
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC13368]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 134--ENERGY POLICY
 
                           SUBCHAPTER VI--COAL
 
                      Part C--Other Coal Provisions
 
Sec. 13368. Ownership of coalbed methane


(a) Federal lands and mineral rights

    In the case of any deposit of coalbed methane where the United 
States is the owner of the surface estate or where the United States has 
transferred the surface estate but reserved the subsurface mineral 
estate, the Secretary of the Interior shall administer this section. 
This section and the definitions contained herein shall be applicable 
only on lands within Affected States.

(b) Affected States

    Not later than 180 days after October 24, 1992, the Secretary of the 
Interior, with the participation of the Secretary of Energy, shall 
publish in the Federal Register a list of Affected States which shall be 
comprised of States--
        (1) in which the Secretary of the Interior, with the 
    participation of the Secretary of Energy, determines that disputes, 
    uncertainty, or litigation exist, regarding the ownership of coalbed 
    methane gas;
        (2) in which the Secretary of the Interior, with the 
    participation of the Secretary of Energy, determines that 
    development of significant deposits of coalbed methane gas is being 
    impeded by such existing disputes, uncertainty, or litigation 
    regarding ownership of such coalbed methane;
        (3) which do not have in effect a statutory or regulatory 
    procedure or existing case law permitting and encouraging the 
    development of coalbed methane gas within that State; and
        (4) which do not have extensive development of coalbed methane 
    gas.

The Secretary of the Interior, with the participation of the Secretary 
of Energy, shall revise such list of Affected States from time to time. 
Any Affected State shall be deleted from the list of Affected States 
upon the receipt by the Secretary of the Interior of a Governor's 
petition requesting such deletion, a State law requesting such deletion, 
or a resolution requesting such deletion enacted by the legislative body 
of the State. A Governor intending to petition the Secretary of the 
Interior to delete a State from the list of Affected States shall 
provide the State's legislative body with 6 months notice of such 
petition during a legislative session. At the end of such 6-month 
period, the Governor may petition the Secretary of the Interior to 
delete a State from the list of Affected States, unless during such 6-
month period, the State's legislative body has enacted a law or 
resolution disapproving the Governor's petition. Until the Secretary of 
the Interior, with the participation of the Secretary of Energy, 
publishes a different list, the States of West Virginia, Pennsylvania, 
Kentucky, Ohio, Tennessee, Indiana, and Illinois shall be the Affected 
States, effective on October 24, 1992. The States of Colorado, Montana, 
New Mexico, Wyoming, Utah, Virginia, Washington, Mississippi, Louisiana, 
and Alabama shall not be included on the Secretary of the Interior's 
list of Affected States or any extension or revision thereof.

(c) Failure to adopt statutory or regulatory procedure

    If an Affected State has not placed in effect, by statute or by 
regulation, a substantial program promoting the permitting, drilling and 
production of coalbed methane wells (including pooling arrangements) 
within that State within 3 years after becoming an Affected State, the 
Secretary of the Interior, with the participation of the Secretary of 
Energy, shall administer this section and shall promulgate such 
regulations as are necessary to carry out this section in that State.

(d) Implementation by Secretary of the Interior

    In implementing this section, the Secretary of the Interior, with 
the participation of the Secretary of Energy, shall--
        (A) consider existing and future coal mining plans,
        (B) preserve the mineability of coal seams, and
        (C) provide for the prevention of waste and maximization of 
    recovery of coal and coalbed methane gas in a manner which will 
    protect the rights of all entities owning an interest in such 
    coalbed methane resource.

(e) Spacing

    Except where State law in an Affected State contains existing 
spacing requirements regarding the minimum distance between coalbed 
methane wells and the minimum distance of a coalbed methane well from a 
property line, the Secretary of the Interior shall establish such 
requirements within 90 days after the assertion of jurisdiction pursuant 
to subsection (c) of this section.

(f) Spacing units

    Applications to establish spacing units for the drilling and 
operation of coalbed methane gas wells may be filed by any entity 
claiming a coalbed methane ownership interest within a proposed spacing 
unit. Upon receipt and approval of an application, the Secretary of the 
Interior shall issue an order establishing the boundaries of the coalbed 
methane spacing unit. Spacing units shall generally be uniform in size.

