Gulf Oil Corp. v. Wyoming Oil and Gas Conservation Com'n, No. 84-82
| Court | United States State Supreme Court of Wyoming |
| Writing for the Court | ROSE; ROONEY, Justice, dissenting, with whom BROWN |
| Citation | 693 P.2d 227 |
| Parties | GULF OIL CORPORATION, Petitioner, v. WYOMING OIL AND GAS CONSERVATION COMMISSION and Story Oil Impact Committee, Respondents. |
| Docket Number | No. 84-82 |
| Decision Date | 04 January 1985 |
Page 227
v.
WYOMING OIL AND GAS CONSERVATION COMMISSION and Story Oil Impact Committee, Respondents.
Page 229
Houston G. Williams and Richard L. Williams of Williams, Porter, Day & Neville, P.C., Casper, and Michael C. Smith, Houston, Tex., for petitioner.
Joe Scott, Sp. Asst. Atty. Gen., Casper, for respondent Wyo. Oil and Gas Conservation Com'n.
Rebecca W. Thomson of Burgess & Davis, Sheridan, for respondent Story Oil Impact Committee.
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Before THOMAS *, C.J., and ROSE, ROONEY **, BROWN and CARDINE, JJ.
ROSE, Justice.
This petition for review concerns the authority of the respondent Wyoming Oil and Gas Conservation Commission (Commission or WOGCC) to impose certain restrictions on the drilling activities of petitioner Gulf Oil Corporation (Gulf) on federal land within this state. The Commission granted Gulf's application for a permit to drill a well on national forest land, subject to the condition that Gulf refrain from using its preferred access route through the village of Story, Wyoming. At issue is whether federal mining and environmental protection laws 1 preempt this state's statutes and rules 2 which allow the Commission to condition federally authorized drilling activities on the basis of identified environmental concerns. Gulf also asserts that, the federal preemption question aside, the Commission's order in this case is not supported by substantial evidence. We will affirm.
In compliance with state and federal regulations Gulf sought permission from both WOGCC and the United States Department of the Interior, Bureau of Land Management (BLM) to drill a wildcat well 3 in the Granite Ridge Field of Sheridan County. The proposed well concerns federally owned minerals in the Big Horn National Forest and is one of several exploratory drillings planned by Gulf in this field. Gulf proposed to obtain access to the well site via state highway and county road through Story. This proposed access, designated the southern route, would require extending the existing county road west of Story for about 3.8 miles over national forest land and property owned jointly by Gulf and Texaco, Inc.
Respondent Story Oil Impact Committee (STOIC), composed of citizens of Story, filed a protest with WOGCC concerning the environmental consequences of Gulf's proposed well and access route. STOIC contended that the drilling and related activities would violate Rule 326 (Chapter III, Section 26) of the Rules and Regulations of the Wyoming Oil and Gas Conservation Commission, which provides in part:
"The owner shall not pollute streams, underground water, or unreasonably damage the surface of the leased premises or other lands." 4
The Commission, on its own motion, also raised the matter of Gulf's compliance with Rule 326, and a hearing was held on November 15, 1983.
The testimony and other evidence presented at the hearing focused on the feasibility and environmental impact of various means of reaching the well site. Representatives from Gulf testified concerning five alternative means of access:
1. The proposed southern access road through Story;
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2. The northern access route--an extension of roadway from Gulf's existing well site on private property across national forest land, part of which is subject to Roadless Area Review and Evaluation (RARE II) by the United States Department of Agriculture, Forest Service;
3. The North Piney Creek route which would require the improvement of an existing county bridge;
4. Directional drilling from private property; and
5. Helicopter mobilization.
STOIC offered and the Commission received into evidence the Environmental Assessment of the proposed well prepared by the BLM with technical assistance from the United States Forest Service. 5 The Commission took notice of the ramifications of the RARE II program, pursuant to § 16-3-108(d), W.S.1977, of the Wyoming Administrative Procedure Act. 6
After considering the evidence presented at the hearing, WOGCC, on November 23, 1983, issued its findings of fact and conclusions of law. Findings 9 through 12 describe the consequences of using the proposed southern road:
"9. * * * [The southern road] will go from an elevation of about 5,250 feet to 6,960 feet in a little over two air miles and about 3.8 road miles. To state the obvious, it will be a very steep grade.
