CADDNAR

[CITE: F. D. McCrary Operator, Inc. v. DNR v. DNR, 10 CADDNAR 73 (2005)]

ORDER

1. There are no genuine issues of material fact in existence with respect to this proceeding.

2. McCrary is entitled to judgment as a matter of law.

3. No CMCR exists in Pillar Number 458, the pillar proposed for drilling the C.E. Waltz Well #28 under Permit # 52217.

4. No mine floor exists in Pillar Number 458, the pillar proposed for drilling the C.E. Waltz Well #28 under Permit # 52217.

5. The Department is hereby ordered to revise the CDMC to reflect the removal of Pillar Number 458 from those coal resources presumptorily identified by CDMC as constituting CMCRs.

6. The determination that no mine floor or CMCR exists in Pillar Number 458, the site proposed for drilling the C.E. Waltz Well #28, dictates that the C.E. Waltz Well #28 is not subject to the casing requirements specified in IC 14-37-7-3 and 312 IAC 16-5-4(a).

7. Similarly, the non-existence of a CMCR in Pillar Number 458, dictates that the C.E. Waltz Well # 28 is also not subject to the casing requirements specified within IC 14-37-7-4 and IC 14-37-7-5 or their administrative rule counterparts found at 312 IAC 16-5-4(c) and 312 IAC 16-5-4(h), respectively.

8. In light of McCrary's November 2004 application that resulted in the Department's issuance of a well drilling permit in December 2004 in which McCrary acquiesced to the Division Order's requirement to place an intermediate string of casing to 50 feet below the base of the CMCR or mine floor for purposes of drilling the C.E. Waltz Well #28 under Permit # 52217, this matter is not remanded to the Department as a matter of course.

9. Upon proper request by McCrary for modification of Permit # 52217 for the C.E. Waltz Well #28, pursuant to 312 IAC 16-3-4(a)(1) the Department shall consider such request for modification consistent with this determination.

FINDINGS OF FACT, CONCLUSIONS OF LAW WITH NON-FINAL ORDER ON SUMMARY JUDGMENT

STATEMENT OF THE CASE

1. On June 30, 2003 Claimant, F.D. McCrary, Operator, Inc. (hereinafter "McCrary"), submitted Application for Well Permit # 52217, to drill the C.E. Waltz Well #28 with the intention that it be a producing oil well.

2. McCrary, concurrent with submission of its June 2003 application, sought an informal hearing with the Department of Natural Resources' Division of Oil and Gas (hereinafter "Department") requesting a determination that the proposed location of the C.E. Waltz Well #28 was "not an active or inactive underground coal mine or a known commercially mineable coal resource" (hereinafter "CMCR") and that the permit be issued "unencumbered by the requirements of 312 IAC 16-5-4." Petition for Review of a Determination by the Director of the Division of Oil and Gas (hereinafter "Petition for Review").

3. McCrary's request for

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informal hearing included the names of all persons believed to be affected including the mine operator, Five Star Mining, Inc. (hereinafter "Five Star"), the surface owner and coal lessee, Prosperity Mine LLC (hereinafter "Prosperity") and the coal owner, Vivian Kays, all of whom waived notice of hearing and consented to the relief requested by McCrary through informal hearing. Claimant's Motion for Summary Judgment (hereinafter "Claimant's Motion"), Attachment 8.

4. An informal hearing was held by the Department on August 13, 2003 and Findings of Fact, Conclusions and Order (hereinafter "Division Order") were issued on August 18, 2003. The informal hearing resulted in findings of fact and conclusions, which as relevant to this appeal, may be summarized as follows:
a) McCrary's June 2003 application was valid. Finding of Fact #3
b) The site is within the confines of Prosperity, an active underground mine operated by Five Star. Finding of Fact #3
c) McCrary was instructed by the Department to submit a written request for an informal hearing through which it could consider McCrary's verbal request to forego the setting of intermediate casing sting as specified under IC 14-37-7-3 and 312 IAC 16-5-4(a). Finding of Fact #4
d) More specifically the location proposed for drilling the C.E. Waltz Well #28 was identified by Five Star as occurring in Pillar Number 458 identified in its "Certificate" and attached Mine Map for Prosperity, prepared by Alan Kern, an engineer for Five Star. Finding of Fact #9 & 10, Claimant's Motion, Attachment 6.
e) IC 14-37-7-3 requires the setting of an intermediate casing string through active underground mines permitted under IC 14-34. Conclusion #1.
f) Prosperity is a mine permitted under IC 14-34. Conclusion #2.
g) The language of IC 14-8-2-47 does not address the issue of whether or not a commercially mineable coal resource through which mining has occurred remains commercially mineable. Conclusion #3.
h) The Division does not have a history that can be used to interpret legislative intent with respect to IC 14-37-7-3. Conclusion #5.
i) In the absence of additional statutory language, or a legal opinion by competent authority, addressing the intent of IC 14-37-7-3 with respect to a commercially mineable coal resource that has been previously mined, the Division must apply the plain meaning of the current statute. Conclusion #6.

Claimant's Motion, Attachment 9, Division Order.

5. Through the informal hearing the Department ultimately issued an order requiring McCrary to set an intermediate string of casing to fifty (50) feet below the base of the commercially mineable coal resource or the mine floor as required by IC 14-37-7-3..." Id.

6. On August 28, 2003, McCrary filed its timely Petition for Review seeking review of the requirement to place an intermediate string of casing for the C.E. Waltz Well #28 and the determination that coal remaining in Pillar Number 458 constituted a CMCR as defined at IC 14-8-2-47 and 312 IAC 16-1-8.

7. McCrary's Petition for Review initiated this proceeding, conducted pursuant to IC 4-21.5 (also referred to as the "Administrative Orders and Procedures Act" or "AOPA.") The Indiana Natural Resources Commission adopted rules at 312 IAC 3-1 to assist in its administration of AOPA, and 312 IAC 3-1 also applies to this proceeding.

8. The C.E. Waltz Well #28 is an oil well and as such is a "well for oil and gas purposes" as defined at IC 14-8-2-317 and 312 IAC 16-1-51, and was at all times governed by IC 14-37 and 312 IAC 16.

9. McCrary filed Claimant's Motion for

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Summary Judgment accompanied by affidavits and documentary evidence on January 20, 2004. On April 15, 2004, the Department filed its Cross-Motion for Summary Judgment and Response to McCrary's Motion for Summary Judgment, void of affidavits or evidentiary material. Thereafter, McCrary's Answer and Response to the Department's Cross Motion for Summary Judgment was filed on April 21, 2004 along with its request for oral argument.

10. Oral Arguments were heard on June 8, 2004.

11. McCrary submitted its Proposed Findings and Conclusions on June 14, 2004 to which the Department submitted its Response on July 22, 2004.[FOOTNOTE 1]

12. On August 24, 2004, the Administrative Law Judge notified the parties of her intention to take official notice of the following extrinsic information:
a) Public Hearing, Written Comments, Analysis and Recommended Order of Hearing Commissioner on Final Adoption of Amendments to 310 IAC 7-1 (Oil and Gas Well Drilling Rule), 84-178G (LSA Document 84-84). (hereinafter "84-178G")
b) Public Hearing, Written Comments, Analysis and Recommended Order of Hearing Commissioner on Final Adoption of Amendments to 310 IAC 7-1 (Oil and Gas Well Drilling Rule), 85-086G. (hereinafter "85-086G")
c) Report of Public Hearing (and Meetings), Analysis and Recommended Order of Hearing Commissioner on Final Adoption of Rules, 88-077G (LSA Document # 88-73). (hereinafter "88-077G")
d) Supplemental Report on Public Hearing, 86-031G (LSA Document # 86-31F). (hereinafter "86-031G")

13. McCrary filed its response to the notice of taking official notice of the extrinsic information on September 4, 2004, but neither party objected.

14. The Administrative Law Judge entered a non-final order on summary judgment [FOOTNOTE 2] on September 13, 2004, which concluded that summary judgment could not be entered on the total proceeding due to the fact that insufficient evidence was presented upon which to base a determination as to the existence or non-existence of a CMCR in Pillar Number 458.

15. On October 8, 2004, the Department filed its Motion to Reconsider and Clarify the Non-Final Order on Summary Judgment to which McCrary filed its response on October 18, 2004 and a decision on the Department's Motion to Reconsider was entered on October 25, 2004.

16. During an October 12, 2004 status conference the parties agreed to submit supplemental evidentiary material in support of their original summary judgment motions in lieu of scheduling a hearing for the presentation of evidence on the sole remaining issue.

17. McCrary's supplemental evidence was filed on December 1, 2004.

18. On January 6, 2005, Black Beauty Coal Company, Solar Sources Underground, LLC, Gibson County Coal LLC and the Indiana Coal Council, Inc. (hereinafter collectively "petitioners") filed their petition to intervene in this proceeding.

19. "Findings of Fact and Conclusions of Law with Non-Final Order on Petition to Intervene" were entered on January 18, 2005 and is presently ripe for consideration by the Natural Resources Commission upon the filing of Objections by February 7, 2005.

20. On January 21, 2005 the Department filed its "Motion to Dismiss Case as Moot" on the grounds that on November 18, 2004 McCrary submitted a second Application for Well Permit involving Permit # 52217 and the C.E. Waltz Well # 28 expressly stating the intention to utilize an intermediate casing string.

21. The Department's Motion to Dismiss was denied on January 24, 2005.

22. On January 27, 2005 a "Notice by Respondent DNR" was filed indicating that it had elected not to file supplementary evidence in the proceeding for the reason that an informal hearing seeking to revise Cementing Depths for Mineable Coals, 1984 edition (hereinafter "CDMC") is under the jurisdiction of the Director of

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the Division of Oil and Gas and that McCrary's November 2004 application requesting to drill the C.E. Waltz Well #28 under Permit #52217 using an intermediate string of casing was a binding permit requirement making the determination of the existence of a CMCR unnecessary.

