[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Proposed Rules]
[Pages 52736-52767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25254]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3200, 3210, 3220, 3240, 3250, and 3260

RIN: 1004-AB18
[AA-610-08-4141-02]


Geothermal Resources Leasing and Operations

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend regulations which implement the 
Geothermal Steam Act of 1970, (Steam Act). This proposed rulemaking 
addresses leasing, permitting and operational and unitization 
requirements for geothermal exploration, drilling, and utilization 
operations. The proposed rulemaking proposes no additional permit 
requirements. The proposed regulations would put all the geothermal 
regulations in a plain English format; reduce and streamline permitting 
and information requirements; provide BLM the maximum possible 
flexibility regarding permit issuance and thereby accommodate the full 
range of potential geothermal operations and development scenarios; and 
reorganize the regulations and provide specific permit application 
informational requirements to allow more consistent interpretation of 
requirements by BLM and its industrial customers.

DATES: Any comments must be received by BLM on or before Janaury 6, 
1997. Comments received which are postmarked after this date will not 
necessarily be considered in the decisionmaking process on the final 
rule.

ADDRESSES: If you wish to comment, you may hand-deliver comments to the 
Bureau of Land Management, Administrative Record, Room 401, 1620 L 
Street, NW., Washington, DC; or mail comments to the Bureau of Land 
Management, Administrative Record, Room 401LS, 1849 C Street, NW., 
Washington, DC 20240. You also may transmit comments electronically via 
the Internet to [email protected]. Please include ``attn: 
RIN 1004AB18'' in your message. If you do not receive a confirmation 
from the system that we have received your internet message, contact us 
directly during regular business hours. You will be able to review 
comments at BLM's Regulatory Management Team office, Room 401, 1620 L 
Street, NW., Washington, DC, during regular business hours (7:45 a.m. 
to 4:15 p.m.) Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Richard Hoops, (702) 785-6568.

SUPPLEMENTARY INFORMATION:

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

I. Public Comment Procedures

Written Comments

    Written comments on the proposed rule should be specific, should be 
confined to issues pertinent to the rule, and should explain the reason 
for any recommended change. Where possible, comments should reference 
the specific section or paragraph of the proposal which the comment 
addresses. BLM may not necessarily consider or include in the 
Administrative Record for the rule comments which BLM receives after 
the close of the comment period (see ``DATES'') or comments delivered 
to an address other than those listed above (see ``ADDRESSES'').

[[Page 52737]]

II. Background and Discussion of Proposed Rule

    This proposed rule would revise 43 CFR parts 3200, 3210, 3220, 
3240, 3250, and 3260 which implement the classification, leasing, 
exploration, drilling, and utilization, requirements of the Geothermal 
Steam Act of 1970 and the Geothermal Steam Act Amendments of 1988 (the 
Steam Act). The new rule would eliminate existing parts 3210, 3220, 
3240, 3250 and 3260, rewrite corresponding subparts under part 3200, 
and reorganize the existing regulations so that all permitting 
requirements and operator responsibilities for each phase of 
development may be found in a specific subpart. The proposed rule would 
more clearly delineate the existing permitting and informational 
requirements.
    The existing part 3280, concerning unit agreements, will not be 
affected by this proposed rule. BLM intends to revise part 3280 in 
harmony with this general revision of the 3200 regulations, but in a 
separate rulemaking in the very near future.
    Existing parts 3200, 3210, 3220 and 3240 are consolidated and 
placed in order corresponding to the sequence in which leasing 
procedures occur. The exploration regulations are moved from subparts 
3209 and 3264 and redesignated as subpart 3250. Existing part 3260 is 
revised to describe only the requirements for drilling operations. The 
existing part 3250, Site License, and the existing portions of part 
3260 addressing geothermal resource utilization are revised and 
redesignated as subpart 3270, Utilization of Geothermal Resources.
    The following table lists how each subpart is reorganized:

------------------------------------------------------------------------
          Current regulations                  Proposed regulations     
------------------------------------------------------------------------
3200--Geothermal Resources Leasing:      3200--Geothermal Resources     
 General.                                 Leasing.                      
3201--Available Lands; Limitations;      3201--Available Lands.         
 Unit Agreements.                                                       
3202--Qualifications of Lessees........  3202--Qualifications of        
                                          Lessees.                      
3203--Leasing Terms....................  3206--Lease Issuance.          
                                         3207--Additional Lease Term.   
                                         3208--Extended Lease Term.     
                                         3209--Additional Lease         
                                          Information.                  
3204--Surface Management Requirements..  [deleted].                     
3205--Fees, Rentals and Royalties......  3210--Fees, Rentals and        
                                          Royalties.                    
3206--Lease Bonds......................  3213--Personal and Surety      
                                          Bonds.                        
                                         3214--Bonding and Lease        
                                          Operations.                   
                                         3215--Certificate of Deposit   
                                          and Letter of Credit.         
                                         3216--Bond Collection After    
                                          Default.                      
3207--Leases for a Fractional or Future  3206--Lease Issuance.          
 Interest.                                                              
3208--(Reserved)                                                        
3209--Geothermal Resources Exploration   3250--Geothermal Exploration.  
 Operations.                                                            
3210--Noncompetitive Leases: General...  3204--Noncompetitive Leasing.  
3220--Competitive Leases: General......  3205--Competitive Leasing.     
3241--Transfers........................  3217--Transfers, Interest and  
                                          Qualifications.               
                                         3218--Requirements for Filing  
                                          Transfers.                    
3242--Production and Use of Byproducts.  3272--The Contents and Review  
                                          of a Plan of Utilization.     
3243--Cooperative Conservation           3219--Cooperative Conservation 
 Provisions.                              Provisions.                   
3244--Terminations and Expirations.....  3212--Relinquishment,          
                                          Termination, Cancellation, and
                                          Expiration.                   
3250--Utilization of Geothermal          3273--Applying for and         
 Resources.                               Obtaining a Site License.     
                                         3274--Joint utilization        
                                          Agreements.                   
3260--Geothermal Resources Operations:   3260--Geothermal Drilling      
 General.                                 Operation--General.           
                                         3270--Utilization of Geothermal
                                          Resources General.            
3261--Jurisdiction and Responsibility..  3260--Geothermal Drilling      
                                          Operation--General.           
                                         3262--Conducting Drilling      
                                          Operations.                   
                                         3263--Well Abandonment.        
                                         3270--Utilization of Geothermal
                                          Resources General.            
3262--Requirements for Operating Rights  3261--Permitting (drilling).   
 Owners.                                                                
                                         3262--Conducting Drilling      
                                          Operations.                   
                                         3271--Permitting Utilization   
                                          Operations.                   
                                         3272--Contents and Review of a 
                                          Plan of Utilization.          
                                         3276--Conducting Utilization   
                                          Operations.                   
3263--Measurement of Production........  3276--Conducting Utilization   
                                          Operations.                   
3264--Reports to be Made by All Lessees  3261--Permitting (drilling).   
                                         3266--Reports (drilling).      
                                         3274--Submitting a Utilization 
                                          Permit.                       
                                         3275--Submitting a Production  
                                          Permit.                       
3265--Procedure in Case of Violation of  3268--Inspection, Enforcement, 
 the Regulations.                         and Noncompliance (drilling). 
                                         3277--Inspection, Enforcement, 
                                          and Noncompliance             
                                          (utilization).                
3266--Appeals..........................  3255--Relief and Appeals       
                                          (exploration).                
                                         3269--Relief and Appeals       
                                          (drilling).                   
                                         3278--Relief and Appeals       
                                          (utilization).                
------------------------------------------------------------------------

Parts 3200--Geothermal Resources Leasing: General, 3210 Noncompetitive 
Leases, 3220--Competitive Leases, and 3240 Rules Governing Leasing

    Firstly, the new rule would restructure the definitions section, 
retaining many of the existing terms but also removing several 
technical terms (such as ``the Secretary'' and ``the Service'') which 
no longer fit within the plain English style, and adding new terms 
(such as ``MMS'') which play a significant role in the new rule. 
Furthermore, some existing terms which have narrow applicability, such 
as ``significant thermal features within units of the National Park 
System'' would be relocated to the specific

[[Page 52738]]

sections to which they apply. To this extent, the new definitions 
section contains only terms which are used repeatedly throughout the 
regulations. Also, the definition of commercial quantities is expanded 
to address the difference between commercial quantities of individual 
lease and unit production. Finally, the terms would be alphabetized, 
and the designations markers (a), (b), (c) and so forth, removed, in 
keeping with Federal Register guidance.
    Next, the section describing lands subject to geothermal leasing 
would be condensed and rewritten into 43 CFR 3201.10. Nothing in the 
new section alters what lands are available for geothermal leasing; 
rather, this section would just be streamlined and rewritten into plain 
English. Subpart 3202 would contain the qualifications for a lessee 
which, likewise, are intended to retain all substantive provisions from 
the existing regulations, streamlined and rewritten into plain English.
    The proposed rule would completely restructure existing regulations 
concerning the general leasing processes. Firstly, proposed subpart 
3203 would introduce the term Known Geothermal Resource Area (KGRA) and 
briefly describes how this designation determines whether an area can 
be leased through noncompetitive bidding or solely through the 
competitive bidding process. Subpart 3204 would then revise the manner 
in which noncompetitive leases become available. BLM will no longer 
prepare an availability list of relinquished or terminated leases; 
instead, lands will become available for noncompetitive leasing as soon 
as BLM closes each case. An offeror could apply for these lands at any 
time, and instead of collecting applications in one-month application 
periods, BLM would open each application upon submission and 
immediately begin processing.
    This new process would substantially improve the way BLM handles 
noncompetitive lease applications. By eliminating the one-month delay, 
BLM would create a rolling application review process which would 
approve or deny an application much sooner than under the current 
process. BLM could determine at any time prior to issuing the lease 
that the land is a known geothermal resource area (KGRA), either as a 
result of overlapping applications for the same land or due to evidence 
indicating threshold geothermal activity (see the definition in 43 CFR 
3203.11); which would mean that the area is subject to competitive 
leasing. Otherwise, once BLM approves a noncompetitive lease 
application, no KGRA designation would apply and any later overlapping 
applications would be rejected.
    If overlapping applications were filed prior to approval of the 
first application, this competitive interest would prompt BLM to 
examine the land for further evidence that might warrant a KGRA 
designation. If the designation were approved, all noncompetitive 
applications would be rejected and the lands would be made available 
under the competitive leasing provisions. If no KGRA designation were 
warranted, then the lease would be offered to the first qualified 
applicant, i.e., the first person to submit an application which meets 
all requirements.
    Under the proposed regulations BLM would continue to issue 
competitive leases as in the past, relying on published notices of 
available lands and a sealed bidding process. The regulations for 
competitive leasing would be relocated to subpart 3205, condensed and 
written into plain English. BLM would make no substantive changes to 
the manner in which we review applications, select the winning bid, 
notify the successful bidder, issue the lease, revoke offers when the 
successful bidder fails to respond, and so forth.
    Most of the leasing terms at subpart 3203 of the existing 
regulations would be retained in condensed, plain English form in 
proposed subparts 3206 through 3210. However, some substantive and 
organizational changes are proposed. For example, BLM would change the 
requirements for diligent exploration under a lease. The current 
regulation (43 CFR 3203.5) requires that diligent exploration occur 
during lease years 11 through 15, but BLM proposes to remove this 
requirement since these lease years are not part of the primary period. 
Rather, the new regulations add a requirement at 43 CFR 3208.10(a) that 
a lease be extended due to diligent drilling over the end of the 
primary period. To qualify, the operator must diligently strive to 
reach a reasonable drilling target, which BLM will define based on 
local geology and the type of development proposed by the operator.
    Under 43 CFR 3208.10 (b) and (c) of the proposed regulations leases 
would be eligible for extensions in two new, additional situations:( 1) 
when committed to a unit, lease terms expiring prior to the unit could 
be extended to match the unit terms as long as diligent unit 
development is occurring; and (2) any lease not part of a participating 
area is eligible for two successive five-year extensions when it is 
eliminated from a unit by contraction or unit review. These extensions 
address industry concerns that leases adjacent to producing areas may 
be terminated, regardless of diligence, due to the lack of electrical 
sales contracts or poor energy market lasting for extended periods.
    The proposed rule would enact a few other minor substantive changes 
to lease terms. For example, BLM would delete the special requirements 
at 43 CFR 3203.4(d) for describing unsurveyed public lands adjacent to 
tidal waters in southern Louisiana and in Alaska, since this part is 
rarely used, and since the general regulations for describing 
unsurveyed lands are adequate. Several other portions of existing 
subpart 3203 have been merged into other sections: section 3203.6, 
concerning plans of development and operation, has been incorporated 
into various sections within new subparts 3260 and 3270; 43 CFR 3203.7, 
concerning oil, gas and helium reservations, is covered by 43 CFR 
3210.17. The 43 CFR 3203.1-6 concerning converting leases to a mineral 
lease would be relocated to 43 CFR 3209.10.
    The provisions on fees, rentals and royalties in subpart 3205 would 
be replaced by subpart 3211 in streamlined, plain English form. Except 
as noted, BLM does not intend to change any of these existing 
substantive provisions, but merely to make the existing ones more 
readily understood by the public, and more manageable for BLM. The only 
notable change is that the existing provision at 43 CFR 3205.3-7(a), 
concerning waivers and suspensions of payments, would be relocated to 
43 CFR 3212.14, grouping it with the regulations on suspension of 
operations or operations and production leases. Finally, subparts 3206-
Lease Bonds, 3207--Leases for a Fractional or Future Interest, and 
3209-Geothermal Resources Exploration Operations would be relocated to, 
respectively, subparts 3214, 3206, and 3250. In each case, except as 
otherwise discussed in this preamble, the changes enacted by the 
proposed regulation would be limited to consolidation and plain English 
rewrites.

Part 3250--Utilization of Geothermal Resources

    In order to separate operational regulations from the leasing 
provisions, the geothermal resources utilization regulations currently 
found in part 3250 would be relocated to subpart 3270, and the new 
subpart 3250 would contain the geophysical exploration operation 
regulations currently found in subpart 3209. The permitting and 
operational responsibilities for geophysical exploration operations 
occurring on either unleased public lands, Indian

[[Page 52739]]

lands, or lands leased for geothermal resources activities conducted by 
a lessee or permittee are consolidated here into a single set of 
standards. An exploration permit application would consist of the 
permit form and any operational and environmental information necessary 
for BLM to provide a timely review and decision.
    These flexible informational requirements would adequately cover 
the level of detail necessary to provide sufficient information for 
applications to drill shallow temperature gradient wells (up to 500 
feet deep), temperature gradient wells (with depths of 4000 feet or 
more), or any exploratory drilling in areas of increased environmental 
concern. Currently, Geothermal Resources Operational Order 1 limits the 
depth of temperature gradient wells to 500 feet unless BLM grants 
specific authorization to drill deeper, but the proposed regulations at 
43 CFR 3252.30 will allow an operator to propose a temperature gradient 
well to any depth necessary to adequately measure temperature 
gradients. Sections would be added for inspection, enforcement and 
noncompliance, and appeals, and the current exploration bond 
requirements would be retained.

Part 3260--Geothermal Resource Operations: General

    In order to consolidate drilling operations regulations in one 
location, subpart 3260 as proposed would address only the drilling 
permit application, approval, and reporting requirements. Regulations 
addressing permits for utilization facilities and information 
requirements related to the utilization of geothermal resources would 
be moved to a new subpart 3270. To address concerns often expressed by 
the public as well as other regulatory agencies, the Jurisdiction and 
Responsibility section (current subpart 3261) would be amended to 
clarify BLM's existing authority to take post-permit actions, such as 
requiring modifications to or shutting down operations that are in 
noncompliance or pose an immediate threat to the public, the 
environment or private property.
    Under proposed subpart 3260, a drilling application would consist 
of a plan of operation, geothermal drilling permit and drilling 
program, and all three documents could be submitted for review 
simultaneously. The plan of operation information requirements would be 
reduced to cover only specific drilling activities, eliminating the 
current requirement that applicants also address resource utilization. 
The plan of operation and drilling program could be written to apply to 
more than one well, though separate geothermal drilling permits would 
be required for each proposed well. Pad construction could commence 
once BLM approved the plan of operation or a sundry notice specifically 
requesting authorization for the site construction, while the drilling 
program and geothermal drilling permit could be submitted later. The 
well location plat, as currently required, would need to be certified 
by a licensed surveyor.
    A geothermal sundry notice would be necessary for actions such as 
casing program changes, well stimulation, or plugging and abandoning a 
well, but BLM could waive the sundry notice requirement for specific 
routine well work, surveys, or downhole maintenance. For activities 
that would result in an environmental impact not already described in 
the plan of operation, the applicant would be required to submit a 
geothermal sundry notice to amend the plan of operation, which would 
result in subsequent environmental review.
    These permit review options would provide both BLM and resource 
users the maximum flexibility and the best opportunity to address the 
broad range of operational and environmental issues encountered during 
geothermal development. BLM would be able, as a result, to respond to 
industry requests more efficiently and ensure all environmental 
requirements are met.
    Several other sections have been modified to improve the way in 
which BLM oversees existing operations. In new 43 CFR 3266.50, BLM 
would reduce the current requirements of notification or reports for 
all accidents occurring on federal lands (current 43 CFR 3262.7) to 
require notification and reports only when the accident affects 
operations or causes environmental hazards. Per the authority under 
section 5 of the lease terms, BLM can conduct inspections to ensure 
compliance with the permit, lease terms, regulations and the Steam Act. 
When the lessee submits information it regards as confidential, it 
would be clearly marked with the words ``confidential information,'' 
although BLM would ultimately determine whether such information is 
exempt from public disclosure under the Freedom of Information Act 
regulations set forth in 43 CFR part 2.
    The noncompliance subsection is revised to more clearly define what 
BLM can do when an operator fails to promptly commence or complete a 
required remedial action. This would include modification of project 
operations, temporary or permanent shut down of operations, or lease 
termination.
    Because the requirements specified in some of the current 
Geothermal Resources Operational Orders have become out of date, BLM 
will revise the requirements and incorporate them into new regulations 
in 1997. This proposed action changes some standards and requirements 
from current Orders, and when finalized these changes will have 
precedence over the Orders standards.
    A new subpart 3270 makes several changes to the existing permitting 
procedures and operator responsibilities for producing and utilizing 
geothermal resources. Several related definitions would be transferred 
to this part from existing part 3260, and adding a new definition for 
commercial operations that would specifically identify when the 
production permit is required. To gain a permit to construct and 
operate a utilization facility under this part, an operator would 
submit in an application a plan of utilization, utilization permit, 
production permit, site license and joint utilization agreement, where 
applicable. The applicant would need to submit the plan of utilization 
and the utilization permit together, while the remaining items could be 
submitted together or separately, although BLM will not approve the 
utilization permit until receiving a site license and related bond. 
These changes to the permitting process are intended to provide the 
operator increased flexibility in submitting the necessary information 
as it becomes available. The same process would apply to all types of 
utilization facility proposals, rather than using separate procedures 
for permitting research and demonstration facilities and individual 
well facilities, as the current regulations do.
    Before any surface disturbing activities associated with 
utilization facility construction and testing could begin, BLM would 
have to approve the plan of utilization, utilization permit and site 
license. An approved utilization permit would authorize the site 
preparation, construction and testing of a facility located on lands 
leased for federal geothermal resources or Indian land. Production 
permit approval would then be needed to begin commercial operation 
(defined as delivering any form of geothermal resources for sale or for 
use by the operator) of the facility or the utilization of federal 
resources. By contrast, only the production permit would be needed to 
locate a proposed utilization facility on unleased public lands 
receiving production allocated to or from wells located on federal 
leases or Indian lands.
    The plan of utilization would describe the proposed facility and 
its

[[Page 52740]]

environmental protection measures, and the operator could begin 
building the facility according to this plan once BLM approves the 
utilization permit. Those portions of the plan of operation, as 
described in the existing regulations, that involve requirements 
related to utilization would become requirements of the plan of 
utilization. However, instead of requiring the operator in all cases to 
collect baseline environmental data prior to the initiation of 
production, BLM would determine which, if any, specific environmental 
parameters should be addressed, and begin degradation monitoring. BLM 
could also require monitoring of facility operations as a condition of 
approval of the permit to ensure environmental compliance.
    The site license requirements would be moved from part 3250 to 
proposed subpart 3270 and directly incorporated into the utilization 
permitting process. At the time of application, the site license area 
must be on federally leased lands, although the license term would not 
be based on the lease term. Applicants would be required to submit a 
site license bond with their license application. Other requirements, 
such as the minimum utilization bond amount of $100,000 for any 
electrical generation facility and the current bonding requirement for 
direct use facilities, would remain unchanged. A site bond may not be 
required for a direct use facility.
    The proposed regulations would eliminate the requirement that a 
lessee or unit operator pay a minimum annual rent of $100 per acre for 
the site license area, because the lease already grants the right to 
utilize a reasonable amount of surface for utilization and the lessee 
has already paid either rental or royalties. However, if an entity 
other than a lessee or unit operator owns the utilization facility, the 
site license rental would still be required. Furthermore, should the 
location of a site license area occur on a federal lease which has 
terminated, the license could remain in effect with facility siting 
authorized by BLM under FLPMA for BLM-managed lands, or by the 
appropriate surface management agency (in coordination with BLM) for 
all other lands.
    When the facility is owned by someone other than the lessee or unit 
operator, a joint utilization agreement would be required as part of 
the site license approval process. This document constitutes the 
agreement between a lessee or unit operator and a third party siting a 
unitization facility on their land. The third party, as the facility 
operator, would then assume full responsibility for all phases of 
facility permitting and operations.
    The production permit authorizes the sale and/or use of federal 
geothermal resources, and BLM must approve this permit before a 
utilization facility starts commercial operation. For this permit, the 
applicant must provide specific information about the proposed 
facility's operations, particularly its production and royalty 
metering. The new rules would reduce the current requirement for 
detailed engineering drawings to require only generalized schematics of 
the facility. BLM could attach conditions of approval to the production 
permit, such as monitoring of the facility to ensure compliance with 
environmental and/or operational standards, and BLM could modify or 
shut down the facility operation were it in noncompliance with 
environmental or operational standards.
    The new regulations would incorporate and add greater detail to 
Geothermal Resource Operational Order 7, containing standards for the 
types and accuracy of meters used to measure production or utilization 
or to determine royalties. The proposed regulations would identify the 
following for both electrical generation and direct use facilities: (1) 
where the operator must locate the various types of meters (43 CFR 
3276.41); (2) meter accuracy standards which vary depending on the 
volume of resource measures (43 CFR 3276.42); and (3) meter accuracy 
standards for installation and measurement.
    Several issues regarding the site license and joint utilization 
agreements remain open questions, and BLM is seeking the public's input 
regarding these questions. First, BLM believes that the provisions for 
a site license should be eliminated, as a site license does not grant 
any additional authority to utilize the surface beyond that already 
granted by an approved utilization plan. BLM is therefore contemplating 
removing this provision in the future. If you believe the site license 
performs a necessary function, are there any alternatives to the 
current system that would serve the same purpose?
    BLM is also seeking comments regarding whether the public believes 
BLM should continue to require a rental for a site license if the site 
licensee is other than a geothermal lessee.
    Some final matters: editorial changes have been made to correct 
several cross-references; and BLM will modify its forms to accommodate 
the numerous changes in the proposed regulations, as well as to account 
for existing forms which have expired.