(g) Development under pooling arrangement

    Following issuance of an order establishing a spacing unit under 
subsection (f) of this section, and pursuant to an application for 
pooling filed by the entity claiming a coalbed methane ownership 
interest and proposing to drill a coalbed methane gas well, the 
Secretary of the Interior shall hold a hearing to consider the 
application for pooling and shall, if the criteria of this section are 
met, issue an order allowing the proposed pooling of acreage within the 
designated spacing unit for purposes of drilling and production of 
coalbed methane from the spacing unit. The pooling order shall not be 
issued before notice or a reasonable and diligent effort to provide 
notice has been made to each entity which may claim an ownership 
interest in the coalbed methane gas within such spacing unit and each 
such entity has been offered an opportunity to appear before the 
Secretary of the Interior at the hearing. Upon issuance of a pooling 
order, each owner or claimant of an ownership interest shall be allowed 
to make one of the following elections:
        (1) An election to sell or lease its coalbed methane ownership 
    interest to the unit operator at a rate determined by the Secretary 
    of the Interior as set forth in the pooling order.
        (2) An election to become a participating working interest owner 
    by bearing a share of the risks and costs of drilling, completing, 
    equipping, gathering, operating (including all disposal costs), 
    plugging and abandoning the well, and receiving a share of 
    production from the well.
        (3) An election to share in the operation of the well as a 
    nonparticipating working interest owner by relinquishing its working 
    interest to participating working interest owners until the proceeds 
    allocable to its share equal 300 percent of the share of such costs 
    allocable to its interest. Thereafter, the nonparticipating working 
    interest owner shall become a participating working interest owner.

The pooling order shall designate a unit operator who shall be 
authorized to drill and operate the spacing unit. The pooling order 
shall provide that any entity claiming an ownership interest in the 
coalbed methane within such spacing unit which does not make an election 
under the pooling order shall be deemed to have leased its coalbed 
methane interest to the unit operator under such terms and conditions as 
the pooling order may provide. No pooling order may be issued under this 
paragraph for any spacing unit if all entities claiming an ownership 
interest in the coalbed methane in the spacing unit have entered into a 
voluntary agreement providing for the drilling and operation of the 
coalbed methane gas well for the spacing unit.

(h) Escrow account

    (1) Each pooling order issued under subsection (g) of this section 
shall provide for the establishment of an escrow account into which the 
payment of costs and proceeds attributable to the conflicting interests 
shall be deposited and held for the interest of the claimants as 
follows:
        (A) Each participating working interest owner, except for the 
    unit operator, shall deposit in the escrow account its proportionate 
    share of the costs allocable to the ownership interest claimed by 
    each such participating working interest owner as set forth in the 
    pooling order issued by the Secretary of the Interior.
        (B) The unit operator shall deposit in the escrow account all 
    proceeds attributable to the conflicting interests of lessees, plus 
    all proceeds in excess of ongoing operational expenses (including 
    reasonable overhead costs) attributable to conflicting working 
    interests.

    (2) The Secretary of the Interior shall order payment of principal 
and accrued interest from the escrow account to all legally entitled 
entities within 30 days of receipt by the Secretary of the Interior of 
notification of the final legal determination of entitlement or upon 
agreement of all entities claiming an ownership interest in the coalbed 
methane gas. Upon such final determination--
        (A) each legally entitled participating working interest owner 
    shall receive a proportionate share of the proceeds attributable to 
    the conflicting ownership interest;
        (B) each legally entitled nonparticipating working interest 
    owner shall receive a proportionate share of the proceeds 
    attributable to the conflicting ownership interest, less the cost of 
    being carried as a nonparticipating working interest owner (as 
    determined by the election of the entity under the applicable 
    pooling order);
        (C) each entity leasing (or deemed to have leased) its coalbed 
    methane ownership interest to the unit operator shall receive a 
    share of the royalty proceeds (as set out in the applicable pooling 
    order) attributable to the conflicting interests of lessees; and
        (D) the unit operator shall receive the costs contributed to the 
    escrow account by each legally entitled participating working 
    interest owner.

The Secretary of the Interior shall enact rules and regulations for the 
administration and protection of funds delivered to the escrow accounts.

(i) Approval of Secretary of the Interior

    No entity may drill any well for the production of coalbed methane 
gas from a coal seam, subject to the provisions of subsection (g) of 
this section, in an Affected State unless the drilling of such well has 
been approved by the Secretary of the Interior.

