With energy prices at record highs interest in long-dormant rights to develop oil and gas resources underneath farmland could badly upset the natural beauty and balance of the rugged American West

Adam Tanner
BIRNEY Montana - Reuters


The log cabins and dirt roads on Jeanie Alderson's isolated ranch suggest little has changed since her great-great aunt and uncle first came to the rolling hills of southeastern Montana 120 years ago.

"No one in 1916 or 1909 had any concept of strip mining or coal bed methane pumping out and the devastation" Alderson said. "When you start pumping out groundwater we think 'Uh oh there goes my livelihood.'"

Divided ownership of land above and below ground -- known as split estates -- has deep roots in the American West where the federal government offered cheap land to settlers and railroad companies but often kept subsurface rights.

Today the government manages 700 million acres (280 million hectares) of mineral rights. On 58 million of those acres mostly in the West others own the rights to the surface.

Environmentalists complain that the Bush administration has dramatically expanded mineral leases in energy-rich states such as Wyoming and Montana and they say oil and gas companies are scrambling for a piece of the action before President George W. Bush leaves office in January.

"In the closing days of the Bush administration we are seeing this enormous rush to lease everything gas-related" said Teresa Erickson staff director of the Northern Plains Resource Council an environmental group.

State governments also lease mineral rights but some regional officials say it is federal leasing that threatens their wildlife and the environment.

"The level of leasing in recent years has been breathtaking" Montana Gov. Brian Schweitzer a Democrat told Reuters. "The arrogance of this administration vis-a-vis federal lands -- it dwarfs the previous administrations."

According to the U.S. Minerals Management Service which collects revenues on federal leases for oil gas coal and other solid minerals the federal government sold leases on 47497077 acres in the 2007 fiscal year compared with 37448305 acres in fiscal 2001 a 27 percent increase.

U.S. Department of Interior officials testified in March that leasing and producing minerals has earned the government $176 billion from oil natural gas and other minerals since 1982 including $11.4 billion in fiscal 2007.

The department's goal is to ensure that companies are in compliance with the terms of their lease and that the government is receiving fair market value the officials Stephen Allred and Randall Luthi told a U.S. congressional subcommittee.

Alderson and her family owns the 8400-acre Bones Brothers Ranch above ground and about a quarter of the mineral rights below. Unknown to her until she started researching the issue many of the mineral rights were leased in 1999 to 2000 some going for as little as $2 an acre in 10-year leases although prices for leases are up sharply since then in many places.

One travels many miles on dirt roads to arrive at the ranch where calves are raised and beyond log cabins nature extends as far as the eye can see. A few miles away the Indian military leader Crazy Horse fought his last battle in 1877.

"The public thinks -- even Montanans -- that there is this big chunk of land why aren't we mining it?" Alderson said. "My parents were told in the 1970s it's your patriotic duty -- so that someone in Poughkeepsie can have an electric toothbrush."

Nearby at the Diamond Cross Ranch an energy company in February set up a methane gas well after Forest Mars Jr. the billionaire heir to the candy company bearing his family surname lost a court fight to prevent it.

"The worst part of the split estate issue is that it pits neighbor against neighbor" said Phil Wood manager of the Diamond Cross Ranch.

That's because those owning the mineral rights may want energy exploration while those who do not own the rights have nothing to gain. With higher energy prices "there is going to be more activity of course and with more activity comes more complications" Wood said.