III. Procedural Matters

National Environmental Policy Act

    BLM has prepared an environmental assessment (EA), and has 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 National Environmental Policy Act of 1969 
(NEPA), 42 U.S.C. 4332(2)(C). BLM has placed the EA and the Finding of 
No Significant Impact (FONSI) on file in the BLM Administrative Record 
at the address specified previously. BLM invites the public to review 
these documents by contacting us at the addresses listed above (see 
ADDRESSES), and suggests that anyone wishing to submit comments in 
response to the EA and FONSI do so in accordance with the Written 
Comments section above, or contact us directly.

Paperwork Reduction Act

    The collection of information contained in this rule has been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance numbers 1004-0034, 1004-0074, 1004-0132 and 
1004-0160.

Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act of 1980 (RFA), 5 
U.S.C. 601 et seq., 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. BLM has determined under the RFA 
that this proposed rule would not have a significant economic impact on 
a substantial number of small entities.

Executive Order 12866

    According to the criteria listed in section 3(f) of Executive Order 
12866, BLM has determined that the proposed rule is not a significant 
regulatory action. As such, the rule is not subject to Office of 
Management and Budget review under section 6(a)(3) of the order.

Unfunded Mandates Reform Act

    Revision of 43 CFR group 3200 will not result in any unfunded 
mandate to state, local or tribal governments in the aggregate, or to 
the private sector, of $100,000,000 or more in any one year.

Executive Order 12612

    The proposed rule would not have sufficient federalism implications 
to

[[Page 52741]]

warrant BLM preparation of a Federalism Assessment (FA).

Executive Order 12630

    The proposed rule does not represent a government action capable of 
interfering with constitutionally protected property rights. Section 
2(a)(1) of Executive Order 12630 specifically excludes actions 
abolishing regulations or modifying regulations in a way that lessens 
interference with private property use from the definition of 
``policies that have takings implications.'' Since the primary function 
of the proposed rule is to abolish unnecessary regulations and rewrite 
existing ones, there will be no private property rights impaired as a 
result. Therefore, BLM has 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 12988

    The Department of the Interior has determined that this rule meets 
the applicable standards provided in sections 3(a) and 3(b)(2) of 
Executive Order 12988.

Author

    The principal authors of this proposed rule are Richard Hoops and 
Jack Lewis of the Nevada State Office, Sean Hagerty and Sonia 
Santillian of the California State Office, Richard Estabrook of the 
Ukiah District Office, Jack Feuer and Donna Kauffman of the Oregon 
State Office, Dennis Davis of the Prineville District Office, and 
Robert Henricks and Connie Seare of the Utah State Office, all of the 
Bureau of Land Management.

List of Subjects

43 CFR Part 3200

    Environmental protection, geothermal energy, government contracts, 
public lands-mineral resources, reporting and recordkeeping 
requirements, surety bonds.

43 CFR Part 3210

    Geothermal energy, government contracts, land management bureau, 
public lands-mineral resources, reporting and recordkeeping 
requirements.

43 CFR Part 3220

    Geothermal energy, government contracts, land management bureau, 
public lands-mineral resources, reporting and recordkeeping 
requirements.

43 CFR Part 3240

    Geothermal energy, government contracts, land management bureau, 
mineral royalties, public lands-mineral resources, reporting and record 
keeping requirements, water resources.

43 CFR Part 3250

    Geothermal energy, geothermal exploration, land management bureau, 
public lands-mineral resources, reporting and recordkeeping 
requirements, surety bonds.

43 CFR Part 3260

    Environmental protection, geothermal energy, government contracts, 
land management bureau, public lands-mineral resources, reporting and 
recordkeeping requirements.

    Dated: September 27, 1996.
Sylvia V. Baca,
Acting Assistant Secretary of the Interior.

    For the reasons set forth above in the preamble, and under the 
authority of the Geothermal Steam Act of 1970, as amended (30 U.S.C. 
1001-1027), The Freedom of Information Act (5 U.S.C. 552), and the 
Federal Land Policy and Management Act (43 U.S.C. 1701 et seq.), 43 CFR 
chapter II is amended as set forth below:

PARTS 3210, 3220, 3240, 3250 AND 3260--[REMOVED]

    1. Parts 3210, 3220, 3240, 3250 and 3260 are removed.
    2. The heading ``GROUP 3200--GEOTHERMAL RESOURCES LEASING'' and the 
accompanying note is removed.
    3. Part 3200 is revised to read as follows:

PART 3200--GEOTHERMAL RESOURCE LEASING

Subpart 3200--Geothermal Resource Leasing--General

Sec.
3200.1  What are the meanings of terms I need to know to understand 
the regulations in this part?
3200.2  Information collection.
3200.3 What are my rights of appeal?

Subpart 3201--Available Lands

3201.10  What lands are available for geothermal leasing?
3201.11  What lands are not subject to geothermal leasing?

Subpart 3202--Lessee Qualifications

3202.10  Who can hold a geothermal lease?
3202.11  Must I prove I can hold a lease when filing a lease offer?
3202.12  Are other persons allowed to act in my behalf?
3202.13  What happens if the offeror dies before the lease is 
issued?

Subpart 3203--Obtaining a Lease

3203.10  How can I obtain a geothermal lease?
3203.11  How is a KGRA determined?

Subpart 3204--Noncompetitive Leasing

3204.10  How do I file an offer to lease?
3204.11  How do I describe the lands in my lease offer?
3204.12  What fees must accompany my offer?
3204.13  May I combine acquired and public domain lands on the same 
offer?
3204.14  What are the minimum and maximum acreage requirements for 
my offer?
3204.15  What happens when two or more applicants apply for a 
noncompetitive lease for the same land?
3204.16  How does BLM determine the first qualified applicant?
3204.17  May I withdraw my offer?
3204.18  May I amend my offer?

Subpart 3205--Competitive Leasing

3205.10  How does BLM lease competitive lands?
3205.11  How do I obtain information on the terms and conditions of 
leases being offered through competitive bidding?
3205.12  How do I bid for a parcel?
3205.13  What is the minimum acceptable bid?
3205.14  How does BLM conduct the sale?
3205.15  To whom does BLM issue the lease?
3205.16  How will I know if my bid is accepted?
3205.17  How will I know if my bid is not accepted?

Subpart 3206--Lease Issuance

3206.10  Are there any additional requirements prior to lease 
issuance?
3206.11  What is the maximum acreage I may hold?
3206.12  How does BLM compute acreage holdings?
3206.13  Am I charged for acreage if the United States owns only a 
fractional interest in the geothermal resources?
3206.14  Are there any acreages which are not chargeable?
3206.15  What procedures does BLM follow when a party holds or 
controls excess accountable acreage?
3206.16  What is the primary term of my lease?
3206.17  When will BLM issue my lease?

Subpart 3207--Additional Lease Term

3207.10  Under what circumstances is my lease eligible for an 
additional term beyond its primary term?

Subpart 3208--Extending the Current Lease Term

3208.10  Under what circumstances is my lease eligible for an 
extension of the primary term?
3208.11  What procedures must I follow to obtain an extension of my 
lease?
3208.12  What information must I include in the report to document 
that I have made bona fide efforts?

[[Page 52742]]

3208.13  What will BLM do if I choose to make payments in lieu of 
commercial operation?
3208.14  What will BLM do if I choose to make significant 
expenditures?
3208.15  May I change my election of making payments in lieu of 
commercial quantities or making significant expenditures during the 
extension?

Subpart 3209--Conversion of a Lease Producing Byproducts

3209.10  May I convert my geothermal lease to a mineral lease?

Subpart 3210--Additional Lease Information

3210.10  When does lease segregation occur?
3210.11  Is a lease segregated from an agreement or plan eligible 
for an extension?
3210.12  May I consolidate leases?
3210.13  What is the diligent exploration requirement?
3210.14  How do I meet the diligent exploration requirement?
3210.15  Is there an option to performing diligent exploration?
3210.16  What happens if I don't meet the diligence requirement or 
pay the additional rental?
3210.17  Can leases or locations for other mineral commodities occur 
on the same lands that my geothermal lease is located?
3210.18  May BLM readjust the terms and conditions of my lease?
3210.19  How will BLM readjust the terms and conditions of my lease?
3210.20  May BLM readjust the rental and royalty rates of my lease?
3210.21  What happens if I object to the proposed readjusted terms 
and conditions or rental and royalty rates?
3210.22  What lease obligations am I accountable for during 
readjustment negotiations?
3210.23  When do the readjusted terms become effective?
3210.24  Must I prevent the drainage of geothermal resources from my 
lease?

Subpart 3211--Fees, Rentals, and Royalties

3211.10  What are the filing fees, rentals, and royalties for 
leases?
3211.11  When is my annual rental payment due?
3211.12  How and where do I submit my rental payment?
3211.13  Is there a different rental or minimum royalty amount for a 
fractional interest lease?
3211.14  Prior to production, am I expected to pay rental if my 
lease is committed to an approved cooperative or unit plan?
3211.15  When unit production starts, am I expected to pay rental if 
my lease is committed to an approved cooperative or unit plan?
3211.16  Will I always pay rental on my lease?
3211.17  What are the possible royalty rates of my lease?

Subpart 3212--Suspension of Operations or Operations and Production

3212.10  May I obtain a suspension of operations or operations and 
production on my lease, and if so, for what reasons?
3212.11  When is a lease suspension effective or terminated?
3212.12  How does a suspension affect the lease terms?
3212.13  What happens when the suspension is lifted or removed?
3212.14  May BLM reduce or suspend the royalty or rental rate of my 
lease?
3212.15  What information must I submit when requesting a reduction 
or suspension of the royalty or rental rate of my lease?

Subpart 3213--Relinquishment, Termination, Cancellation, and Expiration

3213.10  Who may relinquish a lease?
3213.11  What form must I submit to relinquish a lease?
3213.12  Can BLM accept a partial relinquishment resulting in less 
than 640 acres?
3213.13  When does my relinquishment take effect?
3213.14  How does a lease terminate?
3213.15  What if I don't pay the entire amount of rental due?
3213.16  Will BLM notify me if my lease terminates?
3213.17  Can my lease be reinstated? If so, how?
3213.18  Who may petition to reinstate a lease?
3213.19  What must I do to obtain a reinstatement?
3213.20  Are there reasons why BLM would not approve a 
reinstatement?
3213.21  When will my lease expire?
3213.22  Will BLM notify me when my lease expires if it is in an 
extended term?
3213.23  May BLM cancel my lease?
3213.24  When is a cancellation effective?

Subpart 3214--Personal and Surety Bonds

3214.10  Who must post a geothermal bond?
3214.11  Who is covered by the bond?
3214.12  What does my bond cover?
3214.13   What is the minimum dollar amount required under each type 
of operation bond?
3214.14  What kind of financial guarantee will BLM accept to back my 
bond?
3214.15  Is there a special bond form I must use?
3214.16  Where must I submit my bond?
3214.17  Who will BLM hold liable under the bond and what are they 
liable for?
3214.18  What are my bonding requirements when a lease interest is 
transferred to me?
3214.19  How do I modify the terms and conditions of my bond?
3214.20  Can BLM ever increase the bond amount above the minimums?
3214.21  Where must I get a certificate of deposit or a letter of 
credit?
3214.22  What special requirements are there if I want to use a 
certificate of deposit to back my bond?
3214.23  What special requirements are there if I want to use a 
letter of credit to back my bond?

Subpart 3215--Bond Collection After Default

3215.10  In what circumstances does BLM collect on a bond?
3215.11  As the principal on the bond, may BLM require me to restore 
the face amount of my bond or require me to replace my bond after 
BLM collects on default?
3215.12  What if I do not restore the face amount or file a new 
bond?
3215.13  When will BLM cancel or terminate my bond?

Subpart 3216--Transfers

3216.10  What types of lease interests can I transfer?
3216.11  Where and when am I required to file a transfer of 
interest?
3216.12  When does a transferee assume responsibility for lease 
obligations?
3216.13  What are the responsibilities of the transferor?
3216.14  Are there required filing fees and forms associated with 
filing my transfer?
3216.15  Is there a required time frame for filing requests for 
approval of transfers?
3216.16  Must I file separate requests for approval of transfers for 
each lease?
3216.17  Where must I file estate transfers, corporate mergers and 
name changes?
3216.18  How do I describe the lands in my lease transfer?
3216.19  Can I transfer record title interest for less than 640 
acres?
3216.20  When does an assignment segregate a lease?
3216.21  When is my assignment/transfer effective?
3216.22  Does BLM grant all requests for approval of transfer?

Subpart 3217--Cooperative Conservation Provisions

3217.10  What is the purpose of unit agreements and cooperative 
plans?
3217.11  What is the purpose for communitization or drilling 
agreements?
3217.12  What information regarding a proposed communitization or 
drilling agreement must you submit to BLM?
3217.13  When is a communitization or drilling agreement effective?
3217.14  Under what conditions will BLM approve operating, drilling 
or development contracts?
3217.15  What information must I submit to BLM regarding proposed 
operating, drilling or development contracts?

Subpart 3250--Exploration Operations--General

3250.10  What is the purpose, scope and authority of the subparts 
pertaining to exploration operations?

Subpart 3251--Permitting of Exploration Operations

3251.10  What types of operations may I propose when submitting an 
application for an exploration permit?
3251.11  May I conduct exploration operations on my lease, someone 
else's lease or unleased land?
3251.12  Do I need a permit prior to conducting exploration 
operations?

[[Page 52743]]

3251.13  What information must I submit with my application for an 
exploration permit?
3251.14  What action will BLM take on my permit?
3251.15  How do I receive BLM approval to change permitted 
exploration operations?
3251.16  Must I submit data obtained through exploration operations 
to BLM?
3251.17  Are there any bonding requirements for conducting 
exploration operations?
3251.18  When will the bond be released?

Subpart 3252--Conducting Exploration Operations

3252.10  What operational requirements must I meet when conducting 
exploration operations?
3252.11  What environmental requirements must I meet when conducting 
exploration operations?
3252.12  How deep may I drill a temperature gradient well?
3252.13  How long may I collect information from my temperature 
gradient well?
3252.14  What are the requirements for completing and abandoning a 
temperature gradient well?
3252.15  Must I notify BLM when I have completed my exploration 
operations?

Subpart 3254--Inspection, Enforcement, and Noncompliance

3254.10  Will BLM inspect my exploration operations?
3254.11  What action may BLM take if my exploration operations are 
not in compliance?

Subpart 3255--Exploration Operations Relief and Appeals

3255.10  May I request variances from notices to lessees, permit 
conditions of approval, and operational or other orders issued by 
the BLM?
3255.11  How may I appeal a BLM decision regarding my exploration 
operations?

Subpart 3260--Geothermal Drilling Operation--General

3260.10  What types of geothermal operations are covered under this 
subpart?
3260.11  What standards apply to my drilling operations?
3260.12  Can BLM issue additional orders or instructions?

Subpart 3261--Permitting of Drilling Operations

3261.10  What approval must I obtain prior to well pad construction 
drilling?
3261.11  What information must I submit to get approval for drilling 
operations or well pad construction?
3261.12  What is a plan of operations?
3261.13  When must I have an approved plan of operations?
3261.14  Must I submit my drilling permit application and plan of 
operations at the same time?
3261.15  Can a plan of operations and drilling permit apply to more 
than one well?
3261.16  How do I amend a plan of operations or a drilling permit 
application?
3261.17  Do I need a bond before I build a well pad or drill a well?
3261.18  How will BLM review my application documents and notify me 
of their status?
3261.19  How do I get approval to change an approved drilling 
operation?
3261.20  How do I get approval for subsequent well operations?

Subpart 3262--Conducting Drilling Operations

3262.10  What operational requirements must I meet when drilling a 
well?
3262.11  What environmental requirements must I meet when drilling a 
well?
3262.12  Must I post a sign at every well?
3262.13  Can BLM require well spacing?
3262.14  Can BLM require me to take samples or perform tests and 
surveys?

Subpart 3263--Well Abandonment

3263.10  May I abandon a well without notifying BLM?
3263.11  What information must I submit to get my sundry notice for 
abandonment approved?
3263.12  How will BLM review my sundry notice for abandonment and 
notify me of its status?
3263.13  What must I do to restore the site?
3263.14  Can BLM require me to abandon a well?
3263.15  Can I abandon a producible well?

Subpart 3266--Reports

3266.10  What information must I submit after completing a well?
3266.11  What information must I submit after completing subsequent 
well operations?
3266.12  What information must I submit after abandoning a well?
3266.13  What well records must I maintain for each well?
3266.14  Must I notify BLM of accidents occurring on my lease?

Subpart 3267--Confidential, Proprietary Information

3267.10  Must I identify confidential information that I submit to 
BLM?
3267.11  Will BLM treat information marked as confidential, as such?
3267.12  How long will confidential information I submit to BLM 
remain confidential?

Subpart 3268--Inspection, Enforcement, and Noncompliance

3268.10  What part of my drilling operation can BLM inspect?
3268.11  What action can BLM take if my operations are in 
noncompliance?

Subpart 3269--Geothermal Drilling Operations Relief and Appeals

3269.10  May I request a variance from notices to lessees, permit 
conditions of approval, and operational and other orders issued by 
BLM?

Subpart 3270--Utilization of Geothermal Resources--General

3270.10  What types of geothermal operations are permitted under 
this part?
3270.11  What standards apply to my utilization operations?
3270.12  What are my responsibilities for utilizing geothermal 
resources on a lease?

Subpart 3271--Permitting of Utilization Operations

3271.10  How do I obtain authorization to construct and test a 
utilization facility?
3271.11  How do I obtain authorization to begin commercial 
operations?

Subpart 3272--The Contents and Review of a Plan of Utilization and 
Utilization Permit

3272.10  What must I do prior to commencing site preparation, 
construction and testing of the facility?
3272.11  What information must I submit in a plan of utilization?
3272.12  How should I describe the proposed facility?
3272.13  How should I describe the environmental protection measures 
I intend to take?
3272.14  How will BLM review my plan of utilization and notify me of 
its status?
3272.15  How do I obtain authorization to construct and test my 
facility?

Subpart 3273--Applying for and Obtaining a Site License

3273.10  When do I need a site license?
3273.11  Are there any situations in which I do not need a site 
license?
3273.12  What if the lands I want a license for are not administered 
by BLM?
3273.13  Are any lands not available for geothermal site licenses?
3273.14  What area does a site license include?
3273.15  What information must I include in my site license 
application?
3273.16  What is the annual rental for a site license or direct use 
facility?
3273.17  Can BLM reassess the annual rental for my site license?
3273.18  Must all facility operators pay the annual site license 
rental?
3273.19  What are the bonding requirements for a site license?
3273.20  What are my obligations under the site license?
3273.21  How long will my site license remain in effect?
3273.22  May BLM terminate my site license?
3273.23  May I relinquish my site license?
3273.24  May I assign or transfer my site license?
3273.25  What if my site license application involves lands under 
the jurisdiction of another agency?

[[Page 52744]]

Subpart 3274--Submitting a Joint Utilization Agreement

3274.10  What is the purpose of a joint utilization agreement?
3274.11  Which parties must sign the joint utilization agreement?

Subpart 3275--Applying for and Obtaining a Production Permit

3275.10  What information must I include in my application for a 
production permit?
3275.11  How will BLM review my application for a production permit?
3275.12  Can I get an authorization even if I cannot prove I can 
operate within required standards?