(j) Authorization to stimulate coal seam

    (1) No operator of a coalbed methane well may stimulate a coal seam 
without the written consent of each entity which, at the time that the 
coalbed methane operator applies for a drilling permit, is operating a 
coal mine, or has by virtue of his property rights in the coal the 
ability to operate a coal mine, located within a horizontal or vertical 
distance from the point of stimulation as established by the Secretary 
of the Interior pursuant to paragraph (3) of this subsection. In seeking 
the coal operator's consent, a coalbed methane well operator shall 
provide the coal operator with necessary information about such 
stimulation, including relevant information to ensure compliance with 
coal mine safety laws and rules.
    (2) In the absence of a written consent pursuant to paragraph (1) 
and at the request of a coalbed methane operator, the Secretary of the 
Interior shall make a determination regarding stimulation of a coal 
seam. Such request shall include an affidavit which shall--
        (A) state that an entity from which consent is required pursuant 
    to paragraph (1) has refused to provide written consent;
        (B) set forth in detail the efforts undertaken by the applicant 
    to obtain such written consent;
        (C) state the known reasons for the consent not being provided;
        (D) set forth the conditions and compensation, if any, offered 
    by the applicant as part of the efforts to obtain consent; and
        (E) provide prima facie evidence that the method of stimulation 
    proposed by the coalbed methane operator will not (i) cause 
    unreasonable loss or damage to the coal seam considering all 
    factors, including the prospect, taking into consideration the 
    economics of the coal industry, that coal seams for which no actual 
    or proposed mining plans exist will be mined at some future date, or 
    (ii) violate mine safety requirements. If a denial of consent by a 
    coal operator is based on reasons related to safety, the Secretary 
    of the Interior shall seek the views and recommendations of the 
    appropriate State or Federal coal mine safety agency. Any 
    determination by the Secretary of the Interior shall be in 
    accordance with all applicable Federal and State coal mine safety 
    laws and such views and recommendations. A determination by the 
    Secretary of the Interior approving a method of stimulation may 
    include reasonable conditions including, but not limited to, 
    conditions to mitigate, to the extent practicable, economic damage 
    to the coal seam. Any determination approving or denying a method of 
    stimulation by the Secretary of the Interior shall be subject to 
    appeal. Interested entities shall be allowed to participate in and 
    comment on proceedings under this paragraph.

    (3) The Secretary of the Interior shall by rule establish, for an 
Affected State, a region thereof, or a multi-State region comprised of 
Affected States, the boundaries within which a coalbed methane operator 
shall be required to obtain written consent from a coal operator 
pursuant to paragraph (1). Such boundaries shall be stated in terms of a 
horizontal and a vertical distance from the point of stimulation and 
shall be determined based on an evaluation of the maximum length, height 
and depth of fracture producible in a coal seam in such Affected State, 
region thereof, or multi-State region comprised of Affected States.
    (4) The consent required under this subsection shall in no way be 
deemed to impair, abridge, or affect any contractual rights or 
objections arising out of a coalbed methane gas contract or coalbed 
methane gas lease in existence as of October 24, 1992,\1\ between the 
coalbed methane operator and the coal operator, and the existence of 
such lease or contractual agreement and any extensions or renewals of 
such lease shall be deemed to fully meet the requirements of this 
section.
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    \1\ See Codification note below.
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    (5) Nothing in this subsection precludes either a coal operator or a 
coalbed methane operator from seeking in the appropriate State forum 
compensation for the consequences of a determination by the Secretary of 
the Interior pursuant to paragraph (2).

(k) Notice and objection

    (1) The Secretary of the Interior shall not approve the drilling of 
any coalbed methane well unless the unit operator has notified each 
entity which is operating, or has the ability, by virtue of his property 
rights in the coal, to operate, a coal mine in any portion of the 
coalbed that would be affected by such well within the distances 
established pursuant to the rules promulgated under subsection (j)(3) of 
this section. Any notified entity may object to the drilling of such 
well within 30 days after receipt of a notice. Upon receipt of a timely 
objection to the drilling of any coalbed methane gas well submitted by a 
notified entity, the Secretary of the Interior may refuse to approve the 
drilling of the well based on any of the following:
        (A) The proposed activity, due to its proximity to any coal mine 
    opening, shaft, underground workings, or to any proposed extension 
    of the coal mine, would adversely affect any operating, inactive or 
    abandoned coal mine, including any coal mine already surveyed and 
    platted but not yet being operated.
        (B) The proposed activity would not conform with a coal 
    operator's development plan for an existing or proposed operation.
        (C) There would be an unreasonable interference from the 
    proposed activity with present or future coal mining operations, 
    including the ability to comply with other applicable laws and 
    regulations.
        (D) The presence of evidence indicating that the proposed 
    drilling activities would be unsafe, taking into consideration the 
    dangers from creeps, squeezes or other disturbances due to the 
    extraction of coal.
        (E) The proposed activity would unreasonably interfere with the 
    safe recovery of coal, oil and gas.

