The U.S. Supreme Court announced Friday it will resolve a civilcourt case between a group of oil companies, headed by BP AmocoProduction Co., and the Southern Ute Indian Tribe over rights androyalties to natural gas produced from coal in the San Juan Basin.The Supreme Court will hear arguments in April with a decision dueby the end of June.

The decision gives the oil companies the opportunity to overturna July decision handed down by the 10th Circuit U.S. Court ofAppeals, which awarded ownership of the gas contained in 200,000acres of Colorado land to the tribe. Andy Inglis of BP-Amoco said,”Unfortunately, the 10th Circuit Court’s decision has createdconfusion and uncertainty, which we believe the Supreme Courtrecognizes and will help resolve. We are optimistic the SupremeCourt will overturn the 10th Circuit Court’s decision and restorethese mineral rights to the historical owners.”

The Southern Ute Tribe’s original litigation was filed in 1991when it argued that it not only owns the coal which is found on itsreservation, as required by the Coal Land Acts of 1909 and 1910,but also the gas that this coal produces. The oil companies arguethat all the minerals except coal belonged to original homesteadersand they acquired the minerals from the homesteaders legally.

A three-judge appellate court ruled in favor of the tribe in1997, but the oil companies were granted an appeal to have the 10thCircuit review the case last year. The ruling, however, once againwent against the oil companies.

Amoco defendants appealed to the Supreme Court, saying the caseaffects more than 16 million acres of potential coal-bearing land.Amoco warned the court of “industry disruption and profounduncertainty and hardship.”

The U.S. Justice Department, however, disagreed, saying theclaims were exaggerated. And the Department of the Interior, whichhad been a defendant with Amoco in the case, reversed its position,siding with the Southern Utes, following passage of legislation inthe 105th Congress that grandfathered all existing coal-bed methaneleases except those on Indian lands.

The Interior Department is expected to continue to work withCongress to evaluate whether any additional legislation isappropriate to address future questions about methane ownership.

John Norris

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