[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Rules and Regulations]
[Pages 58610-58616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20150]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3140

[WO-310-1310-PP-241A]
RIN 1004-AD76


Leasing in Special Tar Sand Areas

AGENCY: Bureau of Land Management, Department of the Interior.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Bureau of Land Management (BLM or ``we'') is issuing this 
interim final rule to amend regulations for the leasing of 
hydrocarbons, except coal, gilsonite and oil shale, in special tar sand 
areas. In this rule, BLM amends our regulations to respond to 
provisions of the Energy Policy Act of 2005 that allow separate oil and 
gas leases and tar sand leases in special tar sand areas, specify 
several oil and gas leasing practices that apply to tar sand leases, 
increase the maximum size for combined hydrocarbon leases and tar sand 
leases, and set the minimum acceptable bid for tar sand leases at $2.00 
per acre. The law requiring these changes also requires that this rule 
be published as a final rule within 45 days of enactment.
    This is an interim final rule. Although the rule is effective upon 
publication, there is a 60-day comment period that starts on the date 
of publication. After the comment period, we will review the comments 
and may issue a further final rule making any necessary changes.

DATES: The interim final rule is effective October 7, 2005.

Comments

    You should submit your comments on or before December 6, 2005. The 
BLM will not necessarily consider any comments received after the above 
date during its decision-making on the interim final rule.

ADDRESSES: 

Comments

    You may mail comments to Director (630), Bureau of Land Management, 
Eastern States Office, 7450 Boston Boulevard, Springfield, Virginia 
22153. Hand delivery: 1620 L Street NW., Suite 401, Washington, DC 
20036. For information about filing comments electronically, see the 
SUPPLEMENTARY INFORMATION section under ``Electronic access and filing 
address.''

FOR FURTHER INFORMATION CONTACT: Ron Teseneer in the Solid Minerals 
Group at (202) 452-5094. For assistance in

[[Page 58611]]

reaching Mr. Teseneer, 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, 7 days a week.

SUPPLEMENTARY INFORMATION:

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

I. Public Comment Procedures

Electronic Access and Filing Address

    You may view an electronic version of this interim final rule at 
BLM's Internet home page: http://www.blm.gov. Internet e-mail: 
[email protected]. Please also include ``Attention: 1004-
AD76'' and your name and return address in your message. If you do not 
receive a confirmation from the system that we have received your 
Internet message, contact us by phone at (202) 452-5030.
    Federal eRulemaking Portal: http://www.regulations.gov.

Written Comments

    Written comments on the interim final rule should be specific, 
should be confined to issues pertinent to the interim final 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 commenter is addressing. The BLM may not necessarily 
consider or include in the Administrative Record for the final 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).
    Comments, including names, street addresses, and other contact 
information of respondents, will be available for public review at 1620 
L Street, NW., Suite 401, Washington, DC, during regular business hours 
(7:45 a.m. to 4:15 p.m.), Monday through Friday, except Federal 
holidays. Individual respondents may request confidentiality. If you 
wish to request that BLM consider withholding your name, street 
address, and other contact information (such as: Internet address, FAX 
or phone number) from public review or from disclosure under the 
Freedom of Information Act, you must state this prominently at the 
beginning of your comment. The BLM will honor requests for 
confidentiality on a case-by-case basis to the extent allowed by law. 
The BLM will make available for public inspection in their entirety all 
submissions from organizations or businesses, and from individuals 
identifying themselves as representatives or officials of organizations 
or businesses.