Subpart 3276--Conducting Utilization Operations

3276.10  Can I change my approved plan of utilization or production 
permit?
3276.11  What are the facility operator's obligations?
3276.12  Are there environmental and safety requirements for lease 
operations?
3276.13  Are there reporting requirements for lease operations?
3276.14  What information must be included for each well in monthly 
well reports?
3276.15  What information must be included in the monthly report for 
generation facilities?
3276.16  What additional information must be submitted in the 
monthly report for flash and dry facilities?
3276.17  What information must be included in the monthly report for 
direct use facilities?
3276.18  Does the facility operator have to measure the geothermal 
resources?
3276.19  What aspects of my geothermal operations must I measure?
3276.20  How accurately must I measure my production and 
utilization?
3276.21  To what standards must I install and maintain my meters?
3276.22  What must I do if I find an error in a meter?
3276.23  May BLM require me to test for byproducts associated with 
the production of geothermal resources?
3276.24  May I commingle production?
3276.25  What action will BLM take if I waste geothermal resources?
3276.26  Can BLM order me to drill and produce wells on my lease?

Subpart 3277--Inspection, Enforcement, and Noncompliance

3277.10  Will BLM inspect my operations?
3277.11  What records must I keep available for inspection?
3277.12  What actions may BLM take if I am in noncompliance?

Subpart 3278--Utilization Relief and Appeals

3278.10  May I request a variance from notices of lessees, permit 
conditions of approval, and operational and other orders issued by 
BLM?
3278.11  Can I appeal a BLM decision regarding my utilization 
operations?

    Authority: 5 U.S.C. 552; 30 U.S.C. 1001-1027; 43 U.S.C. 1733, 
1740.

Subpart 3200--Geothermal Resource Leasing


Sec. 3200.1  What are the meanings of terms I need to know to 
understand the regulations in this part?

    Act means the Geothermal Steam Act of 1970, as amended (30 U.S.C. 
1001 et seq.).
    Additional term means the 40 years beyond the primary term of a 
producing lease. The additional term is granted when geothermal steam 
is produced or utilized in commercial quantities within the primary 
term. This differs from an extended term because additional terms 
constitute a new lease term; whereas extensions lengthen the primary 
term without creating a new term. See the procedures in subpart 3207 of 
this part.
    Assignment means a transfer of all or a portion of the lessee's 
record title interest in a lease.
    Byproducts are minerals (exclusive of oil, hydrocarbon gas, and 
helium) which are found in solution or in association with geothermal 
steam that are not of sufficient value to warrant extraction and 
production by themselves because they have a value of less than 75% of 
the value of the geothermal steam or because of technical difficulties 
in extraction and production.
    Casual use means activities that ordinarily lead to no more than 
negligible disturbance or damage to lands, resources, or improvements.
    Commercial quantities means either:
    (1) For production from a lease, a sufficient volume (in terms of 
flow and temperature) of the resource to provide a reasonable return 
after all variable costs of production are met; or
    (2) For production from a unit, a sufficient volume of the resource 
to provide a reasonable return after all variable costs of production 
and drilling are met.
    Cooperative agreement means an agreement for the production and 
utilization of separately owned interests in the geothermal resources 
in which separate ownership units are independently operated without 
allocation of production.
    Development contract means an agreement between one or more lessees 
and one or more entities which, when approved by BLM, facilitates 
resource exploration and serves to protect the public interest.
    Exploration operations means any activity relating to the search 
for evidence of geothermal resources. This activity requires physical 
presence on the land and may result in damage to public lands or 
resources. Exploration includes, but is not limited to, geophysical 
operations such as drilling shallow temperature gradient wells or holes 
used for explosive charges for seismic exploration. It also includes 
related construction of roads and trails, and cross-country transit by 
vehicles over public land. Exploration operations do not include the 
production or utilization of geothermal resources, which may only be 
conducted under a lease and in accordance with the regulations of this 
part (see subparts 3260 and 3270 of this part).
    Extended term means an initial and any successive 5-year period 
beyond the primary term of a lease during which BLM will grant the 
lessee the right to continue activities under the existing lease. 
Extensions differ from an additional term because they serve to extend 
the primary term, rather than creating a new one. See the procedures in 
subpart 3208 of this part.
    Facility operator means the entity receiving authorization from BLM 
to site, construct, test and/or operate a utilization facility. A 
facility operator may be a lessee, a unit operator, or a third party.
    Geothermal exploration permit is an application you submit 
describing proposed exploration operations and which, when approved by 
BLM, authorizes geothermal exploration operations and associated 
surface disturbance.
    Geothermal resources operational order means a formal, numbered 
order, issued by BLM, that implements or enforces the regulations in 
this Part.
    Geothermal steam and associated geothermal resources are products 
of geothermal steam or hot water and hot brines, including those 
resulting from water, gas, or other fluids artificially introduced into 
geothermal formations, heat or other associated energy found in 
geothermal formations, and byproducts derived from these.
    Geothermal sundry notice is a written request submitted by an 
operator for permission to deviate from operations in a previously 
approved permit or sundry notice. A geothermal sundry notice may also 
be submitted to obtain permission to perform work not otherwise covered 
in a permit or sundry notice.
    Joint utilization agreement means an agreement between a facility 
operator and a Federal lessee or unit operator, if the two entities are 
different, which permits a facility operator to construct a utilization 
facility on Federal lands leased for geothermal resources. The 
agreement must provide for the construction, testing and operation of a 
utilization facility on the lease.
    Known geothermal resource area (KGRA) is an area where BLM 
determines that persons knowledgeable

[[Page 52745]]

in geothermal development would expend money to develop geothermal 
resources. For more information on how BLM determines KGRAs, see 43 CFR 
3203.11.
    MMS means the Minerals Management Service.
    Notice to lessees means a written notice issued by BLM that 
implements the regulations in this part or geothermal resource 
operational orders, and provides more specific instructions on 
geothermal issues within a state, district or resource area.
    Operating rights owner means a person or entity holding operating 
rights in a lease. A lessee is also an operating rights owner if the 
operating rights or a portion of them have not been severed from record 
title.
    Operator means any person or entity who has assumed responsibility 
for the operations conducted on the leased lands.
    Plan of utilization means a plan which fully describes the 
utilization facility, including measures for environmental protection 
and mitigation. An approved plan of utilization permits the siting of a 
utilization facility on federal lands.
    Primary term means the first 10 years of a lease, not including any 
periods of suspension.
    Produced or utilized in commercial quantities means a well 
producing geothermal resources in commercial quantities, or the 
completion of a well capable of producing geothermal resources in 
commercial quantities when BLM determines the lessee is diligently 
attempting to utilize the geothermal steam.
    Production permit means authorization from BLM allowing for the 
production of geothermal resources from federal lands.
    Public domain lands or public lands means lands, including mineral 
estates, that never left the ownership of the United States, were 
obtained in exchange, reverted to the ownership of the United States 
through the operation of the public land laws, or have been identified 
by Congress as part of the public domain.
    Record title means an interest in a lease which includes the 
responsibility for paying rent and the right to assign and relinquish 
the lease.
    Relinquishment means action taken by the lessee to voluntarily end 
the lease in whole or in part.
    Shallow temperature gradient wells means a well drilled up to 500 
feet deep for the purpose of obtaining information on the change in 
temperature over the depth of the well in order to extrapolate 
temperatures at a greater depth.
    Site license means authorization from BLM allowing the construction 
of a utilization facility on leased Federal lands.
    Stipulation means a condition attached by BLM to a lease or permit.
    Temperature gradient wells means a well drilled to a depth of 4000 
feet or more for the purpose of obtaining information on the change in 
temperature over the depth of the well in order to extrapolate 
temperatures at a greater depth.
    Termination means the cancellation of a lease due to nonpayment of 
annual rental, cessation of production, or other action by the lessee 
which breaches the contract.
    Transfer means conveyance of any interest a party may have in a 
Federal lease. This definition includes the terms assignment and 
sublease.
    Unit agreement means an agreement for the exploration, production 
and utilization of separately owned interests in geothermal resources 
as a single consolidated unit without regard to separate ownerships and 
which provides for the allocation of costs and benefits on a basis 
defined in the agreement.
    Unit area means all tracts committed to an approved unit agreement.
    Unit operator means any person or entity that has stated in writing 
to BLM that it is responsible for the operations conducted under the 
unit agreement and is so designated in the unit agreement.
    Unitized substances means geothermal resources recovered from lands 
committed to a unit agreement.
    Utilization permit means authorization from BLM allowing site 
preparation, construction, and testing of a utilization facility.
    Waste means:
    (1) Physical waste, including refuse; and/or
    (2) Improper use or unnecessary dissipation of geothermal resources 
through inefficiency in drilling, production, transmission, or 
utilization.
    Working Interest means an interest granted by a lease, operating 
agreement or other authorizing document in geothermal resources 
conveying the right to explore for, develop, produce, and use 
geothermal resources, except that such rights delegated to a unit 
operator by a unit agreement are not working interests.


Sec. 3200.2  Information collection.

    (a) The collection of information contained in this part has been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance numbers 1004-0034, 1004-0074, 1004-0132 and 
1004-0160. The information will be used to maintain an orderly program 
for leasing, development and production of Federal geothermal 
resources, to evaluate technical feasibility and environmental impacts 
of geothermal operations on Federal and Indian lands, and to determine 
whether exploration expenditures meet the requirements for diligence 
credit under 43 CFR 3202.5. The public must respond to the requests for 
information in order to obtain a benefit.
    (b) Public reporting burden for this information is estimated to 
average 1.6 hours per response, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden 
estimates or any other aspects of this collection of information, 
including suggestions for reducing the burden, to Administrative 
Record, Bureau of Land Management, Room 401 LS, 1849 C Street, NW., 
Washington, DC 20240; and the Paperwork Reduction Project (1004-0160), 
Office of Management and Budget, Washington, DC 20503.
    (c) There are many leases and agreements currently in effect, and 
which will remain in effect, involving Federal geothermal resources 
leases that specifically refer to the United States Geological Survey, 
USGS, Minerals Management Service, MMS, or Conservation Division. These 
leases and agreements may also specifically refer to various officers 
such as Supervisor, Conservation Manager, Deputy Conservation Manager, 
Minerals Manager, and Deputy Minerals Manager. In addition, many leases 
and agreements specifically refer to 30 CFR part 270 or a specific 
section thereof. Those references must now be read to mean either the 
Bureau of Land Management or the Minerals Management Service as 
appropriate.


Sec. 3200.3  What are my rights of appeal?

    You may appeal any decision made by BLM under this part in 
accordance with 43 CFR parts 4 and 1840.

Subpart 3201--Available Lands


Sec. 3201.10  What lands are available for geothermal leasing?

    (a) BLM may issue leases on:
    (1) Lands administered by the Department of the Interior, including 
public, withdrawn and acquired lands;
    (2) Lands administered by the Department of Agriculture with its 
concurrence;

[[Page 52746]]

    (3) Lands conveyed by the United States where the geothermal 
resources were reserved to the United States; and
    (4) Lands subject to section 24 of the Federal Power Act, as 
amended (16 U.S.C. 818), with concurrence from the Secretary of Energy.
    (b) BLM will not issue, extend, review or modify a lease that would 
result in a significant adverse effect on a significant thermal feature 
within a unit of the National Park system. If BLM determines such a 
potential exists, we will include in any lease action all stipulations 
required by law and necessary to protect such features.


Sec. 3201.11  What lands are not subject to geothermal leasing?

    BLM will not issue leases for:
    (a) Lands where the Secretary has determined that issuance of the 
lease would cause unnecessary or undue degradation;
    (b) Lands that are contained within a unit of the National Park 
System, or are otherwise administered by the National Park Service;
    (c) Lands within a national recreation area;
    (d) Lands where the Secretary determines that geothermal operations 
are reasonably likely to result in a significant adverse effect on a 
significant thermal feature within a unit of the National Park System;
    (e) Fish hatcheries or wildlife management areas administered by 
the Secretary;
    (f) Indian trust or restricted lands within or without the 
boundaries of Indian reservations;
    (g) The Island Park Geothermal Area; and
    (h) Lands where section 43 of the Mineral Leasing Act (30 U.S.C. 
226-3) prohibits leasing which includes:
    (1) Wilderness areas or wilderness study areas administered by BLM 
or other surface management agencies;
    (2) Lands designated by Congress as wilderness study areas, except 
where leasing is specifically allowed to continue by the statute 
designating the study area; and
    (3) Lands within areas allocated for wilderness or further planning 
in Executive Communication 1504, Ninety-Sixth Congress (House Document 
numbered 96-119), unless such lands are allocated to uses other than 
wilderness by a land and resource management plan or are released to 
uses other than wilderness by an act of Congress.

Subpart 3202--Lessee Qualifications


Sec. 3202.10  Who can hold a geothermal lease?

    You may hold a geothermal lease if you are:
    (a) A citizen of the United States who has reached the age of 
majority;
    (b) An association, including a partnership, of United States 
citizens;
    (c) A corporation organized under the laws of the United States, 
any state or the District of Columbia; or
    (d) Any domestic governmental unit.


Sec. 3202.11  Must I prove I can hold a lease when filing a lease 
offer?

    Ordinarily you do not need to submit proof at the same time you 
submit the offer, but BLM has the right to request information 
regarding your qualifications at any time, including when you submit 
your offer. If BLM requires additional information, you have 30 days 
from your receipt of the request to submit the information.


Sec. 3202.12  Are other persons allowed to act in my behalf?

    Yes, one person may act on behalf of another, provided he or she 
notifies BLM. The person taking the action must sign the document, note 
his or her title, identify the person on whose behalf he or she is 
acting, and be qualified to hold a lease under 43 CFR 3202.10. BLM may 
require the person to provide written proof of his or her 
qualifications and authority to take such action.


Sec. 3202.13  What happens if the offeror dies before the lease is 
issued?

    If the offeror dies before the lease is issued, BLM will issue the 
lease to either the administrator or executor of the estate or the 
heirs. If the heirs are minors, BLM will issue the lease to either a 
legal guardian or trustee, provided that the legal guardian or trustee 
is also qualified to hold a lease under 43 CFR 3202.10.

Subpart 3203--Obtaining a Lease


Sec. 3203.10  How can I obtain a geothermal lease?

    You must first determine if the lands are located in a known 
geothermal resource area (KGRA). BLM leases lands within a KGRA through 
a competitive sale. If the lands you wish to lease are within a KGRA, 
you must follow the procedures for submitting a bid set out in subpart 
3205 of this part. BLM issues a competitive lease to the person or 
entity submitting the highest qualified bid. BLM leases available lands 
outside a KGRA noncompetitively. You may lease lands outside a KGRA by 
submitting an offer following the procedures set out in subpart 3204 of 
this part. BLM issues noncompetitive leases to the first qualified 
applicant. BLM may issue a lease for a fractional interest if we 
determine the public interest is well served by doing so.


Sec. 3203.11  How is a KGRA determined?

    BLM determines the boundaries of a KGRA based on the following 
indicators:
    (a) Geologic and technical evidence that indicates persons 
knowledgeable in geothermal resource development would spend money 
developing the area;
    (b) Lands within 5 miles of a well capable of production in 
commercial quantities, or all lands in the same geologic structure, 
regardless of the distance from the well capable of production in 
commercial quantities; and
    (c) Where competitive interest exists. Competitive interest exists 
where more than one person expresses interest in leasing an area for 
geothermal resources.

Subpart 3204--Noncompetitive Leasing


Sec. 3204.10  How do I file an offer to lease?

    You or your authorized agent must submit three (3) executed copies 
of current Form 3200-24 to BLM. At least one form must have an original 
signature. We will accept only exact copies of the form on one two-
sided page, to match the original. The application must accurately 
describe the lands covered by your application. You may obtain this 
form (and other BLM forms) by contacting the nearest BLM Office.


Sec. 3204.11  How do I describe the lands in my lease offer?

    You must describe the lands as follows:
    (a) For lands surveyed under the public land rectangular survey 
system, describe the lands by legal subdivision, section, township, and 
range;
    (b) For unsurveyed lands, describe the lands by metes and bounds, 
giving courses and distances, and tie this information to an official 
corner of the public land surveys, or to a prominent topographic 
feature;
    (c) For approved protracted surveys, include an entire section, 
township, and range. Do not divide protracted sections into aliquot 
parts;
    (d) Discuss offers for unsurveyed lands in Louisiana and Alaska 
that have water boundaries with BLM prior to submission; and
    (e) For fractional interest lands, identify the United States 
mineral ownership by percentage.

[[Page 52747]]

Sec. 3204.12  What fees must accompany my offer?

    You must submit a nonrefundable filing fee of $75 for each offer 
and advance rental in the amount of $1 per acre, or fraction of an 
acre. BLM will refund the advance rental if we reject the offer, or you 
withdraw the offer before BLM accepts it. If your advance rental is 
deficient by more than 10 percent, BLM will reject the offer.


Sec. 3204.13  May I combine acquired and public domain lands on the 
same offer?

    Yes, as long as you clearly identify both the acquired lands and 
the public domain lands.


Sec. 3204.14  What are the minimum and maximum acreage requirements for 
my offer?

    The minimum size of a lease is 640 acres. Your offer must include 
all available lands in the section. If the section contains lands not 
available for leasing, the lease must include all the available lands 
in the section, which is then the minimum size of the lease. The 
maximum size of a lease is 2560 acres, although BLM will make an 
exception to this requirement when an offer includes an irregular 
subdivision. Leases must not extend outside a 6 mile square area.


Sec. 3204.15  What happens when two or more applicants apply for a 
noncompetitive lease for the same land?

    BLM begins processing applications as soon as they are received. 
Once BLM approves a noncompetitive lease application, any later 
applications received for the same land are rejected. However, if BLM 
receives additional applications for the same land while the original 
application is still pending, BLM must determine if the overlapping 
applications warrant converting the land at issue to a KGRA.
    (a) If BLM determines that the land should be considered a KGRA, 
then all noncompetitive applications are rejected, and applicants must 
follow the procedures for competitive bidding to obtain a lease.
    (b) If BLM determines that KGRA status is not warranted despite the 
multiple applications, then the lease will be awarded to the first 
qualified applicant.


Sec. 3204.16  How does BLM determine the first qualified applicant?

    BLM determines the first qualified applicant by the priority in 
which the application is filed. BLM issues a noncompetitive lease to 
the offeror who is first to file an application that meets all the 
application requirements.


Sec. 3204.17  May I withdraw my offer?

    Yes, you may withdraw your offer in whole or in part prior to lease 
issuance, provided the remaining lands in a partial withdrawal comply 
with the acreage requirements.


Sec. 3204.18  May I amend my offer?

    Yes, you may amend your offer prior to lease issuance provided your 
amended offer complies with all the lease offer requirements. BLM will 
give your amended offer a new priority based on the date we receive it.

Subpart 3205--Competitive Leasing


Sec. 3205.10  How does BLM lease competitive lands?

    BLM leases Federal lands within KGRAs through a sealed bid, 
competitive sale process. BLM generally establishes parcels of lands 
available for competitive leasing from terminated, expired, or 
relinquished leases and from public expressions of interest. BLM lists 
these parcels, with stipulations, if applicable, in a sale notice, 
posts the notice in an appropriate BLM office and publishes the notice 
for 3 consecutive weeks in a newspaper of general circulation in the 
area of the lands. The sale notice will tell you which lands are 
offered, and where and when to submit your bids. BLM can request you to 
pay the cost of publication, if you are awarded the lease.


Sec. 3205.11  How do I obtain information on the terms and conditions 
of the leases being offered through competitive bidding?

    BLM will post a statement which will include the terms and 
conditions of the lease(s), including the rental and royalty rates. The 
statement will also tell you where you may obtain a form on which to 
submit your bid.


Sec. 3205.12  How do I bid for a parcel?

    Unlawful combination or intimidation of bidders is prohibited by 18 
U.S.C. 1860. You must follow these procedures:
    (a) Submit your bid to the BLM office indicated in the notice prior 
to the date and time specified in the sale notice;
    (b) Submit your bid on Form 3000-2 (or exact copy);
    (c) Submit a bid in a separate, sealed envelope for each full 
parcel;
    (d) Include in each bid a certified or cashier's check, bank draft, 
or money order equal to one-fifth of the amount bid, payable to the 
``Department of the Interior, Bureau of Land Management;'' and
    (e) Label each envelope with the parcel number and the statement 
``Not to be opened before (date posted in the sale notice).''


Sec. 3205.13  What is the minimum acceptable bid?

    BLM will not accept bids which do not meet or exceed the fair 
market value as determined by BLM in accordance with generally 
acceptable appraisal methods. BLM determines the fair market value 
prior to the sale, but does not disclose it to the public.


Sec. 3205.14  How does BLM conduct the sale?

    On the date, and at the place and time set out in the sale notice, 
BLM opens, announces, and records bids. BLM does not accept or reject 
any bid at that time. Bidders are not required to attend the sale.


Sec. 3205.15  To whom does BLM issue the lease?

    BLM will issue the lease to the highest responsible qualified 
bidder within 30 days. If BLM determines that the highest bid is 
inadequate, BLM will reject the bid. BLM reserves the right to reject 
any and all bids.


Sec. 3205.16  How will I know if my bid is accepted?

