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Senate Panel Passes Coalbed Methane Bill

Senate Panel Passes Coalbed Methane Bill

The Senate Energy and Natural Resources Committee passed S. 1950, the Powder River Basin Resource Development Act, by a voice vote last week. Wyoming Sens. Craig Thomas and Mike Enzi said it provides for the fair and expeditious resolution of conflicts between oil and gas producers and coal producers with overlapping leases in the Powder River Basin in Wyoming and southern Montana.

"Clearly the best solution would have been consensual agreements and cooperative production of both resources," said Thomas. "The reality is a conflict still exists. If we allow it to continue, it will result in delays which ultimately leads to fewer jobs and slower economic growth for Wyoming, as well as reduced federal and state revenues."

"There is still a company or two out there that would like to use lease conflicts to gain a financial advantage, but for the most part we have an agreement that this is the reasonable way to proceed," said Enzi. The bill has five major components. It would require a lease holder, either coal or coalbed methane, to give the other at least 180 days notice before mining operations would commence on the common area of the overlapping leases. Once a conflict is imminent, the two parties must attempt to resolve the problem outside of court.

The bill outlines a step-by-step process to resolve disputes and a calculation method to establish which resource would be more beneficial to the public in the event that both resources cannot be harvested. The final clause of the bill, provides that a temporary or permanently displaced leaseholder will receive full fair market value compensation for the amount of resources given up. This ensures displaced leaseholders get a fair amount of compensation, but not more than they would receive from developing the resource. Rep. Barbara Cubin (R-WY) has introduced a companion bill (H. 4297) the House. It currently is in an Energy and Mineral Resources subcommittee but no hearing date has been set.

Alex Steis

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