CADDNAR
Gibson County Coal, LLC v. DNR & Pioneer Oil Company, Inc, 17 CADDNAR 1
Administrative Cause Number: 22-069G
Administrative Law Judge: Elizabeth Gamboa
Petitioner Counsel: Joseph Langerak & Katherine Boren
Respondent Counsel: Ihor Boyko & Stephen T. Link
Date: January 24, 2024
[Editor’s Note: Final Order follows Findings of Fact and Conclusions of Law.]
Procedural Background and Jurisdiction
1. On December 22, 2022, Gibson County Coal, LLC (hereinafter GCC) filed a Petition for Administrative Review (hereinafter Petition) with the Natural Resources Commission (hereinafter Commission). GCC requests an order revoking the decision by the Department of Natural Resources (Department) to issue six permits to Pioneer Oil Company (Pioneer). See Petition.
2. By filing the Petition, Petitioner initiated a proceeding governed by Indiana Code 4-21.5-3, sometimes referred to as the Administrative Orders and Procedures Act (AOPA) and the administrative rules adopted by the Commission at 312 IAC 3-1 to assist with the implementation of AOPA. See IC 4-21.5-3-1, et seq.
3. The Department has been granted regulatory authority over oil and gas wells, including permitting authority pursuant to Ind. Code § 14-37.
4. The Commission is the ultimate authority of the Department. I.C. § 14-10-2-3.
5. The Commission possesses jurisdiction over the subject matter and the persons in this matter.
6. Administrative Law Judge (ALJ) Elizabeth Gamboa was appointed under IC 14-10-2-2 to conduct this proceeding and was assigned this case on January 3, 2023.
7. The Department of Natural Resources (Department) and Pioneer were notified of the Petition when the Commission issued a Notice of Telephonic Prehearing Conference on January 3, 2023. A Telephonic Prehearing Conference was scheduled for January 26, 2023.
8. Ihor Boyko filed an Appearance of Counsel for the Department on January 4, 2023. Stephen Link filed an appearance on behalf of Pioneer on January 10, 2023.
9. By agreement of the parties at the January 26, 2023 Prehearing Conference, an administrative review hearing was scheduled for December 6 and 7, 2023. Additionally, a deadline of April 28, 2023 was established for the filing of dispositive motions at the January 26, 2023 prehearing conference. That deadline was eventually extended to June 30, 2023 at the request of the parties.
10. Pioneer filed an answer to GCC’s petition on February 22, 2023. Pioneer disputed some of the allegations in GCC’s petition and answered that GCC was not entitled to an order revoking the permits issued by the Department to Pioneer. See Answer of Respondent Pioneer Oil Company Inc. to Petition for Administrative Review (Pioneer Answer).
11. Pioneer filed a Motion for Judgment on the Pleadings on June 14, 2023 in which it argued the permits were properly issued to Pioneer and that Pioneer should be granted judgment on the pleadings.
12. The Department filed a Motion to Dismiss on June 30, 2023. The Department argued that because the definition of “waste” was amended by the Indiana legislature effective January 1, 2023, GCC’s argument that the permits would result in waste being committed by Pioneer, GCC’s petition was moot. See Motion to Dismiss Appeal as Moot.
13. GCC filed a Motion for Summary Judgment (Motion) on June 30, 2023. GCC supported the Motion with the Affidavit of John Henderson (Henderson Affidavit). The following documents were attached to the Henderson Affidavit: Exhibit A, GCC’s written objections to the permits for “Marvel #1, #2, and #3 Wells” dated June 30, 2022; Exhibit B, GCC’s written objections to the permits for “Heidenreich #1, #2 and #3 wells” dated July 26, 2022; Exhibit C, GCC’s supplemental comments submitted to the Department after the informal hearing was conducted; and Exhibit D, Findings of Fact, Legal Conclusions, and Determination of Informal Hearing under 312 IAC 29-3-4 issued by the Department on December 7, 2022.