    (a) BLM will send you a letter accepting your bid. The letter will 
be accompanied by 3 copies of the lease. Upon receipt of the letter and 
lease forms, you have 15 days in which to submit:
    (1) The signed lease forms;
    (2) The remaining four-fifths of the bonus bid;
    (3) The first year's advance rental; and
    (4) Signed stipulations, if applicable.
    (b) If you fail to comply with these requirements BLM will revoke 
acceptance of your bid and you will forfeit one-fifth of your bonus 
bid.


Sec. 3205.17   How will I know if my bid is not accepted?

    BLM will send a letter rejecting your bid. At that time, BLM will 
return the one-fifth of the bonus bid that you submitted with your 
application.

Subpart 3206--Lease Issuance


Sec. 3206.10   Are there any additional requirements prior to lease 
issuance?

    Yes.
    (a) You must:
    (1) Accept all lease stipulations;
    (2) Sign a unit joinder or waiver, if applicable; and
    (3) Comply with the maximum limits on acreage holdings.
    (b) BLM must:
    (1) Make a determination of land availability;
    (2) Make a determination that development on your lease will not 
significantly impact any significant

[[Page 52748]]

thermal feature within any of the following units of the National Park 
System:
    (i) Mount Rainier National Park;
    (ii) Crater Lake National Park;
    (iii) Yellowstone National Park;
    (iv) John D. Rockefeller, Jr. Memorial Parkway;
    (v) Bering Land Bridge National Preserve;
    (vi) Gates of the Arctic National Park and Preserve;
    (vii) Katmai National Park;
    (viii) Aniakchak National Monument and Preserve;
    (ix) Wrangell-St. Elias National Park and Preserve;
    (x) Lake Clark National Park and Preserve;
    (xi) Hot Springs National Park;
    (xii) Big Bend National Park (including that portion of the Rio 
Grande National Wild Scenic River within the boundaries of Big Bend 
National Park);
    (xiii) Lassen Volcanic National Park;
    (xiv) Hawaii Volcanoes National Park;
    (xv) Haleakala National Park;
    (xvi) Lake Mead National Recreation Area; and
    (xvii) Any other significant thermal features within National Park 
System Units which the Secretary may, after notice and public comment, 
in accordance with the criteria set out in 30 U.S.C. 1026(a)(3), add to 
the list of significant thermal features.


Sec. 3206.11   What is the maximum acreage I may hold?

    You may not hold, either directly or indirectly, more than 51,200 
acres in any one state, including any leases acquired under the 
provisions of sections 4(a)-4(f) of the Act. You are also not permitted 
to convert mineral leases, permits, applications for permits, or mining 
claims, pursuant to the provision of sections 4(a)-4(f) of the Act, 
into geothermal leases totaling more than 10,240 acres.


Sec. 3206.12   How does BLM compute acreage holdings?

    BLM will compute acreage holdings in the following manner:
    (a) If you own an undivided interest in a lease, your accountable 
acreage will be your proportionate part of the total lease acreage.
    (b) If you own stock in a corporation or a beneficial interest in 
an association which holds a geothermal lease, your accountable acreage 
will be your proportionate part of the corporation's or association's 
acreage; except no one will be charged with a pro rata share of any 
acreage holdings of any association or corporation unless the person is 
a beneficial owner of more than 10% of the stock of the corporation or 
the beneficial interest of the association.
    (c) If you own a royalty interest, record title, or operating 
rights, you will be charged with your proportionate percentage of the 
total lease acreage only. You will not be charged twice for the same 
lease or for different interests in the same lease. For example, if you 
own a 2% overriding royalty, 10% of the operating rights and 50% of the 
record title in a lease, you will be charged with 50% of the total 
lease acreage.


Sec. 3206.13   Am I charged for acreage if the United States owns only 
a fractional interest in the geothermal resources?

    Yes, you are charged with the same proportion as the United States 
owns of the mineral estate. For example, if you own 100% of record 
title in a 100 acre lease, and the United States owns 50% of the 
mineral estate, you are charged with 50 acres.


Sec. 3206.14   Are there any acreages which are not chargeable?

    BLM does not count acreage in any approved unit or cooperative plan 
or acreage subject to an operating, drilling or development contract 
other than communitization or drilling agreements, in determining 
accountable acreage of the lessees or operators.


Sec. 3206.15   What procedures does BLM follow when a party holds or 
controls excess accountable acreage?

    BLM will notify you of an excess acreage situation, and give you 90 
days to divest yourself of the excess acreage. If you fail to comply 
BLM will cancel your leases, beginning with the lease most recently 
issued, until your chargeable acreage is within the maximum allowable.


Sec. 3206.16   What is the primary term of my lease?

    Leases have a primary term of 10 years.


Sec. 3206.17   When will BLM issue my lease?

    Leases are issued the day they are signed by BLM, and are effective 
the first day of the month following the issue date.

Subpart 3207--Additional Lease Term


Sec. 3207.10   Under what circumstances is my lease eligible for an 
additional term beyond its primary term?

    A lease is eligible to be renewed for an additional term under the 
following conditions:
    (a) If you produce or use geothermal steam in commercial quantities 
within the primary term, the lease will continue for as long as 
geothermal steam is produced or used in commercial quantities. However, 
the additional term may not exceed forty years beyond the primary term 
unless the provisions of paragraph (c) of this section apply.
    (b) If, prior to the end of the primary term, you have a well 
capable of producing geothermal steam in commercial quantities, BLM may 
decide to continue the lease for an additional forty-year period, if we 
determine that you are making diligent efforts to commence production. 
You must submit to BLM a written description of the efforts completed 
for the lease year and the efforts planned for the next lease year 60 
days before the lease expires. Your submission should include 
descriptions of negotiations for sales contract, marketing 
arrangements, and electrical generating and transmission agreements and 
any other information you believe supports a finding of diligent 
efforts.
    (c) If at the end of the additional 40-year term, BLM does not need 
the lands for another purpose and you are producing geothermal steam in 
commercial quantities, you will have preferential right to renew the 
lease for an additional 40-year term under terms and conditions 
determined by BLM.

Subpart 3208--Extending the Current Lease Term


Sec. 3208.10   Under what circumstances is my lease eligible for an 
extension of the primary term?

    (a) A lease is eligible for an extension under the following 
circumstances:
    (1) If you commence drilling before the end of the primary term and 
diligently pursue drilling to a reasonable drilling target, as 
determined by BLM based on the local geology and type of development 
proposed by the operator, the lease will be extended for a 5-year 
period. If geothermal steam is produced or utilized during this 5-year 
period, the lease will be extended for a further period not to exceed 
35 years. If at the end of that 35-year period you are producing or 
utilizing geothermal steam in commercial quantities and the lands are 
not needed for other purposes, you will have a preferential right to 
renew the lease for an additional 40-year period under such terms and 
conditions as BLM determines are appropriate.
    (2) If the term of any lease committed to a unit agreement would 
expire prior to the term of the unit expiring, BLM will extend the term 
of the lease to match the term of the unit.
    (3) BLM may extend any lease which at the end of its primary term 
or at the end of an extension provided by either

[[Page 52749]]

paragraphs (a)(1) or (a)(2) of this section is not producing geothermal 
steam, for up to 10 years in successive five-year extensions.
    (4) If you have a lease which produced geothermal steam, and BLM 
determines that it is no longer capable of commercial production, BLM 
may extend the lease for a 5-year period. This extension will only 
continue if you are producing one or more valuable byproducts in 
commercial quantities. You should consult 43 CFR 3209.10 if you wish to 
convert your lease to a mineral lease for the byproduct.
    (b) For an explanation of the difference between an ``additional 
term'' and an ``extended term'' please see the definitions in 43 CFR 
3200.1.


Sec. 3208.11   What procedures must I follow to obtain an extension of 
my lease?

    (a) If you are obtaining an extension under 43 CFR 3208.10 (a)(2) 
or (a)(4), you need not take any action. BLM will grant your lease the 
applicable extension. If your lease is eligible for the extension under 
43 CFR 3208.10(a)(1), you should notify BLM of your drilling activities 
so we may document that you conducted the required drilling at the end 
of the primary term of your lease.
    (b) If you are requesting an extension under 43 CFR 3208.10(a)(3), 
you must:
    (1) Submit a written request to BLM for lease extension 60 days 
prior to the end of the primary or extended term of your lease;
    (2) Include a report documenting that you have made bona fide 
efforts to produce or utilize geothermal resources in commercial 
quantities given the current economic conditions for marketing 
geothermal steam; and
    (3) Indicate whether you choose to make payments in lieu of 
commercial quantities production or to make significant expenditures 
during the period of extension.
    (c) Within 30 days of receipt of your request for extension, BLM 
will notify you whether the request is approved or disapproved, or we 
will request additional information from you, if necessary.


Sec. 3208.12   What information must I include in the report to 
document that I have made bona fide efforts?

    The report must include a description of:
    (a) Operations conducted during the primary term of the lease and 
currently in progress to identify and define the geothermal resource on 
the lease;
    (b) A summary of the results of those operations;
    (c) Actions taken in support of operations such as obtaining 
permits, conducting environmental studies, meeting permit requirements 
or other related activities;
    (d) Actions taken during the primary term of the lease and 
currently in progress to negotiate marketing arrangements, sales 
contracts, drilling agreements, financing for electrical generation and 
transmission projects, or other related actions; and
    (e) Current economic factors and conditions which affect your 
efforts to produce or utilize geothermal resources in commercial 
quantities on the lease.


Sec. 3208.13   What will BLM do if I choose to make payments in lieu of 
commercial operation?

    If you elect to make payments in lieu of commercial quantities 
production and BLM approves the extension, BLM will modify the lease to 
require that you make an annual payment in lieu of production in the 
amount specified by BLM, but not less than $3.00 per acre or fraction 
of an acre of the lands under lease during an initial extension, or 
$6.00 per acre or fraction of an acre for a subsequent extension. The 
actual payment per acre is fixed for the period of the extension. If 
you request it, BLM will inform you of the rate before you submit your 
petition for extension. You must submit in lieu payments to MMS at the 
same time you pay the lease rental. The lease is subject to 
cancellation if you do not make these payments.


Sec. 3208.14   What will BLM do if I choose to make significant 
expenditures?

    If you elect to make significant expenditures, and BLM approves the 
extension, we modify the lease to require you to make annual 
expenditures of at least $15.00 per acre or fraction of an acre for 
lands under lease during an initial extension. You must have 
expenditures of $18.00 per acre or fraction of an acre during a 
subsequent extension. BLM credits expenditures you make in excess of 
the minimum required to subsequent years within the same period of 
extension. Expenditures that qualify as significant expenditures are 
limited to those involving actual drilling operations on the lease, 
geochemical or geophysical surveys for exploratory or development 
wells, road or generating facility construction on the lease, 
architectural or engineering services procured for the design of 
generating facilities located on the lease, and environmental studies 
required by State or Federal law. To obtain credit toward meeting the 
significant expenditure requirement, you must submit to BLM a report of 
qualifying expenditures no later than 60 days after the end of the 
lease year in which the expenditures were made. BLM may cancel your 
lease if you fail to make such expenditures.


Sec. 3208.15   May I change my election of making payments in lieu of 
commercial quantities or making significant expenditures during the 
extension?

    No. You may not change election during a period of extension, but 
must continue either to make payments in lieu of production or make 
significant expenditures until you drill a well that is capable of 
producing geothermal resources in commercial quantities.

Subpart 3209--Conversion of Lease Producing Byproducts


Sec. 3209.10   May I convert my geothermal lease to a mineral lease?

    Yes, you may under the following conditions:
    (a) If you have received a 5-year extension under subpart 3208 and 
the byproducts being produced are leasable under the Mineral Leasing 
Act of February 25, 1920, as amended (30 U.S.C. 181 et seq.), or under 
the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-358), and the 
lease is primarily valuable for the production of that mineral, you are 
entitled to convert your geothermal lease to a mineral lease, provided 
you convert your lease prior to the end of the 5-year period. You will 
be subject to all the terms and conditions of the act permitting 
leasing of the mineral.
    (b) If the minerals are not leasable but are locatable and would be 
considered a byproduct if geothermal steam production were to continue, 
you are entitled to locate these minerals under the mining laws. To 
acquire these rights, you must complete the location of the mining 
claim within 90 days after the termination of the geothermal lease, as 
long as there has been no intervening location and the lands are open 
to entry under the mining laws.
    (c) If leases converted under either paragraphs (a) or (b) of this 
section affect lands withdrawn or acquired in aid of a function of a 
federal department or agency, including the Department of the Interior, 
you may be subject to additional terms and conditions as prescribed by 
the appropriate agency.

Subpart 3210--Additional Lease Information


Sec. 3210.10   When does lease segregation occur?

    (a) Lease segregation occurs when:
    (1) A portion of a lease is committed to a unit agreement, 
communitization agreement, drilling agreement, or

[[Page 52750]]

cooperative plan, and a portion of the lease is not committed; or
    (2) Only a portion of a lease is located in a participating area 
and the unit contracts. The portion of the lease outside the 
participating area is eliminated from the unit agreement and segregated 
as of the effective date of the unit agreement.
    (b) The portion of the lease within the plan or agreement will keep 
the same serial number. BLM will give the portion outside the plan or 
agreement a new serial number with the same lease terms as the original 
lease.


Sec. 3210.11   Is a lease segregated from an agreement or plan eligible 
for an extension?

    No. The new lease will stand alone, and will not receive any of the 
benefits provided to the original lease by virtue of the agreement or 
plan. The eliminated portion of the lease is not eligible for extension 
due to production in commercial quantities, or the existence of a 
producible well on the lands remaining in the agreement or plan, or by 
virtue of the segregation.


Sec. 3210.12   May I consolidate leases?

    BLM may approve the consolidation of two or more contiguous leases 
that have the same ownership and same lease terms, as long as the 
combined leases do not exceed 2,560 acres in size.


Sec. 3210.13   What is the diligent exploration requirement?

    Diligent exploration is a lease requirement to perform activities 
which derive new geologic information regarding the lease or related 
lands. You must conduct diligent exploration beginning in the sixth 
year of the primary term until there is a well capable of commercial 
production. Some examples of activities that would qualify as diligent 
exploration are geochemical surveys, heat flow measurement, core 
drilling or drilling of test drill wells.


Sec. 3210.14   How do I meet the diligent exploration requirement?

    (a) During the first 5 years of the primary term, you only need to 
pay your rentals. If you conduct activities during these first five 
years that would otherwise qualify as diligent exploration 
expenditures, and BLM approves them as such during those five years, 
BLM will count them toward the requirements of future years.
    (b) To qualify as diligent exploration expenditures in lease years 
6 through 10, you must make expenditures equal to the minimum amounts 
set forth in the table below. BLM will apply approved expenditures in 
excess of the requirement in any one year to subsequent years.

------------------------------------------------------------------------
                                                             Expenditure
                         Lease year                            per acre 
------------------------------------------------------------------------
6..........................................................         $4  
7..........................................................          6  
8..........................................................          8  
9..........................................................         10  
10.........................................................         12  
------------------------------------------------------------------------

    (c) To obtain credit for the expenditures you must submit a report 
to BLM no later than 60 days after the end of the lease year in which 
you made the expenditures. You must include the following information 
in your report:
    (1) The types of operations conducted;
    (2) The location of the operations;
    (3) When the operations occurred;
    (4) The amount of money spent conducting those operations; and
    (5) All geologic information obtained from your operations.
    (d) After BLM reviews your report, we will notify you in writing 
whether you have met the diligent expenditure requirement. BLM must 
approve the type of work done and the expenditures claimed in your 
report before they will be credited toward your diligent exploration 
requirements.


Sec. 3210.15  Is there an option to performing diligent exploration?

    Yes. If you do not wish to conduct diligent exploration or if your 
total expenditures do not fully meet the requirement for any lease 
year, you may meet the diligent exploration requirement by paying an 
additional rental of $3 per acre or fraction of an acre. If you choose 
this option, you must submit the additional rental to MMS prior to the 
end of the lease year.


Sec. 3210.16  What happens if I don't meet the diligence requirement or 
pay the additional rental?

    BLM will cancel your lease if you fail to perform and report the 
necessary operations and expenditures or pay the additional rental for 
each lease year prior to the end of that lease year.


Sec. 3210.17  Can leases or locations for other mineral commodities 
occur on the same lands that my geothermal lease is located?

    Yes. The United States reserves the ownership of and the right to 
extract helium, oil and hydrocarbon gas from all geothermal steam and 
associated geothermal resources. In addition, mineral leasing or 
location is allowed on the same lands that are leased for geothermal 
resources, provided that operations under the mineral leasing or mining 
laws do not unreasonably interfere with or endanger geothermal 
operations, and the lands are not withdrawn.


Sec. 3210.18  May BLM readjust the terms and conditions of my lease?

    Yes. Ten years after the commencement of production from your lease 
and at not less than 10-year intervals thereafter, BLM may readjust the 
terms and conditions of your lease as they pertain to stipulations and 
surface disturbance requirements. If the readjustment pertains to use, 
protection or restoration of the surface and the lands are managed by 
another federal agency, that agency must approve the adjustments.


Sec. 3210.19  How will BLM readjust the terms and conditions of my 
lease?

    BLM will provide you with a written proposal for adjustment of the 
terms and conditions of your lease. You have 30 days to object to the 
new terms or relinquish your lease. If BLM does not receive an 
objection, these terms will become part of your lease.


Sec. 3210.20  May BLM readjust the rental and royalty rates of my 
lease?

    Yes. Your lease rates are subject to readjustment at not less than 
20-year intervals beginning thirty-five years after BLM determines that 
your lease is producing. Your rental and royalty will not be increased 
by more than 50 percent of what was paid during the preceding period. 
In no case will BLM raise the royalty rate beyond 22\1/2\ percent. You 
will be provided with written notice of BLM's proposed adjustments. If 
you do not object to the adjustment or relinquish your lease within 30 
days of receipt of the notice, the new rate will become a part of your 
lease.


Sec. 3210.21  What happens if I object to the proposed readjusted terms 
and conditions or rental and royalty rates?

    BLM will issue a decision responding to your objections. If we 
cannot reach an agreement within a 60-day period, either party may 
terminate the lease.


Sec. 3210.22  What lease obligations am I accountable for during 
readjustment negotiations?

    If you object to the proposed terms and conditions of your lease, 
you are still bound by the current lease terms. To avoid termination of 
the lease, you must pay the proposed rentals and royalties timely, 
under protest. If we reach an agreement on rentals that differs from 
BLM's proposal, BLM will refund the difference.

[[Page 52751]]

Sec. 3210.23  When do the readjusted terms become effective?

    The new terms and conditions will be effective at the end of the 
prior term.


Sec. 3210.24  Must I prevent the drainage of geothermal resources from 
my lease?

    Yes. You must prevent the drainage of geothermal resources from 
your lease by either:
    (a) Diligently drilling and producing wells which will protect the 
Federal geothermal resource from loss caused by production from other 
properties; or
    (b) Paying a sum determined by BLM as adequate compensation for 
failure to drill and produce any wells necessary to protect the Federal 
resource. BLM must agree to your use of this option.

Subpart 3211--Fees, Rentals, and Royalties


Sec. 3211.10  What are the filing fees, rentals, and royalties for 
leases?

    Rental and royalty payments are calculated based on the acreage 
amount. Therefore, prior to calculating rental and minimum royalty 
payments, you must determine the acreage amount. You must round up 
partial acreage to the next whole acre. You would then multiply the 
rounded acreage by the appropriate amount set out in the following 
chart to determine the amount you owe. Example: Rental on a lease 
containing 2,456.39 acres is calculated based on 2,457.00 acres.

                   Filing Fees, Rentals, and Royalties                  
------------------------------------------------------------------------
            Type                   Competitive         Non competitive  
------------------------------------------------------------------------
Lease Filing Fee............  N/A.................  $75.00.             
Lease Rental................  $2.00 per acre......  $1.00 per acre.     
Lease Assignment Filing Fee.  $50.00..............  $50.00.             
Royalties:                                                              
    steam, heat, or energy..  between 10% and 15%.  between 10% and 15%.
    demineralized water.....  5%..................  5%                  
    byproducts..............  5% a................  5% a.               
    minimum royalty.........  $2.00 per acre......  $2.00 per acre.     
Additional rental/In lieu of  $3.00 per acre in     $3.00 per acre in   
 diligent exploration.         addition to regular   addition to regular
                               lease rental.         lease rental.      
Additional rental/In lieu of  $3.00 per year/first  $3.00 per year/first
 commercial quantities         5 years, $6.00 per    5 years, $6.00 per 
 production.                   year/second 5 years.  year/second 5      
                                                     years.             
------------------------------------------------------------------------
a Note the exception stated in 43 CFR 3211.17(b).                       

Sec. 3211.11  When is my annual rental payment due?

    (a) You must submit your annual rental payments so they are 
received by BLM or MMS, as appropriate, on or before the anniversary 
date of each lease year. There is no grace period for rental payments. 
If the rental for your lease is not timely paid, the lease will 
automatically terminate by operation of law, unless you meet the 
conditions of 43 CFR 3213.15 of this part. Rental payments are 
considered timely received if they are postmarked by the United States 
Postal Service, common carrier, or their equivalent, on or before the 
anniversary of the lease. This does not include private postal meters. 
If less than a full year remains on a lease, you are still responsible 
for paying a full year's rental on or before the anniversary date of 
the lease.
    (b) When BLM terminates a lease suspension (see subpart 3212 of 
this part) and you had paid rent in advance, BLM applies a prorated 
amount to the annual rental or minimum royalty to complete the lease 
year requirement and return to the next anniversary date. BLM applies 
any remaining monies to the next year's rental. You must pay the 
balance due on or before the next anniversary date to fulfill your 
rental obligation for the next year. If you relinquish the lease, or 
fail to pay the balance due on or before the next anniversary date, BLM 
will refund the outstanding monies. If there is insufficient rental to 
complete payment on the lease year (i.e., to return the next 
anniversary date), BLM will notify you of payment due and grant you 30 
days from receipt of the notification to remit the balance.
    (c) If payment is due on a day in which the designated payment 
office is closed, payment received on the next official working day is 
considered timely.