II. Background

    The Combined Hydrocarbon Leasing Act of 1981 (Pub. L. 97-78) 
amended the Mineral Leasing Act to authorize the Secretary of the 
Interior (Secretary) to issue combined hydrocarbon leases in areas 
containing substantial deposits of tar sand, which were to be 
designated as special tar sand areas. This Act further specified that 
combined hydrocarbon leases were the only type of lease that could be 
offered in these special tar sand areas. The BLM published regulations 
implementing the leasing provisions of this Act on February 18, 1983 
(see 48 FR 7422).
    Section 350 of the Energy Policy Act of 2005 further amended the 
Mineral Leasing Act to authorize the Secretary to issue separate oil 
and gas leases and tar sand leases, in addition to combined hydrocarbon 
leases, in special tar sand areas. Section 350 of the Act also 
specified several oil and gas leasing practices that will apply to tar 
sand leases and set the minimum acceptable bid for tar sand leases at 
$2.00 per acre.
    Section 350(a) also authorizes the waiver of diligence requirements 
in tar sands prospecting permits. Because the Mineral Leasing Act does 
not provide for prospecting permits for this mineral, no provisions to 
implement this part of the new statute are included in this rule.
    Section 369(j)(1)(D) of the Energy Policy Act of 2005 also amended 
the Mineral Leasing Act to increase the maximum acreage of combined 
hydrocarbon leases and tar sand leases in a special tar sand area to 
5,760 acres.
    The terms of section 350 are very clear and leave BLM no room for 
interpretation. Therefore, the BLM finds good cause to omit the general 
notice of proposed rulemaking as required by 5 U.S.C. 553(b) because 
the statutorily prescribed directions make notice and comment 
unnecessary. Section 350(c) of the Act requires BLM to amend these 
regulations in order to implement the changes directed by Congress in 
the Act. The BLM has little discretion in this matter and is merely 
making minor technical amendments and other revisions directly related 
to implementing the Act. For the same reasons, BLM finds good cause 
under 5 U.S.C. 553(d) to make the rule effective immediately upon 
publication. However, we will accept comments on the rule for 60 days 
after the date of publication (see DATES). If there are no substantive 
comments on the interim final rule, we will publish another in the 
Federal Register stating that the rule will stand as published. If 
there are substantive comments on the interim final rule, we will issue 
a further final rule which addresses those comments and makes any 
necessary changes.

III. Discussion of Interim Final Rule

    This interim final rule implements the changes to the 43 CFR part 
3140 regulations that are required by Section 350 and 369 of the Energy 
Policy Act of 2005. A detailed, section-by-section discussion of the 
changes follows:

Part 3140--Leasing in Special Tar Sand Areas

    The title is changed from COMBINED HYDROCARBON LEASING, to reflect 
that oil and gas leases and tar sand leases are now available in 
special tar sand areas.
    The title of subpart 3141 in the index is revised to read ``Subpart 
3141--Leasing in Special Tar Sand Areas.'' This is done because in 
certain circumstances oil and gas leases in special tar sand areas may 
be obtained noncompetitively.
    The authority citation for Part 3140 is amended to add the Energy 
Policy Act of 2005.

Section 3140.0-5 Definitions

    This section is revised to correct references to 43 CFR 3572.1, 
which no longer exists. The new references are 43 CFR 3592 and 43 CFR 
3593.

Section 3140.1-4 Other Provisions

    This section is revised to show the new statutory maximum lease 
size within special tar sand areas, and to indicate that the lease 
referred to in this section is a combined hydrocarbon lease.

Section 3140.4-2 Issuance of the Combined Hydrocarbon Lease

    Paragraph (b) of this section is amended to correct a typographical 
error. Paragraph (d)(2) is amended to reflect the revised maximum lease 
size.

Subpart 3141--Leasing in Special Tar Sand Areas

    The title of this subpart is changed by removing the word 
competitive. This is because under some circumstances, oil and gas 
leases in special tar sand areas may be leased noncompetitively. The 
authority citation for this subpart is changed to include the Energy 
Policy Act of 2005.

Section 3141.0-1 Purpose

    This section is revised to indicate that subpart 3141 now includes 
oil and gas leasing and tar sand leasing in special tar sand areas.

[[Page 58612]]

Section 3141.0-3 Authority

    This section is revised to include the Energy Policy Act of 2005 as 
one of the authorities for subpart 3141.

Section 3141.0-5 Definitions

    This section is amended to include the definitions of an oil and 
gas lease and a tar sand lease for the purposes of this subpart.

Section 3141.0-8 Other Applicable Regulations

    This section is amended to specify that the other regulations 
referenced in the current regulations apply to combined hydrocarbon 
leases only. Two new paragraphs were added to indicate which other 
regulations apply to oil and gas leases and which other regulations 
apply to tar sand leases.

