The opinion of the court was delivered by: GREEN
Presented by the parties' pending cross-motions for summary judgment are the questions of the validity of the November 1, 1979, action of defendant Cecil D. Andrus, Secretary of the United States Department of the Interior, in canceling certain oil and gas leases issued on a noncompetitive basis to plaintiff Texas Oil & Gas Corporation for lands located on the military reservation of Fort Chaffee, Arkansas, and, if such cancellation were improper, the validity of the Secretary's September 20, 1979, decree that delayed indefinitely the issuance to plaintiff of the permits required to begin drilling for oil and gas on the land at Fort Chaffee. Only the former issue need be addressed, however, since a thorough review of the record in this action not only reveals that there are no material facts at issue, but also compels the conclusion that the Secretary's action invalidating the leases was not improper. Accordingly, defendant's motion for summary judgment will be granted and judgment entered in his favor and against the plaintiff.
The lease agreements in question in this litigation involved approximately 40,000 acres of federal property classified as "acquired" lands, that is, lands which are acquired by the United States through purchase or other transfer from a state or private individual, usually for dedication to a particular use. In contrast to such acquired lands are "public domain" lands, which are owned by the United States by virtue of its sovereignty. The distinction between these types of federal real estate is important in that, as a matter of historical perspective, it was the basis for the evolution of the present statutory scheme through which the Congress has delegated responsibility to the Secretary of the Interior for the leasing of federal lands for mineral development.
The authority of the Secretary to administer the grants of mineral rights on public domain lands has been recognized by Congress since the middle of the last century, see, e.g., Act of July 26, 1866, ch. 262, 14 Stat. 251 (currently codified as amended at scattered sections of 30, 43 U.S.C.); Act of May 10, 1872, ch. 152, 17 Stat. 91 (currently codified as amended at 30 U.S.C. § 21 et seq.), although it was not until 1920 that Congress began to authorize the present system of leasing such lands for oil and gas exploration and production by the Secretary, Mineral Leasing Act of 1920, Pub.L.No.146, ch. 85, 41 Stat. 437 (1920) (currently codified as amended at 30 U.S.C. § 181 et seq.). Acquired lands had been leased on an ad hoc basis for some time, but it was not until 1947 that legislation was passed specifically giving the Secretary authority to lease such property. Mineral Leasing Act for Acquired Lands, Pub.L. No. 382, ch. 513, 61 Stat. 913 (currently codified as amended at 30 U.S.C. § 351 et seq.).
Of the provisions of that enactment providing for the leasing of acquired lands, most pertinent to this case is its language, found in section 352 of title 30 of the United States Code, denoting which acquired lands are subject to lease. As originally passed, it provided:
(A)ll deposits of ... oil (and) gas ... which are owned or may hereafter be acquired by the United States and which are within the lands acquired by the United States (exclusive of such deposits in such acquired lands as are (a) situated within incorporated cities, towns and villages, national parks and monuments, (b) set apart for military or naval purposes, or (c) tidelands or submerged lands) may be leased by the Secretary (of the Interior) under the same conditions as contained in the leasing provisions of the mineral leasing laws, subject to the provisions hereof. ... No mineral deposit covered by this section shall be leased except with consent of the head of the executive department ... having jurisdiction over the lands containing such deposit ....
30 U.S.C. § 352 (1970) (emphasis supplied). This congressional mandate that acquired lands set aside for military purposes be excluded from those acquired properties that could be leased was continued until 1976 when section 352 was amended to delete that exemption. Federal Coal Leasing Amendments Act of 1975, Pub.L. No. 94-377, § 12, 90 Stat. 1090 (1976), codified at 30 U.S.C. § 352 (1976). That amendment precipitated the circumstances that have culminated in this litigation.
Not long after the congressional change in section 352 in 1976, action was taken by the Department of Defense and the Department of the Interior, the agencies most directly involved, to amend their applicable regulations. A little over one month after the lease applications were filed by Texas Oil & Gas, the Corps of Engineers, despite the recent revision of section 352 enacted in the Federal Coal Leasing Amendments Act, published proposed regulations that would have continued its past prohibition on leasing acquired lands set aside for military purposes for oil and gas exploration and production. 42 Fed.Reg. 31036 (1977). On September 16, 1977, the Department of the Interior responded to the amendment to section 352 by publishing a proposed change in its regulation concerning acquired lands, 43 C.F.R. § 3101.2-1. As it was in effect at the time of the passage of the Federal Coal Leasing Amendments Act, that regulation declared in pertinent part:
s 3101.2-1 (Acquired) Lands to which the Act does not apply.
(f) Set apart for military or naval purposes, including lands within naval petroleum and oil shale reserves ....
43 C.F.R. § 3101.2-1(f) (1977). The regulation proposed by the Department of the Interior was to amend subsection (f) to modify its reference to all acquired lands set aside for military purposes so as to include only those "(within) naval petroleum and oil shale reserves and within the National Petroleum Reserve in Alaska." 42 Fed.Reg. 46558 (1977). It was also stated in the Federal Register notice accompanying the proposed rule change:
The regulatory prohibition reflecting the old statutory provision remains in effect, serving as an exercise of the Secretary's new authority to lease or not to lease such deposits. This proposal would remove the regulatory prohibition and open these lands for mineral leasing ...