BILLINGS - A legislative subcommittee is recommending that oil and gas companies give landowners who don't own mineral rights on their property more information about split estates and 20 days' notice before coming onto their property to start drilling.
The panel, however, did not recommend requiring surface-use agreements between the parties that would spell out remedies for damages to the land or address such issues as roads, water reservoirs and water disposal.
The recommendations come from a subcommittee of the Montana Environmental Quality Council that was charged with studying whether the state needs better laws to protect landowners facing mineral development. The Legislature created the panel to study surface-use agreements for all mineral development and reclamation and bonding for coal-bed methane development.
The recommendations are open for public comment through June 30.
Split estates occur when one party owns rights to the lands' surface while another party owns underlying gas or mineral rights. Split-estate ownerships are common in Montana, Wyoming and other parts of the West.
Sen. Mike Wheat, D-Bozeman, chairman of the subcommittee, said the most important recommendation is to require developers to give landowners an informational brochure early in the process. The brochure, to be produced by the council, will help the landowner understand the developer's right to come onto the property, Wheat said.
Another recommendation is to extend from 10 days to 20 days the notice developers must give to landowners before starting drilling, Wheat said.
Wheat unsuccessfully tried in the 2005 Legislature to pass laws that would have extended the notice period to 30 days and would have required developers and landowners to negotiate surface-use agreements.
Wheat said he was disappointed there was no recommendation to require surface-use agreements.
"As a lawyer, I always expressed my bias toward having an agreement in matters like this," he said.
The panel also did not recommend requiring companies to post a bond for property damage if no surface use-agreement is reached. Wheat said the majority of the committee thought it didn't make sense to require a bond if a surface-use agreement was not required.
Brian Cebull of Nance Petroleum, a subcommittee member, said the panel found that "the system wasn't as broken as people thought."
The committee learned that Montana already had a surface protection law, which was used as a model for legislation in Wyoming, Cebull said.
Montana already requires bonds for reclamation if a developer abandons a site and has funds in place for orphaned wells, Cebull said. The committee concluded that existing reclamation bonding was adequate, he said.
Extending the landowner notice to 20 days was "a big compromise," said Cebull, adding that extending the notice can be a problem for developers.
Cebull said mandating a surface-use agreement would create burdens in areas where there wasn't a problem. He said he had not heard of a situation where someone wanted a written agreement and didn't get one.
Doug McRae, a Forsyth farmer on the subcommittee, said he wished landowners' interests had been better represented on some issues.
He favored requiring surface-use agreements and thought "six months is more realistic" for landowner notice, saying a shorter notice might not allow him enough time to find new pasture for livestock.
The public comments will be presented to the subcommittee on July 17, with final reports going to the Environmental Quality Council in September. The council will present its recommendations to the 2007 Legislature.