Section 3141.1 General

    This section is amended to allow the authorized officer to issue 
tar sand leases by competitive leasing only. This section also is 
revised to allow the authorized officer to issue oil and gas leases by 
competitive leasing, or if no qualifying bids are received, by 
noncompetitive leasing. This is the same procedure used to lease other 
oil and gas resources under the Mineral Leasing Act. Although it is 
possible to construe the changes made by the Energy Policy Act as 
allowing only competitive leasing of oil and gas in tar sand areas, we 
believe that Congress intended to use the same procedures for all oil 
and gas. There is no reason to treat oil and gas resources in special 
tar sand areas differently.
    Furthermore, it is more efficient to administer the oil and gas 
leasing program of the Utah State BLM Office if the same procedures 
apply to all oil and gas parcels offered in its sales, since BLM 
conducts oil and gas leasing on a statewide basis.
    The revisions to this section also clarify that oil and gas 
resources may be leased by either a combined hydrocarbon lease or by an 
oil and gas lease, and that tar sands may be leased by either a 
combined hydrocarbon lease or by a tar sand lease. The revisions also 
reiterate that an oil and gas lease does not include rights to explore 
for or develop tar sands and that a tar sand lease does not include 
rights to explore for or develop oil and gas.
    This section is revised to specify which oil and gas leasing 
regulations apply to tar sand leasing, and to indicate that the minimum 
acceptable bid for tar sand leases is $2.00 per acre.
    This section is further revised to indicate that tar sand leases 
are not charged against the acreage limitations is found at 30 U.S.C. 
Section 184(d) and 43 CFR 3101.2 for holding oil and gas leases.

Section 3141.2-2 Exploration Licenses

    Paragraph (b)(5) of this section is revised to reflect the new 
maximum lease size for special tar sand areas.

Section 3141.4-2 Consultation With Others

    Several revisions are made in paragraph (b) of this section to 
reflect the availability of oil and gas leases and tar sand leases in 
special tar sand areas.

Section 3141.5-1 Economic Evaluation

    This section is revised to indicate that an economic evaluation is 
required for combined hydrocarbon leases only.

Section 3141.5-2 Term of Lease

    This section is modified to describe the term of lease for tar sand 
leases.

Section 3141.5-3 Royalties and Rentals

    Paragraph (a) of this section is modified to indicate that the 
royalty rate specified applies to tar sand leases.
    Paragraph (c) of this section is modified to indicate that the 
rental rate specified applies to tar sand leases.

Section 3541.5-4 Lease Size

    This section is amended to reflect the statutory maximum lease size 
of 5,760 acres for combined hydrocarbon leases or tar sand leases.

Section 3141.5-5 Dating of Lease

    This paragraph is modified to specify that it also applies to tar 
sand leases.

Section 3141.6-2 Publication of a Notice of Competitive Lease Offering

    This section is amended to specify the publication procedures for 
tar sand leases as directed by the Energy Policy Act of 2005.
    For Tar Sand Leases or Oil and Gas Leases, at least 45 days prior 
to conducting a competitive auction, lands to be offered for a 
competitive lease sale shall be posted in the proper BLM office having 
jurisdiction over the lands as specified in Section 1821.2-1(d) of this 
title, and shall be made available for posting to surface managing 
agencies having jurisdiction over any of the included lands.

Section 3141.6-3 Conduct of Sales

    This section is amended to specify the bidding procedures for oil 
and gas leases and tar sand leases. This is one of the specific 
directives in the Energy Policy Act of 2005.
    Oil and Gas Leases will be conducted using the procedures for oil 
and gas leases in Section 3120.5 of this title.
    Tar sand lease parcels shall be offered by oral bidding, the 
winning bid shall be the highest oral bid by a qualified bidder, equal 
to or exceeding $2.00 per acre, and payments shall be made as provide 
in Section 3120.5-2 of this title.

Section 3141.6-5 Fair Market Value for Combined Hydrocarbon Leases

    This section is revised to clarify that it applies only to combined 
hydrocarbon leases.

Subpart 3142--Paying Quantities/Diligent Development for Combined 
Hydrocarbon Leases

    The title of this subpart is revised to clarify that it applies 
only to combined hydrocarbon leases.

Section 3142.0-5 Definitions

    This section is revised to correct a typographical error.
    The revisions in this section reiterate that the bidding procedures 
for oil and gas leases in special tar sand areas are the same as for 
oil and gas leases elsewhere.

