The U.S. Senate Energy Committee passed S. 1950, the PowderRiver Basin Resource Development Act, by a voice vote yesterday.Sens. Craig Thomas and Mike Enzi (R-WY) said it provides for thefair and expeditious resolution of conflicts between oil and gasproducers and coal producers with overlapping leases in the PowderRiver Basin in Wyoming and southern Montana.

“Clearly the best solution would have been consensual agreementsand cooperative production of both resources,” said Thomas. “Thereality is a conflict still exists. If we allow it to continue, itwill result in delays which ultimately leads to fewer jobs andslower economic growth for Wyoming, as well as reduced federal andstate revenues.”

“There is still a company or two out there that would like touse lease conflicts to gain a financial advantage, but for the mostpart we have an agreement that this is the reasonable way toproceed,” said Enzi.

The bill has five major components. It would require a leaseholder, either coal or coalbed methane, to give the other at least180 days notice before mining operations would commence on thecommon area of the overlapping leases. Once a conflict is imminent,the two parties must attempt to resolve the problem outside ofcourt. The bill outlines a step-by-step process to resolve disputesand a calculation method to establish which resource would be morebeneficial to the public in the event that both resources can notbe harvested. The final clause of the bill, provides that atemporary or permanently displaced leaseholder will receive fullfair market value compensation for the amount of resources givenup. This ensures that displaced leaseholders get a fair amount ofcompensation, but not more than they would receive from developingthe resource.

Rep. Barbara Cubin (R-WY) has introduced a companion bill (H.4297) in the House. It currently is in an Energy and MineralResources subcommittee but no hearing date has been set.

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