PETITION TO INTERVENE BY BLACK BEAUTY COAL COMPANY, SOLAR SOURCES UNDERGROUND, LLC, GIBSON COAL COMPANY, LLC, AND THE INDIANA COAL COUNCIL, INC.

The petitioners, based at least in part upon the previously entered interlocutory order on summary judgment, contend that the proceeding "involves the interpretation of oil and gas rules as applied to land where the oil and gas well will be drilled through an underground coal mine," and "[t]he interests of coal companies mining in Indiana are not adequately represented in this proceeding because no coal company is a party to this cause.[FOOTNOTE 3]" Petition to Intervene, paragraph 1. On this basis the Petitioners claim to be aggrieved or adversely affected "by the issues in the case."

While it was acknowledged in the Findings of Fact and Conclusions of Law with Non-Final Order on Petition to Intervene that the outcome of this proceeding "could have a precedential effect upon the coal industry," the petitioners did not allege to have any relationship to Prosperity, Five Star, Vivian Kays or McCrary and further did not allege to maintain any interest in the permit area proposed for drilling the C.E. Waltz Well #28.

It was concluded, therefore, that the petitioners had failed to establish that they had suffered or were likely to suffer in the immediate future a harm to a legal interest of a pecuniary, personal or property interests as required under Huffman v. Indiana Office of Environmental Adjudication, Indiana Department of Environmental Management and Eli Lilly and Company, 2004 Ind. LEXIS 614, and as such were not "aggrieved or adversely affected by the order" as required by IC 4-21.5-3-21(2)(B) for intervention.

Furthermore, petitioners contended that McCrary brought the instant proceeding as a permit appeal instead of as a more appropriate action for quasi-declaratory relief pursuant to 312 IAC 3-1-15 under which the intervenors allege they would have been entitled to notice and participation. Id., paragraph 11.

Petitioners are arguably correct in their belief that McCrary could have commenced this proceeding pursuant to 312 IAC 3-1-15 for quasi-declaratory relief, however, he was equally entitled to commence this proceeding for review of the Division Order regarding McCrary's June 2003 application involving the C.E. Waltz Well #28 under Permit # 52217.

Because the Division Order and McCrary's Petition for Review concern only the consideration of McCrary's June 2003 application and the Department's determinations with respect to that application, it can not be concluded that the proceeding was actually one for quasi-declaratory relief pursuant to 312 IAC 3-1-15 entitling petitioners to intervene.

DEPARTMENT'S MOTION TO DISMISS CASE AS MOOT

The Department contends that this proceeding was made moot by the fact that during the pendency of the instant proceeding McCrary submitted the November 2004 application, which was approved on December 6, 2004, seeking once again to

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drill the C.E. Waltz Well #28 under Permit #52217. McCrary's November 2004 application expressly seeks to drill the well utilizing an intermediate string of casing in compliance with the Division Order. According to the Department this action on the part of McCrary resulted in the need to dismiss this proceeding because the issue was no longer "live."

"A case is moot when the issues presented are no longer 'live' or the parties lack a legally cognizable interest in the outcome. Laverty and Citizens Coalition of Beverly Shores v. Town of Beverly Shores, 9 CADDNAR 24 (2001); Oil and Industrial Services, Co.,Inc. v. DNR, 9 CADDNAR 57 (2002), British International Insurance Company Limited v. Seguros La Republica, S.A., 354 F.3d 120 (2nd Cir. 2003) citing Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). However, it equally true that so long as a party "retains some interest in the case, so that a decision in its favor will inure to its benefit" the case is not moot. New England Health Care union v. Mount Sinai Hospital, 65 F.3d 1024 (2d Cir. 1995), ref., Richmond v. J. A. Croson Co., 488 U.S. 469 478 n. 1, 109 S.Ct. 706, 713n. 1, 102 L.Ed.2d 854 (1989); Firefighters Local union No. 1784 v. Stotts, 467 U.S. 561, 568-72, 104 S.Ct. 2576, 2582-84, 81 L.Ed.2d 483 (1984); and British International, citing Powell v. McCormack, supra.

This proceeding is distinguishable from Natural Resources Commission cases cited by the Department. In Laverty, the permit underlying the proceeding expired during the pendency of the proceeding thereby causing the issue to simply cease to exist. In Oil & Indistrial, the claimant was a potential transferee of an oil and gas permit that lost all interest in the potential transfer when the transferor transferred the permit to a third party. However, in this instance McCrary maintains an interest in Permit #52217 and the C.E. Waltz Well #28.

It was further determined that an outcome of this proceeding relating to the June 2003 application in McCrary's favor was capable of inuring to his benefit. Pursuant to 312 IAC 16-3-4(a)(1) an owner or operator of a well for oil and gas purposes may request a modification of a permit, which presumably could include a modification of the permit issued in December 2004 to eliminate the requirement to run an intermediate string of casing.[FOOTNOTE 4]

SUMMARY JUDGMENT

Summary Judgment is appropriate where the moving party has sufficiently established that there exists no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Indiana Department of Environmental Management v. Schnippel Construction, Inc., 778 N.E.2d 407 (Ind.App. 2002). The AOPA provides for summary judgment pursuant to IC 4-21.5-3-23, which states as follows:

(a) A party may, at any time after a matter is assigned to an administrative law judge, move for a summary judgment in the party's favor as to all or any part of the issues in a proceeding. The motion must be supported with affidavits or other evidence permitted under this section and set forth specific facts showing that there is not a genuine issue in dispute.

(b) The motion must be served at least five (5) days before the time fixed for the hearing on the motion. The adverse party may serve opposing affidavits before the day of hearing. The administrative law judge may direct the parties to give oral argument on the motion. The judgment sought shall be rendered

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immediately if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits and testimony, if any, show that a genuine issue as to any material fact does not exist and that the moving party is entitled to a judgment as a matter of law. A summary judgment may be rendered upon fewer than all the issues or claims (such as the issue of penalties alone) although there is a genuine issue as to damages or liability, as the case may be. A summary judgment upon fewer than all the issues involved in a proceeding or with respect to fewer than all the claims or parties is not a final order. The administrative law judge shall designate the issues or claims upon which the judge finds no genuine issue as to any material facts. Summary judgment may not be granted as a matter of course because the opposing party fails to offer opposing affidavits or evidence, but the administrative law judge shall make a determination from the affidavits and testimony offered upon the matters placed in issue by the pleadings or the evidence. If it appears from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the administrative law judge may make any order that is just.

(c) If on motion under this section no order is rendered upon the whole case or for all the relief asked and a hearing is necessary, the administrative law judge at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating any person, shall if practicable ascertain:

The administrative law judge shall then make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing further proceedings in the action as are just. Upon the hearing of the action, the facts specified are established in the judge's order under this subsection.

(d) Supporting and opposing affidavits must:
(1) be made on personal knowledge;
(2) set forth facts that are admissible in evidence; and
(3) show affirmatively that the affiant is competent to testify to the matters stated in the affidavit.

(e) The administrative law judge may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, further affidavits, or testimony of witnesses.

(f) If a motion for summary judgment is made and supported under this section, an adverse party may not rely upon the mere allegations or denials made in the adverse party's pleadings as a response to the motion. The adverse party shall respond to the motion with affidavits or other evidence permitted under this section and set forth specific facts showing that there is a genuine issue in dispute. If the adverse party does not respond as required by this subsection, the administrative law judge may enter summary judgment against the adverse party.

The burden of proving that no genuine issue of material fact exists is upon party moving for summary judgment. Id. A genuine issue of material fact exists when facts necessary for the disposition of a proceeding are either (1) in dispute or (2) not in dispute but capable of supporting differing inferences on the same issue. Schnippel, supra.

ISSUES ON SUMMARY JUDGMENT

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The party's contentions on summary judgment relate to three intertwined provisions established by statute and administrative rule. First, is the proper meaning of CMCR as defined at IC 14-8-2-47 and 312 IAC 16-1-8. Second, is the applicability of 312 IAC 16-5-4 and its statutory counterparts IC 14-37-7-3 through IC 14-37-7-5 to the C.E. Waltz, Well #28. And third, is the ability or obligation of the Department to conduct informal hearings to review the existence of CMCRs and pending oil and gas permit applications under 312 IAC 16-5-5, 312 IAC 16-5-4(i), 312 IAC 16-2-3, IC 14-37-3-16 and IC 14-37-3-17.

In this case of first impression there is considerable conflict and apparent confusion on the part of both parties regarding the intent and proper application of the statutory and administrative rule provisions at issue as is evidenced by the Division Order issued following the informal hearing and the parties' respective Motions for Summary Judgment. A lengthy discussion follows in an attempt to clarify these provisions and facilitate the compatible operation thereof.

