U.S. Fish & Wildlife Proposes Revisions to Section 4 of the Endangered Species Act

Of interest to mineral projects, the U.S. Fish and Wildlife Service (USFWS) continues to attempt to revise some of its Endangered Species Act (ESA) implementing regulations to align with the relatively recent decision from the Supreme Court in Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv. (139 S. Ct. 361 (2018)). Today, it proposed new regulations that would establish a process and standards for how the USFWS will conduct exclusion analyses under Section 4(b)(2) of the ESA. Before the Weyerhaeuser decision, the USFWS took the position that a decision not to exclude an area was entirely discretionary to the point that it could not be reviewed under the Administrative Procedure Act (the Supreme Court held to the contrary). The proposed regulations acknowledge that decisions not to exclude critical habitat under Section 4(b)(2) are reviewable, but make sure to reserve as much discretion as possible for the USFWS in making such decisions.

Public comments from interested parties on the proposed rule will be accepted until October 8, 2020. Additional information can be found on the Federal Register’s website.

Alaska Oil & Gas Conservation Commission Proposes Changes to Bond Regulation

The Alaska Oil and Gas Conservation Commission (“AOGCC”) is considering revisions to 20 AAC 25.025 of the Alaska Administrative Code.  One revision would “allow a reduction in the requisite bond amount if an operator demonstrates that it has a bond in place with the landowner dedicated exclusively to the plugging and abandonment of a well or wells.”

For those operators that were authorized to increase their bond amount in four annual installments, the proposed change would give those operators additional time to reach the higher bonding amount by increasing the number of annual installment payments from four to seven.  Installment payments began on August 16, 2019, and currently are due on August 16 of 2020, 2021, and 2022.

Comments to the proposed regulation changes, including the potential costs to private persons of complying with the proposed changes, can be submitted in writing and sent to the following by not later than 4:30 p.m. on September 10, 2020:

By mail:
Jody Colombie
333 West 7th Avenue
Anchorage, Alaska 99501

By facsimile:
(907) 276-7542

By email:
aogcc.customer.svc@alaska.gov

A hearing on the proposed regulation changes is scheduled for September 1, 2020 at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska.  Those desiring to participate or be present at the hearing should check with the AOGCC after August 25, 2020 to ascertain if the hearing will be telephonic.  Additional information is available regarding the hearing and the proposal on the AOGCC’s website.

Changes to Alaska’s Mining Laws – Annual Labor

When Alaska amended its mineral tenure statutes, it significantly changed the statement of labor that must be filed annually to maintain state mining claims. We previously provided an overview of the changes and now explain them in more detail. Neither the amount of labor required nor the deadline for filing the annual statement has changed. Rather, the amendments clarify what counts as labor and what must be reported on the annual statement.

The law now clearly recognizes that labor that occurs on adjacent federal or private mineral interests held in common with state claims can be credited toward the claims so long as the claims benefit from the labor. While most miners believed the prior statutory language—providing that all work benefiting the state claims counted toward the labor requirement—allowed work on non-state lands to satisfy the labor requirement, the new language removes any room to question this long-standing practice.

The information that must be included in the annual statement of labor—commonly referred to as an affidavit of labor, or AOL—is now set forth in the statute, rather than the regulations. There are a few significant changes from the prior requirements. Continue Reading

U.S. Supreme Court Holds that Natural Gas Pipeline May Cross Under Appalachian Trail

On June 15, 2020, the U.S. Supreme Court held in United States Forest Service v. Cowpasture River Preservation Association that the U.S. Forest Service was authorized to issue a special use permit granting a 0.1-mile right of way under the Appalachian Trail (“Trail”) to Atlantic Coast Pipeline, LLC (“Atlantic”) for a proposed underground natural gas pipeline.  The proposed Atlantic Coast pipeline is 604 miles long and connects West Virginia to North Carolina.  The Supreme Court’s 7-2 decision overturned a ruling by the 4th Circuit Court of Appeals which held that the Forest Service did not have the authority to grant the special use permit and right-of-way.  The 4th Circuit found the Appalachian Trail became part of the National Park System when the Secretary of the Interior delegated its authority over the Trail’s administration to the National Park Service, and the Mineral Leasing Act prohibits pipeline rights-of-way through lands in the National Park System.  In overturning the 4th Circuit, the Supreme Court found that the Department of the Interior’s decision to assign responsibility over the Trail to the National Park Service did not transform the land over the Trail passes into land within the National Park System.  Therefore, the Forest Service had the authority to issue the special use permit because administrative action by the Forest Service in making the transfer of the Trail could not alter Congressional action in creating the Trail in the first instance.

Developers of the Atlantic Coast pipeline argued that upholding the 4th Circuit’s ruling would prevent natural gas development on the east coast.  During oral argument, several of the justices’ questions seemed to indicate a desire to find a practical solution to the problem that the transfer of the Trail to the Park Service created for Atlantic.  Though this Supreme Court decision is a victory for Atlantic, Atlantic still faces an uphill battle to construct the pipeline as several more necessary approvals are currently tied up in litigation.

