Onshore Oil and Gas Operations; Federal and Indian Oil and Gas Leases; Onshore Oil and Gas Order Number 1, Approval of Operations, 43349-43364 [05-14103]

Agencies

• DEPARTMENT OF AGRICULTURE
• Forest Service
• DEPARTMENT OF THE INTERIOR
• Bureau of Land Management

[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Proposed Rules]
[Pages 43349-43364]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-14103]


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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 228

RIN 0596-AC20

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[W0-610-411H12-24 1A]
RIN 1004-AD59


Onshore Oil and Gas Operations; Federal and Indian Oil and Gas 
Leases; Onshore Oil and Gas Order Number 1, Approval of Operations

AGENCIES: U.S. Forest Service, Agriculture; Bureau of Land Management, 
Interior.

ACTION: Joint proposed rule.

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SUMMARY: This proposed rule would revise existing Onshore Oil and Gas 
Order Number 1, which was published in the October 21, 1983, edition of 
the Federal Register. The Order provides the requirements necessary for 
the approval of all proposed oil and gas exploratory, development, or 
service wells on all Federal and Indian (except Osage tribe) onshore 
oil and gas leases, including leases where the surface is managed by 
the U.S. Forest Service (FS). It also covers most approvals necessary 
for subsequent well operations, including abandonment. The revision is 
necessary due to provisions of the 1987 Federal Onshore Oil and Gas 
Leasing Reform Act (Reform Act), legal opinions, court cases since the 
Order was issued, and other policy and procedural changes. The revised 
Order would address the submittal of a complete Application for Permit 
to Drill or Deepen package (APD), including a Drilling Plan, Surface 
Use Plan of Operations, evidence of bond coverage and Operator 
Certification.

DATES: Send your comments to reach the Bureau of Land Management (BLM) 
on or before August 26, 2005. The BLM and the FS will not necessarily 
consider any comments received after the above date during its decision 
on the proposed rule.

[[Page 43350]]


ADDRESSES: Mail: Director (630), Bureau of Land Management, Eastern 
States Office, 7450 Boston Boulevard, Springfield, VA 22153.
    Hand Delivery: 1620 L Street, NW., Suite 401, Washington, DC 20036.
    E-mail: comments_washington@blm.gov. Federal eRulemaking Portal: 
https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: James Burd at (202) 452-5017 or Ian 
Senio at (202) 452-5049 at BLM or Barry Burkhardt at (801) 625-5157 at 
the Forest Service. Persons who use a telecommunications device for the 
deaf (TDD) may contact these persons through the Federal Information 
Relay Service (FIRS) at 1-800-877-8339, 24 hours a day, 7 days a week.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures
II. Background
III. Discussion of Proposed Rule
IV. Procedural Matters

I. Public Comment Procedures

A. How Do I File Comments?

    You may submit your comments by any one of several methods:
     You may mail your comments to: Director (630), Bureau of 
Land Management, Eastern States Office, 7450 Boston Boulevard, 
Springfield, Virginia 22153, Attention: RIN 1004-AD59.
     You may deliver comments to 1620 L Street NW., Suite 401, 
Washington, DC 20036.
     You may e-mail your comment to: comments_
washington@blm.gov (Include ``Attn: AD59'' in the subject line).
    Please make your comments on the proposed rule as specific as 
possible, confine them to issues pertinent to the proposed rule, and 
explain the reason for any changes you recommend. Where possible, your 
comments should reference the specific section or paragraph of the 
proposal that you are addressing.
    The Department of the Interior and the FS may not necessarily 
consider or include in the Administrative Record for the final rule 
comments that we receive after the close of the comment period (see 
DATES) or comments delivered to an address other than those listed 
above (see ADDRESSES).

B. May I Review Comments Others Submit?

    BLM intends to post all comments on the internet. If you are 
requesting that your comment remain confidential, do not send us your 
comment at the direct internet address or the e-mail address because we 
immediately post all comments we receive on the internet. Also, 
comments, including names and street addresses of respondents, will be 
available for public review at the address listed under ``ADDRESSES: 
Personal or messenger delivery'' during regular business hours (7:45 
a.m. to 4:15 p.m.), Monday through Friday, except holidays.
    Individual respondents may request confidentiality, which we will 
honor to the extent allowable by law. If you wish to withhold your name 
or address, except for the city or town, you must state this 
prominently at the beginning of your comment. We will make all 
submissions from organizations or businesses, and from individuals 
identifying themselves as representatives or officials of organizations 
or businesses, available for public inspection in their entirety.

II. Background

    The regulations at 43 Code of Federal Regulations (CFR) part 3160, 
Onshore Oil and Gas Operations, in section 3164.1 provide for the 
issuance of Onshore Oil and Gas Orders to ``implement and supplement'' 
the regulations in part 3160. Also, 36 CFR 228.105 provides for the 
issuance of FS Onshore Orders or for the co-signing of Orders with BLM. 
Although they are not codified in the CFR, all onshore orders are 
issued using notice and comment rulemaking and, when issued in final 
form, apply nationwide to all Federal and Indian (except the Osage 
Tribe) onshore oil and gas leases. The table in 43 CFR 3164.1(b) lists 
existing Orders. This proposed rule would revise existing Onshore Oil 
and Gas Order Number 1 (the Order) which supplements primarily 43 CFR 
3162.3 and 3162.5. 43 CFR 3162.3 covers conduct of operations, 
applications to drill on a lease, subsequent well operations, other 
miscellaneous lease operations, and abandonment. Section 3162.5 covers 
environmental and safety obligations. The FS would adopt the Order 
which would supplement 36 CFR part 228 subpart E. The existing Order 
has been in effect since November 21, 1983. For further information, 
see the October 21, 1983 Federal Register at 48 FR 48916.

