in the eyes of the miners, said Jennings. Water re-injection into the coal aquifers makes sense to those outside the coal bed methane companies, but it is another cost they don't want to assume, he said.

“It's an uneasy truce between the communities and how many active coal bed methane permits there are,” added Jennings. “The coal resources are vast in Montana - it is the sixth largest in the world - and Montana could be a big player in coal mining.”

Montana has a vested interest in what is going on in Wyoming's coal bed methane industry because the Big Horn and Powder Rivers run from Wyoming into Montana, and as a result the water quality received has been low and unsuitable for irrigation.

“Coal bed methane water has the potential to add salinity to surface water,” explained Jennings, noting the State of Montana has taken Wyoming to court to settle the issue. “We'd like the water to be clean or low in salinity.”

Like the State of Montana, the agriculture community has a vested interest in the mining activities conducted across the state as mining practices can put agricultural resources at risk.

“The agricultural community needs to be engaged and study the details in hard rock, minerals and coal bed methane mining,” said Jennings. “There is nobody looking out for the ranching and farming communities, and it is not their default to question the permitting and decisions made in reference to minerals, but some engagement is necessary.”

Agriculture producers need to be “vigilant and engaged in the entire process, from the proposal and mitigations to the mining process and closure,” he said. “There are a lot of ways to do it wrong.”

Furthermore, surface landowners need to be active in negotiations with mineral rights leases to achieve proper notification and damage compensation agreements, said Vasseur, who serves as president of the Montana Land and Mineral Owners Association.

Drive-around traffic ruts in the ground caused by traffic during adverse weather and downed fences should be considered when assessing potential surface damages in negotiation, he said.

“The drive-around traffic, particularly in sizemic operations, can be just as intense as on the project trails,” Vasseur added. “They should pay the same for drive-around damage as for the project line traffic Š And, make sure you get it in black and white, otherwise it's lost when either a company agent walks out the door.”

A lot of problems between surface and mineral rights owners stem from lack of communication. This is one problem the Montana Land and Mineral Owners Association strives to solve by assisting land and mineral owners in negotiations.

The Montana Land and Mineral Owners Association was established in 1972 by a group of ranchers from the Bear Paw Mountains who were having troubles with some companies pursuing mineral interests on their land and established some ranchers' rights with the companies.

“We've continued on the same trend,” said Vasseur. “We try to keep up the relationships between the mineral companies and the membership, 95 percent of which are in agriculture - farmers and ranchers - 1 percent are industry people and 4 percent are absentee owners or out-of-state mineral rights owners.”

For more information on the Montana Land and Minerals Owners Association, check out the internet Web site at .


Post a Comment

<< Home