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Candy Billionaire Fights Energy Firms

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MATTHEW BROWN | January 8, 2008 02:18 AM EST | AP

BILLINGS, Mont. — A reclusive billionaire whose family owns the Mars candy empire is emerging as a formidable opponent to the energy industry's plans to expand development of some of the country's most productive coal and gas deposits.

Forrest E. Mars Jr., the former chief executive of Mars Inc., owns a sprawling ranch along Montana's Tongue River _ directly in the sights of companies hoping to tap the area's extensive coal and natural gas reserves.

Through his previously undisclosed ownership of the 82,000-acre Diamond Cross ranch, Mars is bringing his $14 billion fortune to bear on the side of ranchers and conservationists trying to curb the companies' ambitions.

"The perception that it's the big guy (energy companies) versus the little guy (ranchers). In this instance that's not the case," said Bruce Williams, vice president of Fidelity Exploration and Production, a defendant in one of several lawsuits brought by Diamond Cross over natural gas drilling.

The Mars family has a long-standing reputation for secrecy, and Forrest Mars' name is not listed as a party in any of the lawsuits pitting Diamond Cross against coal and natural gas developers. His ownership in the ranch was revealed in a Dec. 28 court affidavit reviewed by The Associated Press.

Mars did not respond to requests for interviews made through his son-in-law, Lonnie Wright, and through Diamond Cross attorney Loren O'Toole.

O'Toole said Mars' opposition to energy development stemmed from the vast amounts of water such projects can consume. In the arid West, water is essential to keeping working cattle ranches such as Diamond Cross alive.

The ranch sits on the northern end of the Powder River Basin, an area with some of the most productive coal and natural gas fields in the nation. Development of those resources was concentrated over the last decade in the southern portion of the basin, in Wyoming.

However, in recent years, exploration began pushing north into Montana. And Mars' ranch soon began to push back, with lawsuits against the companies involved.

Mars' influence on the rolling plains of southeastern Montana could be put to the test by state and federal laws favoring oil and gas development.

Under a property regime known as split estates, landowners in many Western states do not necessarily control the minerals beneath their property. In the Diamond Cross case, Fidelity and another company, Pinnacle Gas Resources, have oil and gas leases on the ranch that predate Mars' ownership, according to public records and company officials.

State law gives the companies the right to enter Mars' land to drill on those leases. So far, however, he's held them at bay.

"Forrest has a lot of money but he's in the same boat as anybody else," said Beth Kaeding, chairwoman of the Northern Plains Resource Council, a conservation group of which Mars is a member.

"If you don't own the mineral rights, it doesn't matter how huge your ranch is, how politically powerful you are, how much money you have," Kaeding said. "Mineral rights trump surface rights."

Mars, Inc. _ maker of Snickers, the Mars bar, M&Ms and a variety of other food products _ is one of the country's largest family-held companies, with an estimated 40,000 employees and $21 billion in annual revenues.

Public records show the billionaire began to amass property in southeastern Montana as early as 2003 _ just as natural gas production in the area was booming.

Since then, Mars has launched or joined multiple court fights through Diamond Cross. The lawsuits have challenged the industry's depletion of water reserves, a proposal to build a new coal railroad through the ranch and, most recently, efforts to drill on Diamond Cross itself.

Ranch manager Denise Wood said Mars had kept the property as a working cattle ranch and his concerns about energy development mirrored those of many long-time residents, particularly the practice of pumping out underground water reserves to access trapped pockets of natural gas.

Those reserves are depended on by farmers and ranchers to water their fields and livestock. Energy companies sometimes capture the water and hold it in stock ponds that ranchers can use, but often it is lost as runoff.

Mars attorney O'Toole said the lawsuits were not meant to block development.

"That's not the point," he said. "The point is we can't lose all that water and at the same time have no provision to put it back."

In the most recent legal case involving Diamond Cross, Wyoming-based Pinnacle Gas Resources is attempting to begin drilling on a lease it holds to more than 10,000 acres of Mars property.

When the company notified Diamond Cross last month that it planned to begin drilling on the ranch by early January, O'Toole responded with a letter barring Pinnacle employees from the ranch. Pinnacle sued, demanding access. The first hearing in the case is scheduled Tuesday, in state district court.

"As a lawyer it should come down to the facts and the law, but there's no denying that money talks," said Pinnacle attorney Chris Mangen.

A Mars victory would mark "a significant change in the interpretation of state law that says you do have access," said Tom Richmond, administrator for the Montana Board of Oil and Gas Conservation. That agency is a defendant in a separate Diamond Cross lawsuit, over its approval of some of Pinnacle's drilling plans.

Richmond offered another solution to the dispute: Pointing to the gas company's size _ its stock is worth about 1 percent of Mars' estimated personal fortune _ he suggested the billionaire could simply buy the publicly traded company if he was determined to keep it off his land.