14. A briefing schedule for the dispositive motions was established by order dated July 6, 2023. The parties were given until July 31, 2023 to file responses to the motions and until August 15, 2023, to file replies to the responses.
15. On July 31, 2023, Pioneer filed a response in opposition to GCC’s motion for summary judgment. Pioneer filed the affidavits of Brandi Stennett and John Brooke in support of its response to GCC’s motion for summary judgment.
16. Also on July 31, 2023, GCC filed a combined response to Pioneer’s motion for judgment on the pleadings and the Department’s motion to dismiss.
17. The Department filed its Response to GCC’s Motion for Summary Judgment and a designation of material in support of its response on July 31, 2023.
18. On August 23, 2023, the Department filed a reply to GCC’s response to the Respondents’ Dispositive Motions.
19. Pioneer filed a reply in support of its motion for judgment on the pleadings on August 25, 2023.
20. GCC filed a reply in support of its motion for summary judgment on August 25, 2023.
Pioneer’s Motion for Judgment on the Pleadings
21. Pioneer argues GCC’s Petition should be dismissed pursuant to Ind. Trial Rule 12(c) because GCC does not allege a sufficient basis to overturn the Department’s decision to grant Pioneer the permits.
22. Unless inconsistent with AOPA or the administrative rules found at 312 Indiana Administrative Code (IAC) 3-1, the administrative law judge may apply the Indiana Trial Rules (T.R.) to the administrative proceedings. 312 IAC 3-1-10.
23. T.R. 8 requires that a claim for relief in civil court contain “a short and plain statement of the claim showing the pleader is entitled to relief and a demand for relief to which the pleader deems entitled.”
24. A motion filed under T.R. 12, in turn, is a mechanism for challenging the legal sufficiency of complaint. A T.R. 12(c) motion for judgment on the pleadings allows a party to request dismissal of a case at the initial stages of the proceedings. Sims v. Beamer, 757 N.E.2d 1021, 1024 (Ind. Ct. App. 2001).
25. AOPA’s pleading requirements are much different than the requirements of T.R. 8. I.C. § 4-21.5-3-7 provides in relevant part:
(a) . . . To qualify for review of any other order described in section 4, 5, or 6 of this chapter, a person must petition for review in a writing that does the following:
(1) states facts demonstrating that:
(A) the petitioner is a person to whom the order is specifically directed;
(B) the petitioner is aggrieved or adversely affect by the order; or
(C) the petitioner is entitled to review under any law.
26. The writing must be filed with the ultimate authority for the agency issuing the order within fifteen days after the person is given notice of the order or any longer period set by statute. I.C. § 4-21.5-3-7.
27. Pursuant to 312 IAC 3-1-3 “[a] proceeding before the commission under IC 4-21.5 . . . is initiated when . . . [a] petition for review is filed under IC 4-21.5-3-7.”
28. Neither AOPA nor 312 IAC 3-1 provides a mechanism for dismissal similar to that provided in T.R. 12.
29. Pioneer does not argue GCC’s Petition does not meet the requirements of I.C. § 4-21.5-3-7. Rather, Pioneer argues T.R. 12 should be applied pursuant to 312 IAC 3-1-10.
30. The pleading requirements of T.R.8 are more stringent than AOPA’s pleading requirements. Subjecting a petition for administrative review to scrutiny under T.R. 12 would be adding requirements to a petition for review that are not required by AOPA.
31. T.R. 12 is therefore found to be inconsistent with AOPA. The Administrative Law Judge declines to apply T.R. 12 to this proceeding.
32. Pioneer’s motion for judgment on the pleadings is denied.
Department’s Motion to Dismiss Appeal as Moot:
33. The Department argues that GCC’s main objection to the permits is that the activity proposed by Pioneer in its application would constitute illegal waste, which is prohibited by I.C. § 14-37-11-1 because “’Pioneer intends to drill the coal bed methane wells and flair the methane to qualify for credits that can be received for capturing coal mine methane.’” See Motion to Dismiss, p. 1.
