Saturday, December 7, 2013

Request For Information: US Army Corps Of Engineers And Flow Easements

I know nothing about this, but a reader asked. It was something new to me, so I'll ask the question, see if anyone knows what I'm talking about. It will help me/others understand the process.

It has to do with the US Army Corps of Engineers (USACE) and "flow easements" along the river.

I assume the "flow easement" does not negate the possibility of a horizontal well extending under the easement or under the river; obviously there are horizontals everywhere under the river.

According to the reader, the operator did not renew the lease and appears not to be interested in drilling in this area (where the USACE has the easement).

Is there something unique about a flow easement that makes drilling here unlikely, or is this purely coincidental, that the USACE has a flow easement here and the operator chooses not to drill?

Is this simply a question of whether the "government royalties" will go to the state or to the federal government (the "riparian" argument in the Bakken)? Who adjudicates the permit, the state or the BLM when the USACE is involved?

If this is all related to the BLM and the BLM backlog (the fact that the operator shows no interest in drilling where there is a "flow easement," is there any way to work with the BLM or USACE (i.e., "negotiate" with the USACE) or this pretty much final?

I have no clue, and the way I ask my questions may show my ignorance. One could refer the question to a mineral owners forum but I am curious how this works.

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