DISCUSSION

I. STATUTORY CONSTRUCTION

Rules of statutory construction prohibit the construction of clear and unambiguous statutes, but "mandate the court to interpret ambiguous statutes in order to ascertain and effectuate the general intent of the legislature." Indiana Alcoholic Beverage Commission v. Osco Drug, Inc., 431 N.E.2d 823 (Ind. App. 1982) When a statute is open to multiple interpretations, the court may consider the implications of a particular construction. Id. Words and phrases are to be given their plain and customary meaning unless the intent of the legislature will be defeated by such meanings, Board of School Trustees v. Indiana Education Employment Relations Board, 497 N.E.2d 1084 (Ind.App. 2 Dist. 1986), and further requires that every word be given effect, and no part be held meaningless. Union Township School Corporation v. State ex rel. Joyce, 706 N.E.2d 183 (Ind. App. 1998). Where the plain and customary meaning of the words will defeat the intent of the legislature, the words may be afforded a particular or technical meaning. Johnson County Farm Bureau Co-Op, Inc. v. Indiana Department of State Revenue, 568 N.E.2d 578, affirmed 585 N.E.2D 1336 (Ind. 1992). Any such statutory construction requires that a determination be made through a consideration of the entire act, Ernst and Ernst v. Underwriters National Assurance Company, 381 N.E.2d 897 (Ind.App. 2 Dist. 1978), and multiple statutes on the same subject "should be construed together so as to produce a harmonious system." Indiana Alcoholic Beverage Commission, supra. There exists a strong presumption that the legislature did not enact meaningless statutory provisions and the rules of construction authorize the intent of the statute to take precedence over the literal language. Althaus v. Evansville Courier Co., 615 N.E.2d 441 (Ind. App. 1 Dist, 1993). "Where a previous statute on a subject contains certain language and a later statute on the same subject deletes the language, a presumption exists that the legislature was cognizant of its presence, and meaning, and intended by the deletion to change the law." Tarver v. Dix, 421 N.E.2d 693 (Ind. App. 1981). Statutory amendment creates the presumption of an intention to change the meaning of the statute. Hammond v. State, 675 N.E.2d 353 (1996 Ind.App.) While courts are prohibited from a review of legislative history for the purpose of invalidating a statute, "where a statute is ambiguous and in order to determine its true meaning" a court may

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consider legislative history. Herff Jones, Inc. v. State Bd. of Tax Comm'rs, 512 N.E.2d 485, (1987 Ind.Tax)

In construing administrative rules the same rules of statutory construction are applicable. State v. Molnar, 803 N.E.2d 261 (2004 Ind.App.)

II. HISTORICAL REFERENCE

Indiana's present oil and gas regulation finds its roots in the Indiana General Assembly's enactment of IC 13-4-7-27 in 1947, which underwent amendment insignificant to this proceeding on five occasions between 1947 and 1985. Until amended in 1986, the only statutory provision relating to oil and gas well drilling stated,

The commission shall have the power and authority to adopt reasonable rules and regulations concerning the protection of coal seams underlying lands on which wells for oil and gas purposes are proposed to be drilled, to the effect that the operator shall, in the event the well is completed as a producing well, run a mine string of casing from the surface through such stratum of coal to a point at least fifty (50) feet below the base of the coal seam or the mine floor, whether drilled through a pillar or not. This section shall not be construed to be a limitation on the obligation of the operator for plugging operations as hereinbefore provided. (Formerly: Acts 1947, c.227, s.23; Acts 1951, c.137, s.12).

IC 13-4-7-24, Indiana Code, 1982. IC 13-4 provided no statutory definitions or procedural instruction in furtherance of section 24. However, administrative rules were promulgated for administration of this original statutory provision. 310 IAC 7-1.

In 1984 efforts began to amend the administrative rules adopted at 310 IAC 7-1. At the heart of this proceeding, were proposed administrative rule promulgation efforts establishing the first definition of CMCR, establishing for the first time a method for identifying CMCRs, amending the definition of "mine string[FOOTNOTE 5]," establishing a process for conducting informal investigative hearings, and revising coal seam protection requirements. These provisions were recommended for preliminary adoption on March 1, 1985. 84-178G.

Only the proposed rules preliminarily adopted as 310 IAC 7-1-1, establishing a definition of CMCR; 310 IAC 7-1-39.5, establishing a method of identifying CMCRs; and 310 IAC 7-1-12.1, establishing a process for conducting informal investigative hearings; were recommended for final adoption on September 20, 1985. 85-086G. The proposed rules which would have amended the definition of the term "mine string," and revised coal seam protection requirements were instead recommended for review by the Natural Resources Study Committee of the Indiana General Assembly. Id.

The text of 310 IAC 7-1-39.5, "Identification of Commercially Mineable Coal Resources," exists unchanged, with the exception of changes in Indiana Code and administrative rule citations, as 312 IAC 16-5-5.

The text of 310 IAC 7-1-12.1, "Informal Investigative Hearings," continues to exist at 312 IAC 16-2-3. Since its establishment in 1985, many amendments of text and minor alterations in procedural requirements, insignificant to this proceeding, have been made. The only substantive amendment is the inclusion of

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the ability to review pending oil and gas permit applications through informal hearing.

The definition of CMCR initially established at 310 IAC 7-1-1 was amended for consistency following the enactment of a statutory definition of CMCR in 1986 at IC 13-4-7-24(d). discussed infra. The definition enacted by the legislature in 1986 continues to exist at IC 14-8-2-47 and 312 IAC 16-1-8.

The subject matter referred to the Natural Resources Study Committee of the Indiana General Assembly relating to coal seam protection and the meaning of the term "mine string," was strenuously debated by proponents of both the oil and gas industry and coal producers during the administrative rule promulgation hearings in 1984 and 1985. 84-178G & 85-086G. The comments received reveal the oil and gas industry's belief that it was exposed to unnecessarily inflated production costs when mine strings of casing were required in light of their contention that cemented centralized production strings of casing provided equivalent protection at a lesser cost. Id. Furthermore, the oil and gas industry complained that under the present administrative rules, coal producers were able to require and were actually in the practice of requiring mine strings of casing in areas where coal rights had not been purchased and no mining was being planned. Id.

The coal producers disputed the proposition that cemented centralized production stings of casing provided equivalent protection and further believed that an amendment to the administrative rules authorizing the use of cemented centralized production strings of casing where mine strings of casing were presently required was beyond the authority granted by the legislature to the Department. Id. Furthermore, the coal industry specifically objected to the proposed amendment because the amended rule did not provide a mechanism by which a coal producer was to be notified of well drilling activities in order to allow the coal producer the ability to witness the drilling activities. However, some coal producers agreed with the oil and gas industry on the point that only foreseeably mineable coal was deserving of protection. Id.

Of particular note is a written proposal for administrative rule amendments submitted by John Stucker, representing Mapco Land and Development Corporation, to address some of these concerns. The proposal set forth a process by which the coal producers involved in mine preparation or actual mining activity were required to submit maps showing the workable limits of their mine and identify lands for which they owned coal rights. The coal producers were prohibited under this proposal from submitting such maps for areas in which there was no true intent to conduct mining activities. Upon receipt of a well drilling application, these maps were to be utilized by the Department to determine if the well was proposed to be drilled in an area registered by a coal producer. When a well was proposed to be drilled in such an area, the proposal suggested that permit issuance would be withheld and the coal producer notified and offered the opportunity to file objections to the well drilling activity. In the event a coal producer objected, the Department then was required to hold a hearing to determine what methods of coal protection were required. The proposal submitted by Mr. Stucker provided for the prima facia identification of coal resources requiring protection, but added protective measures for such coal resources located in areas of actual or planned mining activity.

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Neither Mr. Stucker's proposal nor the Department's proposed amendments was adopted as an administrative rule or enacted following the recommended review by the Natural Resources Study Committee, which lead to the legislative amendment in 1986. However, several concepts set forth in these proposals are extraordinarily similar to the concepts included within the legislative amendments to IC 13-4-7-24 in 1986. 84-178G, John Stucker's proposed rule amendment, p. 18 & Attachment for Preliminary Adoption of 310 IAC 7-1-39. Two notable concepts relate to enhanced protective measures based upon actual or planned mining activity and a mechanism for providing notice to coal producers for the purpose of facilitating oversight of the drilling activities.

The legislature's 1986 enacted amendments state,

(a) If a well for oil and gas purposes is proposed to be drilled, on land underlaid by abandoned workings of an underground mine or within the permit boundaries of an active underground mine permitted under IC 13-4.1, an operator shall, in the event the well is completed as a producing well, run an intermediate string of casing from the surface to a point at least fifty (50) feet below the base of the commercially mineable coal resource or the mine floor, whether drilled through a pillar or not.

(b) If a well is drilled and completed as a producing well through a commercially mineable coal resource and within an area for which a mine plan is filed with the commission, but for which an intermediate string is not required under subsection (a), an operator shall set a production string of casing, properly centralized and cemented, as documented by a sonic cement bond-variable density log. An operator must provide at least forty-eight (48) hours notice to the department and the person who filed the mine plan before commencing logging operations under this subsection. The person who filed the mine plan is entitled to be present during the logging operations and to examine the log. The commission shall determine the adequacy of cement bonding, and, in the event of a bonding failure between fifty (50) feet below and one hundred (100) feet above the commercially mineable coal resource, the operator must perform remedial action, as ordered by the commission, that results in adequate bonding. Within thirty (30) days of commencing logging operations, the operator must provide the department and the person who filed the mine plan with a copy of the sonic cement bond-variable density log. Preparation of the log and any remedial action required under this subsection are at the expense of the operator.

(c) If a well is drilled and completed as a producing well through a commercially mineable coal resource, except a coal resource identified in subsection (a) or subsection (b), that resource shall be protected by a properly cemented, centralized production string of casing.

(d) For the purpose of this section, "commercially mineable coal resource" means a seam of coal at least thirty-six (36) inches thick located no more than eight hundred (800) feet below the surface.

(e) The commission shall adopt rules under IC 4-22-2 to administer this section.

(f) This section shall not be construed to be a limitation on the obligation of an operator for plugging operations as provided in this chapter.

IC 13-4-7-24, Indiana Code 1987 Cumulative Supplement. A comparison of IC 13-4-7-24, as enacted in 1986, with the current provisions of IC 14-37-7 reveal that subsections (b) and (c) now exist at IC 14-37-7-4 and IC 14-37-7-5,

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respectively, subsection (d) now exists at IC 14-8-2-47, and subsection (f) exists at IC 14-37-7-6. These provisions all remain in effect without substantive amendment while subsection (e) was removed entirely from this section. Subsection (a) exists presently at IC 14-37-7-3 with two substantive amendments enacted in 1988. P.L. 109-1988. Those amendments included the change from "abandoned workings of an underground mine" to "inactive underground mine" and the deletion of the ending phrase "whether drilled through a pillar or not." Id.

Following the statutory amendment in 1986, 310 IAC 7-1-39 was amended to restate IC 13-4-7-24 nearly verbatim. 86-031G. 310 IAC 7-1-39(a) was again amended after the 1988 statutory amendment to remove the language "abandoned workings" in favor of the statutory language "inactive," however the rule maintains to date, the ending phrase "whether drilled through a pillar or not." 88-077G.