34. The Department argues that effective January 1, 2023, the Indiana legislature amended Indiana’s definition of “waste” so that the term specifically does not include capturing and destroying coal bed methane for a commercial purpose, including generating carbon credits. Id. at p. 2. The Department argues that this change means Pioneer’s activity would not constitute waste; therefore, the issues GCC raises in its Petition are moot.
35. The Department does not raise the argument that GCC’s Petition does not meet the pleading requirements of AOPA or that GCC is not entitled to relief under AOPA or the administrative rules.
36. Rather, the Department argues that a legal basis stated by GCC in its request for administrative review is not sufficient. Thus, the Department’s Motion is a Motion to Dismiss under T.R. 12(b).
37. A 12(b) motion, like a 12(c) motion, is a mechanism for challenging the legal sufficiency of complaint. Sims, 757 N.E.2d at 1024 (Ind. Ct. App. 2001).[1]
38. Although T.R. 8 requires the complaint for relief to include a statement of the legal basis entitling the petitioner to relief, no such requirement exists in AOPA.
39. Under AOPA, GCC was not required to include a statement showing why it is entitled to relief. Rather, GCC was required only to request an administrative hearing in writing that includes the requirement so I.C. 4-21.5-3-7.
40. GCC’s petition cannot be dismissed based on a legal argument raised in the Petition that is not required by AOPA to be included in the Petition.
41. The Department’s Motion to Dismiss is therefore denied.
GCC’s Motion for Summary Judgment:
Summary judgment standard:
42. A party may move for summary judgment at any time after a proceeding is assigned to the administrative law judge. I.C. § 4-21.5-3-23.
43. Except with respect to service of process, governed by I.C. § 4-21.5-3-1, and the final disposition of an administrative proceeding, governed by I.C. § 4-21.5-3- 28 and 29, Trial Rule 56 of the Indiana Rules of Trial Procedure controls the consideration of a motion for summary judgment. I.C. § 4-21.5-3-23.
44. The ALJ will consider a summary judgment “as would a court that is considering a motion for summary judgment filed under Trial Rule 56 of the Indiana Rules of Trial Procedure.” I.C. § 4-21.5-3-23. Summary judgment shall be granted “if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Ind. Trial rule 56(c); Frendeway & Bartuska v. Brase, 15 CADDNAR 121, 122 (2020).
45. The party moving for summary judgment bears the burden of establishing the party is entitled to summary judgment regardless of whether the party would have the burden of proof in an evidentiary hearing. Mueller-Brown v. Caracci, 13 CADDNAR 156, 157 (2013).
46. The burden of establishing there are no material factual issues is on the party moving for summary judgment. Morris v. Crain, 969 N.E.2d 119, 123 (Ind. Ct. App. 2012). Once the movant has met this burden, the opposing party must present sufficient evidence to show the existence of a genuine triable issue. Id.
47. “A party opposing the motion shall designate . . . each material issue of fact which that party asserts precludes entry of summary judgment and the evidence relevant thereto.” Ind. Trial Rule 56(C).
48. Summary judgment shall be granted “if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Id.
49. Affidavits supporting or opposing a motion for summary judgment “shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” Trial Rule 56(E).
50. Summary judgment may be granted in favor of the moving or nonmoving party. C & C Oil Co., Inc. v. Ind. Dept. of Revenue, 570 N.E.2d 1376 (Ind. Ct. App. 1991). “When any party has moved for summary judgment, the court may grant summary judgment for any other party upon the issues raised by the motion although no motion for summary judgment is filed by such party.” T.R. 56(B).
Undisputed Material Facts:
51. GCC owns and operates the Gibson County Coal mine (Gibson North Mine) in Gibson County, IN. See, Petition; Pioneer Answer.
52. On June 1, 1997, the Department issued Underground Coal Mining Permit U-022 to GCC. The permit was most recently renewed on October 11, 2022 and expires on October 26, 2027. Id.