Sec. 3211.12  How and where do I submit my rental payment?

    You must pay BLM the first year's advance rental. You must pay 
subsequent rentals, royalties, and in lieu payments to MMS. Payments 
may be made to the BLM in the form of personal or cashier's check or 
money order and should be made payable to the Department of the 
Interior--Bureau of Land Management. You may also make payments by 
credit card or electronic funds transfer when specifically authorized 
by BLM. Payments to the MMS by personal or cashier's check, money 
order, or electronic funds transfer, should be made payable to the 
Department of the Interior--Minerals Management Service.


Sec. 3211.13  Is there a different rental or minimum royalty amount for 
a fractional interest lease?

    BLM will not prorate rentals and minimum royalties payable under 
leases for lands in which the United States owns only a fractional 
mineral interest. You must pay for the full acreage in the lease.


Sec. 3211.14  Prior to production, am I expected to pay rental if my 
lease is committed to an approved cooperative or unit plan?

    Yes. You are expected to pay rental in accordance with 43 CFR 
3211.10.


Sec. 3211.15  When unit production starts, am I expected to pay rental 
if my lease is committed to an approved cooperative or unit plan?

    As soon as production is established on your lease, lands included 
in an approved cooperative or unit plan, which are within the 
participating area, are subject to royalties in accordance with 43 CFR 
3211.17. All other unitized lands remain subject to rental in 
accordance with 43 CFR 3211.10.


Sec. 3211.16  Will I always pay rental on my lease?

    No, you are required to pay rentals only until you achieve 
production in commercial quantities. At that time the lease converts to 
royalty status.

[[Page 52752]]

Sec. 3211.17  What are the possible royalty rates of my lease?

    (a) BLM will set out the royalty rate in the lease. BLM will 
determine the royalty rate based on the following:
    (1) The royalty rate for heat or energy derived from lease 
production may range from 10-15% of the heat or energy value.
    (2) The royalty rate for the value of byproducts derived from 
production under the lease and sold or utilized or reasonably 
susceptible to sale or utilization may not exceed 5%, except that the 
royalty rate for minerals listed in section 1 of the Mineral Leasing 
Act (MLA), 30 U.S.C. 181, will be the same as that provided in the MLA.
    (3) The royalty rate for demineralized water produced on a lease 
may not exceed 5%, except that BLM will not charge a royalty for water 
used in the operations of a utilization facility.
    (4) The minimum royalty rate on a producing lease is $2.00 per 
acre.
    (b) Occasions when the minimum royalty rate might apply are when an 
initial positive well commerciality determination is made but actual 
production has not yet begun, or when the value of actual production is 
so low that royalty due under the applicable schedule (in paragraphs 
(a)(1) through (a)(3) of this section) is less than $2.00 per acre.

Subpart 3212--Suspension of Operations or Operations and Production


Sec. 3212.10  May I obtain a suspension of operations or operations and 
production on my lease, and if so, for what reasons?

    The operator may request in writing that BLM place a producing 
lease in suspension. Your request must fully describe the need for the 
suspension. BLM, on its own, may suspend operations on any lease in the 
interest of conservation. The suspension may include leases committed 
to an approved unit agreement. Suspending the leases in a unit does not 
affect unit obligations.


Sec. 3212.11  When is a lease suspension effective or terminated?

    (a) A suspension will take effect and will last for the period 
specified by BLM. Prior to the expiration of the time specified, you 
may request in writing that BLM lift the suspension. If BLM agrees to 
lift the suspension and permit you to resume operations, you must also 
resume payment of rentals and royalty, as applicable.
    (b) BLM may, upon information obtained by or furnished to BLM, 
order the resumption of operations, if BLM determines that the 
operations are necessary to protect the interests of the United States.


Sec. 3212.12  How does a suspension affect the lease terms?

    An approved suspension stays all lease obligations. You do not have 
to conduct drilling, produce thermal steam or pay rents or royalties. 
The time during which the suspension is effective does not count toward 
the lease term.


Sec. 3212.13  What happens when the suspension is lifted or removed?

    When BLM lifts a suspension, we extend the lease term by adding the 
number of days the lease was under suspension to the term. BLM suspends 
rental or minimum royalty payments the first day of the lease month 
following the effective date of the suspension. Your obligation to 
resume these payments begins on the first day of the lease month in 
which BLM lifts the suspension.


Sec. 3212.14  May BLM reduce or suspend the royalty or rental rate of 
my lease?

    Yes, if you submit an application requesting a waiver, suspension 
or reduction of your rent or royalty, BLM may grant the request if it 
determines the following:
    (a) It is in the interests of conservation;
    (b) Doing so will encourage the greatest ultimate recovery of 
resources;
    (c) It is necessary to promote development; or
    (d) The lease cannot be successfully operated under the current 
lease terms.


Sec. 3212.15  What information must I submit when requesting a 
reduction or suspension of the royalty or rental rate of my lease?

    (a) Your request must include:
    (1) The type of reduction being requested;
    (2) The serial number of the lease;
    (3) The name of the lessee and operator;
    (4) The number, location, and status of each well;
    (5) A summary of monthly production from the lease during the last 
6 months;
    (6) A detailed statement of expenses and costs, and all facts 
necessary for BLM to determine if the well can be operated under its 
current terms; and
    (7) Any other information requested by BLM.
    (b) If the application is for a reduction in royalty, you must also 
submit a list of names and amounts of royalties or payments out of 
production paid to each individual, and every effort you have made to 
reduce these payments.

Subpart 3213--Relinquishment, Termination, Cancellation, and 
Expiration


Sec. 3213.10  Who may relinquish a lease?

    The record title holder or its authorized agent may relinquish a 
lease in full or in part, and must sign the relinquishment. If there is 
more than one record title holder to a lease, all record title holders 
or their authorized agents must sign the relinquishment.


Sec. 3213.11  What form must I submit to relinquish a lease?

    You must submit a written request to BLM that includes the serial 
number of each lease you are relinquishing. If you are relinquishing 
the entire lease, no legal description of the land is required. If you 
are relinquishing part of the lease, you must describe the lands 
relinquished.


Sec. 3213.12  Can BLM accept a partial relinquishment resulting in less 
than 640 acres?

    BLM may not accept a partial relinquishment that reduces the lease 
acreage to less than 640 acres or all of the land in the section if 
less than 640 acres is available. BLM may waive the minimum acreage 
provision found at 43 CFR 3204.14, if BLM determines that an exception 
is justified to further development of the resource.


Sec. 3213.13  When does my relinquishment take effect?

    Once approved by BLM, your relinquishment takes effect as of the 
date it is filed, provided that you and your surety have fulfilled your 
obligations to:
    (a) Pay all rentals and royalties due prior to relinquishment;
    (b) Plug and abandon all wells on the relinquished land; and
    (c) Restore the surface resources and comply with environmental 
stipulations in accordance with all applicable laws and regulations and 
lease terms.


Sec. 3213.14   How does a lease terminate?

    A lease terminates under the following conditions:
    (a) If you fail to produce or commence production prior to the end 
of the primary term or obtain an extension, the lease terminates at the 
end of that period; or
    (b) If you fail to pay the rental on or before the anniversary 
date, the lease automatically terminates by operation of law, unless 
you meet the conditions of 43 CFR 3213.15.


Sec. 3213.15   What if I don't pay the entire amount of rental due?

    If your payment is received timely, but is deficient by a nominal 
amount,

[[Page 52753]]

your lease will not automatically terminate. A nominal amount is not 
more than $100 or 5% of the total payment due, whichever is less. BLM 
will notify you if your payment is deficient and will set a date by 
which the deficient payment must be made. Failure to submit the 
deficiency in the time allowed will result in lease termination as of 
its anniversary date.


Sec. 3213.16   Will BLM notify me if my lease terminates?

    Yes, BLM will send a notice by certified mail, return receipt 
requested.


Sec. 3213.17   Can my lease be reinstated? If so, how?

    Yes, if the lease was terminated for failure to timely pay your 
rentals. You will be given 30 days to petition for reinstatement.


Sec. 3213.18   Who may petition to reinstate a lease?

    Every record title holder of the lease must sign a petition for 
reinstatement.


Sec. 3213.19   What must I do to obtain a reinstatement?

    You must submit a petition to BLM requesting reinstatement. The 
petition should include the serial number for each lease and state your 
reason for late payment. You must also submit the rental, including any 
back rental which has accrued from the date of termination with your 
petition, if you have not already paid it to MMS. You must also include 
an explanation of why the delay in payment was justifiable and not due 
to a lack of diligence.


Sec. 3213.20   Are there reasons why BLM would not approve a 
reinstatement?

    Yes, BLM will not approve a reinstatement if:
    (a) You do not prove that failure to pay rent on or before the 
anniversary date was justifiable or was not due to a lack of diligence 
on the part of the lessee;
    (b) A valid lease has been issued for any of the lands prior to the 
filing of a petition for reinstatement (BLM will not issue another 
lease for at least 90 days after the date of termination); or
    (c) The land has become unavailable for leasing.


Sec. 3213.21   When will my lease expire?

    A lease expires at the end of its primary term (10 years) unless it 
meets requirements for an extended or additional term. BLM will not 
notify you when your lease expires at the end of the primary term.


Sec. 3213.22   Will BLM notify me when my lease expires if it is in an 
extended term?

    BLM will notify the lessee by decision that BLM has determined that 
diligent efforts are not being made to use the geothermal resources. 
The lease will expire 30 days after you receive the decision. During 
those 30 days, you may request reconsideration of the decision by 
submitting information detailing why you believe you have made diligent 
efforts to use the resource.


Sec. 3213.23   May BLM cancel my lease?

    BLM may cancel a lease after 30 days notice if we determine that 
you violated the laws and regulations governing geothermal leases and 
operations or you violated the lease terms. BLM may also cancel a lease 
that was issued in error.


Sec. 3213.24   When is a cancellation effective?

    (a) If cancellation is due to a violation of the laws, regulations 
or lease terms, the cancellation is effective 30 days from your receipt 
of notification of the violation. The cancellation of a lease issued in 
error is effective upon issuance of the notice of cancellation. BLM 
will not cancel the lease if:
    (1) You have corrected the violation; or
    (2) BLM determines that the violation can not be corrected during 
the 30 day period and BLM determines you are making a good faith 
attempt to timely correct the violation.
    (b) You may request an evidentiary hearing regarding the violation 
or proposed lease cancellation within 30 days from receipt of the 
violation notification, in accordance with 43 CFR parts 4 and 1840. If 
a hearing occurs and the administrative law judge decides a violation 
occurred, you will have 30 days from receipt of the decision to 
commence or complete any corrective action.

Subpart 3214--Personal and Surety Bonds


Sec. 3214.10   Who must post a geothermal bond?

    The lessee, operating rights owner, or operator must file a bond 
prior to the commencement of exploration operations, drilling 
operations or whenever the operator is changed.


Sec. 3214.11   Who is covered by the bond?

    The principals named on the bond and any other parties the 
principal or surety has consented to cover are covered by the bond.


Sec. 3214.12   What does my bond cover?

    Your bond covers all surface disturbing and down hole activities 
related to drilling and associated operations on a Federal lease, 
reclamation, payment of rentals and royalties, performance of all other 
lease terms and conditions, and compliance with all applicable laws and 
regulations.


Sec. 3214.13   What is the minimum dollar amount required under each 
type of operation bond?

    (a) For exploration activities, the bond may not be less than 
$5,000 for each operation;
    (b) For an individual lease, the bond may not be less than $10,000 
for each lease;
    (c) For a statewide bond which covers all of your leases and 
operations in any one state, the amount may not be less than $50,000; 
or
    (d) For a nationwide bond which covers all of your leases and 
operations nationwide, the amount may not be less than $150,000.


Sec. 3214.14   What kind of financial guarantee will BLM accept to back 
my bond?

    BLM will accept:
    (a) Corporate surety bonds, provided that the surety company is 
approved by the Department of Treasury (see Department of the Treasury 
Circular No. 570 which is published in the Federal Register every year 
on or about July 1); and
    (b) Personal bonds, which are guaranteed by a cashier's check, 
certified check, certificate of deposit, negotiable securities such as 
Treasury notes, or irrevocable letter of credit (see 43 CFR 3214.22). 
BLM will not accept cash to back a bond.


Sec. 3214.15   Is there a special bond form I must use?

    You must use a bond Form (Form 3000-4, June 1988 or later editions) 
approved by BLM for either a corporate surety bond or a personal bond.


Sec. 3214.16   Where must I submit my bond?

    You must file personal or corporate surety bonds and statewide 
bonds in the BLM State Office having jurisdiction over your lease or 
operations. You may file nationwide bonds in any BLM State Office. You 
must file bond riders in the BLM State Office where your bond is 
located. For personal or corporate surety bonds you must file a single, 
originally signed copy of the bond.


Sec. 3214.17   Who will BLM hold liable under the bond and what are 
they liable for?

    All interest owners in a lease assume full liability, jointly and 
severally, from the effective date of the lease for compliance with all 
applicable laws, regulations, lease terms and conditions. Among other 
things, all interest owners are liable for:

[[Page 52754]]

    (a) Well plugging and abandonment;
    (b) Surface reclamation;
    (c) Outstanding rental or royalty payments;
    (d) Assessed royalties to compensate for drainage; and
    (e) Other requirements related to operations on the lease.


Sec. 3214.18   What are my bonding requirements when a lease interest 
is transferred to me?

    (a) If the lands transferred to you contain a well or any other 
surface disturbing activity which was not reclaimed by the original 
lessee, you must post a bond. The bond must cover all of the 
transferee's liability, and those holding an interest or engaging in 
operations on the lease.
    (b) If you previously furnished a statewide or nationwide bond, you 
do not need to post an additional bond.
    (c) If the operator provided the original bond, and the operator 
does not change, you do not need to post a new bond.
    (d) If the original lessee does not transfer all interest in the 
lease to you, you may become a co-principal on the original bond.


Sec. 3214.19   How do I modify or extend the terms and conditions of my 
bond?

    You may modify your bond by submitting a rider to the BLM State 
Office where your bond is held. There is no special form required.


Sec. 3214.20   Can BLM ever increase the bond amount above the 
minimums?

    Yes. BLM may increase the bond amount beyond the minimums set out 
in 43 CFR 3214.13, if those amounts will not cover the estimated costs 
of plugging and abandoning wells, abandoning utilization facilities, 
and/or performing surface reclamation. BLM may also increase the amount 
of your bond if BLM determines that:
    (a) The liability on the lease exceeds the amount of the bond; or
    (b) The operator has a history of noncompliance.


Sec. 3214.21   Where can I get a certificate of deposit or a letter of 
credit?

    You must obtain a certificate of deposit or letter of credit 
through a Federally insured financial institution authorized to do 
business in the United States.


Sec. 3214.22  What special requirements are there if I want to use a 
certificate of deposit to back my bond?

    Your certificate of deposit must:
    (a) Be issued by a federally insured financial institution;
    (b) Include on its face the statement, ``The Secretary of the 
Interior or his delegate must approve redemption of this certificate by 
any party'';
    (c) Not expire;
    (d) Automatically renew; and
    (e) Show it is payable to the Department of the Interior--Bureau of 
Land Management.


Sec. 3214.23  What special requirements are there if I want to use a 
letter of credit to back my bond?

    Your letter of credit must:
    (a) Be issued by a federally insured financial institution 
authorized to do business in the United States;
    (b) Be payable to the Department of the Interior--BLM;
    (c) Be irrevocable during its term and have an initial expiration 
date of not less than one year following the date BLM receives it;
    (d) Be automatically renewable for a period of not less than one 
year, unless the issuing financial institution provides BLM with 
written notice that it will no longer be renewed at least 90 days 
before the letter of credit expires; and
    (e) Include a clause that grants the Secretary authority to demand 
immediate payment, if you fail to meet your obligations under the 
regulations and lease terms.

Subpart 3215--Bond Collection After Default


Sec. 3215.10  In what circumstances does BLM collect on a bond?

    If you fail to meet your obligations under the regulations or the 
lease terms, BLM may collect up to the face amount of the bond. 
Examples of some activities that may result in forfeiture of the bond 
are failure to:
    (a) Properly plug and abandon a well;
    (b) Reclaim the lease area;
    (c) Pay outstanding rental and royalty payments;
    (d) Pay assessed royalties to compensate for drainage; and,
    (e) Meet other requirements related to lease operations.


Sec. 3215.11  As the principal on the bond, may BLM require me to 
restore the face amount of my bond or require me to replace my bond 
after BLM collects on default?

    Yes. If the bond is reduced or fully depleted, you must either:
    (a) Post a new bond of equal value; or
    (b) Restore the existing bond to the amount previously held, before 
continuing any operations on the lease.


Sec. 3215.12  What if I do not restore the face amount or file a new 
bond?

    BLM may initiate action to shut-in any well(s) and proceed to 
cancel all of your leases covered by the subject bond.


Sec. 3215.13  When will BLM cancel or terminate my bond?

    (a) BLM does not cancel or terminate bonds. However, BLM will:
    (1) Terminate the period of liability of a surety or other provider 
of a bond at any time. The bond provider must provide 30 days' notice 
to BLM and to the principals whose obligations are secured. You may not 
conduct any operations after a bond is terminated, without providing a 
new bond satisfactory to BLM. BLM will also terminate the period of 
liability on an old bond once a new bond has been filed and BLM accepts 
it; and
    (2) Release your bond when we have determined, after the passage of 
a reasonable period of time, that you have paid all royalties, rentals, 
penalties, and assessments, satisfied all permit or lease obligations, 
reclaimed the site, and taken effective measures to ensure that the 
mineral prospecting or development activities will not have an adverse 
effect on surface or subsurface resources.
    (b) Any release of the bond does not release or waive any claim the 
BLM may have against any person under the Comprehensive Environmental 
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 
9601 et seq., or under any other applicable laws or any regulations.

Subpart 3216--Transfers


Sec. 3216.10  What types of lease interests can I transfer?

    You can transfer record title, operating rights, or overriding 
royalty interests.


Sec. 3216.11  Where and when am I required to file a transfer of 
interest?

    You must file your transfer in the BLM State Office in which your 
lease is located if:
    (a) You are conveying any interest in your lease;
    (b) An interest holder dies; or
    (c) A corporate merger or name change occurs.


Sec. 3216.12  When does a transferee assume responsibility for lease 
obligations?

    Upon BLM's approval of your transfer, the transferee assumes full 
liability for performance of all lease obligations incurred after the 
date of the transfer.


Sec. 3216.13  What are the responsibilities of the transferor?

    The transferor remains responsible for payment of rents and 
royalties accrued prior to the transfer, payment due to any drainage, 
and all lease obligations that accrued prior to the transfer.

[[Page 52755]]

Sec. 3216.14  Are there required filing fees and forms associated with 
filing my transfer?

    Yes. The following table identifies filing requirements:

----------------------------------------------------------------------------------------------------------------
        Type of transfer             Form required        Form number      Number of copies       Filing fee    
----------------------------------------------------------------------------------------------------------------
Record Title....................  Yes...............  3000-3............  3 executed copies.  $50.00            
Operating Rights................  Yes...............  3000-3(a).........  3 executed copies.  $50.00            
Overriding Royalty..............  No................  Form 3000-3 or in   2 executed copies.  $50.00            
                                                       letter form.                                             
Estate Transfers................  No................  N/A...............  1 List of Leases..  None              
Corporate Mergers...............  No................  N/A...............  1 List of Leases..  None              
Name Changes....................  No................  N/A...............  1 List of Leases..  None              
----------------------------------------------------------------------------------------------------------------

Sec. 3216.15  Is there a required time frame for filing requests for 
approvals of transfers?

    Yes.
    (a) You must file a request for approval of transfers of record 
title, operating rights, and overriding royalty within 90 days from the 
date the transferor signs the document. If you do not file the request 
within the 90 days, BLM may require you to recertify that the transfer 
is still in force and effect.
    (b) No specific time frame is required for filing estate transfers, 
corporate mergers, and name changes. However, such documents must be 
filed within a reasonable time.


Sec. 3216.16  Must I file separate requests for approval of transfers 
for each lease?

    Yes. You must file a separate request for approval of transfer for 
each lease involving transfers of record title or operating rights, 
unless you are transferring rights on more than one lease to the same 
entity. In that case, you may file just one transfer application.


Sec. 3216.17  Where must I file estate transfers, corporate mergers and 
name changes?

    (a) If you hold a bond for any Federal lease, you must file estate 
transfers, corporate mergers, and name changes in the BLM State Office 
that maintains your bond.
    (b) If you do not hold a bond, you must file estate transfer, 
corporate merger and name change documents in the State Office having 
jurisdiction over the lease.


Sec. 3216.18  How do I describe the lands in my lease transfer?

