Blueher, Thomas F.

English

University of New Mexico

Volume 20 
Issue 2 Symposium on "Whither Environmentalism?" 
Spring 1980 
Mineral Leasing Act of 1920: Environmental Standards Set by 
Departmental Regulations 
Thomas F. Blueher 
Recommended Citation 
Thomas F. Blueher, Mineral Leasing Act of 1920: Environmental Standards Set by Departmental 
Regulations, 20 Nat. Resources J. 367 (1980). 
Available at: https://digitalrepository.unm.edu/nrj/vol20/iss2/11 
This Recent Developments is brought to you for free and open access by the Law Journals at UNM Digital 
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MINERAL LEASING ACT OF 1920:
ENVIRONMENTAL STANDARDS SET BY
DEPARTMENTAL REGULATIONS
MINING LAW-MINERAL LEASING ACT OF 1920
The Secretary of Interior has no discretion to reject coal lease appli-
cations of applicants who obtained prospecting permits before the
Federal Coal Leasing Amendments Act of 1976. Natural Resources
Defense Council, Inc. v. Berklund, 609 F.2d 553 (D.C. Cir. 1979).
Appellants, the National Resources Defense Council (NRDC), and
the Environmental Defense Fund (EDF), brought this suit in the
United States District Court, District of Columbia,' seeking a dec-
laratory judgment that the Secretary of Interior has authority to
reject coal mining lease applications on environmental grounds, even
after the lease applicants fulfilled the requirements under Section 2
of the Mineral Leasing Act of 1920.2 Appellants also sought a dec-
laratory judgment setting out the secretary's need to prepare an
environmental impact statement (EIS) on any proposed coal mining
lease where the issuance would constitute major federal action under
the National Environmental Policy Act (NEPA).
Before the District of Columbia Court of Appeals, both parties
agreed with the Department of Interior's position that coal leases
which have a major impact on the human environment should be
accompanied by an EIS.3 This left the appellate court with only one
issue: whether the Secretary of Interior has discretion to reject pref-
erence right coal leases4 on environmental grounds where coal is
found in commercial quantities? The court affirmed the district
court's decision that the secretary does not have such discretion.
This appeal was limited to 183 potential coal lease applicants who
received their prospecting permits under Section 2 of the act prior to
1. Natural Resources Defense Council, Inc. v. Berklund, 458 F. Supp. 925 (D.D.C.
1978).
2. Mineral Leasing Act of 1920, 30 U.S.C.A. §201 (1976) (original version at ch. 85,
§2(a)(b), 41 Stat. 438 (1920)) (current version at 30 U.S.C. §201 (1976)) [hereinafter
cited only to U.S.C.A.].
3. Natural Resources Defense Council, Inc. v. Berklund, 609 F.2d 553, 555 n.3 (D.C. Cir.
1979).
4. The term "preference right lease" is not mentioned in the statute. It is used by the
Department of Interior in its regulations governing lease applications by holders of prospect-
ing permits for coal, phosphate, sodium, sulphur, and potassium. 43 C.F.R. § 3520 (1979).
368 NATURAL RESOURCES JOURNAL [Vol. 20
1973.1 In 1973 the Department of Interior ceased issuing permits for
coal exploration, pending the development of a new program that
would give "proper regard for the protection of the environment." 6
The issuance of prospecting permits was never resumed. The Federal
Coal Leasing Amendments Act of 1976 eliminated prospecting per-
mits and attending lease applications. 7 Consequently, this decision
only affects those outstanding prospecting permittees and their
potential lease applications under the act.
In reaching its decision the appellate court looked to the act, its
historical application and those departmental regulations which
worked to redefine its application.
MINERAL LEASING ACT OF 1920
The act established a program to lease mineral rights on federal
lands for private mining and marketing.' The secretary was given
discretionary power to divide any coal lands into leasing tracts, and
to issue prospecting permits to qualified applicants. 9 Section 201(B)
provided that such permittees "shall be entitled to a lease for all or
part of the land on his permit" if they showed the secretary, within
two years of receiving the permit, that the land contained coal in