IV. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

    These interim final regulations are not a significant regulatory 
action and are not subject to review by Office of Management and Budget 
under Executive Order 12866. These interim final regulations will not 
have an effect of $100 million or more on the economy. See further the 
discussion under the Regulatory Flexibility Act. They will not 
adversely affect in a material way the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities. These interim final 
regulations will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency. These 
interim final regulations do not alter the budgetary effects of 
entitlements, grants, user fees, or loan programs or the right or 
obligations of their recipients; nor do they raise novel legal or 
policy issues.
    This rule changes the types of leases that may be issued in special 
tar sand areas, specifies which of the oil and gas leasing regulations 
will apply to tar sand leasing, sets the minimum acceptable bid for tar 
sand leases at $2 per acre, changes the maximum lease size in special 
tar sand areas, corrects some typographical errors and erroneous cross 
references in the existing regulations, and makes some

[[Page 58613]]

cosmetic changes to make the remainder of the part consistent.
    The only provision of this rule with the potential to have an 
economic impact is the regulation setting the minimum acceptable bid at 
$2 per acre. The $2 per acre minimum bid for tar sand leases will not 
have an effect on productivity, jobs, the environment, or other units 
of government, nor will it have an effect of $100 million. The $2 per 
acre minimum bid may have an effect on the oil and gas industry, but we 
anticipate that the effect will be minimal. The requirement that 
leasing occur competitively will ensure that fair market value will be 
paid for leases issued. In addition, the $2 minimum is a statutory 
requirement of the Energy Policy Act of 2005 and is not discretionary 
on the part of the Secretary of the Interior.
Clarity of the Regulations
    Executive Order 12866 requires each agency to write regulations 
that are simple and easy to understand. We invite your comments on how 
to make these interim final regulations easier to understand, including 
answers to questions such as the following:
    1. Are the requirements in the interim final regulations clearly 
stated?
    2. Do the interim final regulations contain technical language or 
jargon that interferes with their clarity?
    3. Does the format of the interim final regulations (grouping and 
order of sections, use of headings, paragraphing, etc.) aid or reduce 
their clarity?
    4. Would the regulations be easier to understand if they were 
divided into more (but shorter) sections? (A ``section'' appears in 
bold type and is preceded by the symbol ``Sec.  '' and a numbered 
heading, for example Sec.  3141.5-4 Lease size.)
    5. Is the description of the interim final regulations in the 
SUPPLEMENTARY INFORMATION section of this preamble helpful in 
understanding the interim final regulations? How could this description 
be more helpful in making the interim final regulations easier to 
understand?
    Please send any comments you have on the clarity of the regulations 
to the address specified in the ADDRESSES section.

National Environmental Policy Act

    The BLM has determined that this interim final rule is essentially 
administrative in nature and that a National Environmental Policy Act 
(NEPA) analysis must be completed prior to any leasing. This qualifies 
as a categorical exclusion under 516 Departmental Manual (DM) Chapter 
2, Appendix 1.10. Therefore, it is categorically excluded from 
environmental review under section 102(2)(C) of the NEPA, pursuant to 
516 DM, Chapter 2, Appendix 1. In addition, the interim final rule does 
not meet any of the 10 criteria for exceptions to categorical 
exclusions listed in 516 DM, Chapter 2, Appendix 2. Pursuant to Council 
on Environmental Quality regulations (40 CFR 1508.4) and the 
environmental policies and procedures of the Department of the 
Interior, the term ``categorical exclusions'' means a category of 
actions which do not individually or cumulatively have a significant 
effect on the human environment and that have been found to have no 
such effect in procedures adopted by a Federal agency and for which 
neither an environmental assessment nor an environmental impact 
statement is required.
    Furthermore, in the Energy Policy Act of 2005, Congress directed 
that this final rule be published within 45 days exactly. Therefore, 
there is no time to complete a NEPA analysis of the rule and meet the 
prescribed deadline.

Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act (RFA) of 1980, as 
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not 
unnecessarily or disproportionately burden small entities. The RFA 
requires a regulatory flexibility analysis if a rule would have a 
significant economic impact, either detrimental or beneficial, on a 
substantial number of small entities. The interim final regulations 
will have no effect on any small entities. The interim final regulation 
is incorporating a decision already made by Congress. The interim final 
regulation allows separate leases for two resources that formerly were 
only offered jointly in special tar sand areas, specifies which of the 
oil and gas leasing regulations apply to tar sand leases, and sets the 
minimum acceptable bid for tar sand leases. Therefore, BLM has 
determined under the RFA that this interim final rule would not have a 
significant economic impact on a substantial number of small entities. 
The $2 per acre fixed minimum bid for tar sand leases will not have an 
effect on the economy of $100 million. The competitive bidding process 
should ensure that a tar sand lease is sold at fair market value and 
therefore the statutory $2 minimum bid should have no impact on small 
entities.

Small Business Regulatory Enforcement Fairness Act

    These interim final regulations are not a ``major rule'' as defined 
at 5 U.S.C. 804(2). The interim final regulation is essentially 
administrative in nature, changing only the types of leases that may be 
offered in special tar sand areas, specifying which of the oil and gas 
leasing regulations apply to tar sand leases, and setting the minimum 
acceptable bid for tar sand leases.