53. Under permit U-022, GCC is authorized to conduct coal mining operations in the Gibson North Mine. Id.
54. GCC maintains that the Gibson North Mine is temporarily sealed, and mining activities could be conducted in the future from the Gibson North Mine. Complaint; Exhibit A of Henderson Affidavit. Pioneer asserts the mine is permanently closed and designated as abandoned. Pioneer’s Answer; Affidavit of John Brooke (Brooke Affidavit).
55. John Henderson, Vice President of Land Management for GCC, explained that the Gibson North Mine as an active mine but that it is classified as abandoned by the U.S. Mine Safety Administration and listed as an active mine under Permit U-022 “due to coal processing operations being conducted” at the Mine. See, Henderson Affidavit.
56. Clay Dayson, Reclamation Specialist for the Department, testified that mining operations ceased in 2019 “following removal of continuous mining machines and other underground mining equipment, temporary seals were installed by [GCC] . . . to prevent humans and wildlife from entering the underground mine workings.” Affidavit of Clay Dayson.
57. Dayson explained Permit U-022 is listed as active because coal mined by GCC from a separate mine is being separated and processed at the Gibson North Mine. Id.
58. It is not disputed that the Gibson North mine is temporarily sealed. The implications of the sealing of the mine, however, remains disputed.
59. Under Nonsignificant Revision #14 to permit U-022, GCC was granted approval from the Department to dispose of fine refuse from GCC’s active Gibson South Mine into the Gibson North Mine. See Complaint; Pioneer Answer.
60. In July 2022, Pioneer filed six applications for Coal Bed Methane permits. Three of the applications involved Pioneer’s Hendenreich Farms Inc. Lease and three of the applications involved its Marvel Lease. See Affidavit of Brandi Stennett (Stennett Affidavit) and exhibits.
61. All six permits would allow Pioneer to produce from an area of the Gibson North Coal Mine workings covered by Permit U-22. Id.
62. Pioneer applied for the permits to:
Drill and complete the well as set forth in the application into the mine void and test the gas quantity and quality. The results of that testing will help inform our decisions regarding use, marketing and/or flaring of the gas encountered and prevent waste. The gas volumes and composition will help determine whether it can be sold into the pipeline, blended with our other gas to achieve pipeline quality, used in our operations, used to generate electricity, or flared. In any of these uses the mineral interest owner will be paid for the extracted gas and it is expected that monetizable credits will be earned.
Stennett Affidavit and attached exhibits.
63. The Department granted the permits under permit numbers 56148, 56149, 56150, 56157, 56158, and 56159. See Totality of the record.
64. On GCC’s request, the Department “conducted an informal hearing concerning the proposed wells to be drilled under permit numbers 56148, 56149, 46150, 56157, 56158 and 56159” on October 27, 2022. See Petition.
65. The Department concluded that the issues raised by GCC did not apply to the Department’s permitting process. The Department issued the following “Legal Conclusion and Order:”
Accordingly, the Division determines that the objections and comments filed in this matter are outside the purview of the Division’s permitting process to act upon or consider. The permit applications contain the items enumerated by statute and rules of the Division such that the 6 proposed permits should be issued to Pioneer Oil Company, Inc. as requested.
Henderson Affidavit, Exhibit D.
Legal Conclusions:
66. GCC argues the permits should not have been granted because Pioneer has not satisfied all the requirements of Ind. Code § 14-37 for the issuance of the permits.
67. GCC argues:
a. Pioneer intends to flare gas at the well; however, Pioneer may not do so because only an “owner or operator” of the mine may burn the natural gas in flares. Pioneer is not an owner or operator and may not therefore flare the mines.
b. Pioneers’ coal bed methane (CBM) mining under the permit will constitute illegal waste in violation of I.C. § 14-37.
c. I.C. § 14-37 prohibits Pioneer from drilling a CBM well into GCC’s mine workings for the purpose of flaring methane.
d. The Department may not issue two well permits in the same space because there are minimum spacing requirements that vary depending on the rules for the particular formation.