    (a) If you are transferring the entire lease, a legal description 
of the land is not required.
    (b) If you are transferring a portion of the lease, describe the 
lands in the same manner as they are described on the lease.


Sec. 3216.19  Can I transfer record title interest for less than 640 
acres?

    BLM will not approve a record title assignment in whole or in part 
if the lease size is reduced to less than 640 acres, unless the total 
acreage in the lease includes an irregular subdivision. BLM may make an 
exception to the minimum acreage provision found at 43 CFR 3204.14, if 
it is necessary to conserve the resource.


Sec. 3216.20  When does an assignment segregate a lease?

    If you assign 100% of the record title interest in a portion of 
your lease, BLM segregates the assigned portion from the original lease 
and gives it a new serial number with the same terms and conditions as 
those in the original lease.


Sec. 3216.21  When is my assignment/transfer effective?

    Your transfer or assignment becomes effective the first day of the 
month following its approval by BLM.


Sec. 3216.22  Does BLM grant all requests for approval of transfer?

    No. BLM will not approve a transfer if the lease account is not in 
good standing or the transferee does not qualify to hold a lease under 
this part.

Subpart 3217--Cooperative Conservation Provisions


Sec. 3217.10  What is the purpose of unit agreements and cooperative 
plans?

    Lessees enter into a unit agreement or a cooperative plan to 
conserve the resources of any geothermal field or area. Conservation of 
the resource is achieved by collectively developing and operating a 
geothermal field or area. BLM will not approve unit agreements which 
BLM determines are not in the public interest. Unit agreement 
application procedures are provided in 43 CFR part 3280.


Sec. 3217.11  What is the purpose for communitization or drilling 
agreements?

    Communitization or drilling agreements provide for resource 
development when operators cannot independently develop separate tracts 
due to established well spacing or well development programs. Lessees 
may request approval of communitization or drilling agreements or BLM 
may require the lessees to enter into such agreements.


Sec. 3217.12  What information regarding a proposed communitization or 
drilling agreement must you submit to BLM?

    You must provide the following information:
    (a) The location of the separate tracts comprising the drilling or 
spacing unit;
    (b) The apportionment of production or royalties to each separate 
tract;
    (c) The name of each tract operator; and
    (d) Provisions for the protection of the interests of all parties, 
including the United States.


Sec. 3217.13   When is a communitization or drilling agreement 
effective?

    A communitization or drilling agreement is effective when it is 
signed by BLM. BLM will not approve the agreement unless all involved 
parties sign the agreement, and BLM determines that the tracts cannot 
be independently developed.


Sec. 3217.14   Under what conditions will BLM approve operating, 
drilling or development contracts?

    BLM may approve an operating, drilling or development contract 
when:
    (a) The contract is entered into by one or more geothermal lessees 
with one or more persons or partnerships;
    (b) The contract is necessary for large scale operations and 
financing related to the discovery, development, production, or 
transmission, transportation or utilization of geothermal resources; 
and
    (c) BLM determines that the contract is required for the 
conservation of the resource, or public convenience, or the interest of 
the United States would be served by the approval.

[[Page 52756]]

Sec. 3217.15   What information must I submit to BLM regarding proposed 
operating, drilling or development contracts?

    You must submit:
    (a) The contract and a statement of its need;
    (b) All the interests held by the contractor in the area or field;
    (c) The types and scheduling of operations to be conducted under 
the contract;
    (d) Indication that approval of the contract will not result in any 
concentration of control over the production or sale of geothermal 
resources which would violate the antimonopoly laws of the United 
States;
    (e) Copies of all contracts held by the same contractor in the area 
or field; and
    (f) Any other information BLM may require to make a decision 
regarding the proposed contract or to attach any conditions of 
approval.

Subpart 3250--Exploration Operations--General


Sec. 3250.10   What is the purpose, scope and authority of the subparts 
pertaining to exploration operations?

    (a) The regulations in this subpart establish procedures for 
conducting geothermal exploration operations:
    (1) On BLM administered public lands, whether leased or unleased 
for geothermal resources, and covers lessees and nonlessees; and
    (2) On any Federally owned lands leased for geothermal resources.
    (b) The regulations in this subpart do not apply to:
    (1) Unleased land when the surface is administered by an agency 
other than the Bureau of Land Management, unless the surface management 
agency decides to apply them;
    (2) Privately owned land; or
    (3) Casual use activities.

Subpart 3251--Permitting of Exploration Operations


Sec. 3251.10   What types of operations may I propose when submitting 
an application for an exploration permit?

    You may propose any activity fitting the definition of 
``exploration operations''.


Sec. 3251.11   May I conduct exploration operations on my lease, 
someone else's lease or unleased land?

    Yes. You may conduct exploration operations on any public lands 
open to geothermal leasing regardless of whether or not the lands are 
leased. The right to conduct exploration operations under an approved 
permit is nonexclusive. If the lands are already leased for geothermal 
resources or other minerals, your operations may not unreasonably 
interfere with or endanger other operations. In addition, you must not 
unreasonably interfere with or endanger other authorized uses, or cause 
unnecessary or undue degradation of the lands.


Sec. 3251.12   Do I need a permit prior to conducting exploration 
operations?

    Yes. You must have an approved exploration permit prior to 
beginning any exploration operations, whether you have a geothermal 
lease covering the lands or not.


Sec. 3251.13   What information must I submit with my application for 
an exploration permit?

    (a) For any exploration operation other than temperature gradient 
wells, you must fully describe your exploration plans and procedures, 
and include the approximate commencement and termination dates.
    (b) For temperature gradient wells, you must fully describe your 
drilling and completion procedures. You must submit the following 
information submitted for a single well or for several wells proposed 
to be drilled in an area of geologic and environmental similarity:
    (1) A detailed description of the equipment, materials, and 
procedures you will use;
    (2) The depth of the well;
    (3) The casing and cementing program;
    (4) The circulation media (mud, air, foam, etc.);
    (5) A description of the logs that you will run;
    (6) A description and diagram of the blowout prevention equipment 
you will use during each phase of drilling;
    (7) The expected depth and thickness of fresh water zones;
    (8) Anticipated lost circulation zones;
    (9) Anticipated temperature gradient in the area;
    (10) Well site layout and design;
    (11) Existing and planned access roads or ancillary facilities;
    (12) Source of drill pad and road building material and water 
supply; and
    (13) Any other information BLM may require.
    (c) For both (a) and (b) above, you must provide:
    (1) Evidence of bond coverage;
    (2) Estimates of how much surface disturbance your exploration may 
cause;
    (3) A narrative statement describing the proposed measures to be 
taken for the protection of the environment;
    (4) Methods for reclamation of the surface; and
    (5) All other information or data that BLM may require.


Sec. 3251.14   What action will BLM take on my permit?

    BLM will notify you if additional information is needed to process 
your permit. You will also be notified as to whether your permit has 
been approved or denied.


Sec. 3251.15   How do I receive BLM approval to change permitted 
exploration operations?

    You may request a change to an approved exploration permit by 
submitting a sundry notice. The sundry notice must fully describe the 
requested changes. You may not proceed with the change until you 
receive approval from BLM.


Sec. 3251.16   Must I submit data obtained through exploration 
operations to BLM?

    Yes. When you conduct exploration operations on your lease(s), you 
must submit all data obtained as a result of the operations with the 
notice of completion of exploration operations, unless BLM approves a 
later submission.


Sec. 3251.17   Are there any bonding requirements for conducting 
exploration operations?

    (a) Yes. Before you start any operation BLM must receive and 
approve one of the following:
    (1) A surety or personal bond for the individual permit or lease 
for at least $5,000;
    (2) A statewide exploration bond of at least $25,000 covering all 
exploration operations in the state in which the exploration is being 
conducted;
    (3) A nationwide exploration bond of at least $50,000 or
    (4) A rider to an existing nationwide or statewide oil and gas 
exploration bond to include geothermal resources exploration 
operations.
    (b) These bond amounts are minimums. BLM may require an increase if 
you have a history of noncompliance or if the minimum amounts will not 
cover the estimated costs of reclamation, or performance of other 
permit terms.


Sec. 3251.18   When will the bond be released?

    BLM will not release any bond until we are satisfied that you have 
complied with the terms and conditions of the exploration permit, 
including reclamation, associated sundry notices, and all applicable 
requirements.

[[Page 52757]]

Subpart 3252--Conducting Exploration Operations


Sec. 3252.10   What operational requirements must I meet when 
conducting exploration operations?

    (a) You must comply with BLM orders and other standards and 
procedures found in the applicable laws, regulations, geothermal 
resources operational orders, notice to lessees, conditions to the 
approved plan or permit, and lease terms.
    (b) You must also:
    (1) Take all necessary precautions to keep all exploration 
operations under control at all times;
    (2) Use trained and competent personnel;
    (3) Use properly maintained equipment and materials;
    (4) Use operating practices which ensure the safety of life and 
property;
    (5) Prevent the unnecessary waste of or damage to geothermal or 
other energy and mineral resources; and
    (6) Prevent injury.


Sec. 3252.11   What environmental requirements must I meet when 
conducting exploration operations?

    (a) You must conduct all operations performed under this part in a 
workmanlike manner to:
    (1) Protect the quality of surface and subsurface waters, air, and 
other natural resources, including wildlife, soil, vegetation, and 
natural history;
    (2) Protect the quality of cultural, scenic and recreational 
resources;
    (3) Accommodate, as much as possible, other land uses; and
    (4) Protect human and wildlife resources from unacceptable noise 
level.
    (b) You must remove or, with BLM's permission, properly store all 
equipment and materials not in use.
    (c) You must provide and use pits, tanks and sumps of adequate 
capacity. They must be designed to retain all materials and fluids 
resulting from drilling of temperature gradient wells or other 
operations, unless otherwise specified by BLM. When no longer needed, 
you must properly abandon pits and sumps.
    (d) BLM may require you to submit a contingency plan describing 
procedures to protect life, property, and the environment.


Sec. 3252.12  How deep may I drill a temperature gradient well?

    You may drill a temperature gradient well to any depth approved by 
BLM in your exploration permit or sundry notice. Regardless of depth, 
you are not permitted to produce or inject geothermal resources. BLM 
may modify your permitted depth at any time before or during drilling, 
when the bottom hole temperature or other information indicates that 
drilling to the original permitted depth could create risks to human 
health, safety or the environment.


Sec. 3252.13  How long may I collect information from my temperature 
gradient well?

    You may collect information from your temperature gradient well for 
as long as approved by BLM. BLM will require you to abandon a well when 
BLM determines it is necessary to protect the environment or to meet 
operational standards.


Sec. 3252.14  What are the requirements for completing and abandoning a 
temperature gradient well?

    You must submit a sundry notice to obtain BLM approval before 
abandoning a well and conducting surface reclamation. You must complete 
temperature gradient wells in a manner which will allow for abandonment 
and which will prevent interzonal migration of fluids. Tubing must be 
capped when not in use. You must also reclaim the surface to BLM 
specifications.


Sec. 3252.15  Must I notify BLM when I have completed my exploration 
operations?

    Yes. You must file with BLM a notice of completion of exploration 
operations describing the exploration operations, well history, 
completion, abandonment procedures, and site reclamation measures 
within 30 days after:
    (a) Completion of any geophysical exploration operations;
    (b) Completion of the drilling of temperature gradient wells;
    (c) Abandonment of a temperature gradient well; and
    (d) When all exploration sites are abandoned.

Subpart 3253--Inspection, Enforcement, and Noncompliance


Sec. 3253.10  Will BLM inspect my exploration operations?

    Yes. BLM may inspect all exploration operations to ensure 
compliance with all applicable laws, regulations, permit terms and 
conditions of approval, lease terms, if applicable, orders, and notices 
to lessees. BLM may require additional measures to be taken to correct 
any unnecessary or undue damage to the lands. BLM will notify you of 
the nature and extent of any required measures and the time during 
which they must be completed.


Sec. 3253.11  What action may BLM take if my exploration operations are 
not in compliance?

    (a) If BLM finds your operation to be in noncompliance, BLM may 
take one or both of the following actions:
    (1) Issue you a written Incident of Noncompliance, directing you to 
correct any deficiencies within a specific time period;
    (2) Require you to mitigate unnecessary and undue degradation 
caused by your operations; or
    (3) Revoke or suspend your exploration permit, after notice and a 
hearing in accordance with 43 CFR parts 4 and 1840.
    (b) If the noncompliance continues or is of a serious nature, BLM 
will take one or more of the following actions:
    (1) Correct any operational deficiencies at your expense;
    (2) Forfeit all or part of your bond;
    (3) Direct modification or shutdown of your operations;
    (4) Temporarily suspend your exploration permit if necessary to 
protect public health, safety, or the environment. This temporary 
suspension will go into effect immediately and will remain in effect 
while appeals are pending; or
    (5) Initiate cancellation of the lease, if applicable.

Subpart 3255--Exploration Operations Relief and Appeals


Sec. 3255.10  May I request variances from notices to lessees, permit 
conditions of approval, and operational or other orders issued by the 
BLM?

    Yes. BLM may approve variances which:
    (a) Continue to accomplish the purpose of a requirement; and
    (b) Are necessary for the proper control of:
    (1) Exploration operations;
    (2) Conservation of natural resources; or
    (3) Protection of human health and safety, property, or the 
environment.


Sec. 3255.11  How may I appeal a BLM decision regarding my exploration 
operations?

    (a) A party adversely affected by a decision of the BLM may appeal 
that decision to the Interior Board of Land Appeals as set forth in 43 
CFR parts 4 and 1840.
    (b) All decisions or approvals of BLM under this subpart shall 
remain effective pending appeal unless the Interior Board of Land 
Appeals determines otherwise under 43 CFR part 4.

[[Page 52758]]

Subpart 3260--Geothermal Drilling Operations--General


Sec. 3260.10  What types of geothermal operations are covered under 
this subpart?

    (a) This subpart establishes permitting and operating procedures 
for drilling wells intended to flow test or produce geothermal fluids 
and related activities, or inject fluids into a geothermal reservoir. 
This subpart also addresses redrilling, deepening, plugging back, and 
other subsequent well operations.
    (b) This subpart does not address the drilling of temperature 
gradient wells, which is described in subpart 3250 of this part, or the 
utilization of geothermal resources, which is described in subpart 3270 
of this part.


Sec. 3260.11  What standards apply to my drilling operations?

    You must conduct all drilling operations:
    (a) In a prudent manner;
    (b) To prevent unnecessary and undue degradation to the surface and 
subsurface;
    (c) To maximize ultimate recovery;
    (d) To result in the beneficial utilization of geothermal resources 
with minimum waste; and
    (e) In a manner consistent with the principles of multiple use and 
protection of the environment.


Sec. 3260.12  Can BLM issue additional orders or instructions?

    (a) Yes. BLM can issue detailed procedures under this subpart, so 
long as they are consistent with the regulations under this part. 
Detailed procedures will be in the form of:
    (1) Geothermal Resource Operational Orders, for detailed 
requirements on a nationwide basis;
    (2) Notices to Lessees, for detailed requirements on a statewide or 
regional basis;
    (3) Other orders and instructions specific to a field or area;
    (4) Permit conditions of approval; and
    (5) Verbal orders which will be confirmed in writing.
    (b) Before issuing Geothermal Resource Operation Orders or Notices 
to Lessees, BLM will consult with appropriate Federal and state 
agencies, lessees, operators, and other interested parties.

Subpart 3261--Permitting of Drilling Operations


Sec. 3261.10  What approval must I obtain prior to well pad 
construction drilling?

    You must have either an approved geothermal drilling permit, and 
sundry notice for well pad construction, prior to beginning any surface 
disturbance or drilling activities.


Sec. 3261.11  What information must I submit to get approval for 
drilling operations or well pad construction?

    (a) You must submit a completed and signed drilling permit or 
sundry notice form. The drilling permit application must include at 
least the following information:
    (1) A detailed description of the equipment, materials, and 
procedures you will use;
    (2) The depth of the well;
    (3) If applicable, a directional program including:
    (i) The bottom hole location and distances from the nearest section 
or tract lines;
    (ii) The kick-off point;
    (iii) The direction of deviation;
    (iiii) The angle build-up and maximum angle; and
    (iiiii) Plan and cross section maps indicating the surface and 
bottom hole locations;
    (4) The casing and cementing program;
    (5) The circulation media (mud, air, foam, etc.);
    (6) A description of the logs that you will run;
    (7) A description and diagram of the blowout prevention equipment 
you will use during each phase of drilling;
    (8) The expected depth and thickness of fresh water zones;
    (9) Anticipated lost circulation zones;
    (10) Anticipated reservoir temperature and pressure;
    (11) Anticipated temperature gradient in the area;
    (12) A plat certified by a licensed surveyor showing the surveyed 
surface location and distances from the nearest section or tract lines; 
and
    (13) Any other information BLM may require.
    (b) A sundry notice for well pad construction must include a 
description of the well pad layout and design.


Sec. 3261.12  What is a plan of operations?

    A plan of operation describes your plans and procedures for 
production and utilization of the geothermal resources from the lease. 
It contains enough information about your proposal to permit BLM to 
assess the environmental impacts of your operations. This generally 
includes:
    (a) Well pad layout and design;
    (b) A description of existing and planned access roads;
    (c) A description of any ancillary facilities;
    (d) The source of drill pad and road building material;
    (e) The source for water;
    (f) A statement of surface ownership;
    (g) Plans for reclamation of the surface;
    (h) A description of environmental protection measures; and
    (i) Any other information BLM may require.


Sec. 3261.13  When must I have an approved plan of operations?

    You must submit a plan of operations and have it approved by BLM 
prior to commencing production operations on a lease. You do not need 
an approved plan for subsequent well operations, the construction of 
new production facilities or the alteration of existing production 
facilities, unless BLM notifies you that you must submit a plan.


Sec. 3261.14  Must I submit my drilling permit application and the plan 
of operations at the same time?

    No.
    (a) You may submit your drilling permit application and plan of 
operations simultaneously or separately. If you submit them separately:
    (1) You must submit the plan of operations before the drilling 
permit application to allow BLM time to comply with the National 
Environmental Policy Act (NEPA);
    (2) You must submit a sundry notice for well pad construction when 
you are ready to begin actual pad construction; and
    (3) You must submit the plan of operations and drilling permit 
application when you are ready to drill a well. You should submit the 
plan of operations and drilling permit application at the same time.
    (b) If you submit the drilling permit application and plan of 
operations simultaneously, the approved drilling permit application 
will authorize both the pad construction and the drilling and testing 
of the well.


Sec. 3261.15  Can a plan of operations and drilling permit apply to 
more than one well?

    Yes.
    (a) The plan of operation can apply to any number of well sites 
that are in areas of similar geology and environment.
    (b) A drilling permit application may apply to more than one well 
if you will drill the wells in the same manner, and you expect to 
encounter similar reservoir conditions.

[[Page 52759]]

Sec. 3261.16  How do I amend a plan of operations or a drilling permit 
application?

------------------------------------------------------------------------
 If you want to amend a plan of operations                              
   or drilling permit application . . .              Then . . .         
------------------------------------------------------------------------
(a) That has not been approved............  Submit an amended plan of   
                                             operation or drilling      
                                             permit application.        
(b) That has been approved................  Submit a sundry notice      
                                             describing your proposed   
                                             change.                    
------------------------------------------------------------------------

Sec. 3261.17  Do I need a bond before I build a well pad or drill a 
well?

    Before starting any operation, BLM must approve either a surety or 
personal bond in the amounts identified under 43 CFR 3214.13(b), (c), 
or (d).


Sec. 3261.18  How will BLM review my application documents and notify 
me of their status?

    (a) When BLM receives your plan of operations, BLM will begin a 
review in accordance with NEPA. You will be notified if BLM needs more 
information during the NEPA review process. You will also be notified 
when BLM signs the Record of Decision (ROD).
    (b) BLM will review your drilling permit application or sundry 
notice for well pad construction for conformance with your plan of 
operation and any mitigation measures developed during review of your 
plan of operation. BLM will notify you if we need additional 
information and will return the drilling permit application or sundry 
notice to you for correction.
    (c) BLM will review your drilling permit application for technical 
adequacy and compliance with geothermal resource operation orders, 
notices to lessees, or other orders that BLM may have issued. BLM will 
notify you if we need additional information and will return the 
drilling permit application to you for correction.


Sec. 3261.19  How do I get approval to change an approved drilling 
operation?

    (a) You must submit a sundry notice describing the proposed 
changes. You may not proceed with the changes until you have received 
approval from BLM. For operations such as redrilling, deepening, or 
plugging back a well, we may require you to submit a new drilling 
permit application (see 43 CFR 3261.20), if we determine that you are 
proposing a significant change to the approved drilling permit 
application. An example of a significant change would be redrilling the 
well to a completely different target, especially a target in an 
unknown area.
    (b) For changes that will create additional surface disturbance, 
BLM may also require you to submit an amendment to the plan of 
operation.
    (c) BLM may give you verbal approval for a change requiring 
immediate action, such as those necessary to protect life or property. 
In this case, you must submit a written sundry notice within 48 hours 
of BLM's verbal approval.


Sec. 3261.20  How do I get approval for subsequent well operations?

    (a) You must submit a sundry notice describing your proposed 
operation. You may not proceed with the operation until you have 
received approval from BLM.
    (b) BLM may waive the requirement for a sundry notice for work we 
determine to be routine such as cleanouts, surveys, or general 
maintenance. You must continue to submit sundry notices for the 
specific operation unless you receive a waiver from BLM. For 
information on how to obtain a waiver, contact BLM.

