Aulston v. U.S., 88-2349

• Decision Date: 20 September 1990
• Docket Number: No. 88-2349,88-2349
• Parties: Joe AULSTON and Lola Aulston, et al., Plaintiffs-Appellants, v. UNITED STATES of America, et al., Defendants-Appellees, and Shell Western E & P, et al., Intervenors-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 584

915 F.2d 584

Joe AULSTON and Lola Aulston, et al., Plaintiffs-Appellants, v. UNITED STATES of America, et al., Defendants-Appellees, and Shell Western E & P, et al., Intervenors-Appellees.

No. 88-2349.

United States Court of Appeals, Tenth Circuit.

Sept. 20, 1990.

Robert H. Bork, Washington, D.C. (Luke J. Danielson, Denver, Colo., and Stephen Muse, San Antonio, Tex., with him, on briefs), for plaintiffs-appellants.

George W. Van Cleve (Michael J. Norton, Acting U.S. Atty. and Paula M. Ray, Asst U.S. Atty., Denver, Colo., with him, on brief), for defendants-appellees.

Marla J. Williams (Steven B. Richardson with her, on brief), Holme Roberts & Owen, Denver, Colo., for intervenors-appellees.

Before HOLLOWAY, Chief Judge, and SEYMOUR and MOORE, Circuit Judges.

SEYMOUR, Circuit Judge.

This case presents us with the question whether oil and gas reservations to the United States in federal land patents pursuant to the Agricultural Entry Act of 1914, 30 U.S.C. Secs. 121-125 (1988) (1914 Act), include deposits of carbon dioxide gas. The Department of the Interior and the district court concluded that the carbon dioxide gas was reserved to the government. We agree and hold that the term "gas" in the 1914 Act reasonably may be interpreted to include the carbon dioxide deposits.

I.

A.

Plaintiffs are owners of ranchlands and dryland farms in Montezuma and Dolores Counties in the State of Colorado. Underlying or adjacent to these lands are portions of the McElmo Dome, a geologic formation containing a large amount of nearly pure carbon dioxide, which is an inert, non-combustible, odorless gas at normal temperature and pressure conditions. The gas was discovered in the Dome in the 1950s. Although of little or no commercial value for decades, ¹ the combination of the domestic oil shortages of the 1970s and the resultant development of tertiary oil recovery methods employing carbon dioxide suddenly transformed the gas into a valuable resource. Since 1982, carbon dioxide gas has been pumped from plaintiffs' lands by private oil companies under a leasing arrangement with the United States government. The gas is transported by pipeline to otherwise depleted oil fields in Texas, where it is used both as a pressurizer and a solvent to enhance oil recovery there.

The United States' claim to ownership of the carbon dioxide gas derives from reservations to the United States of "oil and gas" or "oil, gas, potash and sodium" contained in plaintiffs' or their predecessors' federal land patents issued under the homestead laws. The reservations at issue were created pursuant to the Agricultural Entry Act of 1914, ch. 142, 38 Stat. 509 (codified as amended at 30 U.S.C. Secs. 121-125 (1988)) (1914 Act). The 1914 Act provided for homestead entry onto lands withdrawn from entry, classified, or reported as valuable for "phosphate, nitrate, potash, oil, gas, or asphaltic minerals," subject to reservations to the United States of the enumerated resources "on account of which the lands were withdrawn or classified or reported as valuable." Id. Sec. 121. Plaintiffs claim that the term "gas" in the 1914 Act and in the patents refers to combustible hydrocarbon gas only.

To gain a proper understanding of the statute at issue, we must put it into its historical context. As is true for much of the West, plaintiffs' lands originally comprised part of a vast public domain. In the second half of the nineteenth century, Congress enacted homestead laws to encourage settlement and agricultural development of these immense stretches of land. See, e.g., Homestead Act of 1862, ch. 75, 12 Stat. 392 (codified as amended at 43 U.S.C. Secs. 161-302 (1982)), repealed by Federal Land Policy and Management Act of 1976, Pub.L. No. 94-579, 90 Stat. 2787.

Settlement occurred at a rapid pace and full fee title to much of this land passed into private hands. In the conservation-minded, Progressivist era of the first few decades of the twentieth century, the concern arose that valuable resources in the public domain should remain in public hands to avoid imprudent development, add to public revenues, and avert the threat of monopolization. See generally Colby, The New Public Land Policy with Special Reference to Oil Lands, 3 Cal.L.Rev. 269 (1915). In particular, the homestead entry laws were viewed as subject to abuse by speculators interested only in the mineral resources underlying them. See The Classification of the Public Lands, 537 USGS Bull. 38-39, Dep't of the Interior (1913) (Bulletin 537). Presumably for fear of the consequences of legislative delay, the Department of the Interior unilaterally withdrew from homestead entry millions of acres believed to contain oil, gas, phosphate, or coal. See id. at 38-43; see also United States v. Midwest Oil Co., 236 U.S. 459, 478-79, 35 S.Ct. 309, 315, 59 L.Ed. 673 (1915) (describing executive land withdrawals).