III. Discussion of the Proposed Rule

    There are four primary reasons the Order is being revised:
    1. The 1987 Reform Act, which amended the Mineral leasing Act, 30 
U.S.C. 181 et seq., included two significant changes affecting APD 
processing on Federal leases. The first important change is the 
addition of a provision for public notification of a proposed action 
before APD approval or substantial modification of the terms of a 
Federal lease.
    The second important change the Act made is the assignment of 
authority to the FS to approve and regulate the surface disturbing 
activity associated with oil and gas wells on National Forest System 
(NFS) lands. Where NFS lands are involved, a Surface Use Plan of 
Operations, included in an APD, is now approved by the FS. The FS also 
approves surface disturbing aspects of related and subsequent 
operations. The FS has actively participated in this revision, and is a 
cosigner of this Order. The Order would apply to FS review of oil and 
gas surface operations.
    2. In response to protests to two Resource Management Plans in 
April 1988, the Office of the Solicitor of the Department of the 
Interior issued two memorandums related to oil and gas issues. The 
first and most far-reaching (issued by the Associate Solicitor, Energy 
and Resources on April 1, 1988, titled ``Legal Responsibilities of BLM 
for Oil and Gas Leasing and Operations on Split Estate Lands''), 
concerned BLM responsibilities on Federal leases overlain by private 
surface (split-estate). In this memorandum the Solicitor's Office 
opined that the National Environmental Policy Act (NEPA), the 
Endangered Species Act (ESA), and the National Historic Preservation 
Act (NHPA) require BLM to regulate exploration, development, and 
abandonment on Federal leases on split-estate lands in essentially the 
same manner as a lease overlain by Federal surface. The memorandum also 
stated that while a private owner's wishes should be considered in 
decisions, they do not overrule requirements of these statutes and 
their implementing regulations.
    The second memorandum (issued by the Assistant Solicitor, Onshore 
Minerals, Division of Energy and Resources on April 4, 1988, titled 
``Legal Responsibilities of BLM for Oil and Gas Leasing and Operations 
under the National Historic Preservation Act'') lays out in more detail 
BLM's responsibilities under NHPA, elucidating further the discussion 
on cultural resources in the first opinion.
    The pertinent requirements of existing Order Number 1 do not fully 
conform to the memorandums issued by the Solicitor's Office in 1988.
    3. The existing Order does not adequately address BLM Rights-of-Way 
or FS Special Use Authorizations which are often required for off-lease 
facilities or those activities outside of lands committed to a unitized 
area. This has led to confusion and delays on the part

[[Page 43351]]

of both the agencies and industry. Under the existing Order, APD 
approval is often delayed pending completion and approval of a Right-
of-Way or Special Use Authorization. We intend for the proposal to 
eliminate or reduce this delay. The proposed rule provides for early 
identification of any needed Right-of-Way or Special Use Authorization, 
allows for conducting a single environmental analysis for the APD and 
Right-of-Way or Special Use Authorization, and permits concurrent 
approval of the Right-of-Way or Special Use Authorization with the APD. 
On NFS lands, the FS will approve off-lease activities directly related 
to the drilling and production of the well as part of the Surface Use 
Plan of Operations instead of through issuing a separate Special Use 
Authorization. Please specifically comment on the provisions in the 
proposal (see proposed Section V. Rights-of-Way (R/W) `` Special Use 
Authorization (SUA)) that would expedite Right-of-Way or Special Use 
Authorization approvals. We are interested in suggestions of other 
methods BLM and the FS could incorporate to expedite approval of energy 
projects.
    4. Existing Order Number 1 is over 20 years old. Conditions, 
regulations, policies, procedures, and requirements have been altered, 
added, and eliminated since the Order was issued. BLM is in the process 
of reviewing field office practices and the preliminary findings from 
that review were considered in the proposed revisions to the Order. BLM 
has reorganized the Order to follow the review and approval process and 
the processing timeframes for each step are now in one section. Also, 
split estate operations are discussed in more detail.
    BLM encourages operators to employ best management practices when 
they develop their APDs. Best management practices are innovative, 
dynamic, and economically feasible mitigation measures applied on a 
site-specific basis to reduce, prevent, or avoid adverse environmental 
or social impacts. BLM field offices incorporate appropriate best 
management practices into proposed APDs and associated on and off-lease 
Rights-of-Way approvals after required NEPA evaluation. They can then 
be included in approved APDs as Conditions of Approval. Typical best 
management practices can currently be found on BLM's Web site at http:/
/www.blm.gov/nhp/300/wo310/O&G/Ops/operations.html.
    The following chart explains the major changes between the existing 
Order and the proposed Order.

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           Existing order                   Proposed order                      Substantive changes
----------------------------------------------------------------------------------------------------------------
Introduction.......................  I. Introduction............  The proposed rule would add a discussion of
                                     A. Authority...............   the authority for issuing Orders and the
                                                                   requirements of the Federal Onshore Oil and
                                                                   Gas Leasing Reform Act. The rule would
                                                                   eliminate the discussion of summary
                                                                   information related to other sections in this
                                                                   Order because they are redundant of this
                                                                   proposed section.
I. Accountability..................  IV. General Operating        The rule would revise the accountability items
                                      Requirements.                and special situations in the existing Order
                                                                   and move them to Section IV. General
                                                                   Requirements.
None...............................  I.B. Purpose...............  The rule would add a new section describing
                                                                   the purpose of the Order.
None...............................  I.C. Scope.................  The rule would add a short section describing
                                                                   the extent to which the Order applies.
None...............................  II. Definitions............  The rule would add a section that defines key
                                                                   terms to ensure consistent understanding of
                                                                   the terms. Terms that are defined in other
                                                                   regulations or Orders are not repeated here.
                                                                   The rule defines the meaning of ``Complete
                                                                   APD'' for clarification and to ensure
                                                                   consistent application of these terms. Please
                                                                   see the more detailed discussion below. The
                                                                   rule would also add a definition of the new
                                                                   ``Master Development Plan.'' Utilizing a
                                                                   Master Development Plan would provide for
                                                                   environmental analysis and approval of field
                                                                   development or multiple proposed wells as a
                                                                   single approval. ``Days'' are defined as
                                                                   calendar days. The existing Order uses both
                                                                   ``business days'' and ``calendar days.''
II. Special Situations.............  IV. General Operating        The rule would amend the accountability items
                                      Requirements.                and special situations in the existing Order
                                                                   and move them to Section IV. General
                                                                   Requirements.
A. Surveying and Staking...........  III.E. 1. Surveying,         The rule would move the Surveying and Staking
III. Drilling Operations...........   Staking, and Inventories.    provisions to Section III.E. and include new
                                                                   information related to more current surveying
                                                                   technology. Maps would be required in both
                                                                   paper and electronic geospatial database
                                                                   format. The rule also contains a provision
                                                                   that the operator make an effort to obtain
                                                                   approval from the surface owner before
                                                                   entering private lands. This provision does
                                                                   not require approval before entry, only a
                                                                   good faith effort to obtain approval.
B. Material to be Filed............  None.......................  The information in existing Section III.A.
1. Notice of Staking...............  III.F. Notice of Staking...   would be incorporated into proposed Sections
2. Application for Permit to Drill.                                III.E. Required Components of a Complete APD
                                                                   Package and III.F. Notice of Staking option
                                                                   is retained.
C. Conferences and Inspections.....  III.C.2. Processing........  The requirements for, and scheduling of,
D. Processing Time Frames..........                                onsite inspections and the overall processing
                                                                   timeframes would be incorporated into a new
                                                                   section on processing. The new section would
                                                                   consolidate all references to processing
                                                                   issues into one section.
E. Cultural Resources Clearance....  IV. General Operating        Information pertaining to cultural resources,
F. Threatened and Endangered          Requirements.                threatened and endangered species, watershed
 Species Clearance and Other                                       protection, and safety would be moved to
 Critical Environmental Concerns.                                  Section IV. General Operating Requirements.

