[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Proposed Rules]
[Pages 12656-12660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2371]


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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 228

RIN 0596-AC20

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

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


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

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

ACTION: Further proposed rule; Reopening of comment period.

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SUMMARY: This further proposed rule amends the proposed rule published 
in the Federal Register on July 27, 2005 (70 FR 43349). The proposed 
rule would revise existing Onshore Oil and Gas Order Number 1 (see 48 
FR 48916 as amended at 48 FR 56226 (1983)). The Order provides the 
requirements necessary for the approval of all proposed oil and gas 
exploratory, development, or service wells on all Federal and Indian 
(except Osage Tribe) onshore oil and gas leases, including leases where 
the surface is managed by the U.S. Forest Service (FS). It also covers 
approvals necessary for subsequent well operations, including 
abandonment. This further proposed rule amends the proposed rule by 
making the provisions on the Application for Permits to Drill or Deepen 
(APD) package processing consistent with the Energy Policy Act of 2005. 
In addition, this further proposed rule amends a provision in the 
proposed rule having to do with proposed operations on lands with 
Indian surface and Federal minerals. This notice also reopens the 
comment period for the proposed rule for 30 days.

DATES: Send your comments on this further proposed rule and the 
proposed rule to the BLM on or before April 12, 2006. The BLM and the 
FS will not necessarily consider any comments received after the above 
date during its decision on the rule.

ADDRESSES: Mail: 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.
    E-mail: [email protected].
    Federal eRulemaking Portal: http://www.regulations.gov.

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

SUPPLEMENTARY INFORMATION:

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

I. Public Comment Procedures

    You may submit your comments by any one of several methods:
    You may mail your comments to: Director (630), Bureau of Land 
Management, Eastern States Office, 7450 Boston Boulevard, Springfield, 
Virginia 22153, Attention: RIN 1004-AD59.
    You may deliver comments to: 1620 L Street NW., Suite 401, 
Washington, DC 20036. You may e-mail your comment to: [email protected]. (Include ``Attention: AD59'' in the subject line).
    You may submit your comments via the Federal eRulemaking Portal at 
http://www.regulations.gov.
    Please make your comments on the rule as specific as possible, 
confine them to issues pertinent to the proposed rule or the further 
proposed rule, and explain the reason for any changes you recommend. 
Where possible, your comments should reference the specific section or 
paragraph of the proposal that you are addressing.
    The Department of the Interior and the FS may not necessarily 
consider or include in the Administrative Record for the final rule 
comments that we receive after the close of the comment period (see 
DATES) or comments

[[Page 12657]]

delivered to an address other than those listed above (see ADDRESSES).
    Individual respondents may request confidentiality. If you wish to 
request that the Bureau of Land Management (BLM) consider withholding 
your name, street address, and other contact information (such as: 
Internet address, fax or phone number) from public review or disclosure 
under the Freedom of Information Act, do not submit your comment 
electronically. You should prominently state at the beginning of your 
comment that you wish to request confidentiality.
    You do not need to re-submit comments you submitted on the first 
proposal. Those comments are part of the administrative record of this 
rulemaking and will be considered in the final rule.

II. Background and Discussion of Further Proposed Rule

    On August 26, 2005 (70 FR 50262) the BLM and the FS extended the 
comment period on the proposed rule that was published in the Federal 
Register on July 27, 2005 (70 FR 43349). On August 8, 2005, the 
President signed the Energy Policy Act of 2005 (Act). Provisions in the 
Act impact the timing of approval of APD provisions addressed in the 
original proposed rule. This further proposed rule would make the 
provisions in the Onshore Order (specifically Sections III.C.2. and 
III.G. of the Order) dealing with APD processing consistent with the 
provisions in the Act. This further proposed rule also modifies a 
provision in the proposed rule regarding proposed operations on lands 
with Indian surface and Federal minerals.