III. APPLICATION OF IC 14-37-7-3 THROUGH IC 14-37-7-5:

Determining the meaning and intent of IC 14-37-7-3 through IC 14-37-7-5 and the administrative rule counterparts found at 312 IAC 16-5-4, is paramount to a decision in this proceeding. In ascertaining that meaning and intent, contemporaneous consideration of IC 14-34 is necessary for context. Ernst and Ernst, supra.

These sections state,

Sec. 3. If a well for oil and gas purposes is proposed to be drilled:
(1) on land underlaid by an inactive underground mine; or
(2) on land within the permit boundaries of an active underground mine permitted under IC 14-34;

an owner or operator shall, if the well is to be completed as a producing well, run an intermediate string of casing from the surface to a point at least fifty (50) feet below the base of the commercially mineable coal resource or the mine floor.

IC 14-37-7-3.

Sec. 4. (a) If a well is drilled and completed as a producing well:
(1) through a commercially mineable coal resource; and
(2) within an area for which a mine plan is filed with the commission but for which an intermediate string is not required under section 3 of this chapter;
an owner or operator shall set a production string of casing properly centralized and cemented and documented by a sonic cement bond-variable density log.

(b) An owner or operator must provide at least forty-eight (48) hours notice to the:
(1) department; and
(2) person who filed the mine plan;
before commencing logging operations under this section.

(c) The person who filed the mine plan is entitled to:
(1) be present during the logging operations; and
(2) examine the log.

(d) The commission shall determine the adequacy of cement bonding. If there is a bonding failure between fifty (50) feet below and one hundred (100) feet above

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the commercially mineable coal resource, the owner or operator shall perform remedial action, as ordered by the commission, that results in adequate bonding.

(e) Not later than thirty (30) days after commencing logging operations, the owner or operator shall provide the department and the person who filed the mine plan with a copy of the sonic cement bond-variable density log.

(f) Preparation of the log and any remedial action required under this section are at the expense of the owner or operator.

IC 14-37-7-4.

Sec. 5. If a well is drilled and completed as a producing well through a commercially mineable coal resource, except a coal resource identified in section 3 or 4 of this chapter, the resource must be protected by a properly cemented, centralized production string of casing.

IC 14-37-7-5.

The administrative rule counterpart to these statutory provisions, found at 312 IAC 16-5-4, provides no additional guidance into the intended application.

On the face of these statutory provisions there is no ambiguity with respect to the intention of the legislature to provide for progressively increasing casing requirements based upon increasing levels of actual or planned underground mining activity in furtherance of concurrent operations of both the coal and oil and gas industries.

However, there exist certain ambiguities with respect to sections 3 and 4 due to the non-existence of any definition of "permit boundaries," as that term relates to active underground mines permitted under IC 14-34, IC 14-37-7-3(2), or "mine plan" as used in IC 14-37-7-4(a)(2). To ascertain the full intent of all three sections, these meanings must be determined and to do so requires a review of IC 14-34 and historical material. Furthermore, the continued existence of the closing phrase "whether drilled through a pillar or not" in 312 IAC 16-5-4(a) in light of the deletion of that phrase in IC 14-37-7-3 must be evaluated.

1. Pillars

The Department has espoused the position that IC 14-37-7-3 requires the running of an intermediate string of casing for all wells drilled in pillars within the permit boundary of active underground mines regardless of the actual existence of a CMCR or mine floor. For the Department's position to warrant merit, the final sentence of IC 14-37-7-3 would have to be ignored or alternatively construed to create the presumptory existence of a CMCR or mine floor in all pillars located within the permit boundary of an active underground mine permitted under IC 14-34.

Language contained within a statute cannot be ignored. , 706 N.E.2d 183 (Ind.App. 1998).

The original enactment of IC 13-4-7-24(a) expressly stated that an intermediate string of casing was required to be run to the depth of fifty (50) feet below the CMCR or mine floor, "whether drilled through a pillar or not." This legislative mandate had the effect of presuming the existence of a CMCR or mine floor in all pillars located within the permit boundary of an active underground mine. However, in 1988, the legislature removed that language, thus also

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eliminating the presumption and the mandatory running of intermediate casing strings in all such pillars.

The permit boundary of an active underground mine is determined solely by the coal producer in plans submitted with their surface coal mining and reclamation permit applications as required by IC 14-34-3-3(14). The debate that occurred in 1984 and 1985 during the attempted amendment of the administrative rules relating to oil and gas drilling revolved around this very issue and the practice of coal producers to require oil and gas operators to run mine strings (intermediates strings) of casing simply by including land areas, even land areas for which mining was not planned, in their mine plans.

The legislature's enactment of IC 13-4-7-24(a), the predecessor to IC 14-37-7-3, clearly provides for progressively increasing casing requirements determinable by increasing levels of actual or planned mining activity, not upon the coal producer's inclusion of land areas within the boundary of its surface coal mining and reclamation permit. This legislative action indicates an intent to eliminate the coal producer's ability to control well casing methods or otherwise unnecessarily impair or impede oil and gas production.

The legislature's 1988 removal of the language that created a presumptory existence of a CMCR or mine floor in all pillars within the permit boundary of an active underground mine permitted under IC 14-34 is consistent with a continuing effort to balance the power and interests of these two competing industries and encourage concurrent and coordinated recovery of both oil and gas as well as coal.

"It can be presumed that the legislature intended its language to be applied in a logical manner consistent with the underlying policies and goals of the statute." Baker v. Town of Middlebury, 753 N.E.2d 67, (Ind.App. 2001), citing , 440 N.E.2d 726, 729. (Ind.Ct.App. 1982). Furthermore the deletion of the language "whether drilled through a pillar or not" from IC 14-37-7-3 presumes an intention by the legislature to change the statute's meaning. It would be inconsistent to determine that the legislature intended to continue the mandatory setting of intermediate casing strings based upon the presumptory existence of CMCRs or mine floors in all pillars located within the permit boundary of an active underground mine permitted under IC 14-34 in light of its elimination of the very language that, at one time, created such a presumption.

The Department and the Petitioners have raised the issue of mine worker safety in underground mines as that relates to the drilling of and casing requirements for oil and gas wells. While general comments relating to mine worker safety were received during the 1985 public hearing with respect to the integrity of cemented centralized casing strings, mine worker safety is presently and was prior to the enactment of IC 14-37-7-3 (and its predecessors) under the exclusive jurisdiction of the U.S. Department of Labor and the Indiana Department of Labor. While there may have been an element of mine worker safety associated with the progressively increasing casing requirements nothing contained within IC 14-37 denotes an intention to grant any jurisdiction of this subject matter to the Department.

All parties acknowledge that the Mine Safety and Health Administration (hereinafter" MSHA") requires coal producers to maintain a 300 foot diameter around all oil and gas wells, 30 CFR 75.1700. This provision has the ability to

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prohibit the drilling of any oil and gas well in any pillar containing an insufficient land mass to accommodate the required 300 foot diameter. However, it is commonly understood that the 300-foot diameter barrier, following appropriate review by the appropriate agency, can and often is reduced. The Department's issuance of a permit authorizing the drilling of a well in a pillar containing less than a 300 foot diameter in no manner authorizes the owner or operator of that oil and gas well to force a coal producer into a violation of MSHA. In that light it appears that of necessity the oil and gas operator and the coal producer involved, such as McCrary, Five Star and Prosperity, would be obliged to work cooperatively to achieve success with a venture such as the one at hand in this proceeding.[FOOTNOTE 6]

With respect to the continuing validity of IC 14-37-7-3's administrative rule counterpart, 312 IAC 16-5-4(a), in conducting background review in administrative law on a matter of first impression, the Indiana Court of Appeals, Second District stated,

When rule-making powers have been granted and exercised, a court will only enforce the rules and regulations as long as they are within the scope of the statute.

"In passing on the validity of administrative rules and regulations, the only concern of the court is to ascertain whether the will of the legislature has been obeyed. In reviewing [**8] the propriety of an administrative regulation, the court must first determine whether the regulation lies within the scope of the authority conferred, it looks to see whether the regulation harmonizes with the plain language of the statute, its origin and its purpose, and must ascertain whether the regulation is consistent with and reasonably necessary to carry out the purposes of the statutory provisions conferring the rule-making power, and then determine whether the regulation is reasonable and not arbitrary."

Van Allen v. State of Indiana, 467 N.E.2d 1210 (Ind. App., 2 Dist., 1984) citing 73 C.J.S. Public Administrative Law & Procedure SECTION 93a, at 603-04 (1983).

In evaluating the validity of 312 IAC 16-5-4(a), the administrative rule's language is a near verbatim rendering of the authorizing statute and thus is unquestionably within the authority conferred by the legislature. However, the continued inclusion of the phrase "whether drilled through a pillar or not" in light of legislative deletion of that phrase must be reviewed separately in regard to the rule's consistency, reasonableness or arbitrariness.

Removal of the closing phrase "whether drilled through a pillar or not" from IC 14-37-7-3, which presumes legislative intent to effectuate a change in the meaning, Tarver, supra, serves to neither prohibit nor mandate application of IC 14-37-7-3 to wells drilled through pillars within the permit boundary of an active underground mine permitted under IC 14-34 or on land underlaid by an inactive underground mine. Continued inclusion of that phrase in 312 IAC 16-5-4(a); however, serves to absolutely mandate application of its provisions to all wells drilled through such pillars. To the extent that 312 IAC 16-5-4(a) absolutely mandates this course of action while the legislative intent of the statute is clearly non-mandatory, application of the rule is inconsistent with legislative authority, and in this instance arbitrary.