[[Page 43352]]

 
G. Components of a Complete          III.E. Components of a       Some of the information contained in the first
 Application for Permit to Drill.     Complete ADP Package.        subsections of existing Section III.G. would
                                                                   be moved into the Drilling Plan (i.e., item
                                                                   3.e.) in the proposed Order and duplication
                                                                   eliminated. The requirements would be
                                                                   unchanged.
IV. Subsequent Operations..........  VIII. Subsequent Operations/ The rule would delete language in the existing
                                      Sundry Notice.               Order that addresses well conversions because
                                                                   it would be addressed in Section IX. of the
                                                                   proposed Order.
A. Production Facilities...........  None.......................  The rule would incorporate information
                                                                   relative to production facilities into other
                                                                   sections.
B. Other Operations................  VIII.A. Surface Disturbing   The rule would make minor editorial changes
                                      Operations.                  especially to incorporate FS approval of
                                                                   subsequent surface disturbing activities.
C. Emergency Repairs...............  VIII.B. Emergency Repairs..  There would be no substantive change to these
                                                                   provisions.
D. Environmental Review............  None.......................  The rule would delete this section since the
                                                                   information would be covered in proposed
                                                                   Section III.C.2. Processing.
V. Well-Abandonment................  XI. Abandonment............  The rule would divide this section into two
                                                                   subsections; A) Plugging and B) Reclamation.
                                                                   The rule would also incorporate additional
                                                                   information and make clearer the reclamation
                                                                   subsection.
None...............................  V. Rights-of-Way (R/W)--     The rule would add this section to explain
                                      Special Use Authorization    when the BLM or FS may require a Right-of-Way
                                      (SUA).                       or Special Use Authorization and how these
                                                                   authorizations would be incorporated into the
                                                                   APD approval process.
VI. Water Well Conversion..........  IX. Well Conversions.......  The rule would add a paragraph to address
                                                                   conversion to a class II injection well and
                                                                   would clarify the process to convert a well
                                                                   to a water well.
VII. Privately Owned Surface.......  VI. Operating on Lands with  This section would change the provisions
A. Federal oil and gas leases......   Private/State Surface and    regarding compensation to surface owners to
B. Indian oil and gas cases........   Federal or Indian Oil and    that which is required by the authority that
                                      Gas.                         granted the surface patent. It would
                                     VII. Leases for Indian Oil    incorporate the latest policy requiring a
                                      and Gas.                     statement from the operator regarding whether
                                                                   or not there is surface owner agreement. If
                                                                   the operator cannot reach an agreement with
                                                                   the surface owner, the operator must provide
                                                                   a bond for the benefit of the surface owner.
                                                                   The bond must must be sufficient to
                                                                   compensate the surface owner in an amount
                                                                   established by the original land patent or
                                                                   statute authorizing the patent.
VIII. Reports and Activities         None.......................
 Required After Well Completion.
                                     X. Variances...............  The rule would move the the requirements to
                                                                   submit completion or recompletion reports to
                                                                   Section IV. General Requirements.
                                     XII. Appeal Procedures.....
                                     The rule would add a new
                                      section to explain how an
                                      operator may request a
                                      variance from a
                                      requirement of the Order
                                      or a waiver, exemption, or
                                      modification of a lease
                                      stipulation and appeals
                                      from denials of those
                                      requests..
                                     The rule would add a new
                                      section to identify the
                                      various appeal processes
                                      and the timeframes
                                      associated with certain FS
                                      appeals. This section
                                      would also clarify that
                                      the incorporation of a FS
                                      approved Surface Use Plan
                                      of Operations into the
                                      approval of an APD is not
                                      subject to protest to BLM
                                      or appeal to IBLA..
----------------------------------------------------------------------------------------------------------------

Discussion of Major Changes

Definition of Complete APD

    The most significant change in the proposed rule is that it would 
eliminate the term ``Technically and Administratively Complete'' and 
replace it with a clear definition of ``Complete APD.'' This new 
definition is consistent with the common practice in many field offices 
and would require all field offices to adopt the same convention. The 
new definition would bring needed consistency to the approval process. 
BLM previously considered defining Administratively and Technically 
complete separately, but decided to abandon this distinction because of 
the difficulty in separating the two concepts and in potential delays 
that might be caused in processing APDs in certain circumstances.
    The Reform Act requires each APD (except on Indian lands) to be 
posted for public review for 30 days. BLM, and the Surface Managing 
Entity if appropriate, will post the required parts of the APD 
immediately after receiving the application, therefore the 30 days will 
commence immediately after the APD or Notice of Staking is filed. No 
decision can be made before the end of the 30 day posting period. This 
is not a change to existing practice. When possible, a copy will be 
posted electronically on the internet.
    Under the proposed process, BLM would review the APD package, 
consult with FS if appropriate, and within 10

