Stonington advances drilling protection for surface owners

By SCOTT McMILLION, Chronicle Staff Writer

Coalbed methane companies would be forced to negotiate with landowners and pay them for any damages before drilling takes place if a bill being considered by the Montana Senate becomes law.

"We'll see if the Legislature feels private property rights go both ways," Sen. Emily Stonington, D-Bozeman, said Thursday. She is the sponsor of Senate Bill 240.

Much of Montana exists under what is called a "severed estate." That means the owner of underground minerals, oil and gas is not necessarily the owner of the surface land.

Under current law, the owner of the mineral rights has legal precedence over the holder of the surface rights.

Although gas companies usually try to negotiate an agreement with the surface owner, if they can't get that done they can enter the property and start working after giving 10 days notice.

"I want to level the playing field," Stonington said of her bill. "The mineral holders have all the advantages and the surface owners have little recourse but to sue" if damages occur.

The issue has attracted intense interest in Gallatin and Park counties over the past two years because the J.M. Huber Co. has leased the mineral rights under 18,000 acres of land centered around Bozeman Pass, planning to drill for CBM.

County officials have denied them so far, but the issue is in court.

Much of the property near the pass is in a severed estate and some surface owners have no idea who owns the mineral rights under their homes.

Stonington, who lives in Kelly Canyon, is one of them.

"I don't even know" who owns the minerals, she said, adding that she had searched property records back to 1912 without finding any reference to property rights.

She said she expects a lot of landowner support for her bill, but also strong opposition from the state's oil and gas industry.

Gail Abercrombie, executive director of the Montana Petroleum Association, said her group will try to defeat the bill.

"The statutes that we have on the books now have been working" to protect surface owners, Abercrombie said.

If Stonington's bill passes, Abercrombie maintains, some landowners could get even less money from gas companies than they get now. The bill requires companies to pay the surface value of the property they disturb and gas companies sometimes pay more than that, she said.

Drillers and surface users have to live with each other for a long time, she said.

"(Gas) operators do not want to go on a piece of property, unless they absolutely have to, if there's an adversarial relationship," Abercrombie said.

State law requires drillers to pay for damages, and if they don't, landowners "can still go to court," she said.

However, current law says they only have to pay for direct disturbances, Stonington said.

Determining the value of disturbed land gets more complicated when the land is in a pricey subdivision in a place like Bridger Canyon or Jackson Creek, where people pay a premium for views instead of ag value.

Stonington's bill, which has a hearing Jan. 31 in the Senate Natural Resources committee, says that if a gas company and a land owner can't make their own deal, the company can go to a judge and have arbitrators appointed.

The drillers couldn't enter the land until a deal is worked out and if they violate the law they could have to pay triple damages.

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