What is the Mineral Leasing Act (1920), and what did it accomplish?

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Central to issues concerning reservation of public lands is the Mineral Leasing Act (MLA) of 1920. In the early twentieth century, Congress began recognizing that certain public lands should not be included in the Homestead Act or the General Mining Law, legislation which authorized the transfer of public lands to private ownership. Some land would be reserved by the federal government, who would see to the preservation of natural resources on these lands as well as manage their economic yields. The MLA followed previous acts that were working toward this goal, including Organic Act of 1897, which established the National Forest System and the National Park Service Act.

The government made this move largely because of the relative unknowns regarding oil reserves in the American West, which, at the turn-of-the-century, was still unexplored and undeveloped. At that time, California was the fifth largest oil-producing state, it produced just nine percent of the nation’s oil. However, during the first decade of the new century, big oil companies, including Standard Oil, Philips Petroleum, and the Santa Fe and Southern Pacific railroads ramped up their exploration and drilling in the west. In 1911, the oil production of the west skyrocketed; the west was now producing seventy-two percent of the nation’s oil. That same year, the United States Supreme Court upheld the lower court’s decision to break up the Standard Oil Trust.

During this era, the majority of drilling was occurring on private or state-held land in Texas, Oklahoma, Kansas and California. But soon the demand for oil became too great, and the oil companies began exploring federal public lands, focusing on California and the northern Great Plains. The San Joaquin Valley and the Los Angeles basin were prized, as the crude oil there was found to be rich in high-octane hydrocarbons, the best petroleum for refining into gasoline.

The oil barons were excite about the deposits found on federal public lands for two reasons. For one thing, these lands were far more cheaply accessible than deposits that had been located in the Gulf of Mexico or coastal California. Moreover, in 1897, the “Oil Placer Act” passed by Congress dictated that, due to the General Mining Law of 1872, all public lands containing petroleum or other mineral oils and chiefly valuable therefore" were "free and open to occupation, exploration, and purchase.”

Additionally, the Mining Act gave citizens the authority to prospect for minerals, including gold, silver, and oil, on public lands. The discoverer of these resources could stake multiple claims to both the minerals and the land in which the minerals had been found. The requirements for securing these lands was minimal. The claimant need only prove that the mine was capable of producing “valuable quantities” of minerals, and that the miner spend at least one hundred dollars per year on improvements and employment. No royalties of any kind or other payment was necessary to the United States government. After the miner had spent five hundred dollars, he was able to buy any adjacent land he wished at just five dollars per acre.

The Mining Act authorized all citizens to enter onto the public lands to prospect for minerals (such as gold, silver, copper, and lead, as well as oil and other fossil fuels), and it allowed the discoverer to stake multiple claims both to the minerals and to their surrounding lands. The only legal requirements for the establishment of a claim were that the mine be capable of producing minerals in "valuable quantities" and that the miner spend at least $100 each year on labor or capital improvements at the site. Upon satisfaction of these minimal conditions, the locator of the minerals could extract and market the minerals without royalty or other recompense to the United States. After expenditure of $500 of labor or capital investment, the miner also could purchase the land adjacent to the minerals for five dollars per acre.

Source: Major Acts of Congress, ©2004 Gale Cengage. All Rights Reserved

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The Minerals Leasing Act of 1920 was a law passed by Congress that authorized the federal government to enter into contractual arrangements, or leases, with privately-owned drilling, mining and foresting companies to operate on that land.  An attempt to balance industrial requirements for natural materials with continued protection of public lands, as set forth years before by President Theodore Roosevelt, a champion of national parks and forests who passed away the year before the Minerals Leasing Act was signed into law.  A follow-on to the General Mining Act of 1872, which allowed for virtually unfettered commercial exploitation of public lands, the 1920 Act was intended to ensure greater oversight by the government, through the administration of the U.S. Bureau of Land Management, of private mining, drilling and foresting operations, with increased revenue gained through the leasing arrangements, flowing into federal coffers.  Under the provisions of the General Mining and Minerals Leasing Acts, millions of acres of public land became available to private companies to explore for and exploit minerals, oil and other natural resources.  

Subsequent to the passage of the Minerals Leasing Act has been passage of additional legislation regulating this area.  The Mining and Minerals Act of 1970, a description of which is provided in the attached document.

Leasing arrangements for private companies to exploit natural resources on public lands have proven profitable for the government, but environmentalists and others have long protested the destruction of mined lands and the deforestation caused by logging operations.  

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