[[Page 43353]]

days of the filing determine if the package contains all the documents 
and information sufficient and necessary for processing. If the APD 
package did not contain the minimum documentation and information, BLM 
or the FS would notify the operator about the deficiencies. If an 
incomplete package were to contain sufficient information to continue 
processing, BLM or the FS would process the package to the point where 
continued processing would either be impractical or impossible without 
additional information. Generally, a ``complete'' determination would 
follow after the applicant submits any additional material.
    Under the proposal, within 10 days of receiving an APD package or a 
Notice of Staking, BLM will establish a future date for an onsite 
inspection. Under the existing Order, the onsite is held within 15 days 
of filing. Under this proposal, BLM and/or the FS would hold the onsite 
inspection as soon as practical after filing. Providing more 
flexibility in scheduling the onsite inspection will allow BLM to take 
into account weather conditions and the availability of the operator 
and agency staff, as well as the surface owner if split estate is 
involved. It is both agencies' intent to hold the onsite as soon as 
possible and normally within 15 days after filing. The agencies 
recognize that conducting this event so soon after filing may be 
difficult, but we consider it, nevertheless, desirable and necessary.
    The proposal makes BLM, rather than the operator, responsible for 
inviting surface owners to participate in onsite inspections.
    BLM would initiate the review of the APD package as soon as 
practical after filing by the operator. Some deficiencies are difficult 
to detect and may not be evident until the onsite inspection. 
Therefore, a determination of completeness may be delayed beyond 10 
days after filing. Under this proposed Order, BLM may notify the 
operator of any remaining deficiencies and any other changes necessary 
within 7 days after the onsite inspection.
    The operator is encouraged to respond to BLM requests for 
additional information or to correct deficiencies within 45 days of the 
request. Faster response times by the operator will help to expedite 
the review process. BLM envisions that the operator may be asked for 
additional information on more than one occasion. The technical review 
of the APD package is made by many different specialists. In an effort 
to expedite the approval process, BLM will not wait to compile a 
complete list of all deficiencies in a particular application. Instead, 
BLM will provide requests for additional information to the operator as 
soon as BLM or FS staff identifies a specific deficiency. Waiting to 
notify the operator of separate issues may unnecessarily slow the 
approval process.
    Under the proposed Order, after the operator provides all requested 
information, BLM would determine if the package is complete, that is, 
that the data submitted is accurate, complete, meets BLM standards 
where applicable, and fully describes the proposed action. A complete 
package must contain the information listed in 43 CFR 3162.3-1 and 43 
CFR 3164.1, as appropriate, and the information this Order would 
require. A complete application does not include a cultural or wildlife 
inventory, NEPA documentation, or other materials that are not 
requirements of the sections cited above or in this Order. It is the 
policy of BLM and FS to begin the NEPA analysis and other inventories 
as soon as sufficient information is present to support the work.
    It is the intent of BLM and the FS to process APDs within 30 days 
after the APD package is complete. However, other regulatory 
requirements, such as those in the NEPA, NHPA, and ESA, may result in 
further delay. Neither BLM nor the FS can make a final decision on any 
APD or Surface Use Plan of Operations until these regulatory 
requirements are completed. Compliance in some cases may depend on 
actions taken by other agencies over which BLM and the FS have no 
administrative control. Therefore, neither BLM nor the FS can commit to 
processing all APDs within a given time, but intend to process all APDs 
within the minimum time necessary to meet all regulatory requirements. 
This is consistent with existing policy and practice. The existing 
Order, effective in 1983, says that ``the 30-day time frame for 
completion of the APD process may sometimes be exceeded where it is 
necessary to prepare an EA. * * *'' BLM did not routinely prepare EAs 
for each APD in 1983 because they were categorically excluded from NEPA 
analysis until 1992. We now conduct some form of NEPA analysis for all 
submitted APD packages. In addition, since the 1983 Order, NHPA and ESA 
requirements have become more extensive. With these added regulatory 
requirements, it is not realistic for BLM to commit to processing all 
APDs in 30 days.

Drilling and Surface Use Plans

    This proposal would make specific changes to the drilling and 
surface use plans as follows:
    The former 8-point Drilling Program (also referred to as the 
Subsurface Use Plan) would be replaced with a 9-point Drilling Plan. 
This proposal would expand the required description in the existing 
Order addressing the anticipated casing program, and add a new 
requirement to the Drilling Plan to address the type and amount of 
cement operators propose to use in setting each casing string.
    We would replace the former 13-point Surface Use Program (or Plan) 
with a 12-point Surface Use Plan of Operations. We would remove the 
former point 13 of the Surface Use Plan of Operations ``Operator 
Certification'' and make it a separate component of the APD package. 
This change makes it clear that the Operator Certification covers the 
entire APD package and not just the Surface Use Plan of Operations.
    The 13-point Surface Use Plan is currently codified in Forest 
Service Regulations at 36 CFR 228 Subpart E, Appendix A. Under this 
rule, Appendix A would be deleted. Although it would not be codified in 
36 CFR, section III.E. of the proposed Order would apply to surface use 
operations on NFS lands. That proposed section defines the components 
of a complete Surface Use Plan of Operations or Master Development 
Plan. The rule would also revise 36 CFR 228.105(a)(1) to direct 
operators to submit surface use plans or Master Development Plans in 
accordance with the proposed Order, or other applicable onshore orders.

Master Development Plans

    This proposal would establish a new approval process for multiple 
well proposals called a Master Development Plan. This process would be 
used by an operator to submit plans for field development or a multiple 
well program in lieu of several individual APDs.
    These proposals could be addressed in a single NEPA analysis and 
approval. This process would facilitate the consideration of cumulative 
effects early in the process and enable broad application of identified 
mitigation measures, while minimizing or significantly reducing the 
cumulative timeframe for approval. We also anticipate that this 
approval will lead to better planning of field development which will 
minimize adverse environmental impacts.
    The proposed rule envisions the APD as an application for a 
proposed action that is impacted by other analytical requirements such 
as the NHPA and the ESA. The documents other statutes require are not 
part of a complete APD package. This proposal also explains the 
approval process for certain subsequent

[[Page 43354]]

well operations. The revised Order would describe the relationship 
between the APD package and any application for an associated BLM 
Right-of-Way or FS Special Use Authorization that may be required. This 
Order would replace the 1983 Order incorporated by the FS into its oil 
and gas regulations.

