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CONTENTS

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Letters of transmittal.-

III

I. Early Public Land Policies: Historical development --

1-

Opening the frontier----

1

Conservation—a new policy.

2

Leasing

Mineral access on acquired lands_-

Disposition of common variety minerals--

Offshore mineral access.

Recent developments in public land mineral policy-

II. 1872 mining law and the materials disposal system.-

9

Introduction

9

How the location-patent system works..

9

Location procedures..

9

Prediscovery tenure-

10

Validity of a mineral location—the discovery requirement.

11

Assessment work---

12

Mineral patents---

12

The materials disposal system-

13

III. Oil and gas and the leasing system.

15

Background

15

How the leasing system works..

Competitive bidding-

16

Lease terms---

16

Utilization and communitization..

17

Lease termination-

17

The simultaneous filing system.

18

Acreage limitations...

18

IV. Oil shale, Native asphalt, and tar sands---

19

Introduction

19

Oil shale.

19

Program implementation -

21

1. Lease offerings-

21

2. Term, rental, and royalty

22

3. Performance requirements.

4. Bonding

24

5. Extraordinary environmental costs..

24

Future development of Federal oil shale resources.

24

Tar sands and asphalt---

24

V. Other leasable minerals...

27

Introduction

27

Prospecting permits.

27

Preference right leases-

28

Competitive leases_-

28

Acreage limitations_

30

Phosphate and sodium use permits----

31

Hardrock mineral leasing on certain acquired lands_-

31

Special leasing legislation -

32

LIST OF LAWS GOVERNING ACCESS TO MINERALS ON THE FEDERAL

LANDS

Mining law of 1872 and related laws (30 U.S.C. 21–54, 161, 162, 541-541i,

621–625)

Mineral Leasing Act of 1920 (30 U.S.C. 181–263).

33

61

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Sulfur Leasing Act of 1926 (30 U.S.C. 271–276)-
Potash Leasing Act of 1927 (30 U.S.C. 281-287--
Railroad and Other Rights-of-Way Leasing Act of 1930 (30 U.S.C.

97 99

301-306) Lease of mineral deposits within acquired lands. Materials Disposal Act of 1947 (30 U.S.C. 601-604). “Common Varieties" Act--

102 103 106 109

LIST OF TABLES

1. Bids on lease offerings in Colorado and Utah..
2. Oil shale reserves, prototype tracts_-
3. Rentals and royalties for leasable nonfuel minerals.
4. Acreage limitations for leasable nonfuel minerals.

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23
29
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CURRENT MINERAL LAWS OF THE UNITED STATES

I. EARLY PUBLIC LAND POLICIES: HISTORICAL DEVELOPMENT

One of the overriding problems facing the United States after its war of independence with Great Britain was lack of revenues. Alexander Hamilton promoted the idea of selling the public lands lying between the Alleghenies and the Mississippi River as a solution to this problem. This view was officially enacted in the famous Land Ordinance of May 20, 1785, which became the foundation for the public land system. Not only did this legislation begin the system of rectangular surveys but also it marked the first public land mineral policy by reserving "one-third part of all gold, silver, lead, and copper mines, to be sold, or otherwise disposed of as Congress shall hereafter direct.” This law expired with the Continental Congress in 1787.

The new Constitution, which became effective in 1788, contained the following provision in Article IV, Section 3: “The Congress shall have power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.” Under this power Congress passed three statutes dealing with the public domain in 1796, 1800, and 1804; but the only mineral value considered was salt.

In 1807 Congress passed a public land law which included a provision authorizing leasing of the lead mines in the Indiana Territory. This section reserved to the United States for future disposal "the several lead mines in the Indiana Territory, together with as many sections contiguous to each as shall be deemed necessary by the President of the United States.” The only stipulation was that the lease term could not exceed 5 years. This system was abandoned first in Missouri in 1829 and then in the Upper Mississippi Valley in 1846. Congress passed the Act of July 11, 1846, authorizing the President to sell the reserved lead mines “as soon as practicable”. Furthermore, by the Act of March 1, 1847, Congress authorized the President to sell lands in the upper peninsula of Michigan containing copper, lead, or other valuable ores.

In general, during the period from 1784 to 1846, government policy had clearly been to distinguish lands valuable for minerals from general agricultural lands in the hope of maximizing revenues from the public lands. Just as the Preemption Act of 1841 marked the end of the attempt to use the sale of the general public lands as a source of revenue in favor of rapid disposition and development, so did the 1846 and 1847 acts reflect the shift of policy with respect to the mineral lands.

OPENING THE FRONTIER

When gold was discovered at Sutter's sawmill in California in 1848, no mining law existed for the public lands. The massive gold rush which followed created serious problems. The mining camps which grew up around the various strikes established their systems of law-both criminal and mining. The mining codes which developed bore marks of the disparate backgrounds of the miners who brought their experience from Mexico, Wales, and other mining districts in the United States.