Unfunded Mandates Reform Act

    These interim final regulations do not impose an unfunded mandate 
on State, local, or tribal governments or the private sector of more 
than $100 million per year; nor do these interim final regulations have 
a significant or unique effect on State, local, or tribal governments 
or the private sector. The interim final rule will not impose any 
mandate on State, local, or tribal governments or the private sector. 
The regulations implement clear and mandatory provisions of a recently 
enacted statute. The interim final regulation is essentially 
administrative in nature, changing only the types of leases that may be 
offered in special tar sand areas, specifying which of the oil and gas 
leasing regulations apply to tar sand leases, and setting the minimum 
acceptable bid for tar sand leases. Therefore, BLM is not required to 
prepare a statement containing the information required by the Unfunded 
Mandates Reform Act (2 U.S.C. 1531 et seq.).

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

    The interim final rule does not represent a government action 
capable of interfering with constitutionally protected property rights. 
The interim final rule has no effects that could be considered a 
taking. This rule change is administrative in nature. It changes the 
types of leases that may be issued in special tar sand areas, specifies 
which of the oil and gas leasing regulations will apply to tar sand 
leasing, sets the minimum acceptable bid for tar sand leases at $2 per 
acre, changes the maximum lease size in special tar sand areas, 
corrects some typographical errors and erroneous CFR references in the 
existing regulations and erroneous CFR references in the existing 
regulations, and makes some conforming changes to make the remainder of 
the part consistent. Therefore, the Department of the Interior has 
determined that the rule

[[Page 58614]]

would not cause a taking of private property or require further 
discussion of takings implications under this Executive Order.

Executive Order 13132, Federalism

    The interim final rule will not have a substantial direct effect on 
the States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. The interim final rule will have no 
effect on the States, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. This rule 
change is administrative in nature. It changes the types of leases that 
may be issued in special tar sand areas, specifies which of the oil and 
gas leasing regulations will apply to tar sand leasing, sets the 
minimum acceptable bid for tar sand leases at $2 per acre, changes the 
maximum lease size in special tar sand areas, corrects some 
typographical errors and erroneous cross references in the existing 
regulations, and makes some conforming changes to make the remainder of 
the part consistent. Therefore, in accordance with Executive Order 
13132, BLM has determined that this interim final rule does not have 
sufficient Federalism implications to warrant preparation of a 
Federalism Assessment.

Executive Order 12988, Civil Justice Reform

    Under Executive Order 12988, the Office of the Solicitor has 
determined that this interim final rule would not unduly burden the 
judicial system and that it meets the requirements of sections 3(a) and 
3(b)(2) of the Order.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    In accordance with Executive Order 13175 we have identified no 
potential effects on Indian trust resources; however, it does affect 
split estate lands involving Indian surface and federal minerals. 
Accordingly, we are in the process of preparing a letter to the 
potentially affected tribes to inform them of the procedural changes 
that will take place in special tar sands areas and seeking their 
comments on the rule.

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

    In accordance with Executive Order 13211, BLM has determined that 
the interim final rule will not have substantial direct effects on the 
energy supply, distribution or use, including a shortfall in supply or 
price increase. This rule does not represent the exercise of agency 
discretion. Congress' mandate to offer oil and gas leasing and tar sand 
leasing, separately, in special tar sand areas may result in an 
increase in oil and gas production of unknown amounts. It does not 
impose a regulatory burden on any lessee.

Paperwork Reduction Act

    BLM has determined that these regulations do not contain 
information collection requirements that the Office of Management and 
Budget must approve under the Paperwork Reduction Act of 1995, 44 
U.S.C. 3501 et seq.
Author
    The principal author of this rule is Ron Teseneer, Solid Minerals 
Group (WO320). Jim Kohler, Utah State Office, BLM, Dennis Daugherty, 
Office of the Solicitor, Department of the Interior, and Frank Bruno, 
Regulatory Affairs provided assistance during this effort.

List of Subjects in 43 CFR Part 3140

    Government contracts, Hydrocarbons, Mineral royalties, Oil and gas 
exploration, Public lands--mineral resources, Reporting and 
recordkeeping requirements.

    Dated: September 29, 2005.
Rebecca W. Watson,
Assistant Secretary, Land and Minerals Management.