Bonding

    This proposal would also clarify that BLM authority to require 
additional bond in 43 CFR 3104.5 applies to off-lease facilities 
required to further development of the lease, such as the large 
impoundments being created in Wyoming for produced water from Federal 
and nonfederal coalbed natural gas wells. BLM is obligated by the 
Reform Act to require sufficient bond to insure ``the restoration of 
any lands or surface waters adversely affected by lease operations 
after the abandonment or cessation of oil and gas operations on the 
lease'' 30 U.S.C. 226(g). An Assistant Solicitor's memorandum of July 
19, 2004, concluded that BLM has the authority to require additional 
bond for such facilities and that the current regulation does not limit 
BLM to increasing the required amount of an existing bond. Accordingly, 
the proposal does not represent a change in the regulatory scheme.
    Provisions in the final Order will supersede any inconsistent 
provisions of existing regulations, inasmuch as they will constitute a 
later exercise of Administrative Procedure Act rulemaking. To the 
maximum extent practical, we will identify such inconsistencies and 
include conforming amendments to titles 36 or 43, or both, of the CFR 
in the final rule.

IV. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

    These proposed regulations are not a significant regulatory action 
and are not subject to review by Office of Management and Budget (OMB) 
under Executive Order 12866. OMB makes the final determination under 
the Executive Order. These proposed regulations will not have an effect 
of $100 million or more on the economy. They will not adversely affect 
in a material way the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local, or tribal 
governments or communities. These proposed regulations will not create 
a serious inconsistency or otherwise interfere with an action taken or 
planned by another agency. These proposed regulations do not alter the 
budgetary effects of entitlements, grants, user fees, or loan programs 
or the right or obligations of their recipients; nor do they raise 
novel legal or policy issues. The revisions this rule would make to the 
Order primarily involve changes to BLM and FS administrative processes. 
For example, changes to the term ``Administratively and Technically 
Complete'' only pertain to the process BLM and the FS would use to 
review APD packages and would not have any significant economic impact. 
Other changes, such as the proposal to add a provision for the use of a 
Master Development Plan, may improve processing and predictability of 
operations due to better advance planning of field development. 
Clarifying that our authority to require additional bond applies to 
off-lease facilities would have no economic impact since BLM already 
has the authority under the existing regulatory scheme to require this 
bond. Also, as a result of more clear rules, operators will have a 
better understanding of BLM and FS requirements, processes, and 
timelines leading to reduction in delays in processing and possible 
administrative cost savings for BLM, the FS, and operators.

Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as 
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not 
unnecessarily or disproportionately burden small entities. The RFA 
requires a regulatory flexibility analysis if a rule would have a 
significant economic impact, either detrimental or beneficial, on a 
substantial number of small entities. For the purposes of this 
analysis, we will assume that all entities (all lessees and operators) 
that may be impacted by these regulations are small entities.
    The rule principally deals with the requirements necessary for the 
approval of all proposed oil and gas exploratory, development, or 
service wells on all Federal and Indian (except Osage tribe) onshore 
oil and gas leases. These changes are not significantly different from 
the existing Order and primarily consist of changes to BLM and FS 
administrative processes that would not significantly impact operators 
or lessees. As a result of more clear rules, operators will have a 
better understanding of BLM and FS requirements, processes, and 
timelines leading to a reduction in delays in processing and some 
administrative cost savings for BLM, the FS, and operators. Therefore, 
BLM and the FS have determined that under the RFA this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities.
    The use of best management practices in conditions of approval for 
a permit to drill is not new. BLM currently uses them as conditions of 
approval and therefore this provision will have no economic impact on 
small entities.
    The bonding provision in the rule would not impact small entities 
since the provisions merely reflect existing authority. As stated 
earlier, an Assistant Solicitor's opinion of July 19, 2004, concluded 
that BLM has the authority to require additional bond for such 
facilities and that the current regulation does not limit BLM to 
increasing the required amount of an existing bond. Accordingly, the 
proposal does not represent a change in the regulatory scheme.

Small Business Regulatory Enforcement Fairness Act

    These proposed regulations are not a ``major rule'' as defined at 5 
U.S.C. 804(2). For the reasons stated in the RFA discussion, this 
proposed rule would not have an annual effect on the economy greater 
than $100 million; it would not result in major cost or price increases 
for consumers, industries, government agencies, or regions; and it 
would not have significant adverse effects on competition, employment, 
investment, productivity, innovation, or the ability of U.S.-based 
enterprises to compete with foreign-based enterprises.

Unfunded Mandates Reform Act

    These proposed regulations do not impose an unfunded mandate on 
state, local, or tribal governments or the private sector of more than 
$100 million per year; nor do these proposed regulations have a 
significant or unique effect on state, local, or tribal governments or 
the private sector. This proposed rule would primarily involve changes 
to BLM's and the FS's administrative processes that would not have any 
significant effect monetarily, or otherwise, on the entities listed. 
Therefore, BLM and the FS are not required to prepare a statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.).

Executive Order 12630, Governmental Actions and Interference With 
Constitutionally Protected Property Rights (Takings)

    The proposed rule does not represent a government action capable of 
interfering with constitutionally protected property rights. This 
proposed rule has no potential to effect property rights as the changes 
it would make to

[[Page 43355]]

existing procedures primarily involve changes to BLM's and the FS's 
administrative processes. Therefore, the Department of the Interior and 
the Department of Agriculture have determined that the rule would not 
cause a taking of private property or require further discussion of 
takings implications under this Executive Order.

Executive Order 13132, Federalism

    The proposed rule will not have a substantial direct effect on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. The proposal will not have any effect on 
any of the items listed. As stated above, the rule principally deals 
with the requirements necessary for the approval of all proposed oil 
and gas exploratory, development, or service wells on all Federal and 
Indian (except Osage tribe) onshore oil and gas leases. In other words, 
the rule affects the relationship between operators, lessees, and BLM 
and the FS and would not impact states. Therefore, in accordance with 
Executive Order 13132, BLM has determined that this proposed rule does 
not have sufficient Federalism implications to warrant preparation of a 
Federalism Assessment.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    BLM approves proposed operations on all Indian (except Osage) 
onshore oil and gas leases and agreements. BLM has begun consultation 
on the proposed revisions to the Order and will continue to consult 
with Tribes during the formal comment period on the rule.