In 1910, Congress recognized the executive's authority to make land withdrawals and provided a procedure by which the Department of the Interior could withdraw any public lands and reserve them for the public purpose set forth in the withdrawal order. See Pickett Act of 1910, ch. 421, 36 Stat. 847 (codified as amended at 43 U.S.C. Secs. 141-142 (1970)), repealed by Federal Land Policy and Management Act of 1976, Pub.L. No. 94-579, 90 Stat. 2792; see also Midwest Oil Co., 236 U.S. at 482-83, 35 S.Ct. at 316-17 (validating executive withdrawals and discussing purpose and effect of Pickett Act). The Pickett Act withdrawals were only partial, however. When originally enacted, the Act provided that lands so withdrawn would remain open for development and purchase of "minerals other than coal, oil, gas and phosphates." Ch. 421, 36 Stat. 847. In 1912, Congress amended the Pickett Act and replaced this list of excluded minerals with a provision allowing exploration and purchase of metalliferous minerals on withdrawn lands. See Act of August 24, 1912, ch. 369, 37 Stat. 497. Under the Pickett Act, the Department of the Interior continued with its policy of withdrawing vast quantities of land it believed valuable for petroleum (including gas), phosphate, potash, waterpower, coal, and other nonmetalliferous minerals. See Letters from the Secretary of the Interior to Congress (Dec. 13, 1912 and December 16, 1913) (Report on Land Withdrawals from Settlement, Location, Sale, or Entry under Provisions of the Act of Congress Approved June 25, 1910, 36 Stat. 847).

In addition to the Pickett Act land withdrawals, the United States Geological Survey (USGS) embarked on a large-scale program of classification of the public lands according to their mineral, hydrologic, and agricultural characteristics. See generally Bulletin 537. Under the USGS system then in use, mineral lands could be classified as coal lands, oil and gas lands, potash lands, or phosphate lands, among other minerals. See id. Concerning oil and gas, the Survey noted:

"The immediate purpose of the classification of oil and gas land is to withhold from entry all lands containing valuable deposits of fluid hydrocarbons pending the enactment of adequate legislation providing for their disposition. The ultimate purpose of the classification is to determine the position and extent of the areas whose value for their deposits of oil or gas, whether proved by actual drilling or indicated by favorable geologic conditions, is greater than their value for agriculture or other purposes and to provide for a disposition of the deposits in accordance with this greater value."

Id. at 117. Once land was so classified, a proposed withdrawal order would be sent to the Secretary of the Interior for appropriate action. ²

In the wake of these large-scale withdrawals, it was evident that valuable farm or ranch lands would go untilled or ungrazed because they were withdrawn from entry on account of the valuable deposits believed to exist there. Congress responded with a series of acts, including the 1914 Act, permitting homestead entry onto such lands while reserving various types of mineral estates in the United States. See, e.g., Act of March 3, 1909, ch. 270, 35 Stat. 844 (codified at 30 U.S.C. Sec. 81 (1988)) (reserving coal); Act of August 24, 1912, ch. 367, 37 Stat. 496, repealed by Act of December 16, 1930, ch. 14, 46 Stat. 1028 (reserving enumerated mineral resources in land patents issued in Utah); 1914 Act (authorizing reservations of phosphate, nitrate, potash, oil, gas, and asphaltic minerals); Stock Raising Homestead Act of December 29, 1916, ch. 9, 39 Stat. 864 (codified at 43 U.S.C. Sec. 299 (1982)) (reserving "coal and other minerals"); see generally Bate, Mineral Exceptions and Reservations in Federal Public Land Patents, 17 Rocky Mtn.Min.L.Inst. 325, 345-50 (1972).

Plaintiffs' or their predecessors' patents contain reservations of "oil and gas" or "oil, gas, potash and sodium" ³ pursuant to the 1914 Act. A typical patent grants the land to the homestead claimant

"EXCEPTING AND RESERVING TO THE UNITED STATES all oil and gas in the lands so patented, and to it, or persons authorized by it, the right to prospect for, mine and remove such deposits from the same upon compliance with the conditions and subject to the provisions and limitations of the [1914 Act]."

Rec., vol. II, at 2. The relevant portions of the 1914 Act in turn provide:

"Lands withdrawn or classified as phosphate, nitrate, potash, oil, gas, or asphaltic minerals, or which are valuable for these deposits, shall be subject to appropriation, location, selection, entry, or purchase, if otherwise available, under the nonmineral land laws of the United States, whenever such location, selection, entry, or purchase shall be made with a view of obtaining or passing title with a reservation to the United States of the deposits on account of which the lands were withdrawn or classified or reported as valuable, together with the right to prospect for, mine, and remove the same."

30 U.S.C. Sec....