68. Pioneer argues that it complied with all the statutory and regulatory requirements; therefore, the Department was required to issue the permits. Summary judgment should therefore be granted in Pioneer’s favor.
69. The Department argues the permits were properly granted because Pioneer’s application complied with the requirements of I.C. § 14-37-4-8 and 312 IAC 29-4-7.
70. Administrative review of the Department’s licensure determination is conducted de novo. I.C. § 4-21.5-3-14.
71. Coal Bed Methane (CBM) is defined as:
Gaseous substances of whatever character lying within or emanating from:
(1) unmined coal seams, either naturally or as a result of stimulation of the coal seam;
(2) the void created by mining out coal seams; or
(3) the gob created by longwall or other extraction methods of coal mining.
I.C. § 14-37-2-42.2.
72. The commission has been granted the authority under to I.C. § 14-37-3-14.5 to regulate CBM wells and compliance with I.C. 14-37-4-8 and I.C. § 14-37-4-8.5.
73. “A person may not drill, deepen, operate or convert a well for oil and gas purposes without a permit issued by the department.” I.C. § 14-37-4-1.
74. A well for oil and gas purposes is
a well bore drilled, deepened, or converted for any purpose for which a permit is required under IC 14-37. The term includes the following: . . . a coal bed methane well.
I.C. 14-8-2-317.
75. Pursuant to I.C. § 14-37-4-5, an application for a permit under I.C. § 14-37 must include:
(1) A plat of the land or lease upon which the well is to be located;
(2) The location of the proposed well as certified by a professional surveyor registered under IC 25-21.5.
(3) The surface elevation of the proposed well and the method used for determining that elevation.
(4) The depth of the proposed well.
(5) The number and location of all other dry, abandoned, or producing wells located with one-fourth (1/4) mile of the proposed well.
(6) The distance from the proposed well to the three (3) nearest boundary lines of the tract.
(7) With respect to an application to drill within a city or town, a certified copy of the official consent by ordinance of the municipal legislative body.
(8) Other information determined by the commission that is necessary to administer this article.
76. I.C. § 14-37-4-8 provides:
(a) Except as provided in section 9 of this chapter and subject to subsection (b) and (c), if an applicant for a permit complies with:
(1) this article; and
(2) the rules adopted under this article;
the director shall issue the permit.
(b) The division shall:
(1) maintain a list of parties with experience and interest in mining commercially minable coal resources who request in writing to be given notice of the filing of completed permit applications under this chapter with respect to coal bed methane; and
(2) give written notice of each complete permit application filed under this chapter with respect to coal bed methane not later than fifteen (15) days after the filing date to each party on the list maintained under subdivision (1) , and to each party that files an affidavit under IC 14-37-7-8.
(c) The notice given under subsection (b)(2) must include at least the following with respect to each proposed coal bed methane well:
(1) The location, type, and depth.
(2) The coal seam affected.
(d) The director may not issue a permit under this chapter until all of the following requirements are satisfied:
(1) At least thirty (30) days have elapsed after giving notice under subsection (b)(2).
(2) Proof of both of the following has been submitted to the director:
(A) Receipt of the permit application’s written notice as provided under section 8.5(e) of this chapter.
(B) That the applicant complied with the notification to the surface owner provisions required under IC 32-23-7-6.5. The applicant may submit as proof a certified mail receipt, the surface owner’s written acknowledgment of receipt of the notification or copy of an agreement with the surface owner establishing different notification terms.
(3) The director has taken into consideration:
(A) Comments received during the period referred to in subdivision (1) from a person interested in the future minability of the commercially minable coal resource; and
(B) Objections made under section 8.5(h) of this chapter.
(4) The applicant has submitted to the director documentation demonstrating that the commercial minable coal seam outside the coal bed methane production area is protected adequately for future underground mining.
