## Facts

- The Secretary of the Interior issued Copper Valley an Alaska federal oil and gas lease effective February 1, 1966, for a ten-year primary term ending January 31, 1976, and thereafter only while production continued in paying quantities.
- Near the end of the primary term, Copper Valley sought to extend the lease by drilling across the expiration date and applied for a permit to drill.
- On January 30, 1976, USGS approved the permit with conditions, including a “winter season only” operating limitation imposed to protect tundra and permafrost during summer thaw.
- Copper Valley began drilling on January 31, 1976, reached about 100 feet, and shut down for the 1976 summer season under the winter-only limitation; similar seasonal shutdowns continued.
- Copper Valley obtained a two-year extension, moving the expiration to January 31, 1978 (the maximum extension permitted under 30 U.S.C. § 226(e)).
- Eleven days before the extended expiration, Copper Valley sought an additional 12-month extension, claiming the summer shutdowns were “suspensions of operations and production” ordered in the interest of conservation under 30 U.S.C. § 209, which would extend the lease for the suspension period.
- The Secretary denied the request, concluding that the winter-only permit condition did not constitute a statutory “suspension” requiring an extension.

## Issues

1. Whether a winter-only drilling restriction that requires seasonal summer shutdowns constitutes a “suspension of operations and production” ordered in the interest of conservation under 30 U.S.C. § 209, requiring lease extension for the shutdown periods.
2. Whether construing § 209 to require extensions for seasonal operating limits would conflict with 30 U.S.C. § 226(e)’s finite lease-term structure, including its single two-year extension cap.

## Decision

- The D.C. Circuit affirmed summary judgment for the Secretary.
- The court held that the winter-only permit condition and resulting seasonal shutdowns were not a § 209 “suspension of operations and production.”
- Because § 209 did not apply, Copper Valley was not entitled to an additional extension beyond the term as extended under § 226(e), and the lease expired.

## Legal Principles

- A § 209 “suspension of operations and production” is confined to formal, extraordinary, conservation-based suspensions that halt lease operations, not ordinary or foreseeable operating restrictions incorporated through permitting and regulation.
- Conservation-related permit conditions that limit when operations may occur (including seasonal restrictions) do not, without more, toll the lease term under § 209.
- Statutes governing federal oil and gas leases should be read to avoid defeating Congress’s express lease-term limits; § 209 cannot be interpreted to create serial extensions that circumvent § 226(e)’s term and extension cap.
- Courts may credit the administering agency’s reasonable construction of “suspension” within the Mineral Leasing Act’s structure and purpose where consistent with the statutory text and scheme.

## Conclusion

The court upheld the Secretary’s refusal to extend the lease, ruling that seasonal winter-only drilling limits are regulatory operating conditions rather than a statutory “suspension of operations and production” under 30 U.S.C. § 209, and that treating such limits as suspensions would improperly undermine the lease-term limits set by 30 U.S.C. § 226(e).


Copper Valley Mach. Works, Inc. v. Andrus, 653 F.2d 595 (D.C. Cir. 1981)