0
Accordingly, BLM amends 43 CFR part 3140, as set forth below:

PART 3140--COMBINED HYDROCARBON LEASING

0
1. Amend part 3140 by revising the part heading to read as follows:

PART 3140--LEASING IN SPECIAL TAR SAND AREAS

0
2-3.The authority citation for part 3140 is revised to read as follows:

    Authority: 30 U.S.C. 181 et seq.; 30 U.S.C. 351-359; 95 Stat. 
1070; 43 U.S.C. 1701 et seq.; the Energy Policy Act of 2005 (Pub. L. 
109-58), unless otherwise noted.

Subpart 3140--Conversion of Existing Oil and Gas Leases and Valid 
Claims Based on Mineral Locations

0
4. Remove the authority citation for subpart 3140.

0
5. Amend Sec.  3140.0-5 by revising paragraph (b) to read as follows:


Sec.  3140.0-5  Definitions.

* * * * *
    (b) A complete plan of operations means a plan of operations that 
is in substantial compliance with the information requirements of 43 
CFR 3592 for both exploration plans and mining plans, as well as any 
additional information required in this part and under 43 CFR 3593, as 
may be appropriate.
* * * * *

0
6. Amend Sec.  3140.1-4 by revising paragraph (a) to read as follows:


Sec.  3140.1-4  Other provisions.

    (a) A combined hydrocarbon lease shall be for no more than 5,760 
acres. Acreage held under a combined hydrocarbon lease in a Special Tar 
Sand Area is not chargeable to State oil and gas limitations allowable 
in Sec.  3101.2 of this title.
* * * * *

0
7. Amend Sec.  3140.4-2 by revising paragraphs (b) and (d)(2) to read 
as follows:


Sec.  3140.4-2  Issuance of the combined hydrocarbon lease.

* * * * *
    (b) The authorized officer shall not sign the combined hydrocarbon 
lease until it has been executed by the conversion applicant and the 
lease or claim to be converted has been formally relinquished to the 
United States.
* * * * *
    (d) * * *
    (2) To the extent necessary to promote the development of the 
resource, the authorized officer may issue, upon the request of the 
applicant, one combined hydrocarbon lease that does not exceed 5,760 
acres, which shall be as nearly compact as possible, to cover non-
contiguous oil and gas leases or valid claims which have been approved 
for conversion.

Subpart 3141--Competitive Leasing in Special Tar Sand Areas

0
8. Revise the subpart heading for subpart 3141 to read as follows:

Subpart 3141--Leasing in Special Tar Sand Areas

0
9. Remove the authority citation for subpart 3141.

0
10. Revise Sec.  3141.0-1 to read as follows:


Sec.  3141.0-1  Purpose.

    The purpose of this subpart is to provide for the competitive 
leasing of lands and issuance of Combined Hydrocarbon Leases, Oil and 
Gas Leases, or Tar Sand Leases within special tar sand areas.

[[Page 58615]]


0
11. Revise Sec.  3141.0-3 to read as follows:


Sec.  3141.0-3  Authority.

    The regulations in this subpart are issued under the authority of 
the Mineral Leasing Act of February 25, 1920 (30 U.S.C. 181 et seq.), 
the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the 
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et 
seq.), the Combined Hydrocarbon Leasing Act of 1981 (95 Stat. 1070), 
and the Energy Policy Act of 2005 (Pub. L. 109-58).

0
12. Amend Sec.  3141.0-5 by redesignating paragraphs (b) and (c) as 
paragraphs (d) and (e), respectively, and adding new paragraphs (b) and 
(c) to read as follows:


Sec.  3141.0-5  Definitions.

* * * * *
    (b) For purposes of this subpart, ``oil and gas lease'' means a 
lease issued in a Special Tar Sand Area for the exploration and 
development of oil and gas resources except for tar sand.
    (c) Tar sand lease means a lease issued in a Special Tar Sand area 
exclusively for the exploration for and extraction of tar sand.
* * * * *

0
13. Amend Sec.  3141.0-8 by:
0
A. Revising the section heading;
0
B. Redesignating paragraphs (a), (a)(1), (a)(2), (a)(3), (a)(4), 
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9), and (a)(10) as paragraphs 
(a)(1), (a)(1)(i), (a)(1)(ii), (a)(1)(iii), (a)(1)(iv), (a)(1)(v), 
(a)(1)(vi), (a)(1)(vii), (a)(1)(viii), (a)(1)(ix), and (a)(1)(x), 
respectively;
0
C. Redesignating paragraphs (b) and (c) as paragraphs (a)(2) and 
(a)(3), respectively;
0
D. Adding new paragraph (a) introductory text;
0
E. Revising newly redesignated paragraph (a)(3); and
0
F. Adding new paragraphs (b), and (c), to read as follows:


Sec.  3141.0-8  Other Applicable Regulations.