Executive Order 12988, Civil Justice Reform

    Under Executive Order 12988, the Office of the Solicitor has 
determined that this proposed rule would not unduly burden the judicial 
system and that it meets the requirements of sections 3(a) and 3(b)(2) 
of the Order. We have reviewed these regulations to eliminate drafting 
errors and ambiguity. They have been written to minimize litigation, 
provide clear legal standards for affected conduct rather than general 
standards, and promote simplification. Drafting the regulations in 
clear language and working closely with legal counsel assists in all of 
these areas.

Paperwork Reduction Act

    These regulations contain information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.), we submitted a copy of the proposed information collection 
requirements to the OMB for review. The OMB approved the information 
collection requirements under Control Number 1004-0137, which expires 
on March 31, 2007.

National Environmental Policy Act

    BLM and the FS have prepared an environmental assessment (EA) and 
have found that the proposed rule would not constitute a major Federal 
action significantly affecting the quality of the human environment 
under section 102(2)(C) of the NEPA, 42 U.S.C. 4332(2)(C). A detailed 
statement under NEPA is not required. BLM has placed the EA and the 
Finding of No Significant Impact on file in the BLM Administrative 
Record at the address specified in the ADDRESSES section.
    The proposed revisions to Order 1 would not impact the environment 
significantly. For the most part, the revisions would involve changes 
to BLM's and the FS's administrative processes. For example, replacing 
the term ``Administratively and Technically Complete'' with the term 
``Complete APD'' only changes the process BLM would use to review APD 
packages and would not have any impact on the environment whatsoever. 
Other changes, such as the proposal to add provisions for the use of a 
Master Development Plan, may actually provide improved environmental 
protection due to better advance planning of field development. The use 
of best management practices can lead to reduced environmental damage. 
Also, the procedural and clarifying changes would have no meaningful 
impact of any kind on the physical or economic environment. Any 
environmental effects of APDs on Federal lands are analyzed on a case-
by-case basis.

Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    In accordance with Executive Order 13211, BLM has determined that 
the proposed rule will not have substantial direct effects on the 
energy supply, distribution or use, including a shortfall in supply or 
price increase. This rule would clarify the administrative processes 
involved in approving an APD and more clearly lay out the timeline for 
processing applications. It is not clear to what extent clarification 
of the rules will save BLM, the FS, or operators administrative cost, 
but we anticipate that the cost savings will be minimal, as will any 
direct effects on the energy supply, distribution or use.

Clarity of the Regulations

    Executive Order 12866 requires each agency to write regulations 
that are simple and easy to understand. We invite your comments on how 
to make these proposed regulations easier to understand, including 
answers to questions such as the following:
    1. Are the requirements in the proposed regulations clearly stated?
    2. Do the proposed regulations contain technical language or jargon 
that interferes with their clarity?
    3. Does the format of the proposed regulations (grouping and order 
of sections, use of headings, paragraphing, etc.) aid or reduce their 
clarity?
    4. Would the regulations be easier to understand if they were 
divided into more (but shorter) sections?
    5. Is the description of the proposed regulations in the 
SUPPLEMENTARY INFORMATION section of this preamble helpful in 
understanding the proposed regulations? How could this description be 
more helpful in making the proposed regulations easier to understand?
    Please send any comments you have on the clarity of the regulations 
to the address specified in the ADDRESSES section.

Authors

    The principal authors of this rule are: James Burd of the BLM 
Washington Office; Bo Brown of the BLM Alaska State Office; Brian 
Pruiett of the BLM Buffalo, Wyoming Field Office; Gary Stephens of the 
BLM New Mexico State Office; Hank Szymanski of the BLM Colorado State 
Office; Howard Clevinger of the BLM Vernal, Utah Field Office; Roy 
Swalling of the Montana State Office; and Barry Burkhardt of the FS 
Intermountain Regional Office, Ogden, Utah, and assisted by the staff 
of BLM's Regulatory Affairs Group and the Department of the Interior's 
Office of the Solicitor.

List of Subjects

36 CFR Part 228

    Environmental protection; Mines; National forests; Oil and gas 
exploration; Public lands-mineral resources; Public lands-rights-of-
way; Reporting and recordkeeping requirements; Surety bonds; Wilderness 
areas.

43 CFR part 3160

    Administrative practice and procedure; Government contracts; 
Indians-lands; Mineral royalties; Oil and gas exploration; Penalties; 
Public lands-

[[Page 43356]]

mineral resources; Reporting and recordkeeping requirements.

36 CFR Chapter II

    For the reasons set out in the joint preamble, the FS proposes to 
amend 36 CFR part 228 as follows:

PART 228--MINERALS

    1. The authority citation for part 228 continues to read as 
follows:

    Authority: 30 Stat. 35 and 36, as amended (16 U.S.C. 478, 551); 
41 Stat. 437, as amended, sec. 5102(d), 101 Stat. 1330-256 (30 
U.S.C. 226); 61 Stat. 681, as amended (30 U.S.C. 601); 61 Stat. 914, 
as amended (30 U.S.C. 352); 69 Stat. 368, as amended (30 U.S.C. 
611); and 94 Stat. 2400.

    2. Revise Sec.  228.105(a)(1) to read as follows:


Sec.  228.105  Issuance of onshore orders and notices to lessees.

    (a) * * *
    (1) Operators shall submit surface use plans of operations or 
Master Development Plans in accordance with the applicable Onshore Oil 
and Gas Order. Approval of a Master Development Plan constitutes 
approval of any surface use plan of operations submitted as a part of, 
or consistent with, the approved Master Development Plan.
* * * * *
    3. Revise Sec.  228.107(c) to read as follows:


Sec.  228.107  Review of surface use plan of operations.