Changes to Alaska’s Mining Laws – Qualification Statutes

Senate Bill 155, amending Alaska’s mineral tenure statutes, took effect April 30, but also addresses certain historical events affecting state mining claims. As previously reported, the amendments clarify who can hold state mining rights. But maybe more importantly, the law now addresses the effect of past qualification issues on the validity of the mineral interests.

Alaska law has long required that a corporation could hold state mining rights only if it is organized under U.S. law (including the laws of any state or territory) and qualified to do business in the State of Alaska. But in some instances, a mining claim’s history includes a time when a foreign entity held the mining claims or the business qualifications had lapsed in some manner and then been cured. The effect of these historical events on the current validity of the claims was unclear. Continue Reading

Draft North Slope Area Plan Available for Public Review and Comment

Stoel Rives is actively monitoring developments in the North Slope Area Plan (NSAP).  This week, the Public Review Draft of the NSAP was issued for public review and comment. Comments must be received by mail, email, fax, or through the online public comment portal by not later than July 15, 2020. Comments may also be hand delivered to the DNR Resource Assessment and Development Section office in Anchorage during normal business hours of operation.

We will continue to monitor developments related to the NSAP and provide updates.  However, should you have questions related to the NSAP or the Public Review Draft, please contact our office.

Alaska’s Mineral Tenure Statutes Amended

Governor Mike Dunleavy signed Senate Bill (“SB”) 155 amending Alaska’s mineral tenure statutes, effective April 30, 2020. The legislation addresses issues regarding qualification to hold state mining claims, location of claims, statements of annual labor, and automatic abandonment of mining claims. The amendments and additions to the statutes clarify a number of issues and assure that state mining claims are not deemed abandoned without due process.

Qualifications

SB 155 amends AS 38.05.190 to clarify who may hold exploration and mining rights. As amended, the law expressly authorizes limited liability companies qualified to do business in Alaska and registered trusts to acquire and hold state mining claims. Previously, it was not clear that these types of entities could hold claims, or what effect such ownership may have on the claims. The amendments include a notice and cure process by which the Department of Natural Resources (“DNR”) may void a mining interest if a qualification defect is not cured within 90 days after notice. The requirement that an owner be a citizen of the United States or a business entity organized in the United States, with limited exceptions, remains in the statute. Continue Reading

Alaska DNR Issues Guidance for Placer Mining Operations During COVID-19

The Department of Natural Resources (“DNR”) Division of Mining, Land and Water has issued guidance for placer mining operations to comply with the state’s COVID-19 health mandates. Mining is identified as “critical infrastructure” in the Alaska Essential Services and Critical Workforce Infrastructure Order. Before traveling to their placer operation, and while at their operation, miners must practice appropriate social distancing and comply with Health Mandate 10 regarding interstate travel and self-quarantine, and Health Mandate 12 regarding intrastate travel.

Miners traveling from outside of the state are required to quarantine for 14 days upon arrival. This quarantine must occur before miners begin to acquire supplies or mobilize their placer operations. Miners who are located in the state and those who have completed the required 14-day quarantine should purchase supplies and provisions in their local home area before traveling to their placer operation. Additionally, if workers are required to travel between communities, a plan must first be submitted to the state outlining how they will avoid spreading COVID-19.

Alaska Suspends Fees for Easements, Rights-of-Way, and Mining Leases

State of Alaska Governor Mike Dunleavy has issued COVID-19 Disaster Order of Suspension No 2, suspending a long list of statutory and regulatory provisions. The list of suspended statutes includes AS 38.05.850 which authorizes the state to grant easements and rights-of-way for roads, pipelines, and other facilities associated with the extraction of minerals. Under such authorizations, payment due dates are suspended and no late fees will be charged. The Order suspends each statute or regulation until 11:59 p.m. on May 11, 2020, unless otherwise noted.

Also, the Division of Mining, Land and Water has issued a finding that payments due under a land sale contract or lease “that are or will be prevented because of the COVID-19 pandemic are prevented by an act of God and may be extended” until 5:00 p.m. on July 10, 2020. The extension expressly applies to an Upland Mining Lease, a Mill Site Lease, and an Offshore Mining Lease. To qualify for the extension, an affected person must submit a written request including an explanation of how the COVID-19 pandemic has prevented or will prevent their compliance with the required land sale contract or lease payment.

AOGCC Implements Electronic Permitting Procedures in Response to Office Shutdowns Caused by COVID-19

tax creditLast month, the Alaska Oil and Gas Conservation Commission (AOGCC) announced that it would be implementing electronic permitting procedures in response to office shutdowns caused by COVID-19. The electronic process will also serve as the initial step in developing a fully electronic permitting and reporting system.

The initial system will utilize “AOGCC-designed fillable PDF and Excel forms, emails, and secure FTP sites provided by each Operator.” The Industry Guidance Bulletin 20-001, released by AOGCC, provides guidance on how to complete permit to drill and sundry applications. The Industry Guidance Bulletin 20-002 includes instructions for filling out and submitting AOGCC-designed forms for sundry and well completion reports.

As of April 1, all sundry reports and well completion reports must be submitted via digital formal. Also effective April 1, “Operators shall hold data submittals until a secure, operator-hosted FTP server is available for AOGCC access, which shall be no later than April 20, 2020.” All materials submitted electronically will be stored in accordance with AOGCC’s confidential documents protocols.

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