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Thus, the Department may continue to require application of 312 IAC 16-5-4(a) to wells proposed to be drilled in pillars, but it must first establish that the requirements of that section are applicable to the pillar. The Department may not arbitrarily apply IC 14-37-7-3 or 312 IAC 16-5-4(a) to all wells drilled through pillars absent a determination that the pillar is "underlaid by an inactive underground mine" or "within the permit boundary of an active underground mine permitted under IC 14-34" and that either a CMCR or a mine floor also exists within that pillar.

2. Mine Plan

Within IC 14-34-3-3 there exist multiple references to mine "plans."[FOOTNOTE 7] An application for surface coal mining and reclamation permits require the submission of an "accurate map or plan... clearly showing the following: (A) the land to be affected... (B) the area of land within the permit area upon which the applicant has the legal right to enter and commence surface coal mining operations..." IC 14-34-3-3(9), and "cross section maps or plans of the land to be affected, including the actual area to be mined..." IC 14-34-3-3(14). "Permit area" as used in IC 14-34-3-3(9)[FOOTNOTE 8] is defined as "...the area of land that is indicated on the approved map submitted by the operator with the operator's application," IC 14-8-2-200, and as "the area of land and water within the boundaries of the permit that are designated on the permit application maps, as approved by the director. The permit area includes all areas that are or will be affected by the surface coal mining and reclamation operations during the term of the permit." 312 IAC 25-1-101.

Numerous additional subsections of IC 14-34 reference "mining plans" in terms of including information notifying interested persons where a "copy of the proposed surface coal mining and reclamation plan may be inspected" as part of the permitting process, IC 14-34-4-2; continuing operation of a mine "according to the approved mining and reclamation plan" while awaiting the Department's grant or denial of a request to transfer a permit, IC 14-34-5-2; as well as identifying a "change in the mining or reclamation plan" that is considered nonsignificant, IC 14-34-5-8.2 and the process for obtaining authorization for nonsignificant revisions to a "mining or reclamation plan." IC 14-34-5-8.3.

Pursuant to 30 CFR 783.10, information collected under 30 CFR 783.11 through 30 CFR 783.25 is designed to describe pre-mining environmental resources "within and around the proposed mine plan area." Emphasis added. A portion of the information collected for this use are nearly identical boundary identifications and mapping requirements as those required under IC 14-34-3-3. 30 CFR 783.24 & 30 CFR 783.25.

A review of Natural Resources Commission decisions reveals that a "mine plan" is referenced as a means of identifying "areas to be disturbed," Fossil Fuels Mining, Inc. v. DNR, 1 CADDNAR 79, (1983), in terms of seeking mine plan revisions for the creation of final impoundments, Seminole Coals, Inc. v, DNR, 2 CADDNAR 57, (1984), and is comprised of operational information regarding mine related activities including the identification of other permits with which the coal operator is obliged to comply. , 6 CADDNAR 151, (1992).

While there exists no dictionary definition of the phrase "mine plan," the word "plan" is defined as, "A scheme, program, or method worked out beforehand for

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the accomplishment of an objective: a plan of attack. A proposed or tentative project or course of action: had no plans for the evening. A systematic arrangement of elements or important parts; a configuration or outline: a seating plan; the plan of a story. A drawing or diagram made to scale showing the structure or arrangement of something." http://dictionary.reference.com/search?q=plan, source: The American Heritage Dictionary of the English Language, Fourth Edition, Copyright 2000 by Houghton Mifflin Company. Within coal mining industry usage, again there is no definition of the term "mine plan," but "plan" is given a meaning consistent with everyday usage as, "a map showing features--such as mine workings, geological structures, and outside improvements--on a horizontal plane," or "a scheme or project for mine development." http://www.infomine.com/dictionary/

Through the use of everyday language, mining phraseology or as specified within IC 14-34-3-3 a mine plan is a comprehensive description of overall mining operations. Comments received during the 1984 and 1985 public hearings reveal an understanding within the coal mining industry that a mine plan could be utilized to determine whether a well would be drilled within an area of planned mining. Reference to mine plans as a component of a surface coal mining and reclamation permit predates the use of that term within IC 14-37-7-4. The presumption exists that the legislature was cognizant of its prior use of the term mine plan in the predecessor to IC 14-34 in 1980 at the time it referenced mine plans in the predecessor to IC 14-37-7-4 in 1986. The only reasonable conclusion is that a mine plan, as referenced in IC 14-37-7-4, refers to the plan filed by a coal producer with its surface coal mining and reclamation permit application pursuant to IC 14-34.

3. Permit Boundary

The structure of IC 14-37-7-3(2) allows for alternative application of the term "permit boundary." "Permit boundary" may be construed to apply to the overall land area encompassed by a permit issued under IC 14-34 within which active underground mining is occurring. Or alternatively, the term "permit boundary" may be construed to describe only the subsection of the overall land area identified by the coal producer in the mine maps or plans submitted with the surface coal mining and reclamation permit application that identify the actual area to be mined and within which underground mining activities are occurring.

IC 14-34 proved fruitless as an aid in establishing a meaning because the term "permit boundary" is not used within IC 14-34.

To create a "harmonious system" as required by the rules of statutory construction, section 3 and section 4 must be read in concert and both provisions given effect. Indiana Alcoholic Beverage Commission, supra. Section 4's language clearly establishes the existence of occasions in which a well, proposed to be drilled within a land area identified in a mine plan, is not subject to the requirements of section 3.

To give the term "permit boundary" a meaning consistent with the overall boundary of land identified in the mine plan is tantamount to equating "permit boundary" to "permit area," a term statutorily defined in 1980. Acts 1980, P.L. 101 §3. Because all words must be given a meaning, and the legislature chose "permit boundary" instead of "permit area," it must have intended a different meaning. Union Township School Corporation v. State ex rel. Joyce, supra.

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Consideration of the implications of a particular interpretation is appropriate where alternative constructions are possible. Indiana Alcoholic Beverage Commission v. Osco Drug, Inc., supra. By construing "permit boundary" synonymously with "permit area," the land area being described is equivalent to the total land area encompassed within the mine plan. This construction would mandate application of IC 14-37-7-3 to any well proposed to be drilled anywhere within that entire land area if an active underground mine actually existed within any subsection of that entire area. Thus, although section 4 contemplates the existence of an active underground mine within an area encompassed by a mine plan for which section 3 is inapplicable, under this interpretation such situation becomes an impossibility. The implication of construing "permit boundary" synonymously with the statutorily defined term "permit area," would be the nullification of section 4, which is improper. UNION TOWNSHIP SCHOOL CORPORATION, supra.

To allow sections 3 and 4 to function in unison dictates that "permit boundary" describe only the subsection of land identified in the mine plan where actual mining will occur. The implication of this interpretation is to require application of IC 14-37-7-3 to a well proposed to be drilled in that subsection if an active underground mine exists and a CMCR or mine floor also exists in that subsection. At the same time this interpretation provides for the harmonious application of IC 14-37-7-4 to the remaining areas identified within the mine plan that are outside the identified boundary where actual mining will occur and within which an active underground mine and either a mine floor or CMCR exists.

Pursuant to this analysis, section 3 requires the running of an intermediate string of casing if,

Section 4 requires the decreased casing requirement of a cemented centralized production string documented by a sonic cement bond-variable density log along with its notice and oversight provisions if,

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Section 5, is applicable to any well drilled through a CMCR on land where there exists no actual underground mine and for which there has been no mine plan submitted.

4. Mine Floor

The only use of the term "mine floor" within Indiana Code and administrative rule is at IC 14-37-7-3 and 312 IAC 16-5-4(a). An exhaustive search has failed to reveal the term's definition in statute; rule or regulation by any Indiana or federal source and the term has furthermore, not been identified in everyday dictionaries or mining industry glossaries.

McCrary espouses a meaning of mine floor to include the base of excavated portions of an underground mine while the Department posits that the proper meaning of mine floor is the "upper surface of the stratum underlying a coal seam."[FOOTNOTE 10] While the term "mine floor" is afforded no definition, the word "floor" is defined in both common dictionaries and coal mining glossaries. However, the meanings provided are widely variable and are consistent with both McCrary's and the Department's preferred definition. Therefore, the meaning of "mine floor" as used in IC 14-37-7-3 and 312 IAC 16-5-4(a) cannot be conclusively ascertained therefrom and requires additional evaluation.

"Floor" is afforded a common meaning that includes, " the bottom of any more or less hollow place: the floor of a tunnel." Random House Webster's College Dictionary, 2000 Second Revised and Updated Random House Edition, original emphasis. Within coal mining usage the word "floor" means,
"1. The rock underlying a stratified or nearly horizontal ore deposit, corresponding to the footwall of more steeply dipping deposits.
2. The bottom of a coal seam or any other mineral deposit. Source: Arkell
3. Plank-covered, or steel-mesh-covered, level work area at the base of a drill tripod or derrick around the collar of a borehole in front of the drill.
4. Loose plank laid parallel with rock drift at the heading before blasting a round of holes to facilitate the loading of broken rock.
5. A horizontal, flat orebody.
6. The bed or bottom of the ocean. A comparatively level valley bottom; any low-lying ground surface. Source: AGI
7. That part of any underground gallery upon which a person walks or upon which a tramway is laid.
8. A plank platform underground.
9. The upper surface of the stratum underlying a coal seam." Source: CTD. http://www.infomine.com/dictionary

Historical material provides no insight into the meaning of the term "mine floor."

Additional search for use of the term "mine floor" reveals that the term is utilized in three places within the Code of Federal Regulation with all such usage relating to Underground Coal Mining. 30 CFR 75.1903(a) states that "permanent underground diesel fuel storage facilities must be ...(7) provided with competent concrete floor or equivalent to prevent fuel spills from saturating the mine floor." 30 CFR 75.820(f) states that "prior to installation or removal of conveyor belt structure, high voltage cables extending from the section power center to longwall equipment and located in the belt entries must be: ...(3) located at least 6.5 feet above the mine floor." 30 CFR 75.380 states that "...escapeways shall meet the requirements of this section ... (c) each escapeway shall be ... (3) maintained to at least a height of 5 feet from the mine floor to the mine roof.