"10. Much of this road goes along a limestone cliff. There is a minimal amount of vegetation on it now and there is not likely to be more in the future. About 700 feet of this will be visible from 80 percent of Story, and an additional 1,000 feet of road will be visible from various points in the area. Much would be visible from Interstate Highway 90.
"11. The road will also run close to the Story Penrose Trail, as shown on Gulf Exhibit 2. This trail is a major access route for recreational purposes (hiking, birdwatching, hunting, and fishing) to various lakes, creeks, and the Cloud Peak Primitive Area in the Big Horn National Forest.
"12. Due to the extreme grade of the road and its crossing of the limestone cliff, it will be impossible to reclaim a considerable portion of the road. Some parts will be a permanent scar on the landscape."
Finding 21 sets out the problems associated with the alternate, northern route:
"21. * * * Much of this route is a private road through the land of an individual named Burns, or land owned by a corporation owned by Burns. As part of the arrangement to be able to use this route to [Gulf's existing well site], Gulf promised Burns that it would not extend this road into the nearby Big Horn National Forest. This road does cross some
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National Forest land and some land under the RARE II designation after leaving Burns' property. Though Gulf has the power of condemnation for an access road to an oil well, it has orally promised Burns it would not use condemnation against him."Obstacles also exist with respect to the North Piney Creek route, as indicated in Finding 20:
"20. Another alternative access would involve going along and crossing North Piney Creek. To do so, Gulf would have to improve a bridge across the creek to accommodate heavy truck traffic. The Sheridan County Commission has denied them permission to do so."
The Commission recognized the impossibility of directional drilling through 10,000 feet of granite (Finding 23), but found that Gulf had not ruled out the feasibility of helicopter mobilization as a means of access:
"19. Gulf objected to helicopter mobilization to drill the [proposed] well * * * because it was too expensive, too much equipment had to be moved, and it would be hazardous to carry explosives on the helicopters. The Bureau of Land Management (BLM), in their Environmental Assessment (EA) concluded that helicopter mobilization would have the least effect on the environment of any alternative. We make no finding of this nature. We do find that helicopter mobilization would not require building the southern access road with the resultant permanent scar on the mountain. The evidence does not reflect how expensive helicopter mobilization would be, the nature and amount of equipment that would have to be moved, the reason for having explosives on them, or how many trips with explosives would occur. We are not persuaded that helicopter mobilization is not a viable, technologically feasible, and appropriate means of access to the [proposed] well."
The Commission concluded that the proposed southern access road to the drill site would leave a nonreclaimable scar on the side of the mountain and, therefore, constituted unreasonable land surface damage. The Commission further concluded that Gulf had failed to prove a lack of any reasonable alternative to the southern road:
"It appears there are other feasible alternatives discussed in the Environmental Assessment. We prefer to let the Bureau of Land Management, the Forest Service, and Gulf consider these alternatives in the future. Before a permit would be granted for a route that would cause surface damage such as the southern route, the owner must prove to this Commission that there is no reasonable alternative. Gulf has failed to meet this burden of proof."
Accordingly, WOGCC approved Gulf's application for a permit to drill the well, subject to the condition that access be obtained by means other than the proposed southern route.
Gulf timely filed a petition for judicial review of the Commission's order. The district court certified the case to this court pursuant to Rule 12.09, W.R.A.P. Additional facts pertinent to this case will be developed during our discussion of the issues.
Gulf presents the following issues for our consideration:
"I. Are the actions of the Wyoming Oil and Gas Conservation Commission in imposing conditions on a state permit to drill on federal surface to federal minerals pre-empted by the Supremacy Clause of the United States Constitution?
"II. Does the Wyoming Oil and Gas Conservation Commission lack jurisdiction to impose any restrictions with respect to that portion of the proposed access road which lies on the fee property owned by Gulf Oil Corporation and its partner?
"III. If the jurisdiction of the Wyoming Oil and Gas Conservation Commission has not been pre-empted under the Supremacy Clause of the United States
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Constitution, was its order in this matter arbitrary, capricious, and not supported by substantial evidence?"Before addressing these issues, we must dispose of respondents' contention that this case should be dismissed as moot.
In their briefs, the Commission and STOIC call to our attention factual matters which have developed since the administrative hearing and which, respondents urge, render this petition moot. On March 16, 1984, the BLM approved Gulf's application for a federal permit to drill its proposed well, subject to the condition that access...
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