    (a) Combined hydrocarbon leases.
* * * * *
    (3) The provisions of 43 CFR part 3180 shall serve as general 
guidance to the administration of combined hydrocarbon leases issued 
under this part to the extent they may be included in unit or 
cooperative agreements.
    (b) Oil and gas leases. (1) All of the provisions of parts 3100, 
3110, and 3120 of this title apply to the issuance and administration 
of oil and gas leases issued under this part.
    (2) All of the provisions of part 3160 apply to operations on an 
oil and gas lease issued under this part.
    (3) The provisions of 43 CFR part 3180 apply to the administration 
of oil and gas leases issued under this part.
    (c) Tar sand leases. (1) The following provisions of part 3100 of 
this title, as they relate to competitive leasing, apply to the 
issuance of tar sand leases issued under this part.
    (i) All of subpart 3102;
    (ii) All of subpart 3103 with the exception of sections 3103.2-1, 
3103.2-2(d), and 3103.3;
    (iii) All of section 3120.4; and
    (iv) All of section 3120.5.
    (2) Prior to commencement of operations, the lessee shall develop a 
plan of operations as described in 43 CFR 3592.1 which ensures 
reasonable protection of the environment.

0
14. Amend Sec.  3141.1 by:
0
A. Revising paragraph (a);
0
B. Redesignating paragraphs (b) and (c) as paragraphs (h) and (i), 
respectively;
0
C. Adding new paragraphs (b), (c), (d), (e), (f), and (g); and
0
D. Revising newly redesignated paragraph (h) to read as follows:


Sec.  3141.1  General.

    (a) Combined hydrocarbons or tar sands within a Special Tar Sand 
Area shall be leased only by competitive bonus bidding.
    (b) Oil and gas within a Special Tar Sand Area shall be leased by 
competitive bonus bidding as described in 43 CFR part 3120 or if no 
qualifying bid is received during the competitive bidding process, the 
area offered for competitive lease may be leased noncompetitively as 
described in 43 CFR part 3110.
    (c) The authorized officer may issue either combined hydrocarbon 
leases, or oil and gas leases for oil and gas within such areas.
    (d) The rights to explore for or develop tar sand deposits in a 
Special Tar Sand Area may be acquired through either a combined 
hydrocarbon lease or a tar sand lease.
    (e) An oil and gas lease in a Special Tar Sand Area does not 
include the rights to explore for or develop tar sand.
    (f) A tar sand lease in a Special Tar Sand Area does not include 
the rights to explore for or develop oil and gas.
    (g) The minimum acceptable bid for a lease issued for tar sand 
shall be $2 per acre.
    (h) The acreage of combined hydrocarbon leases or tar sand leases 
held within a Special Tar Sand Area shall not be charged against 
acreage limitations for the holding of oil and gas leases as provided 
in section 3101.2-1 of this title.
* * * * *

0
15. Amend Sec.  3141.2-2 by revising paragraph (b)(5) to read as 
follows:


Sec.  3141.2-2  Exploration licenses.

* * * * *
    (b) * * *
    (5) An application shall cover no more than 5,760 acres, which 
shall be as compact as possible. The authorized officer may grant an 
exploration license covering more than 5,760 acres only if the 
application contains a justification for an exception to the normal 
limitation.
* * * * *

0
16. Amend Sec.  3141.4-2 by revising paragraph (b) to read as follows.


Sec.  3141.4-2  Consultation with others.

* * * * *
    (b) The issuance of combined hydrocarbon leases, oil and gas 
leases, and tar sand leases within special tar sand areas in units of 
the National Park System shall be allowed only where mineral leasing is 
permitted by law and where the lands are open to mineral resource 
disposition in accordance with any applicable Minerals Management Plan. 
In order to consent to any issuance of a combined hydrocarbon lease, 
oil and gas lease, tar sand lease, or subsequent development of 
hydrocarbon resources within a unit of National Park System, the 
Regional Director of the National Park Service shall find that there 
will be no resulting significant adverse impacts to the resources and 
administration of the unit or other contiguous units of the National 
Park System in accordance with Sec.  3109.2 (b) of this title.