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A search of Indiana case law has revealed no usage of the actual term "mine floor," but the phrase "floor of the mine" was used to describe the location at which cars carrying coal are loaded onto cages for purposes of being hoisted from the mine to the surface. Princeton Coal & Mining co. v. Roll, 162 Ind. 115 (S.Ct. 1903).

Federal case law utilizes the term "mine floor" in a limited number of instances in relation to underground excavations being a location where miners work Hayes v. Federal Mine Safety and Health Review Commission, 965 F.2d 1081 (1992 U.S. App LEXIS 12150), in relation to reporting unsafe mine working conditions, Southern Ohio Coal Company v. Federal Mine Safety and Health Review Commission, 716 F.2d 1105 (1983 U.S. App), and in relation to the location of installation of conveyor systems. In Re Lopresti and Salmons, 333 F.2d 932, 142 US PQ (BNA) 176 and Clarkson MFG Company v. Marzall, 194 F. 2d 892.

Review of IC 14-34 for assistance in ascertaining the meaning proved futile, as the term mine floor is not used within IC 14-34. While IC 14-34 does not utilize the term mine floor, IC 14-34-3-3(14)(D) requires that maps and plans depict the nature of the "stratum immediately beneath the coal seam" and IC 14-34-3-3(15)(E)(i) requires a chemical analysis of core samples and test bores down to "the stratum lying immediately underneath the lowest coal seam to be mined."

If the legislature had intended the term mine floor to have the meaning espoused by the Department, it stands to reason that the language contained within IC 14-34-3-3(14)(D), IC 14-34-3-3(15)(E)(i) and IC 14-37-7-3 would consistently utilize either the term "mine floor" or alternatively consistently utilize the definition.

Only one meaning, the meaning proposed by McCrary, is consistent in common usage, mine term glossaries and legal reference. Legal references to the term "mine floor" found within the Code of Federal Regulation and case law all relate to areas within an underground mine that have been excavated and within which employees work and equipment is installed, which is consistent with one of the meanings found in both English dictionaries and mine term glossaries. An exhaustive search of legal reference material discloses no use of the term "mine floor" to describe anything except the area of an underground mine that has been excavated and within which mining activity occurs.

5. Definition of CMCR

The first definition of CMCR was adopted in 1985 at 310 IAC 7-1-1. The definition as preliminarily adopted was "a stratum of coal at least twenty-four (24) inches thick, although not necessarily at the location of an individual well or test hole, located less than one thousand two hundred (1,200) feet below the surface." 84-178G.

During the September 1985 public hearing, representatives of the oil and gas industry were critical of the definition as initially proposed for two reasons. First, they claimed that many seams of coal that would not be mined in the foreseeable future fit the proposed definition and they suggested that "quality factors be considered in determining coal resource commerciality." 85-086G. The second criticism pertained to the possibility that the definition "could be interpreted to mean that even if the coal were absent at the location of the

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well or test hole, but present in the immediate area, or designated in 'Cementing Depths for Mineable Coals', 1984 edition, the setting of a mine string would be required." Id.

It was determined that the addition of quality factors or more stringent thickness or depth requirements to the definition was beyond the subject given preliminary adoption, therefore the rule was not amended before final adoption to encompass this concern. However, to insure that mine strings were required only when the coal resource was present at the exact drilling location, the definition was approved for final adoption with amendment. 85-086G.

The first definition of CMCR, finally adopted through administrative rule was "a stratum of coal present at the location of an individual well or test hole, which averages at least twenty-four (24) inches thick and is less than one thousand two hundred (1,200) feet below the surface." 85-086G.

However, in 1986 the Indiana General Assembly, defined CMCR at IC 13-4-7-24(d), as "a seam of coal at least thirty-six (36) inches thick located no more than eight hundred (800) feet below the surface." P.L. 117-1986. This definition, continues to exist at IC 14-8-2-47 and 312 IAC 16-1-8.

Legislative action in changing the definition's language indicates an intention to change the meaning. Hammond v. State, supra. The definition enacted by the legislature includes three significant differences from the administrative rule adopted at 310 IAC 7-1-1 in 1985. First the legislature substituted the word "seam" in place of the agency's use of the word "stratum." Second the legislature required the coal resource to be thicker and closer to the surface in order to qualify as a CMCR. Third, the legislature removed the language "present at the location of an individual well or test hole" from the definition entirely.

If viewed in a vacuum, the removal of the language "present at the location of an individual well or test hole" from the statutory definition of CMCR, once again left open the question whether the CMCR must exist at the drilling location or merely in the general area of the drilling location. However, by reviewing the remainder of IC 13-4-7-24, now IC 14-37-7-3 through IC 14-37-7-5, it becomes clear that the location of the CMCR in relation to the drilling location is referenced in other subsections. See discussion supra.

By increasing the thickness and decreasing the depth of the coal resource in question, the legislature identified CMCRs as larger coal deposits that could be more efficiently mined. Thus, the coal resource identified as a CMCR became more commercially viable. This enactment appears to have been a favorable reaction by the legislature to the oil and gas industry's criticism in 1985 that the agency's definition lacked a sufficiently demanding standard for the identification of CMCRs.

Meaning must also be given to the legislature's substitution of the word "seam" for the agency's use of the word "stratum." In comparing the words "stratum" and the word "seam" or phrase "seam of coal" each must be reviewed according to their plain and customary meanings unless a particular or technical meaning is indicated. JOHNSON COUNTY FARM BUREAU CO-OP, INC., supra.

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In 1985, at the same time the agency defined CMCR, it also defined the word "stratum" for the first time. 84-178G and 85-086G. Therefore, when the statutory definition of CMCR was enacted, "stratum" was defined at 310 IAC 7-1-1 to mean "a sedimentary layer." Currently, "stratum" is defined in administrative rule to mean, " a single sedimentary bed or layer, regardless of thickness, that consists of generally homogeneous rock material." 312 IAC 16-1-45. There has never existed a statutory definition of the word "stratum" and the administrative rule definition has never included any element of overall size, depth or value.

Conversely, the word "seam" is not defined by statute or administrative rule. "Seam," in common usage is defined as "a stratum of ore or coal thick enough to be mined with profit," http://dictionary.reference.com/search?q=seam, WordNet 2.0, 2003 Princeton University, "a thin layer or stratum (as of rock) between distinctive layers; also: a bed of valuable mineral and especially coal irrespective of thickness," and the phrase "coal seam" is defined as "a bed of coal usually thick enough to be profitably mined." http://www.m-w.com/cgi-bin/ dictionary?book=Dictionary&va=coal seam,

All of these definitions referencing an element of value and size

However, "coal seam" is also defined simply as "a seam of coal," http: //dictionary.reference.com / search?q=coal seam, source: WordNet 2.0, 2003 Princeton University and "seam" is defined as "a thin layer or stratum, as of coal or rock," http://dictionary.reference.com/search?q=seam, source: The American Heritage Dictionary of the English Language, Fourth Edition, Copyright 2000 by Houghton Mifflin Company, "a long, thin layer of rock or another substance that formed between layers of other rocks," http://dictionary.cambridge.org/define.asp?key=seam, all of which are without reference to size or valuation.

In an effort to resolve the differences in plain and customary meanings, reference to relevant technical or industry specific usage of words and phrases is appropriate. Johnson County Farm Bureau Co-Op, Inc., supra. Mining industry sources define "seam" as, "a stratum or bed of coal or other mineral; generally applied to large deposits of coal," Fays Glossary of the Mining and Mineral Industry, published 1918, Dictionary of Mining, Mineral and Related Terms, published 1968, both published by the US. Bureau of Mines, emphasis added, again making reference to overall size.

While the variations in the definition of the word "seam" result in continued conflict, only one interpretation provides a result consistent with the legislature's increase in thickness and decrease in depth that improved commerciality of coal designated as CMCRs. Indiana Alcoholic Beverage Commission, 431 N.E.2d 823 By interpreting the word "seam" synonymously with the word "stratum," any thirty-six (36) inch thick layer of coal located less than eight hundred (800) feet beneath the surface would constitute a CMCR despite the fact that it may cover only one square foot in horizontal dimension at the requisite thickness and excavation costs would far outweigh profitability. However, under an interpretation giving the word seam a meaning consistent with industry usage, a layer of coal thirty-six (36) inches thick located less than eight hundred (800) feet beneath the surface would only be classified as a CMCR if the overall dimension and actual depth were sufficient to make mining commercially profitable. This outcome is not only consistent with an increase in commercial viability, but is also in line with both coal and

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oil and gas industry opinion, voiced during public hearings on the administrative rule amendments, that only actually mineable coal resources needed protection. 84-176G.

Additionally, the definition imposes only minimum thickness and maximum depth requirements, thus mandating exclusion of coal resources of a lesser thickness or located at a greater depth from classification as a CMCR. The mandatory inclusion of coal resources meeting those thickness and depth requirements is not contemplated by the definition.

By requiring a coal resource to be "at least thirty-six (36) inches thick and no more than eight hundred (800) feet" deep, the language of the statute encourages a consideration of those factors contemporaneously in determining the existence of commerciality, thus inviting consideration of other factors. Obviously a layer of coal minimally meeting the thickness requirements might well be of commercial value if located at a depth of one hundred fifty (150) feet, but the cost of excavation from a depth of seven hundred seventy-five (775) feet might well make that same coal resource worthless on the commercial market.