(e) Unless waived by the applicant, the director shall issue or deny a permit under this chapter within fifteen (15) days after the elapse of the thirty (30) day notice period under subsection (d)(1).
77. The Commission has promulgated rules under Ind. Code 4-22 to assist in the implementation of the Oil and Gas statute. Regarding permits, 312 IAC 29-3-7 provides:
(a) Except as provided in subsection (b), if an applicant for a permit complies with IC 14-37 and this article, the division shall issue a permit.
(b) The division may deny a permit application if the applicant or if a person owning or controlling the applicant:
(1) has been issued a notice of violation and failed to abate the violation within sixty (60) days after the deadline for abatement, unless the person has requested an administrative adjudication of the notice of violation, and a final determination has not been rendered by the commission;
(2) controls or has controlled any well for oil and gas purposes and has demonstrated a pattern of violations of IC 14-37 or this article that have resulted in damage to the environment; or
(3) has had a permit revoked under IC 14-37.
(c) For a permit application that does not meet the requirements of IC 14-37 and this article the division will issue a notice of incomplete application allowing the applicant thirty (30) days to correct the .deficiencies. Failure to correct the deficiencies will result in the division's denial of the application.
(d) The division shall issue notice of its decision to approve or deny a permit application in accordance with 312 IAC 29-3-5.
(e) The decision to approve or deny a permit application for a well for oil and gas purposes is subject to IC 4-21.5.
78. “I.C. 14-37-4-8 expressly requires the Department to issue an oil and gas permit upon compliance with statutory and administrative rule requirements and I.C. 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.” F.D. McCrary Operator, Inc. v. DNR, 10 CADDNAR 73, 96 (2005).
79. GCC does not argue that the requirements of I.C. § 14-37-4-8 have not been met or that the Department should have refused to issue the permits pursuant to I.C. § 14-37-4-9. Rather, GCC argues that Pioneer is violating I.C. § 14-37-11-2 and 3 because Pioneer intends to flare the coal bed methane. According to GCC, because Pioneer is not an “owner or operator” of the wells at issue, Pioneer is not allowed to flare the CBM.
80. I.C. § 14-37-11-2, provides:
An owner or operator of a well producing both oil and natural gas may burn the natural gas in flares if there is not a market for the natural gas.
81. I.C. § 14-37-11-3 allows an owner or operator of a coal mine to burn in flares the CBM produced from a CBM well if the burning is necessary to protect coal miners’ safety and/or it is not economical to market the CBM.
82. The term “owner” and “operator” are separately defined under Indiana Code. For the purpose of I.C. 14-37, an owner is defined as a “person who has a right to drill into and produce from a pool and to appropriate the oil and gas produced from the pool for the person and/or others.” I.C. § 14-8-2-195.
83. The term “operator” refers to a person to whom a permit has been issued or a person engaging in an activity for which a permit is required. I.C. § 14-8-2-190; 312 IAC 29-2-94.
84. Pioneer is clearly a person to whom a permit is issued. Thus, Pioneer may flare CBM if the other conditions of I.C. § 14-37-11-2 and § 14-37-11-3 are met.
85. “[T]he mere fact than an operator may potentially act in contravention of the term of a permit is not, in and of itself, a legitimate basis for denying the permit in the first place.” Hoosier Energy Rural Electric v. DNR and L.C. Neely Drilling, 13 CADDANR 1, 3 (2012).
86. I.C. § 14-37-12 grants the Department enforcement authority against a person who violates I.C. 14-37 or any administrative rule adopted pursuant to I.C. 14-37. I.C. § 14-37-12-2. The Department’s enforcement authority includes the ability to revoke a permit. If, in the future, Pioneer violates the provisions of I.C. § 14-37 or any rule applicable thereto, Pioneer would be subject to the Department’s enforcement authority, including the possibility of its permits being revoked.
87. GCC also argues that Pioneer’s proposed wells would constitute waste which is prohibited under § I.C. 14-37-11-1, which provides: “Except as provided in this chapter, waste is prohibited.”