0
17. Revise Sec.  3141.5-1 to read as follows:


Sec.  3141.5-1  Economic evaluation.

    Prior to any lease sale for a combined hydrocarbon lease, the 
authorized officer shall request an economic evaluation of the total 
hydrocarbon resource on each proposed lease tract exclusive of coal, 
oil shale, or gilsonite.

0
18. Revise Sec.  3141.5-2 to read as follows:


Sec.  3141.5-2  Term of lease.

    (a) Combined hydrocarbon leases or oil and gas leases shall have a 
primary term of 10 years and shall remain in effect so long thereafter 
as oil or gas is produced in paying quantities.
    (b) Tar Sand leases shall have a primary term of 10 years and shall 
remain in effect so long thereafter as tar sand is produced in paying 
quantities.

0
19. Amend Sec.  3141.5-3 by revising paragraph (a), redesignating 
paragraph (d) as (e), and adding new paragraph (d), to read as follows.

[[Page 58616]]

Sec.  3141.5-3  Royalties and rentals.

    (a) The royalty rate on all combined hydrocarbon leases or tar sand 
leases is 12\1/2\ percent of the value of production removed or sold 
from a lease. The Minerals Management Service shall be responsible for 
collecting and administering royalties.
* * * * *
    (d) The rental rate for a tar sand lease shall be $1.50 per acre 
for the first 5 years and $2.00 per acre for each year thereafter.
* * * * *

0
20. Revise Sec.  3141.5-4 to read as follows:


Sec.  3141.5-4  Lease size.

    Combined hydrocarbon leases or tar sand leases in Special Tar Sand 
Areas shall not exceed 5,760 acres.

0
21. Revise Sec.  3141.6-2 to read as follows:


Sec.  3141.6-2  Publication of a notice of competitive lease offering.

    (a) Combined Hydrocarbon Leases. Where a determination to offer 
lands for competitive leasing is made, a notice shall be published of 
the lease sale in the Federal Register and a newspaper of general 
circulation in the area in which the lands to be leased are located. 
The publication shall appear once in the Federal Register and at least 
once a week for 3 consecutive weeks in a newspaper, or for other such 
periods deemed necessary. The notice shall specify the time and place 
of sale; the manner in which the bids may be submitted; the description 
of the lands; the terms and conditions of the lease, including the 
royalty and rental rates; the amount of the minimum bid; and shall 
state that the terms and conditions of the leases are available for 
inspection and designate the proper BLM office where bid forms may be 
obtained.
    (b) Tar Sand Leases or Oil and Gas Leases. At least 45 days prior 
to conducting a competitive auction, lands to be offered for a 
competitive lease sale shall be posted in the proper BLM office having 
jurisdiction over the lands as specified in Sec.  1821.2-1(d) of this 
title, and shall be made available for posting to surface managing 
agencies having jurisdiction over any of the included lands.

0
22. Amend Sec.  3141.6-3 by redesignating paragraphs (a) through (f) as 
paragraphs (a)(1) through (a)(6), respectively; and by adding new 
paragraphs (a) introducing text, (b), and (c) to read as follows:


Sec.  3141.6-3  Conduct of sales.

    (a) Combined Hydrocarbon Leases.
* * * * *
    (b) Oil and Gas Leases. Lease sales for oil and gas leases will be 
conducted using the procedures for oil and gas leases in Sec.  3120.5 
of this title.
    (c) Tar Sand Leases. (1) Parcels shall be offered by oral bidding.
    (2) The winning bid shall be the highest oral bid by a qualified 
bidder, equal to or exceeding $2.00 per acre.
    (3) Payments shall be made as provided in Sec.  3120.5-2 of this 
title.

0
23. Amend Sec.  3141.6-5 by revising the section heading to read as 
follows:


Sec.  3141.6-5  Fair market value for combined hydrocarbon leases.

Subpart 3142--Paying Quantities/Diligent Development

0
24. Revise the heading of subpart 3142 to read as follows:

Subpart 3142--Paying Quantities/Diligent Development for Combined 
Hydrocarbon Leases

0
25. Amend Sec.  3142.0-5 by revising paragraph (a) to read as follows:


Sec.  3142.0-5  Definitions.

* * * * *
    (a) Production, in compliance with an approved plan of operations 
and by nonconventional methods, of oil and gas which can be marketed; 
or
* * * * *
[FR Doc. 05-20150 Filed 10-6-05; 8:45 am]
BILLING CODE 4310-84-P