* * * * *
    (c) The authorized Forest officer will give public notice of the 
decision on a plan and include in that notice whether the decision may 
be appealed under the applicable Forest Service appeal procedures.
* * * * *

Appendix A to Subpart E of Part 228 [Removed]

    4. Remove Appendix A to Subpart E of Part 228.

    Dated: August 26, 2004.
Sally D. Collins,
Acting Chief, USDA--Forest Service.

    Editorial Note: This document was received at the Office of the 
Federal Register on July 13, 2005.

43 CFR Chapter II

    For the reasons set out in the joint preamble, the Bureau of Land 
Management proposes to amend 43 CFR part 3160 as follows:

PART 3160--ONSHORE OIL AND GAS OPERATIONS

    1. The authority citation for part 3160 continues to read as 
follows:

    Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 
1751; and 43 U.S.C. 1732(b), 1733, and 1740.

    2. Amend Sec.  3164.1(b) by revising the first entry in the chart 
as follows:


Sec.  3164.1  Onshore Oil and Gas Orders.

* * * * *
    (b) * * *

----------------------------------------------------------------------------------------------------------------
                                                                                          Federal
          Order No.                        Subject                 Effective date        Register     Supersedes
                                                                                         reference
----------------------------------------------------------------------------------------------------------------
1............................  Approval of operations.........  [insert 60 days       70 FR * * *...  NTL-6
                                                                 after date of
                                                                 publication of
                                                                 final rule].
----------------------------------------------------------------------------------------------------------------

* * * * *

Appendix--Text of Oil and Gas Onshore Order

    Note --This appendix will not appear in the BLM regulations in 
43 Code of Federal Regulations.

    Dated: August 26, 2004.
Rebecca W. Watson,
Assistant Secretary, Land and Minerals Management.


    Editorial Note: This document was received at the Office of the 
Federal Register on July 13, 2005.
    The following Order would be implemented by the BLM and FS, but 
will not be codified in the Code of Federal Regulations.

Onshore Oil and Gas Order Number 1

Approval of Operations

I. Introduction
    A. Authority
    B. Purpose
    C. Scope
II. Definitions
III. Application for Permit to Drill (APD)
    A. Where to File
    B. Early Notification
    C. APD Posting and Processing
    D. Valid Period of Approved APD
    E. Components of a Complete APD Package
    F. Notice of Staking Option
    G. Approval of APDs
IV. General Operating Requirements
V. Rights-of-Way and Special Use Authorizations
VI. Operating on Lands with Private/State Surface and Federal or 
Indian Oil and Gas
VII. Leases for Indian Oil and Gas
    A. Approval of Operations
    B. Surface Use
VIII. Subsequent Operations and Sundry Notices
    A. Surface Disturbing Operations
    B. Emergency Repairs
IX. Well Conversions
X. Variances
XI. Abandonment
    A. Plugging
    B. Reclamation
XII. Appeal Procedures
Attachment I--Sample Format for Notice of Staking

Onshore Oil and Gas Order Number 1

Approval of Operations

I. Introduction

A. Authority

    The Secretaries of the Interior and Agriculture have authority 
under various Federal and Indian mineral leasing laws, as defined in 
30 U.S.C. 1702, to manage oil and gas operations. The Secretary of 
the Interior has delegated this authority to the BLM, which has 
issued onshore oil and gas operating regulations codified at part 
3160 of Title 43 of the Code of Federal Regulations. The operating 
regulations at 43 CFR 3164.1 authorize BLM's Director to issue 
Onshore Oil and Gas Orders when necessary to implement and 
supplement the operating regulations. The section also states that 
all such Orders are binding on the operator(s) of Federal and Indian 
onshore oil and gas leases (except the Osage Tribe). For leases on 
Indian lands, the delegation to BLM appears at 25 CFR parts 211, 
212, 213, 225, and 227.
    The Secretary of Agriculture has authority under the Federal 
Onshore Oil and Gas Leasing Reform Act of 1987 (Pub. L. 100-203) 
(Leasing Reform Act) to regulate surface disturbing activities on 
NFS lands. This authority has been delegated to the FS. Its 
regulatory authority is at Title 36 CFR, Chapter II, including, but 
not limited to, part 228 Subpart E, part 251 Subpart B, and part 
261. Section 228.105 of 36 CFR authorizes the Chief of the FS to 
issue, or cosign with the Director, BLM, Onshore Oil and Gas Orders 
necessary to implement and supplement the operating regulations. The 
FS is responsible only for approving and administering surface 
disturbing activities on NFS lands and appeals related to FS 
decisions or approvals.

B. Purpose

    The purpose of this Order is to state the application 
requirements for the approval of all proposed oil and gas and 
service wells, certain subsequent well operations, and abandonment.

C. Scope

    This Order applies to all onshore leases of Federal and Indian 
oil and gas (except those of the Osage Tribe), and Federally-
approved

[[Page 43357]]

unit or communitization agreements. It also applies to Indian 
Mineral Development Act agreements. References in this Order to 
leases means unit or communitization agreements, as applicable.