Subpart 3262--Conducting Drilling Operations


Sec. 3262.10  What operational requirements must I meet when drilling a 
well?

    (a) You must:
    (1) Take all necessary precautions to keep the well under control 
at all times;
    (2) Use trained and competent personnel;
    (3) Use properly maintained equipment; and
    (4) Use operating practices that ensure the safety of life and 
property.
    (b) You must use sound engineering principles and take into account 
all pertinent data when:
    (1) Selecting the types and weights of drilling fluids;
    (2) Designing a system for controlling fluid temperatures;
    (3) Designing a blowout prevention equipment; and
    (4) Designing a casing and cementing program.
    (c) You must conduct your operation in accordance with:
    (1) The Act and the regulations of this part;
    (2) Orders;
    (3) Notices to lessees;
    (4) Lease terms;
    (5) Approved plans and permits;
    (6) Conditions of approval;
    (7) Other instructions from BLM; and
    (8) Any other applicable laws and regulations.


Sec. 3262.11  What environmental requirements must I meet when drilling 
a well?

    (a) You must conduct operations to:
    (1) Protect the quality of surface and subsurface water, air, 
natural resources including wildlife, soil, vegetation, and natural 
history;
    (2) Protect the quality of cultural, scenic, and recreational 
resources;
    (3) Accommodate, as much as possible, other land uses;
    (4) Minimize noise;
    (5) Prevent injury; and
    (6) Prevent damage to property and unnecessary or undue degradation 
of the lands.
    (b) You must remove or, with BLM's approval, properly store all 
equipment and materials that are not in use.
    (c) You must retain all fluids from drilling and testing the well 
in properly designed pits, sumps, or tanks.
    (d) When a pit or sump is no longer needed, you must abandon it and 
restore the site as directed by BLM.
    (e) BLM may require you to submit a contingency plan describing how 
you will protect life, property, and the environment.


Sec. 3262.12  Must I post a sign at every well?

    (a) Prior to drilling a well, you must place a sign in a 
conspicuous place containing the following information:
    (1) The name of the lessee or operator;
    (2) Lease serial number;
    (3) Well number; and
    (4) Well location described by section, township, range, and 
quarter quarter-section.
    (b) You must maintain each well sign until the well site is 
reclaimed.


Sec. 3262.13  Can BLM require well spacing?

    Yes. BLM can require well spacing if we determine that it is 
necessary for proper development. If BLM does require well spacing, we 
will consider the following factors:
    (a) Hydrologic, geologic, and reservoir characteristics of the 
field minimizing well interference;
    (b) Topography;
    (c) Unreasonable interference with multiple use of land; and
    (d) Protection of the environment, including ground water.


Sec. 3262.14  Can BLM require me to take samples or perform tests and 
surveys?

    Yes. We may require you to sample or test the well to determine any 
or all of the following:
    (a) The mechanical integrity of a well;
    (b) The identity and characteristics of formations;
    (c) Presence of geothermal resources, water, or reservoir energy;
    (d) Quality and quantity of geothermal resources;
    (e) Well bore angle and direction of deviation;

[[Page 52760]]

    (f) Formation, casing, or tubing pressures;
    (g) Temperatures; or
    (h) Rate of heat or fluid flow.

Subpart 3263--Well Abandonment


Sec. 3263.10  May I abandon a well without notifying BLM?

    No. You must have an approved sundry notice before you start 
abandoning any well.


Sec. 3263.11  What information must I submit to get my sundry notice 
for abandonment approved?

    You must submit the following information along with the sundry 
notice:
    (a) All the information required in the well completion report (see 
43 CFR 3266.10), unless BLM already has that information;
    (b) A detailed description of the proposed work;
    (c) Type, depth, length, and interval of plugs;
    (d) How you will verify the plugs (tagging, pressure testing, 
etc.);
    (e) Mud weight and viscosity that you will use in the uncemented 
portions;
    (f) Plans for perforating or removing casing;
    (g) Plans for surface restoration; and
    (h) Any other information that BLM may require.


Sec. 3263.12  How will BLM review my sundry notice for abandonment and 
notify me of its status?

    (a) After BLM receives your sundry notice, we will review it for 
technical and environmental adequacy. BLM will notify you if we need 
more information and will send you an approved sundry notice.
    (b) BLM may grant verbal approval for plugging requiring immediate 
action. You must promptly submit the information required in 43 CFR 
3263.11 within 48 hours of BLM's verbal approval.


Sec. 3263.13  What must I do to restore the site?

    You must remove all equipment and materials and restore the site to 
a condition that BLM or the surface management agency specifies.


Sec. 3263.14  Can BLM require me to abandon a well?

    Yes. If BLM determines that the well is no longer necessary for 
geothermal resource production, injection, or monitoring, we can 
require you to abandon the well. BLM may also require you to abandon a 
well if we determine that the well is not mechanically sound. In either 
case, you will be given the opportunity to justify why the well should 
not be abandoned before BLM issues final orders to abandon the well.


Sec. 3263.15  Can I abandon a producible well?

    Yes. You must submit the information required in 43 CFR 3263.11. 
BLM may also require you to submit a statement of why you want to 
abandon the well. BLM may deny the request if we determine the well is 
needed to protect a lease from drainage, or to protect the interests of 
the United States or to protect the environment.

Subpart 3266--Reports


Sec. 3266.10  What information must I submit after completing a well?

    You must submit a well completion report within 30 days after you 
complete a well. Your report should include at least the following:
    (a) A complete chronological well history;
    (b) A copy of all logs;
    (c) Copies of all directional surveys; and
    (d) Copies of all mechanical, flow, reservoir, and other test data.


Sec. 3266.11  What information must I submit after completing 
subsequent well operations?

    (a) You must submit a report of subsequent well operations within 
30 days of completing the operations. At a minimum, your report must 
include:
    (1) A complete chronological history of the work done;
    (2) A copy of all logs;
    (3) Copies of all directional surveys;
    (4) Copies of all mechanical, flow, reservoir, and other test data; 
and
    (5) A statement of whether you accomplished the desired result. For 
example, if the well was acidized to increase production, say whether 
there was an increase in the production rate when you put the well back 
on line.
    (b) BLM may waive the requirement for a report of subsequent 
operations for work we determine is routine such as cleanouts, surveys, 
or general maintenance. You must submit the report unless you receive a 
waiver. You may obtain a waiver by verbally requesting one from BLM at 
least 24 hours prior to the planned operations.


Sec. 3266.12  What information must I submit after abandoning a well?

    You must submit a report of well abandonment within 30 days of 
abandoning the well. If site restoration is to be done at a later date, 
you may submit a separate report within 30 days of completing site 
restoration. The well abandonment report must contain the following 
information:
    (a) A complete chronological history of work done;
    (b) A description of each plug, including:
    (1) Amount of cement used;
    (2) Type of cement used;
    (3) Depth that the drill pipe or tubing was run to set the plug;
    (4) Depth to top of plug; and
    (5) If the plug was verified, was it verified by tagging or 
pressure testing; and
    (c) A description of surface restoration procedures.


Sec. 3266.13  What well records must I maintain for each well?

    Yes. You must keep the following information for each well at a 
location that is available to BLM:
    (a) A complete and accurate drilling log in chronological order;
    (b) All logs;
    (c) Water or steam analyses;
    (d) Hydrologic or heat flow tests;
    (e) Directional surveys; and
    (f) A complete log of all subsequent well operations such as 
cementing, perforating, acidizing, and well cleanouts.


Sec. 3266.14  Must I notify BLM of accidents occurring on my lease?

    Yes. You must inform BLM of all accidents within 24 hours which 
affect operations or create environmental hazards. You must also submit 
a report fully describing the incident, if required by BLM.

Subpart 3267--Confidential, Proprietary Information


Sec. 3267.10  Must I identify confidential, proprietary information 
that I submit to BLM?

    Yes. You must clearly mark every page with the words ``Confidential 
Information''.


Sec. 3267.11  Will BLM treat information marked as confidential, as 
such?

    Not necessarily. BLM will treat information that is exempt from 
release under the Freedom of Information Act as confidential. See 43 
CFR part 2 for the regulations addressing privileged documents. BLM 
will not treat surface location, surface elevation, or well status as 
confidential.


Sec. 3267.12  How long will confidential information I submit to BLM 
remain confidential?

    BLM will consider the information confidential as long as it 
remains exempt from release under the Freedom of Information Act (see 
43 CFR part 2).

[[Page 52761]]

Subpart 3268--Inspection, Enforcement, and Noncompliance


Sec. 3268.10  What part of my drilling operations can BLM inspect?

    (a) BLM can inspect all of your drilling operations on Federal and 
Indian land regardless of surface ownership. We may inspect your 
drilling operations for compliance with:
    (1) Your approved plan of operation;
    (2) Your approved drilling permit;
    (3) Conditions of approval;
    (4) Lease terms and conditions;
    (5) Regulations and orders; and
    (6) Notices to lessees.
    (b) BLM can also inspect all of your maps, well logs, surveys, 
records, books, and accounts relative to your drilling operation.


Sec. 3268.11  What action can BLM take if my operations are in 
noncompliance?

    (a) If BLM determines your operations are in noncompliance, we may 
take the following action:
    (1) Issue you a written Incident of Noncompliance, directing you to 
correct any deficiencies within a specific time period;
    (2) Require you to mitigate unacceptable environmental impacts 
caused by your operation; and
    (3) Revoke or suspend your plan of operations after notice and 
hearing in accordance with 43 CFR parts 4 and 1840.
    (b) If the noncompliance continues or is of a serious nature, BLM 
will take one of the following actions:
    (1) Enter your lease, and correct any deficiencies at your expense;
    (2) Forfeit all or part of your bond;
    (3) Direct modification or shutdown of your operations if the 
operations are unsafe or have the potential to cause significant or 
irrevocable harm to the environment;
    (4) Temporarily suspend your exploration permit if necessary to 
protect public health, safety, or the environment. This temporary 
suspension will go into effect immediately and will remain in effect 
while appeals are pending;
    (5) Initiate cancellation of the lease; or
    (6) Take action against the lessee, who is ultimately responsible 
for noncompliance.

Subpart 3269--Geothermal Drilling Operations Relief and Appeals


Sec. 3269.10  May I request a variance from notices to lessees, permit 
conditions of approval, and operational and other orders issued by BLM?

    Yes.
    (a) Your request must include enough information to explain:
    (1) Why you cannot meet the provisions of the NTL, permit condition 
of approval, geothermal resource operational order, or other orders 
issued by BLM; and
    (2) Why you need the variance to control your well, conserve 
natural resources, protect human health and safety, protect property, 
or protect the environment.
    (b) BLM may approve your request verbally or in writing. If BLM 
gives you a verbal approval, we will follow up with written 
confirmation.

Subpart 3270--Utilization of Geothermal Resources--General


Sec. 3270.10  What types of geothermal operations are permitted under 
this part?

    The regulations in this subpart cover the permitting and operating 
procedures for the utilization of geothermal resources. This includes 
the following types of development on leased Federal land or Indian 
land:
    (a) Electrical generation facilities;
    (b) Direct use facilities;
    (c) Related utilization facility operations;
    (d) Actual and allocated well field production and injection;
    (e) Related well field operations; and
    (f) Research and demonstration projects.


Sec. 3270.11  What standards apply to my utilization operations?

    You must make certain that all utilization:
    (a) Conforms to prudent operating practices;
    (b) Is conducted in a manner that prevents unnecessary and undue 
degradation to surface and subsurface resources;
    (c) Results in the maximum ultimate recovery; and
    (d) Results in the beneficial use of geothermal resources with 
minimum waste.


Sec. 3270.12  What are my responsibilities for utilizing geothermal 
resources on a lease?

    (a) The facility operator must comply with:
    (1) Lease terms and stipulations;
    (2) The approved plan of utilization;
    (3) Utilization permit and production permit conditions of 
approval;
    (4) All applicable laws and regulations;
    (5) Geothermal resources operational orders, and
    (6) Other written or oral orders that BLM may issue.
    (b) The facility operator must also take all reasonable precautions 
to prevent waste, injury to persons, damage to real or personal 
property, and must minimize impacts to surface and subsurface resources 
and the environment.

Subpart 3271--Permitting of Utilization Operations


Sec. 3271.10  How do I obtain authorization to construct and test a 
utilization facility?

------------------------------------------------------------------------
If you want to construct a facility * *        Then you need * * *      
-------------------*----------------------------------------------------
(a) on Federal lands leased for          POU, UP, and SLA.              
 geothermal resources and you are the                                   
 lessee and facility operator.                                          
(b) on Federal lands leased for          POU, UP, SLA, and JUA.         
 geothermal resources, and you are not                                  
 the lessee.                                                            
(c) on Federal lands leased for          POU, UP, and SLA.              
 geothermal resources committed to a                                    
 unit and you are the unit operator.                                    
(d) on Federal lands leased for          POU, UP, SLA, and JUA.         
 geothermal resources committed to a                                    
 unit and you are not the unit operator.                                
(e) on private land committed to a       POU and UP only addressing     
 Federal unit and you are the unit        pipelines or other facilities 
 operator.                                on Federal land.              
(f) on private land committed to a       POU and UP only addressing     
 Federal unit and you are not the unit    pipelines or other facilities 
 operator.                                on Federal land, and JUA.     
(g) on private land that will utilize    POU and UP only addressing     
 Federal goethermal resources from        pipelines or other facilities 
 other Federal leases.                    on Federal land.              
(h) on your Federal split estate lease.  no permits required to         
                                          construct and test facility.  
(i) on a Federal split estate lease and  POU and UP only addressing     
 you are not the lessee.                  pieplines or other facilities 
                                          on Federal land, and JUA.     

[[Page 52762]]

                                                                        
(j) on unleased public land............  FLPMA R-O-W.                   
------------------------------------------------------------------------
Note: ``POU'' is a Plan of Utilization                                  
 A``UP'' is a Utilization Permit                                        
 A``SLA'' is a Site License Agreement                                   
 A``JUA'' is a Joint Utilization Agreement                              
 A``FLPMA'' is the Federal Land Policy and Management Act               
 A``ROW'' is a Right of Way                                             

Sec. 3271.11  How do I obtain authorization to begin commercial 
operations?

    The lessee, operator, or third party facility operator must submit 
an application for a production permit to BLM for approval if the 
commercial operations involve Federal mineral resources.

Subpart 3272--The Contents and Review of a Plan of Utilization and 
Utilization Permit


Sec. 3272.10  What must I do prior to commencing site preparation, 
construction and testing of the facility?

    You must submit a plan of utilization and a utilization permit, and 
both must be approved by BLM before you begin.


Sec. 3272.11  What information must I submit in a plan of utilization?

    A plan of utilization consists of a description of the proposed 
facilities and anticipated environmental impacts and proposed measures 
for mitigating environmental impacts.


Sec. 3272.12  How should I describe the proposed facility?

    Your description of the proposed facility should include the 
following information:
    (a) A generalized description of all proposed structures and 
facilities, including their size, location, and function;
    (b) A generalized description of proposed facility operations 
including estimated total production and injection rates, estimated 
well flow rates, pressures, and temperatures, facility net and gross 
electrical generation, and, if applicable, interconnection with other 
utilization facilities. If it is a direct use facility, you must submit 
information required by BLM to permit BLM to determine the amount of 
resource utilized;
    (c) A contour map covering the entire utilization site showing 
production and injection well pads, pipeline routes, facility 
locations, drainage structures, and existing and planned access and 
lateral roads;
    (d) A description of site preparation and associated surface 
disturbance including the source for site or road building materials, 
amounts of cut and fill, drainage structures; an analysis of all site 
evaluation studies prepared for the site(s), and a description of any 
additional tests, studies, or surveys which are planned to assess the 
geologic suitability of the site(s);
    (e) The source, quality, and proposed consumption rate of water 
used during facility operations, and the source and quantity of water 
used during facility construction;
    (f) The methods for disposing of, or abating the emission of, 
noncondensible gases;
    (g) An estimated number of personnel needed during construction and 
operation of the facility;
    (h) A construction schedule;
    (i) A schedule for testing of the facility and/or well equipment, 
and for the start of commercial operations;
    (j) A description of architectural landscaping or other measures to 
minimize visual impacts; and
    (k) Any additional information or data which BLM may require.


Sec. 3272.13  How should I describe the environmental protection 
measures I intend to take?

    (a) Your description should include, at a minimum, measures 
proposed to:
    (1) Prevent or control fires;
    (2) Prevent soil erosion;
    (3) Protect surface or ground water;
    (4) Protect fish and wildlife;
    (5) Protect cultural, visual, and other natural resources;
    (6) Minimize air and noise pollution; and
    (7) Minimize hazards to public health and safety during normal 
operations.
    (b) Your description should also include provisions for monitoring 
facility operations to ensure continuing compliance with applicable 
regulations, geothermal resources operational orders, and noise, air, 
and water quality standards, and for other environmental parameters 
identified by BLM.
    (c) BLM may require you to collect data concerning the existing air 
and water quality, noise, seismicity, subsidence, and ecological 
systems, or other environmental information for a period of at least 
one year prior to production. BLM will approve data collection 
methodologies. BLM may reduce the data collection requirements of this 
paragraph, including the duration of data collection, commensurate with 
the level of potential environmental impacts from the proposed 
operations.
    (d) A description of the methods for the abandonment of the 
utilization facilities and the site restoration procedures to comply 
with applicable requirements of the regulations, lease, geothermal 
resources operational orders or other BLM orders, notices to lessees, 
and permit conditions of approval.
    (e) You must also submit any additional information or data which 
BLM may require.


Sec. 3272.14  How will BLM review my plan of utilization and notify me 
of its status?

    (a) BLM will review the plan of utilization for completeness, 
technical soundness and environmental acceptability. In coordination 
with the appropriate Federal surface management agency and in 
cooperation with other concerned Federal, state, and local agencies, 
BLM will comply with the National Environmental Policy Act. We will 
notify you if we need additional information and when we approve, 
modify or deny the Plan of Utilization.
    (b) BLM will make all documents submitted as part of or in support 
of a Plan of Utilization available to all appropriate Federal, state, 
and local agencies, and interested members of the public for review; 
except that we will not make available for public review any 
information that is not releasable under the Freedom of Information 
Act, and which was submitted as part of the plan. See 43 CFR 3267.11.
    (c) Before approving your plan of utilization, BLM will determine 
that the lease is in good standing, and you have filed an acceptable 
bond in accordance with the requirements of 43 CFR 3214.13 and 3273.19.


Sec. 3272.15  How do I obtain authorization to construct and test my 
facility?

    You must submit a utilization permit along with your plan of 
utilization. BLM must approve the permit before you construct or test 
your facility.

[[Page 52763]]

Subpart 3273--Applying for and Obtaining a Site License


Sec. 3273.10  When do I need a site license?

    You must have an approved site license if you plan to construct and 
operate a utilization facility on Federal lands leased for geothermal 
resources.


Sec. 3273.11  Are there any situations in which I do not need a site 
license?

    (a) You do not need a site license if your facility will be on 
split estate land where the surface is not owned by the United States.
    (b) You do not need a site license for installing a testing 
facility or using the production of an individual well for electrical 
power generation or another non-electrical beneficial use. However, you 
do need a site license if your facility is for transmission or use of 
more than 10 megawatt (MW) maximum output.
    (c) You do not need a site license for a research and demonstration 
project sited on a Federal geothermal lease, if:
    (1) The project does not have more than 20 MWs electrical capacity; 
and
    (2) The facility does not have a projected life of more than 5 
years from the date it becomes operational. If you intend to convert 
your research and development facility to a permanent commercial 
operation after the initial 5 year period, you must apply for a license 
prior to the end of the 5 years. However, you do need a drilling permit 
under subpart 3260 of this part for such facilities.


Sec. 3273.12  What if the lands I want a license for are not 
administered by BLM?

    (a) If you want a license for land that is withdrawn or reserved 
for the use of a Federal agency other than BLM, BLM will consult with 
the surface management agency before issuing the license, and include 
any terms and conditions requested by the agency.
    (b) Where the land is subject to section 24 of the Federal Power 
Act, BLM will issue the license subject to terms and conditions 
requested by the Federal Energy Regulatory Commission.


Sec. 3273.13  Are any lands not available for geothermal site licenses?

    BLM may not issue a site license for lands that are not available 
for geothermal leasing. A list of these lands is set out at 43 CFR 
3201.11.


Sec. 3273.14  What area does a site license include?

    The site license area will, as determined by BLM, be a reasonably 
compact tract of Federal land limited to as much of the surface as is 
necessary for the adequate utilization of geothermal resources.


Sec. 3273.15   What information must I include in my site license 
application?

    Your site license application must include :
    (a) A description of the boundaries and the area of the land 
applied for, as determined by a certified licensed surveyor, along with 
a description of the land by legal subdivision, section, township and 
range, or by approved protraction surveys, if applicable;
    (b) A non-refundable fee of $50;
    (c) A site license bond;
    (d) The first year's rental, if applicable (see 43 CFR 3273.16);
    (e) A copy of the joint utilization agreement, when required (see 
43 CFR 3274.10);
    (f) A description of the proposed facility, including any 
substations, indicating whether you intend to interconnect your 
proposed facility with other facilities and to sell the energy you 
produce to others or use it yourself; and
    (g) A statement showing the amount of merchantable timber, if any, 
that you will use or destroy by constructing your facility, and a 
statement agreeing to deposit with BLM, in advance of construction, the 
stumpage value of the timber to be used or destroyed. BLM will 
determine the value, which will not exceed fair market value.


