Energy boom is crowding ranchers
More ranchers rail against federal 'split estate' laws that control mineral rights beneath their land.
Irv Alderson's clan of cowboys has ranched near the banks of the Tongue River since the 1880s, when Montana was still a territory.Skip to next paragraph
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Rawhide tough and well-read, generations of Aldersons helped expand their land holdings to 8,500 acres. Along the way, they cemented an attachment to these stark weathered plains despite droughts, personal tragedies, and downturns in cattle prices.
Now the onetime professional steer roper and other ranchers here face a new test - energy companies intensifying their search for natural gas beneath the same lands used by grazing herds.
The trend, causing tension across the American West, stems from the policy of "split estates" - where the owners of at least 50 million acres of private land have surface rights, while energy developers can own the mineral rights beneath or lease them from the federal government.
That means scores of ranchers here in the Powder River basin may have little say over thousands wellheads that could soon proliferate. While some landowners will reap benefits, anything from monetary compensation to ranch improvements, most feel helpless against an industry that they see threatening to mar the landscape and contaminate precious groundwater. A growing number of ranchers are fighting back against the federal government with lawsuits aimed to strengthen landowners' influence over energy development practices within their acres.
At their Bones Brothers Cattle Ranch outside Birney, the Aldersons say their worries started at the end of the Clinton administration when the Bureau of Land Management (BLM), the federal agency in charge of leasing minerals in the West, awarded a handful of companies the right to extract coalbed methane gas from beneath their property.
"Mineral rights were sold by the BLM, literally right out from under their ranch home," says environmental-law attorney Jack Tuholske, who is representing the Aldersons and a few dozen other ranchers in a case now before the Ninth Circuit Court of Appeals. "Not only did the BLM do this without even contacting the Aldersons, it sold the rights at rock bottom prices and at an auction that few people but the energy companies knew about."
Greg Albright, a BLM spokesman in Billings, says the process may seem controversial, but it is perfectly legal. Further, not all property owners are hostile to split-estate rules. Indeed, several ranchers in Wyoming, who own all or some of their subsurface mineral rights, have become millionaires overnight and publicly praise the gas companies for their contribution to the economy.
Yet even benefits bestowed by well-intentioned energy companies may do little to soothe ranchers who feel their livelihoods are threatened.
Mike Helvey and his wife, Rebecca, are ambivalent over what split estate has brought to their doorstep. Shortly after they bought their 760-acre spread on the Wyoming-Montana state line, they were notified by Fidelity Energy that drilling would begin.
By law, all property owners know when they purchase land if it has a split estate, though most never believe it will be a factor. "It was like a shotgun wedding," Mr. Helvey says, pointing to 50 wellheads now on his land, many within sight from his living room.
As a trade-off for its invasion, the company voluntarily offered the Helveys money that enabled them to build a new house, not a common proposal. They've received new fencing, an improved driveway, and a water tank for the cows that brims with salt-laden water drawn out of the gas wells. "The company has helped us do things with our land we otherwise couldn't have afforded to do," he says.