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Bonding For Reclamation of Oil, Gas, and Hard Rock Minerals Development

David L. Deisley, Proceedings of 37th Annual Rocky Mountain Mineral Law Institute (1991)

Reclamation bonding requirements applicable to oil, gas, and hard rock mineral development in the western United States are the subject of this paper. Bonding is one important, and often expensive, element of reclamation requirements that govern the exploration for and development of oil, gas, and hard rock minerals. To put bonding requirements in context, the underlying reclamation programs that generate the bonding requirements also must be discussed.

Twenty-one years ago, a paper entitled Mined Land Reclamation in the Western United States1 was presented at the 16th Annual Institute. The paper presented a comprehensive analysis of the legal basis for regulation of the impact of mining operations on the land, the potential for conflict between federal and state legislative objectives, and possible constitutional issues related to governmental takings. The paper noted that seven western states had adopted mined land reclamation acts.2

Today, virtually all western states3 have statutes that govern the reclamation of oil, gas, and mining operations.4 In addition, the federal government in its role as the manager of the public lands has instituted reclamation requirements for oil, gas, and [19-4] mining operations on such lands.5 Many of these regulatory programs require the project operator to post some form of financial surety to ensure completion of project