Although Congress took up the question in 1850, it was 16 years before a mining law was passed. During this period the rapid-development philosophy had reached full flower with the passage of the Homestead Act of 1862. This law provided that settlers could acquire farms of 160 acres for only a nominal fee at the time of filing so long as they actually lived on and improved the homestead for 5 years (reduced to 3 years in 1866) Reflecting a similar approach, the Lode Law of 1866 stated in its opening section that “the mineral lands of the public domain ... are hereby declared to be free and open to exploration and occupation.” Full fee title in the form of a patent was made available for claims containing veins bearing gold, silver, cinnabar, or copper, provided that the claimant had complied with the applicable customs or rules of the mining district and had expended at least $1,000 in actual labor and improvements. The fee for a patent was a modest $5.00 per acre. The Placer Act of 1870 extended the patent system to "all forms of deposit, excepting veins of quartz, or other rock in place” thus encompassing previously neglected placer-type deposits. The patent fee for such claims was placed at $2.50 per acre.

In 1872 Congress passed the General Mining Law, which combined and somewhat modified the two earlier acts. This 1872 Mining Law is still in effect today, with remarkably little change. It maintains the policy of keeping the public lands open to exploration and occupation, with the significant modification that the lands occupied must contain "valuable mineral deposits."

The details of the system established under this law will be considered more fully in another section. At this point it is principally significant to note that the 1872 Mining Law was clearly a product of the times. In large part it represented a legal recognition of existing realities. The Federal presence on the western public lands was virtually nonexistent. Most of the mining activity occurred in remote, mountainous portions of the public lands where there were no other competing uses. During the time it took Congress to pass legislation governing mining access, miners had simply gone ahead and appropriated the mineral resources they discovered on the public lands. At the same time, they established their own rules of development. Such private appropriation of the public lands was fully in accordance with the prevailing Congressional policy of that period.

CONSERVATION-A NEW POLICY

Settlement of the West under the wide-open policy laws such as the Homestead Act and the General Mining Law proceeded rapidly. According to Gates in his History of Public Land Law Development:

* * * farm making in the West reached its peak in the 20 years between 1880 and 1900 when 497,230 new farms were created in the public domain west of the first tier beyond the Mississippi, but including Minnesota. Between 1882 and 1913 the number of mineral patents issued annually exceeded 1,000 in all but 5 years, with a peak number of 3,242 being

issued in 1892. Inevitably, however, a conservationist movement began developing during this period as a counterforce to this rapid disposition and exploitation of land and resources, The rapid dissipation of timber prompted the first substantive piece of legislation to come out of this movement, the Forest Reservation Act. This law authorized the President:

*** to set apart and reserve, in any State or Territory having public land bearing forests, in (sic) any part of the public lands wholly or in part covered with timber or undergrowth, whether of commercial value or not, as public reservations * * * During this same period Congress began a policy of setting aside areas of unique natural beauty in what are now Yellowstone, Sequoia, Yosemite, Kings Canyon, and Mount Rainier National Parks. No entry for either agricultural or mineral purposes was allowed in these areas. As Gates points out:

For a country whose policy from the outset has been to pass the public lands into private ownership as speedily as possible, this series of acts to preserve areas of considerable size in public ownership was a remarkable change in attitude Together with the adoption of the Forest Reservation Act they mark a turning point in public land policy.

This "remarkable change” was also soon to show itself in mineral policies. Public lands containing coal had since 1864 been governed by separate legislation which operated under a “sale” policy instead of the "free mining” policy adopted for other minerals. Because of indications that this law was being subverted, and because it was felt that the coal lands were passing into private ownership at a dangerously fast rate, President Theodore Roosevelt withdrew from all forms of entry approximately 66 million acres of land said to contain workable coal deposits.

In 1908 President Roosevelt created the National Conservation Commission, with Gifford Pinchot as chairman, to advise the President with respect to the condition of the natural resources. Among its numerous suggestions the Commission pointed out the significance of phosphate for the production of fertilizer. On December 9, 1908, 4.7 million acres of phosphate-bearing lands were withdrawn from entry. In 1909 President Taft withdrew over 3 million acres of oil and gas lands, and in 1913, potash and associated saline lands were also withdrawn in aid of legislation and for classification.

The 1909 oil and gas withdrawals precipitated a test of the executive authority to preempt the effect of a Congressional directive allowing entry onto the public lands valuable for minerals. In the case of United States v. Midwest Oil Co. (1914) the Supreme Court held that the executive branch did indeed have a kind of implied authority to make such withdrawals as a result of long standing practice and Congressional acquiescence. In the meantime Congress passed the Pickett Act granting the President discretionary authority to temporarily withdraw from settlement, location, sale, or entry any of the public lands for waterpower sites, irrigation, classification of lands, or other public purposes. However, entry under the mining laws for metalliferous minerals was expressly permitted on lands withdrawn by authority of the Pickett Act.

In a related development Congress passed a series of acts by which the public land suitable for agricultural use might be sold into private

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