The phrase CMCR is a creation of the Indiana rulemaking process and research reveals no other use of the phrase. However, throughout history in interpreting coal leases and contracts, courts have interpreted the phrase "mineable coal" to mean "coal that can be profitably mined by judicious methods." Martin's Fork Coal Co. v. Harlan-Wallins Coal Corp, 14 F. Supp. 902,1934 U.S. Dist. LEXIS 1051; Auxier Coal Co. v. Big Sandy & Millers Creek Coal Co., 238 S.W. 189, 194 Ky. 14 (Ky.App. 1922)

There is no express statement in the definition that CMCR was intended to be considered in terms of value or profitability but the phrase being defined in and of itself, while not overwhelming or controlling, infers a meaning. Eaton v. Onan Corporation, 117 F.Supp.2d 812, (S.D. Ind. 2000) The combination of factors discussed, supports the determination that a CMCR as defined at IC 14-8-2-47 and 312 IAC 16-1-8, exists only when a coal resource meeting the requisite depth and thickness requirements is of such an actual size and is located at such an actual depth as to be valuable and profitably mined. While the legislature did not expressly authorize the consideration of the coal's quality as a determinative factor, to the extent that value of the coal resource is based upon quality, that consideration would be necessary in determining commerciality.

IV. INFORMAL INVESTIGATIVE HEARINGS

Through IC 14-37-3-16, the legislature requires the commission to provide for informal hearings in five (5) enumerated instances, unrelated to this proceeding. However, while imposing upon the commission the obligation to conduct informal hearings in certain instances, the legislature also granted to the commission the authorization to "hold informal hearings to consider any matter that assists in the administration of the division." IC 14-37-3-16. Any determination made through an informal hearing, except a decision relating to the modification, repeal or amendment of an administrative rule, is reviewable under IC 4-21.5 and any determination relating to an administrative rule is the subject of review under IC 4-22-2. IC 14-37-3-17

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Administrative rules adopted under the authority of IC 14-7-3-16, do include subject matter in addition to the five expressed instances in which informal investigative hearings are required. 312 IAC 16-2-3. Included within the administrative rule is the express ability to conduct informal investigative hearings for the purposes of "revising the location of known commercially mineable coal resources." 312 IAC 16-2-3(a)(4). Similar to IC 14-37-3-16, 312 IAC 16-2-3(d) specifies that a determination resulting from such informal investigative hearing is subject to review under IC 4-21.5 and 312 IAC 3-1 unless it pertains to administrative rule adoptions, which are subject to review under IC 4-22-2.

Statutory and administrative rule authorization for the Department to conduct informal investigative hearings is unambiguous. However, review of IC 13-7-3-16 and 312 IAC 16-2-3 alone leaves ambiguity relating to the scope of the Department's authority to issue orders resulting from such a hearing. A thorough reading of 312 IAC 16, reveals that 312 IAC 16-5-5, which serves to identify the location of known CMCRs through the use of "Cementing Depths for Mineable Coal," 1984 edition (hereinafter CDMC) and authorizes revision thereof, is the only provision directly related to 312 IAC 16-2-3(a)(4).

While 312 IAC 16-5-5(a) establishes the presumptory location of known CMCRs based upon the content of CDMC, it further acknowledges that the presumption can be rebutted by any affected person through a proceeding controlled by IC 4-21.5. 312 IAC 16-5-5(c). The rule also authorizes the content of CDMC to be revised by any person through a written request and informal hearing as established under 312 IAC 16-2-3. 312 IAC 16-5-5(b). The term "known CMCR" is not defined separately; however, the only references to known CMCRs being found in 312 IAC 16-5-5 and 312 IAC 16-2-3(a)(4) reveals that the intended scope of review under 312 IAC 16-2-3(a)(4) is limited to the revision of CDMC as specified in 312 IAC 16-5-5(b).

Curtis Ault, previous Associate Head of the Coal and Industrial Minerals Section of the Indiana Geological Survey, who compiled the CDMC, explained during the October 1984 public hearing that CDMC identified coal resources that are protected and also established a table of cementing depths necessary for the protection of those resources. Gary Fricke, previous Director of the Department's Division of Oil and Gas, explained that upon receipt of well drilling permits, CDMC would be "utilized to determine the depth of coal seam protection." Mr. Fricke continued to explain that "a person might seek to modify the area incorporated in the coal seam protection by filing a petition similar to what is currently employed for spacing exceptions." 84-178G.

The key to understanding the differences regarding the revision of CDMC and the ability to rebut a presumption created by recognition of CDMC is the meaning of "person" and "affected person" as used in the respective subsections. "Person" is not defined in 312 IAC 16, but for purposes of IC 14-37 a person is "an individual, a partnership, an association, a fiduciary, an executor or administrator, a limited liability company, a corporation, or a governmental entity." IC 14-8-2-202(d). The term "affected person" is afforded no definition, however is routinely understood to be a person who has suffered or is likely to suffer in the near future harm to some pecuniary, property or personal interest. Huffman v. Indiana Office of Environmental Adjudication, Indiana Department of Environmental Management and Eli Lilly and Company, 2004 WL 1462827 (2004).

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Therefore, 312 IAC 16-5-5(b), authorizes any person to seek revision of the content of CDMC through informal hearing controlled by 312 IAC 16-2-3 while allowing only a person aggrieved by the determination of existence of a CMCR through the use of CDMC to rebut that presumption through an administrative proceeding. 312 IAC 16-5-5(c).

V. PERMIT ISSUANCE UNDER 312 IAC 16-5-4(i)

Language similar to what is now found at 312 IAC 16-5-4(i) is initially observed in 1985 as a portion of the proposed amendment to 310 IAC 7-1-39 involving coal seam protection. As discussed previously, this proposed administrative rule amendment was referred to the Natural Resources Study Committee and ultimately resulted in the 1986 statutory amendment of IC 13-4-7-24. Thereafter, 310 IAC 7-1-39, was amended and among other things added language similar to what is now found at 312 IAC 16-5-4(i). 88-086G

Initially the language contained within the administrative rule clearly stated, "no permit may be issued until an opportunity for hearing is provided to affected persons in accordance with IC-22-1," which made clear that similar to any permitting procedure any person affected or aggrieved by a permit determination may seek administrative review. 86-031G.

The language of 310 IAC 7-1-39, was amended to its present form in 1988 and historical reference provides no insight for the amendment. 88-077G. The language presently tends to indicate that the Department is prohibited from issuing a permit requiring application of 312 IAC 16-5-4 until such permit issuance has been reviewed through an administrative proceeding. However, in reviewing IC 14-37 it becomes apparent that the agency is not statutorily authorized to withhold issuance of an oil and gas permit until administrative review under IC 4-21.5 has occurred. IC 14-37-4-8 expressly obligates the Department to issue an oil and gas permit upon compliance with statutory and administrative rule requirements and IC 14-37-4-9 specifically identifies the only means by which the Department may refuse to issue a permit if other requirements have been met. Nothing contained within IC 14-37-4-9 allows for the withholding of a permit being issued under 312 IAC 16-5-4, but is instead related to past violations of permits that have substantially damaged the environment.

Furthermore, IC 4-21.5-3-7 specifically states that a petition for review must "state facts demonstrating that the petitioner is (A) a person to whom an order is specifically directed; (B) the petitioner is aggrieved or adversely affected by the order or (C) the petitioner is entitled to review under any law." IC 4-21.5-3-7(1) An applicant for an oil and gas well permit, would not qualify for review as an aggrieved or adversely affected person unless the applicant disputed the basis of the Department's determination as to the coal seam protection requirements upon which its permit was conditioned under 312 IAC 16-5-4.

Therefore, despite the language change in 1988, the administrative review authorized by 312 IAC 16-5-4(i) must be viewed as a process by which a person aggrieved by a determination that a proposed well is located within an area identified in 312 IAC 16-5-4(a), 312 IAC 16-5-4 (b) - (g), or as a location of a known CMCR as set forth in 312 IAC 16-5-5, may seek administrative review.

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FINDINGS OF FACT and CONCLUSIONS

1. The Natural Resources Commission is the ultimate authority for purposes of this proceeding. IC 14-10-2-3.

2. Personal service was made upon the Department and the Natural Resources Commission has jurisdiction over the subject matter and the persons of the parties.

3. The location proposed by McCrary for drilling the C.E. Waltz Well #28 is in Survey 14, Township 1 North, Range 9 West, Pike County, Indiana within the boundary identified by Prosperity in its surface coal mining and reclamation permit issued under IC 14-34 for mining the springfield coal bed and is "within the underground workings of Prosperity." Claimant's Motion, I. Facts, paragraph 1 and 7 and Attachment 1, "Affidavit of Fred McCrary," Attachment 4, "Application for Well Permit," Attachment 3, "Affidavit of Alan Kern," and Attachment 9, "Order of the Division Director."

4. The C.E. Waltz Well #28 more specifically is proposed to be drilled through Pillar Number 458, a pillar remaining in a mined out, but unsealed, panel of Prosperity that is presently utilized for ventilation. Claimant's Motion, I. Fact, paragraph 7 and Attachments 3, "Affidavit of Alan Kern," and Attachment 6, "Certificate."

5. It may be reasonably inferred from the fact that the location proposed for drilling the C.E. Waltz Well #28 is a pillar remaining in a mined out panel of Prosperity that the location is within the boundary of land identified by Five Star pursuant to IC 14-34-3-3(14) as an area to be actually mined.

6. While the panel proposed for the drilling of the C.E. Waltz Well # 28 may be mined out and no longer active, the fact that the panel remains unsealed and is being utilized for ventilation reasonably infers that underground mining is actively ongoing within the boundary of land identified by Five Star pursuant to IC 14-34-3-3(14) as an area within Prosperity to be actually mined.

7. The C.E. Waltz Well #28, being located within the boundary of Prosperity, a mine permitted under IC 14-34, and also being within the permit boundary of land identified by Five Star as an area to be actually mined, within which active underground mining is occurring, is "within the permit boundary of an active underground mine permitted under IC 14-34." IC 14-37-7-3(2) and 312 IAC 16-5-4(a).

8. While Pillar Number 458 is "within the permit boundary of an active underground mine permitted under IC 14-34," in light of the legislative deletion of the phrase "whether drilled through a pillar or not," from the statutory counterpart to 312 IAC 16-5-4(a), before requiring the setting of an intermediate string of casing, the Department must also determine whether a mine floor or CMCR exists in Pillar Number 458.

