In 2003, the US Bureau of Land Management (BLM) issued a memorandum to the state directors of Wyoming and Montana containing policy and guidance on conflicts between coalbed natural gas and surface coal mine development in the Powder River Basin. The policy seeks to achieve the following goals in resolving development conflicts between CBM and surface coal mining on federal coal, oil and gas leases:
- Optimise the recovery of both resources
- Prevent avoidable waste of the public's resources
- Honour the rights of each lessee
- Protect public health and safety and mitigate environmental impacts.
To these ends, the BLM established the following:
Conflict Resolution or Cooperative Development Agreements: While BLM encourages oil and gas and coal companies to resolve conflicts among themselves, lessees may request the review and approval of conflict resolution or cooperative development agreements to ensure their consistency with this policy.
Conflict Administration Zones (CAZ): CAZs are established around each active coal mine area with a potential for conflict with CBM development and notify the affected lessees and operators. The measures are intended to encourage and facilitate the efficient and timely extraction of CBM prior to coal removal.
Incentive to Accelerate Natural Gas Production: The BLM may offer a royalty rate reduction to oil and gas lessees to expedite CBM extraction order to allow coal mining operations to proceed uninterrupted. A 50% royalty rate reduction is available to any CBM well located on a federal oil and gas lease within a CAZ.