II. Definitions

    As used in this Order, the following definitions apply:
    Blooie Line means a discharge line used in conjunction with a 
rotating head in drilling operations when air or gas is used as the 
circulating medium.
    Complete APD means that BLM and the Surface Managing Entity, if 
appropriate, have determined that the information in the APD package 
is accurate and addresses all BLM requirements. The APD package must 
contain:
     A completed Form 3160-3 (Application for Permit to 
Drill or Reenter) (see 43 CFR 3162.3-1(d)),
     A well plat certified by a registered surveyor with a 
surveyor's original stamp (see Section III.E.1. of this Order),
     A Drilling Plan (see 43 CFR 3162.3-1(d) and Section 
III.E.2. of this Order),
     A Surface Use Plan of Operations (see 43 CFR 3162.3-
1(d) and Section III.E.3. of this Order),
     Evidence of bond coverage (see 43 CFR 3162.3-1(d) and 
Section III.E.5. of this Order),
     Operator certification (see Section III.E.6. of this 
Order),
     An original signature, which may be an electronic 
signature that meets BLM standards (see Section III.E.6. of this 
Order), and
     Other information that may be required by Order or 
Notice (see 43 CFR 3162.3-1(d)(4)).
    All maps and plats required as part of the APD must be submitted 
in both hard copy and geospatial database formats. BLM or the 
Surface Managing Entity, as appropriate, will review the APD package 
and determine that all information in the drilling plan, the surface 
use plan of operations, bonding requirements, and other information 
that BLM may require (43 CFR 3162.3-1(d)(4)), including the well 
location plat and geospatial databases, completely describe the 
proposed action. A complete APD is not defined to include cultural, 
wildlife, or other inventories that may be required or an 
environmental assessment or environmental impact statement that may 
be required by the NEPA.
    Condition of Approval (COA) means a site-specific requirement 
included in an approved APD or Sundry Notice that may limit or amend 
the specific actions proposed by the operator. Conditions of 
Approval minimize, mitigate, or prevent impacts to public lands or 
other resources. Best management practices may be incorporated as a 
Condition of Approval.
    Days means all calendar days including holidays.
    Drilling Plan means those documents an operator submits as part 
of an APD package or as a supplement to an approved plan of 
operations detailing the proposed drilling operations and containing 
the information required by 43 CFR 3160 and applicable Orders.
    Emergency Repairs means actions necessary to correct an 
unforeseen problem that could cause or threaten immediate 
substantial adverse impact on public health and safety or the 
environment.
    Geospatial Database means a set of georeferenced computer data 
that contains both spatial and attribute data. The spatial data 
defines the geometry of the object and the attribute data defines 
all other characteristics.
    Indian lands means any lands or interest in lands of an Indian 
tribe or an Indian allottee held in trust by the United States or 
which is subject to Federal restriction against alienation.
    Indian Oil and Gas means any oil and gas interest of an Indian 
tribe or on allotted lands where the interest is held in trust by 
the United States or is subject to Federal restrictions against 
alienation. It does not include minerals subject to the provisions 
of section 3 of the Act of June 28, 1906 (34 Stat. 539), but does 
include oil and gas on lands administered by the United States under 
section 14(g) of Public Law 92-203, as amended.
    Master Development Plan means information common to multiple 
planned wells, including drilling plans, surface use plans of 
operations, and plans for future production.
    National Forest System Lands means those Federal lands 
administered by the U.S. Forest Service, such as the National 
Forests and the National Grasslands.
    Onsite Inspection means an inspection of the proposed drill pad, 
access road, flowline route, and any associated Right-of-Way or 
Special Use Authorization needed for support facilities, conducted 
before the approval of the APD or Surface Use Plan of Operations and 
construction activities.
    Reclamation means returning disturbed land as near to its 
predisturbed condition as is reasonably practical.
    Split Estate means lands where the surface is owned by an entity 
or person other than the owner of the Federal or Indian oil and gas.
    Surface Managing Entity means any Federal or state agency having 
jurisdiction over the surface, or a private owner of the surface, 
overlying Federal or Indian oil and gas.
    Variance means an approved alternative to a provision or 
standard of an Order, Notice to Lessee, or other requirement (see 43 
CFR 3101.1-4).

III. Application for Permit To Drill (APD)

    An Application for Permit to Drill or Reenter (APD), on Form 
3160-3, is required for each proposed well, and for reentry and 
deepening of existing wells (including disposal and service wells), 
to develop an onshore lease for Federal or Indian oil and gas.

A. Where To File

    The operator must file an APD, Sundry Notice, or other required 
document in the BLM field office having jurisdiction over the lands 
described in the application. As an alternative to filing in a local 
BLM office, an operator may file an APD using BLM's electronic 
commerce application for oil and gas permitting and reporting. 
Contact the local BLM field office for details before using the 
electronic commerce application.

B. Early Notification

    The operator should contact BLM and any applicable Surface 
Managing Entity, including all private surface owners, to request an 
initial planning conference as soon as the operator has identified a 
potential area of development. Early notification is voluntary, but 
it allows the involved Surface Managing Entity to apprise the 
prospective operator of any unusual conditions on the lease area. 
Early notification also provides both the Surface Managing Entity 
and the prospective operator with the earliest possible 
identification of time-sensitive requirements and determination of 
potential areas of conflict. The prospective operator should have a 
map of the proposed project available for Surface Managing Entity 
review to determine if a cultural or wildlife inventory or other 
information may be required.

C. APD Posting and Processing

1. Posting

    The Mineral Leasing Act, 30 U.S.C. 181 et seq., as amended, 
requires BLM and the Federal Surface Managing Entity, if other than 
BLM, to provide at least 30 days public notice before BLM or the FS 
may approve an APD or Master Development Plan on a Federal oil and 
gas lease. Posting is not required for Indian leases.
    BLM will post the APD notice in an area of the BLM field office 
having jurisdiction that is readily accessible to the public and, 
when possible, electronically on the internet. If the surface is 
managed by a Federal agency other than BLM, that agency also is 
required to post the notice for 30 days. The posted notice is for 
informational purposes only and is not an appealable decision. The 
purpose of the posting is to give any interested party notification 
that a Federal approval of mineral development has been requested. 
BLM or the FS will not post confidential information.
    If the operator subsequently moves the proposed location of the 
well, reposting of the proposal for an additional 30-day period may 
be necessary if BLM or the FS determines that the change is 
significant.

2. Processing

    The timeframes established in this subsection apply to both 
individual APDs and to the multiple APDs included in Master 
Development Plans.
    (a) Within 10 days of receiving an APD package, BLM, in 
consultation with the FS, if appropriate, will notify the operator 
as to whether or not the APD is complete and will request additional 
information and correction of any deficiencies if necessary. If 
there is enough information to begin processing the APD package, BLM 
and the FS will do so up to the point that missing information or 
uncorrected deficiencies renders further processing impractical or 
impossible. The operator has 45 days after receiving notice from BLM 
to provide any additional information requested or the APD may be 
returned to the operator.

[[Page 43358]]

    (b) Within 10 days of receiving the APD package, BLM, in 
coordination with the operator and Surface Managing Entity 
(including, in the case of split estate, the private surface 
owners), if appropriate, will schedule a future date for the onsite 
inspection unless the onsite inspection was held as part of the 
Notice of Staking (see Section III.F. of this Order). The onsite 
inspection will be held as soon as practicable based on schedules 
and weather conditions. Within 7 days of the onsite inspection, BLM, 
and the FS if app