Rocky Mountain Front: Factsheet

Old Man of the Hills and Walling Reef

What’s the Latest News?
In April, federal mineral leases owned by Donald Epperson were sold to Trout Unlimited. Those federal leases are located in the Flathead National Forest just south of Glacier National Park and west of the Blackfeet Indian Reservation. Epperson joins Questar and Startech as entities that either have donated or sold their federal leases. All of these leases are being returned to the federal government and cannot be re-issued since they are located in the area withdrawn from leasing by the new federal law concerning Front leases.

Why Was the Front Lease Withdrawal Law Pursued?
In 2004, the Bush Administration began an Environmental Impact Statement (EIS) on proposals to drill within the Blackleaf portion of the Front. In October of that year, however, the Administration put the EIS on hold, citing overwhelming public support for protecting the Front’s outstanding wildlife and recreation. The Administration, through the BLM, said it would welcome creative solutions, including legislation to retire the federal leases: “There may be a better resolution of the issue than the EIS process. Stopping work on the EIS will give all parties a chance to step back and look at other alternatives to resolve the issues of energy development in the Blackleaf Area. Some of the alternatives could include providing the lessee with credits towards other BLM leases; buying out the lease; exchanging the lease for other public land leases; or completing the EIS in the future. BLM does not have the authority to begin work on buying out or exchanging the leases. The course of action would need to be initiated through the lessee and Congress.” -- BLM Blackleaf EIS Briefing Document, October, 2004

How Did Montana’s Senators Get Involved?
Senator Conrad Burns was open to privately funded solutions. In June 2006 he announced legislation to prohibit new federal oil and gas leasing on the Front noting “the majesty of Montana,” that he had heard from Montanans across the board, and that his bill “strikes a common-sense balance that benefits all parties involved.” Burns’ legislation became part of the larger Interior Appropriations Bill. When that bill stalled late last year, Senator Max Baucus placed the bill, with additional language providing tax incentives for leaseholders to sell or donate their Front leases, onto a tax bill that passed Congress and was signed into law by the President.

What Does the Front Law Do?
The law does three things. One, it prevents any new leasing of federal mineral rights along the Front. Two, while existing federal leases are not affected, should an existing lease expire or be retired, then that area would be off limits to re-leasing. Three, the bill has tax incentives to encourage existing Front leaseholders to voluntarily retire their federal leases.

Ear Mountain, west of Choteau

What Area is Included?
The law covers only federal mineral rights and federal leases within an approximately 500,000 acre area extending from Glacier National Park to near Rogers Pass. Most of the affected area is National Forest and BLM lands. However, soon after the Front legislation was announced, Senator Burns, in consultation with the BLM, agreed to extend the boundary covered by the proposed legislation further east. Senator Baucus used this same boundary for his bill that eventually became law. As in the original proposal, only federal mineral rights are impacted and this boundary change helped facilitate voluntary lease retirement efforts underway in the Blackleaf area.

What About Private Property?
The lease withdrawal legislation applies only to federal rights and in no way diminishes the rights of private or state mineral owners. Private and state mineral owners remain free to develop, hold, or sell their mineral rights as they see fit. For example, the State of Montana recently leased about 5000 acres near Deep Creek within the federal withdrawal area.

What Does the Energy Industry Think?
Several recent events have revealed how the “energy market” views the Front. First, in the summer of 2005, a wildcat natural gas well on Flesher Pass resulted in a dry well. This well tested the same geological formation as the Front, cost $10 million and went 16,000 feet deep. As a result, Suncor Energy declared a financial loss and plugged the well. This event was closely monitored by the energy industry. As noted earlier, three energy firms already have come forward to donate or sell their Front leases. These companies have a responsibility to create profits for shareholders and they saw an opportunity with the Front law to avoid similar losses and recoup some costs. Other entities now are looking at similar efforts to sell or donate their Front leases.

What is the Long-Term Impact of the Front Law?
This legislation helps keep the Front the way it is now – open and accessible for everyone to enjoy. The law is a creative public-private solution that represents the best of Montana; working together to protect our heritage and way of life. Simply put, it’s what the Bush Administration and others had in mind when they halted proposed drilling in October 2004. As noted earlier, private and state property and leases – whether existing leases or possible future private or state mineral leases – are not impacted by this law which addresses only new federal leasing (plus tax breaks for voluntarily retirement of existing federal leases).

What’s the Public Response to the Front Law?
Efforts to protect the Front are supported by a broad coalition of Montanans – local landowners, hunters, sportsmen, and others. For example, last fall more than 30 Montana hunting and fishing groups sent an open letter to Congress stating their full support for the Front bill.