9. Because a "mine floor" is the floor of the excavated portion of an underground mine and Pillar Number 458 is an unmined and unexcavated land mass remaining intact for stability and subsistence purposes, the location cannot contain a mine floor.

10. By operation of rule, the springfield coal bed being mined by Five Star is identified in CDMC as a presumed a CMCR. 312 IAC 16-5-5, "Cementing Depths for Mineable Coal" 1984 Edition, 85-086G.

11. McCrary is a "person" for purposes of IC 14-37 as defined at IC 14-8-2-202(d), authorized to seek revision of CDMC pursuant to 312 IAC 16-5-5(b) and 312 IAC 16-2-3(a)(4).

12. McCrary sought through the informal hearing process to establish the non-existence of a CMCR in Pillar Number 458. For clarification, while a revision of CDMC removing Pillar Number 458 from presumptory identification as a CMCR may have served McCrary's purpose, application of 312 IAC 16-5-5(b) and 312 IAC 16-2-3(a)(4) is limited to the revision of CDMC.

13. Creating a point of confusion McCrary states, without providing evidentiary support, that the Department does not utilize CDMC for the identification of locations of known CMCRs, "McCrary's Motion," II. Regulatory Background, 18, and further that McCrary itself does not believe CDMC actually identifies locations of known

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CMCRs. "McCrary's Motion," IV. Argument. Contrary to McCrary's beliefs or the Department's actual use of CDMC in identifying locations of known CMCRs, 312 IAC 16-5-5(a) does establish the presumptory existence of CMCRs in locations identified in CDMC.[FOOTNOTE 11] Neither McCrary nor the Department can ignore the existence of known CMCRs so identified.[FOOTNOTE 12] Consequently, if the Department were to determine the non-existence of a CMCR in Pillar Number 458 through methods other than revision of CDMC, its action upon that determination would be contrary to law unless CDMC was revised accordingly.

14. Upon receipt of McCrary's request for informal hearing under 312 IAC 16-5-5(b) and 312 IAC 16-2-3(a)(4) the Department was obligated to determine the actual existence of a CMCR at that location and revise CDMC if appropriate. The Department's findings of fact, conclusions and order issued following the informal hearing fail to make such a determination.

15. The Department's order requiring McCrary to set an intermediate string of casing pursuant to IC 14-37-7-3 and 312 IAC 16-5-4(a) in drilling the C.E. Waltz Well #28 without first determining the existence of a CMCR in Pillar Number 458 was in error.[FOOTNOTE 13]

16. The Department's issuance of its Division Order following the informal hearing constituted notice under 312 IAC 16-5-4(i) that the C.E. Waltz Well #28 was considered by the Department to be within the permit boundary of an active underground mine permitted under IC 14-34. Upon receipt of such notice, 312 IAC 16-5-4(i) entitles McCrary, as an aggrieved person, to seek administrative review of that determination pursuant to IC 4-21.5 and 312 IAC 3.

17. McCrary's request for administrative review in this proceeding, controlled by IC 4-21.5 and 312 IAC 3, is being considered as a review under both 312 IAC 16-5-5(b) and 312 IAC 16-2-3(d) as well as 312 IAC 16-5-4(i). Review authorized by 312 IAC 16-2-3(d) is one to review the Departments failure to issue a determination as to the revision in CDMC to remove Pillar Number 458 from those locations presumptorily identified therein as known CMCRs. Pursuant to 312 IAC 16-5-4(i), this proceeding serves as administrative review of the Department's determination that the provisions of IC 14-37-7-3 and 312 IAC 16-5-4(a) are applicable to the C.E. Waltz Well #28.

18. Notwithstanding McCrary's right to administrative review provided by 312 IAC 16-5-5(b), 312 IAC 16-2-3(d) and 312 IAC 16-5-4(i), it is also qualified for administrative review as a person to whom the Division Order is specifically directed and as a person who is aggrieved or adversely affected by the Division Order. In this instance McCrary also qualifies for administrative review solely upon the basis of IC 4-21.5-3-7(1).

19. Evidence presented by McCrary, undisputed by the Department, establishes that Prosperity extracts coal from the Indiana No. 5 seam, which is the only coal seam in the vicinity of Pillar Number 458 that could be characterized as a CMCR. Claimant's Motion, I. Facts, paragraphs 6 & 7 and Attachments 2, "Affidavit of Tim Kerr." And Attachment 7, "Geologist's Certification."

20. A CMCR exists only when a coal resource is economically mineable. In determining the actual existence of such a coal resource at a particular location, the definition requires consideration of the actual thickness and actual depth of the resource in ascertaining the value and cost of extraction to establish the profitability or commerciality of mining that coal resource.

21. Coal resources of a thickness less than thirty-six (36) inches or located at a depth greater than eight hundred (800) feet must be excluded from consideration as a CMCR.

22. McCrary submitted evidence, undisputed by the Department, that the coal resource in the Indiana #5 Coal Seam is extracted from an average depth of one hundred ninety (190) to three hundred (300) feet subsurface, and more specifically two hundred twenty (220) feet at the proposed well location. Claimant's Motion, I. Facts, Paragraph 6 and Attachment 2, Affidavit of Tim Kerr.

23. Further evidence submitted by McCrary, undisputed by the Department, establishes that Alan Kern,

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a professional engineer representing Five Star, as the operator of Prosperity, no longer considers the panel containing Pillar Number 458 to be a CMCR. Claimant's Motion, Attachment 6, "Certificate"

24. Kern's conclusion relating to the existence of a CMCR is limited solely to circumstances related to Pillar Number 458 in which the C.E. Waltz Well #28 would be drilled under Permit #52217. Upon these circumstances Kern determined that approximately 3,152 tons of coal remained in Pillar Number 458 and a generous estimate of the sale price would be approximately $78,000.00.

25. Kern explained that "the profitability goal for an underground mine is a 15% pretax profit" and if that goal were met, the mine could predict a cost of mining at an estimated $66,982.00. Supplemental Affidavit of Alan Kern.

26. Kern's conclusion, which is not disputed by the Department, is that the pretax profit of mining Pillar Number 458 would approximate $3.75 per ton of coal for a total profit of only $11, 820.00, which is "not commercially feasible." Supplemental Affidavit of Alan Kern.

FOOTNOTES:

1. To the extent applicable, the parties' Findings and Conclusions have been incorporated in this decision.

2. The document was inappropriately entitled "Non-Final Order on Summary Judgment" but should more appropriately characterized as an Interlocutory Order on Summary Judgment.

3. It is appropriate to note here that while the petitioners are correct that there is no coal company as a party to this proceeding, representatives of Prosperity and Five Star, the coal lessee and coal mine operator directly connected to Pillar Number 458, the C.E. Waltz Well #28 and Permit #52217, have supported McCrary in this proceeding through the filing of evidentiary affidavits.

4. It is important to note that the Department bears the burden of establishing that the issues involved in this proceeding are moot. The Department did not allege that the intermediate string of casing currently required under the drilling permit issued on December 6, 2004 had already been installed.

5. At the time of the public hearings, "mine string" was defined as "a string of casing the size of which is to be not less than 3 1/2" greater inside diameter than the outside diameter of the oil string to be used and hole bore should not be less than 4" larger than outside diameter of mine string." 310 IAC 7-1-1. A "mine string" is the equivalent of an "intermediate string" of casing, which is at issue in this proceeding.

6. Matters within the jurisdiction of the U.S. Department of Labor and the Indiana Department of Labor under MSHA are not at issue in this proceeding and nothing contained within this opinion is intended or should be construed as a usurping of the jurisdiction, authority or responsibility of those agencies.

7. The references to mine plans found within IC 14-34-3-3 pre-existed the reference in IC 14-37-7-4 to mine plans. Acts 1980, P.L. 101 §3.

8. The term "permit area" was defined consistent with its federal counterpart, Surface Mining and Reclamation Control Act, in 1980. Acts 1980, P.L. 101 §3.

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9. The previous statutory language, "abandoned workings of an underground mine," limited application of IC 13-4-7-24(a) (predecessor to IC 14-37-7-3) to those mines for which no further mining was actually contemplated. However, amending the statutory language to "inactive underground mine" served to expand applicability of IC 14-37-7-3 to include not only abandoned mines, but also any actually existing mine that is presently idle or non-functioning regardless of future intentions.

10. See "Respondent DNR's Motion to Reconsider and Clarify Non-Final Order on Summary Judgment"

11. Because 312 IAC 16-5-5(b) and 312 IAC 16-2-3(a)(4) limits the scope of the informal hearing process to the revision of known CMCRs identified through CDMC, absent operation of CDMC, McCrary was not entitled to such informal hearing but instead would have been obliged to request review as an aggrieved person pursuant to 312 IAC 16-5-4(i).

12. If McCrary or the Department believes that 312 IAC 16-5-5's establishment of the presumptory existence of CMCRs through the use of CDMC should be revisited, the Department may seek administrative rule amendments through IC 4-22 and McCrary as a "person" may seek through IC 14-37-3-16 and 312 IAC 16-2-3 to commence the process for administrative rule amendment.

13. While the Department's conclusion regarding the existence or non-existence of either an underground mine or a CMCR would be determinative of the drilling requirements imposed upon permit #52217; McCrary's request for informal investigative hearing was wholly misconstrued by the Department as a request for variance or exception to the drilling requirements of IC 14-37-7-3 and 312 IAC 16-5-4(a). McCrary's request for informal hearing cannot be characterized as a request for variance or exception to statutory and administrative rule provisions that may be inapplicable.

14. This proceeding is not being considered as a review under 312 IAC 16-5-5(c) because evidence presented does not establish that the Department's determination regarding the existence of a CMRC, if such determination was made by the Department, was based in whole or in part upon the content of CDMC. Therefore, McCrary does not qualify as an "affected person" whose affected status is a result of the operation of CDMC.