88. Waste is defined in I.C. § 14-8-2-302 as:
(2) For the purposes of IC 14-37, the term includes the following:
(A) Locating, spacing, drilling, equipping, operating, or producing a well for oil and gas purposes drilled after March13, 1947, in any manner that:
(i) Reduces or tends to reduce the quantity of oil or gas ultimately to be recovered from any well in Indiana; or
(ii) Violates the spacing provision adopted by the commission under IC 14-37.
(B) Storing oil in earthen reservoirs except in an emergency to prevent total loss of that oi.
(C) Producing oil or gas in a manner that will cause water channeling or zoning.
(D) Injecting fluids into a stratum or party of a stratum capable of producing oil or gas, except in accordance with the terms of a Class II well for which a permit issued under IC 14-37.
(E) Allowing water other than fresh water to flow from any producing horizon located in a producing pool, except in accordance with the term of a permit issued under IC 14-37.
(3) For purposes of IC 14-37, the term does not include capturing and destroying coal bed methane for a commercial purpose, including the generation of carbon credits.
89. Pioneer indicated in its permit applications that it might flair the CBM to generate carbon credits.
90. GCC argues that despite the amendment, CMB flaring operations “not carried out in conjunction with or incident to ownership or operation of an existing well or mine- regardless of whether it is carried out for the purpose of generating carbon offset credits – is still considered waste within the meaning of § 14-37-11-1.” According to GCC’s argument, only GCC, as the “owner or operator” of the Gibson North Mine, could carry out CBM flaring without causing illegal waste. See Petitioner’s Motion for Summary Judgment.
91. GCC’s argument equates the phrase “owner or operator” with “owner.” As stated above, the terms are defined separately. The term “operator” includes a person to whom a permit has been issued, which would include Pioneer. I.C. § 14-8-2-190; 312 IAC 29-2-94.
92. GCC argues that Pioneer is prohibited from drilling a CBM well into GCC’s mine workings to conduct CBM flaring. GCC again asserts that only GCC, as the owner or operator of the Gibson North Mine, may conduct flaring activity at the Gibson North Mine.
93. As has already been established, Pioneer is an operator and may conduct flaring activity. GCC has cited no law that prohibits the Department from granting Pioneer’s permits even though they involve the mine workings of the Gibson North Mine.
94. GCC further argues that that the Department “may not issue two well permits in the same space; there are minimum spacing requirements that vary depending on the rules for the particular formation.” See Petitioner’s Motion for Summary Judgment, p. 9.
95. GCC did not support this argument with citation to authority or evidentiary materials but argues Pioneer’s activities could violate spacing requirements which could cause problems, including increased risk for the potential for accidents.
96. Pioneer would be subject to appropriate sanctions and penalties if it violated the terms of the permit or regulatory requirements. However, the potential that a violation would occur after the permit is granted is not a “legitimate basis for denying the permit in the first place.” Hoosier Energy Rural Electric v13 CADDNAR 1, 3.
97. That spacing requirements could be violated sometime in the future is not a legitimate basis for denying Pioneer’s permits.
98. The burden was on GCC to establish it is entitled to judgment as a matter of law. GCC has failed in this regard.
99. Further, the facts relevant to the Department’s issuance of the permits is not in dispute. Summary judgment is therefore granted in favor of the Department and Pioneer.
Final Order:
100. Summary judgment is granted in favor of Pioneer Oil Company, Inc., and the Department of Natural Resources.
101. This final order disposes of all issues in this proceeding.
102. The administrative hearing scheduled for December 6 and December 7, 2023, is hereby vacated.
[1] A T.R. 12(b) motion to dismiss may be made before a party has filed an answer whereas a T.R. 12(c) motion for judgement on the pleadings is made after the pleadings are closed. See, e.g., Northern Indiana Gun & Outdoor Shows, Inc., v. City of South Bend, 163 F.3d 449, 456 (1996).