Oil and gas leases, raw milk debated as legislature nears end

HELENA -- A legislative committee has tabled a lawmaker’s attempt to clarify how private land is leased to oil companies.

Speaker of the House Austin Knudsen, R-Culbertson, is the sponsor of House Bill 384, which would have revised language used on oil and gas leases to inform landowners of the associated costs of oil extraction from their land.

Knudsen said leases tell landowners they will receive royalties from wells on their land. However, he said the oil industry tends to deduct transportation and operating costs from that royalty. That information isn’t generally on the lease.

“It’s just industry standard,” Knudsen said. “When you’re dealing with private mineral owners, costs are routinely deducted.”

Knudsen’s bill would require lease agreements to notify landowners of these associated costs. He said the bill would not prevent agreements that simply pay a gross royalty.

No supporters spoke on the bill in the Senate Energy and Telecommunications Committee last week, despite its nearly unanimous passage in the House.

Opponents said the bill’s broad language change would discourage oil companies from locating in Montana.

“Companies do pay attention to the changes this body makes in terms of deciding whether they want to locate or grow their business here,” said Peggy Trenk, representing the Treasure State Resource Association.

Others argued it gives the state too much power in private business transactions.

“We think the provisions of this bill further insert the state to deal with these unique lease terms,” said Bridger Mahlum, representing the Montana Chamber of Commerce.

Mahlum said the bill appeared to be prompted by a “handful of cases,” and that if problems arise with lease agreements then they should be dealt with through existing legal channels.

Senate kills milk bill

Throughout Montana’s 65th Legislative Session, issues of personal freedom have continuously taken center stage. One bill that encapsulated that was one that would have allowed for the limited sale of raw milk.

The Senate voted down House Bill 325 on a 22-28 vote after debating it for more than an hour.

The bill, introduced by Rep. Nancy Ballance, R-Hamilton, allowed for milk sales from a limited numbers of milk-producing cows, sheep and goats. It would have barred producers from selling raw milk in a retail setting, allowing just person-to-person sale.

During its first committee hearing in February, Ballance called HB 325 “the ultimate freedom bill.”

Opponents at that hearing argued the bill did not provide enough safety measures.

“It does not provide adequate disease, drug or antibiotic testing,” said Krista Lee Evans, representing the Montana Milk Producers Association.

Sen. Keith Regier, R-Kalispell, carried the bill in the Senate.

“Processing foods takes valuable nutrients out of the food,” Regier said. “Steamed or raw vegetables are said to be healthier. Many of you eat salad with raw ingredients.”

Opponents of the bill said raw milk poses a health risk, and that milk pasteurization kills harmful bacteria like E.coli.

“We have found through the years and years of public health work … that pasteurization does its work,” said Sen. Jill Cohenour, D-Helena. “It protects us from the sicknesses that can come from raw milk.”

Cohenour also said the bill would be costly to local communities, who would need to conduct county health investigations in the event of illnesses from infected raw milk.

In 2015, the Senate voted down a similar bill, also carried by Ballance, on a split vote. Another died in 2013.