    (2) In the event the Secretary of the Interior does not approve the 
drilling of a coalbed methane well pursuant to paragraph (1), the 
Secretary of the Interior shall consider whether such drilling could be 
approved if the unit operator modifies the proposed activities to take 
into account any of the following:
        (A) The proposed activity could instead be reasonably done 
    through an existing or planned pillar of coal, or in close proximity 
    to an existing well or such pillar of coal, taking into 
    consideration surface topography.
        (B) The proposed activity could instead be moved to a mined-out 
    area, below the coal outcrop or to some other feasible area.
        (C) The unit operator agrees to a drilling moratorium of not 
    more than two years in order to permit completion of coal mining 
    operations.
        (D) The practicality of locating the proposed spacing unit or 
    well on a uniform pattern with other spacing units or wells.

(l) Plugging

    All coalbed methane wells drilled after October 24, 1992, that 
penetrate coal seams with remaining reserves shall provide for 
subsequent safe mining through the well in accordance with standards 
prescribed by the Secretary of the Interior, in consultation with any 
Federal and State agencies having authority over coal mine safety. Well 
plugging costs should be allocated in accordance with State law or 
private contractual arrangement, as the case may be.

(m) Notice and objection by other parties

    The Secretary of the Interior shall not approve the drilling of any 
coalbed methane well unless such well complies with the spacing and 
other requirements established by the Secretary of the Interior and each 
of the following:
        (1) The unit operator of such well has notified, or has made a 
    reasonable and diligent effort to notify, all entities claiming 
    ownership of coalbed methane to be drained by such well and provided 
    an opportunity to object in accordance with requirements established 
    by the Secretary of the Interior.
        (2) Where conflicting interests exist, an order under subsection 
    (g) of this section establishing pooling requirements has been 
    issued.

The notification requirements of this subsection shall be additional to 
the notification referred to in subsection (k) of this section. The 
Secretary of the Interior shall establish the conditions under which 
entities claiming ownership of coalbed methane may object to the 
drilling of a coalbed methane well.

(n) Venting for safety

    Nothing in this section shall be construed to prevent or inhibit the 
entity which has the right to develop and mine coal in any mine from 
venting coalbed methane gas to ensure safe mine operations.

(o) Other laws

    The Secretary of the Interior shall comply with all applicable 
Federal and State coal mine safety laws and regulations.

(p) Definitions

    As used in this section--
        (1) The term ``Affected State'' means a State listed by the 
    Secretary of the Interior, with the participation of the Secretary 
    of Energy, under subsection (b) of this section.
        (2) The term ``coalbed methane gas'' means occluded natural gas 
    produced (or which may be produced) from coalbeds and rock strata 
    associated therewith.
        (3) The term ``unit operator'' means the entity designated in a 
    pooling order to develop a spacing unit by the drilling of one or 
    more wells on the unit.
        (4) The term ``nonparticipating working interest owner'' means a 
    gas or oil owner of a tract included in a spacing unit which elects 
    to share in the operation of the well on a carried basis by agreeing 
    to have its proportionate share of the costs allocable to its 
    interest charged against its share of production of the well in 
    accordance with subsection (f)(3) of this section.
        (5) The term ``participating working interest owner'' means a 
    gas or oil owner which elects to bear a share of the risks and costs 
    of drilling, completing, equipping, gathering, operating (including 
    any and all disposal costs) \2\ plugging, and abandoning a well on a 
    spacing unit and to receive a share of production from the well 
    equal to the proportion which the acreage in the spacing unit it 
    owns or holds under lease bears to the total acreage of the spacing 
    unit.
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    \2\ So in original. Probably should be followed by a comma.
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        (6) The term ``coal seam'' means any stratum of coal 20 inches 
    or more in thickness, unless a stratum of less thickness is being 
    commercially worked, or can in the judgment of the Secretary of the 
    Interior forseeably \3\ be commercially worked and will require 
    protection if wells are being drilled through it.
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    \3\ So in original. Probably should be ``foreseeably''.
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(Pub. L. 102-486, title XIII, Sec. 1339, Oct. 24, 1992, 106 Stat. 2986.)

                          Codification

    October 24, 1992, referred to in subsec. (j)(4), was in the original 
``the effective date of this section'', which was translated as meaning 
the date of enactment of Pub. L. 102-486, which enacted this section.