Sec. 3273.16   What is the annual rental for a site license or direct 
use facility?

    The annual site license area rental will be determined by BLM and 
will be set forth in your approved site license. The amount will be not 
less than $100 per acre or fraction thereof for an electrical 
generation facility or direct use area and not less than $10 per acre 
or fraction thereof for a facility for non-electrical purposes. You 
must submit the first year's rental to BLM. All subsequent rental 
payments must be made to MMS.


Sec. 3273.17   Can BLM reassess the annual rental for my site license?

    Yes. The site license will contain a provision permitting BLM to 
reassess the rental for lands covered by the license beginning with the 
tenth year and then in ten-year intervals.


Sec. 3273.18   Must all facility operators pay the annual site license 
rental?

    No. A lessee siting a unitization facility on his or her lease, or 
a unit operator siting a utilization facility on leases committed to 
his or her unit, need not pay the annual rental. Only a facility 
operator other than a lessee or unit operator must pay the annual 
rental.


Sec. 3273.19   What are the bonding requirements for a site license?

    (a) Before BLM issues a site license for an electrical generation 
facility, the facility operator must submit a surety or personal bond 
of at least $100,000. BLM can waive this requirement if we determine 
that any nonelectrical uses are unlikely to cause significant 
environmental harm.
    (b) Before BLM issues a site license for a direct use facility, the 
facility operator must furnish BLM with a surety or personal bond in an 
amount specified by BLM.
    (c) In either case, the terms of the bond must provide for 
compliance with conditions of the site license, lease terms, and the 
regulations of this part.


Sec. 3273.20   What are my obligations under the site license?

    As the facility operator, you:
    (a) Are liable for all damages to the lands or property of the 
United States caused by yourself, your employees or contractors or 
employees of such contractors;
    (b) Must indemnify the United States against any liability for 
damages or injury to persons or property arising from the occupancy or 
use of the lands authorized under the site license; and
    (c) Must remove any structure(s) and restore any surface 
disturbance, when no longer needed during facility construction or 
operation. This will also include the utilization facility if you are 
unable to operate the facility and BLM determines that you are not 
diligent in your efforts to return the facility to operation.


Sec. 3273.21   How long will my site license remain in effect?

    BLM will grant a site license for a primary term of 30 years, 
independent of the term of the lease on which the facility is sited. 
The site license will remain in effect as long as you use Federal 
geothermal resources in a diligent manner and you are complying with 
all provisions of the license. Should the lease on which the site 
license is located expire or terminate, you may apply to convert the 
authority for the facility siting to a permitted facility under the 
provisions of section 501 of FLPMA, 43 U.S.C. 1761, if the lands are 
located on BLM-managed lands. For all other lands, you must obtain 
authorization to continue using the surface for the facility siting 
from the appropriate surface management agency, unless that continuing 
authorization has already been granted by the surface management 
agency.

[[Page 52764]]

Sec. 3273.22   May BLM terminate my site license?

    Yes, BLM may terminate your site license by written order for any 
of the following reasons:
    (a) BLM may terminate your site license for any violation of the 
license terms and conditions, lease terms, applicable laws and 
regulations, geothermal resources operational orders and conditions of 
the plan of utilization, utilization permit, and/or production permit, 
including any conditions, after a 30 day notice. The termination will 
not take effect if, within the 30 day notice period, you correct the 
violation or BLM determines the violation can not be corrected within 
30 days and you initiate and continue diligent efforts to correct the 
violation.
    (b) BLM may also terminate your site license if we determine you 
are no longer diligently utilizing Federal geothermal resources.


Sec. 3273.23   May I relinquish my site license?

    Yes. You may relinquish your license by submitting a written notice 
for BLM review and approval. BLM will not approve the relinquishment 
until the conditions or requirements identified in 43 CFR 3273.20 are 
met.


Sec. 3273.24   May I assign or transfer my site license?

    Yes. You may transfer your site license in whole or in part. You 
must submit any transfer to BLM for approval, along with a $50 filing 
fee. Your application for transfer must include a written statement 
from the person or entity to whom you are transferring the license that 
they are qualified to hold a lease under 43 CFR 3201.11, and a written 
statement that they will comply with all terms and conditions of the 
license. The transfer is not valid until BLM approves it.


Sec. 3273.25   What if my site license application involves lands under 
the jurisdiction of another agency?

    BLM will consult with and obtain the consent of the appropriate 
surface management agency prior to issuing the site license.

Subpart 3274--Submitting a Joint Utilization Agreement


Sec. 3274.10   What is the purpose of a joint utilization agreement?

    A joint utilization agreement documents that:
    (a) A lessee or unit operator is allowing a third party to occupy 
the lease or unit for facility construction and operation of a 
utilization facility, when the facility is located on Federal land 
leased for geothermal resources.
    (b) You do not need a joint utilization agreement when a site 
license is not required.


Sec. 3274.11   Which parties must sign the joint utilization agreement?

    Any third part facility operator must sign. Additionally,
    (a) If the utilization facility is located on a Federal lease not 
committed to a unit agreement, the Federal geothermal lessee must sign; 
or
    (b) If the utilization facility is located on a lease committed to 
a unit agreement, the unit operator must sign.

Subpart 3275--Applying for and Obtaining a Production Permit


Sec. 3275.10   What information must I include in my application for a 
production permit?

    The facility operator must include the following information in a 
production permit application:
    (a) The design, specifications, observation, and calibration 
schedule of production, injection, and royalty meters;
    (b) A schematic diagram of the utilization site or individual well 
indicating the location of each production and royalty meter. If the 
sales point is located off the utilization site, then you must provide 
a generalized schematic diagram of the electrical transmission or 
pipeline system, including the location of meters;
    (c) A copy of the sales contract for the sale and/or utilization of 
geothermal resources;
    (d) A description and analysis of reservoir, production, and 
injection characteristics, including the flow rates, temperatures, and 
pressures of each production and injection well;
    (e) A schematic diagram of each production or injection well 
showing the wellhead configuration including meters;
    (f) A schematic flow diagram of the utilization facility including, 
if applicable, interconnections with other facilities;
    (g) A description of the utilization process in sufficient detail 
to enable BLM to determine if the resource will be utilized in an 
acceptable manner;
    (h) The planned safety provisions for emergency shutdown to protect 
public health and safety and for protection of the environment. This 
should include a schedule for the testing and maintenance of safety 
devices;
    (i) The environmental and operational parameters to be monitored 
during the operation of the facility and/or well(s); and
    (j) Any additional information or data that BLM may require.


Sec. 3275.11  How will BLM review my application for a production 
permit?

    BLM will review the documents for completeness and technical 
soundness and will inform you if we need additional information. BLM 
will ensure that your meters meet our accuracy standards.


Sec. 3275.12  Can I get an authorization even if I cannot prove I can 
operate within required standards?

    Yes, but BLM may limit your authorization to operate your facility 
to a specified period of time. During that time, you may obtain actual 
facility and well data, or both, to verify that the facility can 
operate within environmental and operational standards. BLM may extend 
the permit through approval of a sundry notice.

Subpart 3276--Conducting Utilization Operations


Sec. 3276.10  Can I change my approved plan of utilization or 
production permit?

    Yes. You must submit a sundry notice describing your proposed 
change. You may not proceed with your change until you receive BLM 
approval.


Sec. 3276.11  What are the facility operator's obligations?

    (a) The facility operator must comply with BLM's orders, applicable 
laws and regulations, geothermal resources operational orders, notice 
to lessees, lease terms, the approved plan, and conditions to the 
approved plan or permit. You must use:
    (1) Prudent operating practices to ensure the safety of life and 
property;
    (2) Trained and competent personnel; and
    (3) Properly maintained equipment and materials.
    (b) You must base the design of the utilization facility siting and 
operation on sound engineering principles and other pertinent geologic 
and engineering data.
    (c) You are responsible for preventing waste of or damage to 
geothermal and other energy and minerals resources, and unnecessary or 
undue degradation to the lands.
    (d) You are responsible for any noncompliance resulting from any 
utilization related operations.


Sec. 3276.12  Are there environmental and safety requirements for lease 
operations?

    Yes. The facility operator must:
    (a) Perform all utilization facility operations in a workmanlike 
manner to:
    (1) Protect the quality of surface and subsurface waters, air, and 
other natural resources, including wildlife, soil, vegetation, and 
natural history;

[[Page 52765]]

    (2) Protect the quality of cultural, scenic and recreational 
resources;
    (3) Accommodate, as much as possible, other land uses;
    (4) Protect human and wildlife resources from unacceptable levels 
of noise;
    (5) Prevent injury; and
    (6) Prevent damage to property, and unnecessary or undue 
degradation to the lands;
    (b) Monitor facility operations to address identifiable, localized 
environmental resources and concerns associated with the facility or 
lease operations;
    (c) Remove or, with BLM approval, properly store all equipment and 
materials not in use;
    (d) When no longer needed during facility construction or 
operation, properly abandon and reclaim any surface disturbance, as 
approved or prescribed by BLM; and
    (e) When required by BLM, submit a contingency plan describing 
procedures to protect life, property, and the environment.


Sec. 3276.13  Are there reporting requirements for lease operations?

    (a) You must notify BLM within 5 business days of when you begin 
commercial production and utilization.
    (b) You must submit monthly reports to BLM as described below:

------------------------------------------------------------------------
                 If...                               Then...            
------------------------------------------------------------------------
(1) you are the operator of a lease....  you must submit a monthly      
                                          report of well operations for 
                                          each well on your lease.      
(2) you are a unit operator............  you must submit a monthly      
                                          report of well operations for 
                                          each well in your unit.       
(3) you are a facility operator........  you must submit a monthly      
                                          report of facility operations.
(4) you are both a lease or unit         you must submit a monthly      
 operator and the facility operator.      report of well operations for 
                                          your lease or unit, and you   
                                          must submit a monthly report  
                                          of facility operations. You   
                                          may combine all the           
                                          information into one report.  
------------------------------------------------------------------------

    (c) You must submit monthly reports due to BLM by the end of the 
month following the month that the report covers. For example, the 
report covering the month of July is due by August 31.


Sec. 3276.14  What information must be included for each well in 
monthly well reports?

    Include the following information for each well in the monthly 
report of well operations:
    (a) Any drilling operations or changes made to a well;
    (b) Total production or injection in thousands of pounds (klbs);
    (c) Production or injection temperature in degrees Fahrenheit 
( deg.F);
    (d) Production or injection pressure in pounds per square inch 
(psi). You must also specify whether this is gauge pressure (psig) or 
absolute pressure (psia);
    (e) The number of days the well was producing or injecting;
    (f) The well status at the end of the month;
    (g) The amount of steam or hot water lost to venting or leakage;
    (h) The lease number or unit the well is located on;
    (i) The month and year the report is for;
    (j) Your name, title, signature, and a phone number where BLM may 
contact you; and
    (k) Any other information the BLM may require.


Sec. 3276.15  What information must be included in the monthly report 
for generation facilities?

    For all electrical generation facilities, include the following 
information in your monthly facility report:
    (a) Mass of steam and/or hot water into the facility in thousands 
of pounds (klbs). For facilities using both steam and hot water, you 
must report the mass of each;
    (b) The temperature of the steam or hot water in degrees Fahrenheit 
( deg.F);
    (c) The pressure of the steam or hot water in pounds per square 
inch (psi). You must also specify whether this is gauge pressure (psig) 
or absolute pressure (psia);
    (d) Gross generation in kiloWatt hours (kWh);
    (e) Net generation at the tailgate of the facility in kiloWatt 
hours (kWh);
    (f) Amount of electricity delivered to the sales point in kiloWatt-
hours (kWh), if the sales point is different from the tailgate of the 
facility;
    (g) Amount of electricity lost to transmission, if applicable;
    (h) Temperature in degrees Fahrenheit ( deg.F) and volume of the 
steam or hot water exiting the facility;
    (i) The number of hours the plant was on line; and
    (j) A brief description of any outages.


Sec. 3276.16  What additional information must be submitted in the 
monthly report for flash and dry facilities?

    You must submit the following information in addition to that 
specified in 43 CFR 3276.15 for flash and dry steam facilities:
    (a) Steam flow into the turbine in thousands of pounds (klbs); for 
dual flash facilities, you must separate the steam flow into high 
pressure steam and low pressure steam;
    (b) Condenser pressure in pounds per square inch absolute (psia);
    (c) Condenser temperature in degrees Fahrenheit ( deg.F);
    (d) Auxiliary steam flow used for gas ejectors, steam seals, pumps, 
etc., in thousands of pounds (klbs);
    (e) Flow of condensate out of the plant (after the cooling towers) 
in thousands of pounds (klbs); and
    (f) Any other information BLM may require.


Sec. 3276.17  What information must be included in the monthly report 
for direct use facilities?

    For direct use facilities, submit the following information:
    (a) A daily breakdown of flow, average temperature in, and average 
temperature out, in degrees Fahrenheit ( deg.F);
    (b) Total monthly flow through the facility in thousands of gallons 
(kgal) or thousands of pounds (klbs);
    (c) Monthly average temperature in, in degrees Fahrenheit ( deg.F);
    (d) Monthly average temperature out, in degrees Fahrenheit 
( deg.F);
    (e) Total heat used in millions of BTU's (MMBTU);
    (f) Number of hours that geothermal heat was used; and
    (g) Any other information BLM may require.


Sec. 3276.18  Does the facility operator have to measure the geothermal 
resources?

    Yes. You must:
    (a) Measure all production, injection and utilization in accordance 
with methods and standards approved by BLM; and
    (b) Maintain and test all metering equipment, and if BLM finds the 
equipment out of tolerance or defective, you must promptly recalibrate, 
repair, or replace it. You must determine the amount of production and/
or utilization

[[Page 52766]]

in accordance with the methods and procedures approved and prescribed 
by BLM.


Sec. 3276.19  What aspects of my geothermal operation must I measure?

    (a) For all well operations, you must measure wellhead flow, 
wellhead temperature, and wellhead pressure.
    (b) For all electrical generation facilities, you must measure:
    (1) Steam and/or hot water flow into the facility;
    (2) Temperature of the water and/or steam into the facility;
    (3) Pressure of the water and/or steam into the facility;
    (4) Gross electricity generated;
    (5) Net electricity at the facility tailgate;
    (6) Electricity delivered to the sales point; and
    (7) Temperature of the steam and/or hot water exiting the facility.
    (c) For direct use facilities, you must measure:
    (1) Flow of steam and/or hot water;
    (2) Temperature into the facility; and
    (3) Temperature out of the facility.
    (d) BLM may also require additional measurements depending on the 
type of facility, the type and quality of the resource, and the terms 
of the sales contract.


Sec. 3276.20  How accurately must I measure my production and 
utilization?

    The meter accuracy that BLM requires depends on whether you use the 
meter in calculating Federal production or royalty and what quantity of 
resource you are measuring.
    (a) For meters that you will use to calculate Federal royalty:
    (1) If the meter measures electricity, it must have an accuracy of 
0.25% or better of reading;
    (2) If the meter measures steam flowing more than 100,000 lbs/hr. 
on a monthly basis, it must have an accuracy of 2% or 
better of reading;
    (3) If the meter measures steam flowing less than 100,000 lbs/hr on 
a monthly basis, it must have an accuracy of 4% or better 
of reading;
    (4) If the meter measures water flowing more than 500,000 lbs/hr on 
a monthly basis, it must have an accuracy of 2% or better 
of reading;
    (5) If the meter measures water flowing 500,000 lbs/hr or less on a 
monthly basis, it must have an accuracy of 4% or better of 
reading;
    (6) If the meter measures heat content, it must have an accuracy of 
4% or better; or
    (7) If the meter measures two phase flow at any rate, BLM will 
determine meter accuracy requirements. However, such meters are 
generally not allowable, and you must obtain the prior written approval 
of BLM before installation and use.
    (b) Any meters that you do not use to calculate Federal royalty are 
considered production meters. Any production meter must maintain an 
accuracy of 5% or better of reading.
    (c) BLM may modify these requirements as necessary to protect the 
interests of the United States.


Sec. 3276.21  To what standards must I install and maintain my meters?

    (a) You must install and maintain all meters required by BLM 
according to the manufacturer's recommendations and specifications or 
BLM's requirements, whichever is more restrictive.
    (b) If you use an orifice plate to calculate Federal royalty, the 
orifice plate installation must comply with ``API Manual of Petroleum 
Standards, Chapter 14, Section 3, Part 2, Third Edition, February, 
1991''.
    (c) For meters used to calculate Federal royalty, you must 
calibrate the meter against a known standard as specified in paragraphs 
(c) (1) through (3) of this section:
    (1) Meters measuring electricity must be calibrated annually;
    (2) Meters measuring steam or hot water flow with a turbine, vortex 
shedder, ultrasonics, or other linear devices, must be calibrated every 
six months, or as recommended by the manufacturer, whichever is more 
frequent; and
    (3) Meters measuring steam or hot water flow with an orifice plate, 
venturi, pilot tube, or other differential device, must be calibrated 
every month and you must inspect and repair the primary device (orifice 
plate, venturi, pitot tube) annually.
    (d) You must use calibration equipment that is more accurate than 
the equipment you are calibrating.
    (e) BLM may modify any of these requirements as necessary to 
protect the interests of the United States.


Sec. 3276.22  What must I do if I find an error in a meter?

    (a) If the meter is used to calculate Federal royalty, you must 
correct the error immediately and notify BLM by the next working day of 
its discovery.
    (b) If the meter is not used to calculate Federal royalty, you must 
correct the error and notify BLM within three days of its discovery.
    (c) If correcting the error will cause a change in the sales 
quantity of more than 2% for the month(s) in which the error occurred, 
you must adjust the sales quantity for that month(s) and submit an 
amended facility report to BLM within 3 working days.


Sec. 3276.23  May BLM require me to test for byproducts associated with 
the production of geothermal resources?

    Yes. You must conduct any tests required by BLM.


Sec. 3276.24  May I commingle production?

    Yes, if you obtain BLM's prior approval. BLM will review your 
request to commingle production from wells on your lease with 
production from other leases held by you or other lessees and may grant 
approval subject to conditions we prescribe.


Sec. 3276.25  What action will BLM take if I waste geothermal 
resources?

    BLM will make a determination on the amount of production lost 
through waste of the geothermal resource. If BLM determines that you 
have not taken all reasonable precautions to prevent waste of 
geothermal resources, we will require compensation based on the value 
of the lost production. BLM may also terminate your site license.


Sec. 3276.26  Can BLM order me to drill and produce wells on my lease?

    Yes. BLM can order you to promptly drill and produce any wells 
necessary to ensure that lease development and production occur in 
accordance with sound operating practices.

Subpart 3277--Inspections, Enforcement, and Noncompliance


Sec. 3277.10  Will BLM inspect my operations?

    Yes. All operations are subject to inspection by BLM to ensure 
compliance with permit terms and conditions of approval, lease terms 
and conditions, orders, and notices to lessees, applicable regulations 
and laws. During normal operating hours, you must allow BLM to inspect 
all facilities utilizing Federal geothermal resources.


Sec. 3277.11  What records must I keep available for inspection?

    The operator or facility operator must keep all records and 
information pertaining to royalty and production meters available for 
BLM inspection for a period of at least six years from the time of 
collection. This includes records and information from meters located 
off your lease or unit when such records or information are necessary 
to determine resource production to a utilization facility or the 
allocation of resource production to your lease or unit.

[[Page 52767]]

Sec. 3277.12  What actions may BLM take if I am in noncompliance?

    (a) If BLM finds your operation to be in noncompliance, we may take 
the following action:
    (1) Issue you a written Incident of Noncompliance, directing you to 
correct any deficiencies within a specific time period;
    (2) Require you to mitigate unacceptable environmental impacts 
caused by your operation; or
    (3) Revoke or suspend your utilization permit, after notice and a 
hearing in accordance with 43 CFR parts 4 and 1840.
    (b) If the noncompliance continues or is of a serious nature, BLM 
will take one of the following actions:
    (1) Enter your lease, and correct any deficiencies at your expense;
    (2) Collect all or part of your bond;
    (3) Direct modification or shutdown of your operations;
    (4) Temporarily suspend your utilization permit if necessary to 
protect public health, safety or the environment. This temporary 
suspension will go into effect immediately, and remain in effect while 
any appeals are pending; or
    (5) Initiate cancellation of the lease.

Subpart 3278--Utilization Relief and Appeals


Sec. 3278.10  May I request a variance from notices to lessees, permit 
conditions of approval, and operational and other orders issued by BLM?

    Yes.
    (a) Your request must include enough information to explain:
    (1) Why the notice to lessees, permit condition of approval, 
geothermal resource operational order, or other orders issued by BLM 
cannot be met; and
    (2) Why the variance is necessary to control your well, conserve 
natural resources, protect human health and safety, protect property, 
or protect the environment.
    (b) BLM may approve your request verbally or in writing. We will 
follow up a verbal approval with written confirmation.


Sec. 3278.11  Can I appeal a BLM decision regarding my utilization 
operations?

    You may file an appeal with BLM in accordance with the procedures 
of 43 CFR parts 4 and 1840.

[FR Doc. 96-25254 Filed 10-7-96; 8:45 am]
BILLING CODE 4310-84-P