Definition of ``Complete APD''

    This further proposed rule amends the definition of ``Complete 
APD'' (see Section II., Definitions, of the Order) by requiring that an 
onsite inspection conducted jointly by the BLM, the FS if appropriate, 
and the operator be completed prior to the BLM designating the APD 
package as complete. Currently, in all circumstances, the BLM, and the 
FS if appropriate, conducts on-site inspections to determine if an APD 
package is complete. The BLM and FS intend to continue this practice 
under the amended Order since examination of existing on-the-ground 
circumstances is the only way to ensure that the information in the APD 
package is consistent with conditions at the proposed drill site and 
along the proposed access route. The proposed changes will make it 
clear that the BLM and FS intend to continue requiring on-site 
inspections as part of the APD approval process.

APD Processing

    This further proposed rule amends Section III.C.2. of the Order 
dealing with APD processing because the APD process described in the 
Order is inconsistent with the process required by the Act.
    Section 366 of the Act amends the Mineral Leasing Act (30 U.S.C. 
226(p)(1)) to add a requirement that the Secretary notify an applicant 
within 10 days of receiving an APD either that the APD is complete or 
what additional information is required to make the application 
complete. While a 10-day notice provision was included in the Order 
proposed on July 27, 2005, it is now a statutory requirement.
    Section 366 of the Energy Policy Act of 2005 contains other 
deadlines for processing APDs that were not addressed in the July 27, 
2005 proposed Order. While the steps and requirements in the Act are 
similar to the proposed rule, the Act has two additional timing 
requirements that the Order must address.
    First, the Act requires that the Secretary approve an APD 30 days 
after it is complete or notify the applicant of: (1) Any actions that 
the operator can take to get approval; (2) what steps, such as National 
Environmental Policy Act (NEPA) or other regulatory compliance, remain 
to be completed; and (3) the schedule for completion of these 
requirements. The proposed Order contained no specific time for making 
a final decision on the application.
    Second, in those situations where the BLM delays the decision, the 
Act and this further proposed rule give the applicant two years to take 
whatever actions are identified in the 30-day notice. The Act amends 30 
U.S.C. 226 by adding a new paragraph (p)(3)(B), and this further 
proposed rule also adds a new requirement, that the Secretary must make 
a final decision on the application within 10 days of the applicant's 
completion of these actions, if all other regulatory requirements are 
complete. The timeframes established in this section apply to both 
individual APDs and to the multiple APDs included in Master Development 
Plans. In addition, even though the time limits established in Section 
366 of the Act are amendments to the Mineral Leasing Act and, 
therefore, do not apply to Indian leases, we are proposing to apply the 
same time limit procedures for both Federal and Indian leases.
    The BLM does not approve Surface Use Plans of Operations for 
National Forest Service (NFS) lands. The FS notifies the BLM of its 
Surface Use Plan of Operations (SUPO) approval and the BLM proceeds 
with its APD review. For APDs on NFS lands, the decision to approve a 
Surface Use Plan of Operations or Master Development Plan may be 
subject to FS appeal procedures which may take up to 105 days from the 
date of the decision. Pursuant to the Mineral Leasing Act, as amended 
by the Federal Onshore Oil and Gas Leasing Reform Act of 1987 (30 
U.S.C. 226(g)), proposed section III.C.2.b. provides that BLM may not 
approve an APD until the FS has approved the SUPO. This condition is 
consistent with Section 366 of the Energy Policy Act which provides 
that the Secretary shall issue a permit within 30 days only if 
requirements of other applicable law have been completed within that 
timeframe (30 U.S.C. 226(p)(2)). Therefore, in situations where the 
SUPO is not approved, the BLM will provide notice within the 30 day 
period that action on the APD will be deferred until the FS completes 
action on the SUPO.

