Pay attention class. Today we have a civics lesson that demonstrates how the oil and gas industry works hand in hand with the Montana legislature to deprive landowners of their rights.
It’s not subtle. Stay with me and you’ll get it.
Lesson 1. Split estates
Let’s start at the beginning. In Montana, real property is divided into two estates: a surface estate and a mineral estate. In some cases the surface owner is also the mineral owner. Such a property is called a unified estate, or fee simple.
In other cases, for various reasons, the mineral estate has been split, or severed, from the surface estate. In this case the person who owns the rights to the minerals is different from the person who owns the land. This is called a split estate.
In Montana, when there is a split estate the mineral rights are dominant. According to MCA § 76-2-209 local governments are prohibited from “prevent(ing) the complete use, development or recovery of any mineral, forest, or agricultural resource.”
When a mineral owner wants to get his oil or gas out of the ground, there is little the surface owner can do to protect himself. Typically the mineral holder pays the surface owner a one-time fee for access to the land, and puts up a small bond as an insurance policy against damages.
These payments offer little protection if there is serious damage — water contamination, or methane leakage, or spills that poison the soil, or livestock damage, or chemical-related sickness.
Lesson 2. Citizen initiated zoning restores fairness to surface owners
As good students, you might be wondering how the law protects surface owners who are at risk of being harmed. There is one provision in the law called citizen initiated zoning, established in MCA § 76-2-101.
Landowners in Carbon and Stillwater Counties are pursuing this path. It’s a process by which surface owners can establish the conditions under which extraction may take place. These rules can set standards for water, air, and soil testing; establish required distances between wellbores and residences, and limit the amount of noise made by drilling activity. In addition, these rules can establish fees to make sure the community costs caused by drilling are paid by operators, not taxpayers.
Citizen initiated zoning is not a ban. It is a way to restore fairness to the process and make sure that drilling is done right, and that the costs of doing business are paid by those who benefit from oil and gas drilling, not the taxpayers and landowners who do not.
It’s a lot of work, so it’s not something landowners should undertake lightly. For one thing, 60% of the landowners in a proposed zone need to sign a petition requesting the zone. Over the last year the landowner groups in both Stillwater and Carbon Counties have been studying possible regulations, gathering signatures, and meeting with County Commissioners and other county officials to plan for the establishment of citizen initiated zones.
Lesson 3. Oil companies try to define away landowner rights
But class, oil companies don’t like any restrictions on how they operate, and they will do what they have to do to keep citizens from having a voice.
When landowners in Belfry petitioned the Carbon County Commissioners to set up the Silvertip Zone in an area where Energy Corporation of America (ECA) planned to drill, ECA’s attorney Mike Dockery objected.
In a letter to the Commissioners, Dockery contended that the 60% threshold for signatures applies to mineral rights holders as well as surface owners:
The affidavit…does not even discuss the owners of the mineral interests, nor does (it) suggest there has been any attempt to ascertain those owners or obtain those signatures. Unless the Petitioners consist of sixty percent (60%) of the affected real property owners within the proposed Zoning District cannot be created under the Zoning District Act.
This was a novel argument, and one that was quickly dismissed by Carbon County Attorney Alex Nixon, who noted that there is no Montana case law to support the notion that mineral rights holdings are “real property,” and no reason to include them for purposes of the 60% calculation.
Acceptance of Dockery’s argument would obliterate any opportunity for citizens to establish a zone. Where estates are split, mineral rights holders usually include oil companies, the federal Bureau of Land Management and speculators, none of whom have any interest in regulating oil and gas drilling on a local level.
The idea that Dockery floated seemed like nothing more than legal adventurism, and not worth taking seriously.
Lesson 4. The legislature does the oil company’s bidding
Class, this is where you need to pay attention. What seemed like a random legal idea by an oil company attorney is about to become Montana law.
Hidden inside this apparently unremarkable bill, which includes a lot of dense definitions, is exactly what Mike Dockery is arguing for. If the bill passes and is signed by Governor Bullock, it would mean that a mineral interest would become a division of land.
Yes, the severed mineral rights would become by definition a separate tract of land, and so, for the purposes of citizen initiated zoning, petitioners would have to get signatures of 60% of the property owners, who would then include not only surface owners, but mineral owners as well.
Just like that, the bill would take away the ability of landowners to petition for their rights. Getting signatures of 60% of surface owners plus mineral owners would be impossible. It would require hours of research at the County Clerk’s office, and even if you could find the mineral owners, it’s pretty unlikely an oil company or speculator would give a hoot about petitioning for landowner rights.
Lesson 5: The Beartooth Front connection
So who is Forrest Mandeville, the legislator who introduced the bill? He’s a new member of the Montana House, elected last November. He’s an up and comer, still under 30, a 2006 graduate of Point Loma Nazarene University in San Diego who received his MA in Public Administration from Montana State Billings in 2013.
According to his Facebook page, Mandeville seems to be staking his reputation on a bill that would allow Montana residents to enter online fantasy sports leagues and win cash prizes.
But class, let’s look a little deeper in that resume. Ah yes, there it is. For the last six years Mandeville has been the County Planner for Stillwater County. In that capacity he authored long-range planning documents, advised Stillwater County Commissioners on planning and community development issues, and conducted various other planning activities. That includes meeting with Stillwater residents planning a citizen initiated zone.
Connecting the dots
OK class, let me connect the dots for you, because this is the part of the lesson you’ll be tested on.
- Local landowners, concerned about an oil company’s plan to bring “a little bit of the Bakken” to the Beartooth Front, meet to form citizen initiated zones. The zones are a way to assert their right to determine the rules by which oil drilling can occur on their own properties.
- The landowners meet with elected county officials and county planners to begin working on the zones.
- The oil companies figure out what the landowners are up to, and come up with a novel scheme for a law to take away their rights
- They find a fresh young legislator eager to make his mark, one who is very familiar with the citizen initiated zoning plans, and write a bill for him that would disenfranchise the landowners.
- The legislator, eager to curry favor with the oil industry, carries their water in the bill.
Class, this is how the oil and gas industry controls Montana at the expense of citizens.
Those of you who want extra credit can write a paper speculating on the conversations that took place involving attorneys, county commissioners, lobbying groups, legislative staff and professional associations.
Lesson 6. What citizens can do
Class, there are some things you can do to protect your rights. The bill is scheduled for a legislative hearing tomorrow, Tuesday, January 27, at 3:00pm in Room 172 at the Capitol in Helena. If you’re in Helena, by all means drop in to see how easily your rights can be snatched away.
You can find out how to contact your Montana House representatives here. Encourage them to protect your rights by voting no on HB302 .
Here’s how you can contact Forrest Mandeville directly:
PO Box 337
Columbus, MT 59019-0337
Phone: (406) 690-1933
Legislator Online Messaging Form (note that you can use this form to send a message to the entire Local Government Committee, which will be conducting a hearing on this bill. Select “Committee” and (H) Local Government.
I’ll keep you updated about the progress of this bill. If it passes, I’ll tell you how to contact Governor Bullock to encourage him to veto the bill.