[Federal Register Volume 70, Number 139 (Thursday, July 21, 2005)]
[Notices]
[Pages 42093-42094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14100]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[WO-310-1310-PB-24 1A]


Notification To Terminate the Benefits of the Royalty Rate 
Reductions Granted Under the Stripper Well Royalty Reduction Program 
and Request for Comment

AGENCY: Bureau of Land Management, Interior.

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SUMMARY: The Bureau of Land Management (BLM) is providing the six-month 
notification to terminate all royalty rate reductions for stripper well 
properties under the regulations at 43 CFR 3103.4-2(b)(4). In addition, 
BLM is requesting comments on the financial conditions under which BLM 
would reestablish the benefit.

DATES: This termination of benefits for stripper well properties is 
effective for sales on or after February 1, 2006. Send your comments to 
reach BLM on or before August 22, 2005. The BLM will not necessarily 
consider comments received after the above date.

ADDRESSES: Mail: Director (630), Bureau of Land Management, Eastern 
States Office, 7450 Boston Boulevard, Springfield, Virginia 22153.
    Personal or messenger delivery: 1620 L Street, NW., Suite 401, 
Washington, DC 20036.
    Direct Internet: http://www.blm.gov.nhp/news/regulatory/index.html.
    Internet E-mail: [email protected].
    Federal eRulemaking Portal: http://www/regulations.gov.

FOR FURTHER INFORMATION CONTACT: Rudy Baier, Bureau of Land Management, 
(202) 452-5024 (Commercial or FTS). Persons who use a 
telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339, 24 hours a day, 
seven days a week, except holidays, for assistance in reaching Mr. 
Baier.

[[Page 42094]]


SUPPLEMENTARY INFORMATION: Under 43 CFR 3103.4-2(b)(4), BLM may 
terminate the benefits under the stripper well royalty reduction 
program upon 6 month's notice in the Federal Register when BLM 
determines that the average oil price has remained above $28 per barrel 
over a period of 6 consecutive months (based on the WTI Crude average 
posted prices and adjusted for inflation using the implicit price 
deflator for gross national product with 1991 as the base year). The 
adjusted threshold for the third quarter of calendar year 2004 was 
$35.97 and for the fourth quarter $36.16.
    Based on BLM analysis, the WTI Crude average oil prices exceeded 
the adjusted threshold during the last 6 months. Therefore, as 
authorized by 43 CFR 3103.4-2, this serves as notice that BLM will 
terminate the benefits of the stripper well royalty reduction program 
effective for sales on or after February 1, 2006. Therefore, beginning 
on the effective date, those properties currently receiving relief 
under section 3103.4-2 must pay royalty in accordance with the royalty 
rate in the lease or other BLM-approved royalty rate reductions.
    Inherent in our authority to terminate the benefits of the royalty 
reduction program for stripper wells at a price threshold is the 
authority to reinstate the program should prices later fall beneath 
such a threshold. In the event that the new stripper royalty reduction 
regulations are not in effect when prices again make production 
uneconomic, BLM proposes to reinstate the availability of benefits 
under the royalty reduction program for stripper wells after 
publication of notice in the Federal Register.
    It is BLM's intention to propose new regulations to address 
situations in which prices again make marginal production uneconomic. 
In the time between when the benefits of the program terminate and when 
the new regulations are effective, BLM may reinstate the existing 
program.
    BLM proposes to reinstate the availability of benefits when it 
determines that the average oil price has remained below $28 per barrel 
over a period of 6 consecutive months (based on the WTI Crude average 
posted prices and adjusted for inflation using the implicit price 
deflator for gross national product with 1991 as the base year).
    BLM recognizes that the $28 per barrel trigger was instituted over 
12 years ago and conditions since that time may have changed 
considerably. Therefore, BLM is requesting comment specifically on the 
financial conditions under which BLM would reestablish the benefit 
under the existing stripper well royalty reduction program. Please see 
the ADDRESSES section above for information on where to submit your 
comments.

    Dated: May 13, 2005.
J.O. Ratcliff,
Acting Assistant Secretary, Land and Minerals Management.
[FR Doc. 05-14100 Filed 7-20-05; 8:45 am]
BILLING CODE 4310-84-P