Driving through the Powder River Basin en route to my family’s ranch last Thanksgiving, my eyes darted back and forth across the mixed grass prairie dotted with Wyoming big sagebrush. As the miles slipped away, my mind increasingly focused on the latest add-ons to this prairie: twisting roads, giant trucks, drilling rigs, wastewater pits, metal buildings and great clouds of dust.

I remember back in 2003, hearing my brother—rancher and veterinarian Eric Barlow—say as he watched the drilling rigs rumble up to a coalbed methane field on a neighboring ranch, “They’re gearing up to industrialize this area…this is not what I want my land to look like.”

Eric’s vision has become a reality. The industrialization of the Powder River Basin has moved fast, and without a bird’s eye view its boundaries are hard to discern. And while coalbed methane has obviously had positive impacts on Wyoming’s economy, the state’s open spaces are gradually being diminished, and many landowners have seen their way of life change forever. But now, with the passage of a surface owners protections bill by the Wyoming legislature, landowners who do not own their mineral rights finally have some legal say in the development of oil and gas on their property.

The Need for Legislative Reform
Forty-eight percent of Wyoming’s private land is split estate, which means that different parties own the surface and mineral rights. The rapid pace of coalbed methane development in the Powder River Basin has fueled a growing number of conflicts between surface owners and mineral owners.

The need for legislation to protect surface owners has been apparent for several years now. In most instances of split estate, the mineral owner – often the federal government – has the right to access the land surface to develop the subsurface minerals. This right supercedes those of the property owner, which is ironic in a state like Wyoming where private property rights are so highly valued. Oil and gas companies commonly strike “surface use” agreements with the landowner; however, these contracts are not required by law. In fact, historically surface owners have had no clear legal rights to coordinate activities or negotiate payments for surface damage caused by oil and gas development on their land.

SF 60 Boosts Surface Owner Rights
Widely hailed as an acceptable compromise between landowners and mineral-rights owners, Senate File 60, which Governor Freudenthal signed into law in February, marked the third attempt in three years to address the split estate issue. Much of the bill was modeled after Montana’s “Surface Owner Damage and Disruption Com-pensation Act” – a law that has been on the books since 1981.

Senate File 60, which takes effect this July, contains four key requirements for oil and gas development on split estate lands:

Notice – The oil and gas operator must give a minimum of 30 days’ notice to the surface owner before operations can begin. If activity doesn’t occur within 180 days, another 30-day notice is required.
Planning – The operator and surface owner must attempt “good faith negotiations” to reach a surface-use agreement that addresses protection of surface resources, reclamation activities and payment for damages.
Compensation – Damages must be paid to the surface owner for “loss of production and income, loss of land value, and loss of value of improvements” caused by oil and gas development.
Mediation – If a surface-use agreement cannot be reached, the parties must engage in dispute resolution. Before operations can begin, the operator must post a bond ($2,000 per well) to cover potential surface damages.

The U.S. Bureau of Land Management predicts that there may be 76,000 new wells in the state in 10 years. So, the struggle between industry, landowners and government will not disappear. But thanks to the powerful work of citizens’ groups – most notably the Landowners Association of Wyoming and the Powder River Basin Resource Council – surface owners will now be at the negotiating table. The Wyoming Outdoor Council has worked with these groups in the past and will continue to as the new law is implemented.