commercial quantities.' 0
The United States Geological Survey determined when permit
areas contained commercial quantities of coal. Its conclusion was
based on three considerations: whether coal existed, whether it could
be extracted at a profit, and its characteristics.' 1 Environmental
concerns were not a necessary consideration in this determination.
DEPARTMENTAL REGULATIONS
The court noted that the Department of Interior introduced en-
vironmental requirements into this lease process in regulations
promulgated on January 18, 1969.1 2 Those regulations required a
5. 609 F.2d at 555 n.1. "[A] s of October 1974, in six western states, at least 496,000
acres containing some 12 billion tons of coal were subject to 183 preference right lease
applications." 458 F. Supp. at 931. "As of January 1975, in four western states, there were
still some 100,812 acres subject to outstanding prospecting permits, any or all of which
could mature into preference right lease applications." 458 F. Supp. at 931 n.12.
6. Order No. 2952, 38 Fed. Reg. 4682 (1973).
7. Federal Coal Leasing Amendments Act of 1975, Pub. L. No. 94-377, §4, 90 Stat.
1083, 1085 (affecting the Mineral Leasing Act of 1920, 30 U.S.C. § § 181-263 (1976)).
8. 30 U.S.C.A. § § 181-263 (1976).
9. 30 U.S.C.A. §201 (1976).
10. 30 U.S.C.A. § 201(B) (1976).
11. Natural Resources Defense Council, Inc. v. Berklund, 458 F. Supp. at 929.
12. 43 C.F.R. §23.5(A) (1979).
ENVIRONMENTAL CONSIDERATIONS
technical examination to estimate the environmental impact of pro-
posed prospecting and mining efforts, and to provide means to
protect nonmineral resources.1 3 Before a permittee or lessee can
begin prospecting or mining the Department has to approve a de-
tailed exploration or mining plan.' 
The court further noted that all outstanding lease applications are
now subject to a 1976 regulation which redefines "commercial quan-
tities." A permittee applying for a lease must establish, through
detailed procedures, the profitability of the proposed mining.' 6 He
must show that revenues will exceed development and operating
costs. These costs include compliance with reclamation and environ-
mental standards.' 7 Additionally, a 1977 regulation permits the
exchange of applications with environmental shortcomings for 1)
bidding rights in subsequent competitive lease sales, 2) modifications
of existing leases where appropriate or 3) exchange of other mineral
rights of comparable value.' 8
The court concluded that the property rights anticipated by those
lease applicants with valid pre-1976 prospecting permits cannot be
diminished.'" Under the terms of Section 201(B) of the act, the
Secretary of Interior must grant lease applications once the applicant
establishes "commercial quantities" of coal within his permit area. In
conjunction with this, the court explicitly noted that environmental
safeguards have been instituted into the lease application process
through Department of Interior regulations. An applicant must estab-
lish commercial quantities as defined in the 1976 regulation. Appli-
cants must also comply with the technical environmental safeguards
provided in the January 1969 regulations.
CONCLUSION
This decision upholds the established property rights of the 183
potential lease applicants. The court achieved this by enforcing the
specific language of the act, which establishes that the Secretary of
Interior has no authority to reject coal lease applications on environ-
mental grounds if the applicant has complied with the appropriate
regulations. Although the secretary cannot reject lease applications
on environmental grounds, he also cannot authorize a coal mining
13. Id.
14. 43 C.F.R. § §23.7, .8 (1979).
15. 43 C.F.R. §3521.1-1(c) (1979).
16. Id.
17. Id.
18. 43 C.F.R. § 3526 (1979).
19. 609 F.2d at 559.
April 19801
370 NATURAL RESOURCES JOURNAL [Vol. 20
lease until the applicant has specifically complied with the environ-
mental safeguards mandated by the regulations. The Department of
Interior has, in effect, incorporated environmental safeguards into
the act through its regulations.
THOMAS F. BLUEHER


Mineral Leasing Act of 1920: Environmental Standards Set by Departmental Regulations

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