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Landowners get nasty surprise from government
| Wednesday, Jun 21 2006 9:50 PM
Last Updated: Wednesday, Jun 21 2006 9:54 PM
Let the buyer beware.
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That appears to be the lesson that some landowners are choking down after learning that the federal government has sold the mineral rights for potentially oil-producing earth right out from under their feet.
And with oil producers urgently looking for new sources of energy, the property owners could soon see drilling rigs on their turf -- whether they like it or not.
The Bureau of Land Management, or BLM, sold oil and gas rights to 19,600 acres in California at an average of $35.16 on June 14. Some 12,800 acres, or 65 percent, are in Kern County, according to the BLM.
That includes 80 acres owned by Charles Fox at Rangeview Ranches in the southwest corner of Kern.
Fox said he knew the government owned the mineral rights under the surface of his property -- in what is known as a "split-estate" arrangement -- but never dreamed they would be sold.
"I might have thought the government would have wanted to take (the land) back, but it never occurred to me there was a possibility they would sell the mineral rights under my property. I just didn't think it would happen."
But the split-estate clause is no sneaky trick. When public land is sold to a private buyer, the government may retain the subterranean mineral rights, which can be sold to third parties.
That's one of the conditions of title to the land, and it's up to the buyer to acknowledge it before signing on the dotted line, said Ron Huntsinger, Bakersfield BLM field manager.
It's bad enough that oil speculators might start operating on relatively unspoiled land, Fox said, but it's even worse that he and other owners were blindsided by the BLM sale. They said they were never notified.
"There is no requirement that we notify parcel owners because we don't know who they are," Huntsinger said. "It's extremely difficult if not impossible" to determine who all the owners are, he said.
The BLM posts notifications in newspapers and other public places, Huntsinger said, but tracking down each landowner -- some of whom might live out of state -- is just too cumbersome.
Knute Johnson and his wife, Penny Maines, own 60 acres in Ridgeview Ranches. They found out about the sale from Los Padres ForestWatch, a nonprofit conservation group working to protect the Los Padres National Forest adjacent to some of the leased land.
The couple also knew of the mineral rights clause, but they, too, never expected the leases to be sold -- especially without notification.
"I'm not happy with the fact that my property values are going to go down the toilet," Johnson said.
Jeff Kuyper, executive director of ForestWatch, said that the BLM is required to notify all "interested persons" about lease sales. The landowners, he said, apparently don't fit the definition of "interested persons."
"I can't think of anyone who'd be more interested than the people whose land would be directly affected by the drilling," Kuyper said.
Kuyper suspects the BLM skirted the rule to keep the owners from possibly bidding on the leases beneath their property to shut out oil developers.
What's more, he contends that the BLM uncharacteristically held the auction in Sacramento instead of Bakersfield to discourage local owners and others from driving several hours to attend.
Richard Grabowski, BLM deputy state director for minerals and energy in Sacramento, directs the leasing sales. He said that in the past five or six years the auctions have mostly been held in Bakersfield.
"But for the last few years, I've been trying to move them around a bit," he said. "We got a good response in Sacramento.
"There is no hidden agenda," he said.
Huntsinger said it's not known if the land holds oil or gas, but there's enough promise to justify interest.
ForestWatch has filed protests with the BLM. The agency could deny the protest, modify the drilling requirements or even revoke the bids, Kuyper said.
If denied, ForestWatch could appeal to the federal Interior Department or possibly to federal court, Kuyper said.
Fox, a retired employee of the city of Los Angeles, said oil activity would spoil his paradise.
"I'm just going to have to get rid of it," he said. "It (will have) lost its appeal."