- Associated Press - Friday, March 6, 2015

BOISE, Idaho (AP) - An Idaho Senate committee has sent to the full Senate a bill giving state officials the option of excluding the federal government’s mineral rights from areas that contain natural gas and oil.

The Senate Resources and Environment Committee on Friday approved the industry-backed bill that has already passed in the House.

If it becomes law it will give the five-member Idaho Oil and Gas Conservation Commission the option to exclude federal mineral rights if the federal government fails to grant leases.

Backers say the state needs that option because the U.S. Bureau of Land Management is halting development by failing to offer leases in western Idaho where the nascent industry is moving forward.

“As you know, the BLM has a lot of federal processes and hoops to jump through before they can lease the land,” said Rep. Judy Boyle, R-Midvale, who brought the bill forward. “You’re dealing with a federal agency that takes a long time.”

She noted the BLM must meet federal environmental laws before leasing, and that can take years. Meanwhile, though, the federal government can’t be compelled to take part in a leasing program as can be done with private landowners. Without a federal lease, she said, production is halted.

“Give the Oil and Gas Commission the leeway, if they want to do this, the ability to do this,” said John Peiserich of Alta Mesa, a Houston-based oil company.

The company has drilled more than a dozen wells in western Idaho and is building a pipeline. Company officials have said they would simply like to lease BLM land and pay the royalties. But without leases being offered, the company’s development plans have been blocked.

It’s not exactly clear how the BLM in Idaho would respond to having potential royalty money, half of which would go to Idaho, excluded. No federal officials testified on Friday. But the agency in previous hearings before the Oil and Gas Conservation Commission fought attempts by Alta Mesa to have its mineral rights excluded.

John Freemuth, a Boise State University professor and public lands expert who analyzed the bill at the request of The Associated Press, said it wasn’t clear to him how the state had the authority to exclude federal mineral rights.

Alma Hasse of Idaho Residents Against Gas Extraction on Friday spoke against the bill.

“Let’s just call this what it is,” she said. “It’s theft of federal government property.”

It’s not clear how much money might be involved. Jim Classen, a member of the Oil and Gas Conservation Commission, has testified before lawmakers that he estimates Alta Mesa has spent $65 million developing its wells and other infrastructure in western Idaho.

Classen and his fellow commissioners, should the bill become law, will be tasked with whether or not to exclude federal mineral rights.

“The commission will as a group try to do what they consider to be the most fair appraisal on behalf of all mineral interest owners, including BLM,” Classen said after the meeting.

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