OCR Text |
Show general knowledge suggest reasonably good prospects for success.* To achieve the objective of this recommendation, the administrator should have the authority to segregate public land from mineral exploration for a short period of time. At the end of the prescribed period exploration rights should be available non-competitively in the same manner that we have recommended with regard to other minerals. Adoption of this recommendation would eliminate the need for the simultaneous filing system currently in effect. Similarly, this would eliminate the known geologic structure as a standard for competitive allocation of oil and gas leasing rights.27 Prospecting permits and leases should apply to all leasable minerals unless expressly excluded by the administrator in accordance with legislative guidelines. Unless a particular mineral or class of minerals is specifically mentioned, it is excluded from permits or leases at the present time. In our view, this practice does not conform to changes in technology and mineral industry patterns in recent years. Diversification has proceeded to the point where, as a general rule, a mineral explorer can be expected to develop any commercially valuable deposit he may find. Of course, the administrator should have carefully defined authority to exclude minerals, particularly when available information indicates that competitive sale of exploration rights for particular minerals would be appropriate. Congress should provide guidelines to implement this recommendation that would (a) limit the area covered by a single exploration lease or permit and the aggregate acreage any one explorer can hold, (b) specify the period of time for which the exploration right is granted, and (c) establish performance requirements designed to assure diligent exploration as a condition of retaining and renewing the rights conferred. We are convinced that there should be maximum sizes prescribed for prospecting permits and nonproducing leases to promote competition in mineral exploration and eliminate holding areas without development. Limits should apply only to such situations and should not include producing areas where no maximum acreages are believed necessary. In some respects these ends are achieved by law or administrative regulation. However, there is a lack 27 The expanded competitive leasing system we recommend will, we believe, eliminate the improper use of partial assignments discussed in the Comptroller General's Report (B-l 18678) dated March 17, 1970. * Commissioners Clark, Goddard, and Hoff submit the following separate views: The abolition of all noncompeti-tive leasing was proposed by us in more than one Commission session. Developments in Alaska and the Report by the Comptroller General, B-l 18678, dated March 17, 1970, on leasing emphasize this view. of uniformity which should be corrected. For example, no performance requirements are imposed in oil and gas leases, many of which are issued for 10-year terms, other than a provision that a two-year renewal of a nonproducing lease may be obtained only if actual drilling operations are being diligently prosecuted at the expiration of the primary term.28 Such a provision does not adequately protect against mere speculation and certainly does not assure diligent exploration efforts. Under the existing leasing system, administrators have considerable authority through regulation and practice to modify operating conditions unilaterally. This has led to misunderstandings and a lack of confidence in lease tenure, particularly among producers of leasable minerals other than oil and gas. We recommend that, as nearly as practicable, all rights and obligations, including those related to maintenance of the environment, of mineral explorers and developers be clearly defined at the outset of their undertakings, and the unilateral authority to modify operational and payment requirements should be limited under guidelines to be specified by the Congress. It is unfair for one party to an arrangement to have the unilateral power to impose higher royalty obligations or more stringent operating conditions on the other party, particularly when no standards are specified for such changes. Even in the case of renewals, we believe revisions of this kind should be authorized only within limitations to be established by law. Limitations of this kind are not provided under the existing law. Consistent with our recommendations for the location-patent system we, of course, expect that prospecting permits and leases would require compliance with guidelines to minimize use conflicts and protect the environment. Exploration, development, and production plans should be subject to approval in the manner we recommend for the location-patent system. Also, equivalent rehabilitation requirements should be applied. These matters, now left to administrative discretion, should in our view, be required by statute. In the competitive sale of mineral leases, it is common practice for the administrator to reserve the right to reject all bids, even when one or more exceeds the minimum considered acceptable at the time the sale was announced. This right occasionally is exercised and customarily no public reasons are announced for the action. We believe it is in the public interest to reserve this right. The reasons for rejecting all bids at a competitive mineral lease sale should be made public, but the exercise of this authority should not be legally reviewable except in cases of abuse of discretion. Some public lands are in states having laws under 2830U.S.C. §266(e) (1964). 133 |