Operating on Split Estate Lands With Indian Surface Ownership

    This further proposed rule would modify Section VI. of the proposed 
rule by replacing the last sentence of the first paragraph of that 
section to make it clear that the section applies to lands with Indian 
surface and Federal minerals. It also explains that the operator is 
required to address surface use issues with the Bureau of Indian 
Affairs.
    The proposed rule had addressed conferring with surface owners in 
the case of privately owned surface and Federal/Indian leases, as well 
as Indian oil and gas leases where the surface is in different Indian 
ownership. This further proposed rule proposes to apply the policy 
applicable to privately owned surface to all Indian surface and Federal 
oil and gas lease situations. Section VI. would require a good faith 
effort to reach a surface use agreement, and provide for the posting of 
a bond to protect against damages to crops and tangible improvements in 
the absence of agreement. This change merely codifies existing policy.
    We are aware that this further proposed rule may affect other 
provisions in the proposed Order. In the final rule we will conform the 
rest of the Order proposed on July 27, 2005, to be consistent with the 
amendments proposed in this notice as they pertain to the definition of 
``Complete APD,'' the timeline for processing APDs, and the new 
provision on operating on split estate lands with Indian surface 
ownership. Furthermore, provisions in

[[Page 12658]]

the final Order will supersede any inconsistent provisions of existing 
regulations, inasmuch as they will constitute a later exercise of 
Administrative Procedure Act rulemaking. To the maximum extent 
practical, we will identify such inconsistencies and include conforming 
amendments to titles 36 or 43, or both, of the CFR in the final rule. 
For example, the time line in Section III. C. 2. of the proposed rule 
would supersede that portion of 43 CFR 3162.3-1 that discusses 
processing times.

III. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

    The provisions of the proposed rule (see 70 FR 43349), including 
the further proposed rule, are not a significant regulatory action and 
are not subject to review by the Office of Management and Budget (OMB) 
under Executive Order 12866. The OMB makes the final determination 
under the Executive Order. The proposed rule and the further proposed 
rule will not have an effect of $100 million or more on the economy. 
They will not adversely affect in a material way the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local, or tribal governments or communities. The 
proposed rule and the further proposed rule will not create serious 
inconsistencies or otherwise interfere with an action taken or planned 
by another agency. The proposed rule and further proposed rule do not 
alter the budgetary effects of entitlements, grants, user fees, or loan 
programs or the right or obligations of their recipients; nor do they 
raise novel legal or policy issues. The revision to the definition of 
``Complete APD'' requiring onsite inspections would have no impact on 
operators since onsite inspections are currently required as part of 
the APD approval process. The provision on operating on split estate 
lands with Indian surface ownership is consistent with existing policy 
and practice and therefore would have no economic impact. The other 
revisions this rule would make to the Order primarily involve changes 
to the BLM's and the FS's administrative processes.

Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as 
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not 
unnecessarily or disproportionately burden small entities. The RFA 
requires a regulatory flexibility analysis if a rule would have a 
significant economic impact, either detrimental or beneficial, on a 
substantial number of small entities. For the purposes of this 
analysis, we will assume that all entities (all lessees and operators) 
that may be impacted by these regulations are small entities.
    The proposed rule and the further proposed rule address the BLM's 
and the FS's administrative processes involved in processing APDs. 
These changes are not significantly different from the existing Order 
and would not significantly impact operators or lessees. As a result of 
more clear rules, operators will have a better understanding of the BLM 
processes, and the timelines will lead to a reduction in processing 
time and some administrative cost savings for the BLM, the FS, and 
operators. The provision on operating on split estate lands with Indian 
surface ownership merely codifies existing policy. Therefore, the BLM 
and the FS have determined that under the RFA the proposed rule and the 
further proposed rule would not have a significant economic impact on a 
substantial number of small entities.

Small Business Regulatory Enforcement Fairness Act

    The provisions of the proposed rule and the further proposed rule 
are not a ``major rule'' as defined at 5 U.S.C. 804(2). For the reasons 
stated in the RFA discussion, the proposed rule and the further 
proposed rule would not have an annual effect on the economy greater 
than $100 million; would not result in major cost or price increases 
for consumers, industries, government agencies, or regions; and would 
not have significant adverse effects on competition, employment, 
investment, productivity, innovation, or the ability of U.S.-based 
enterprises to compete with foreign-based enterprises. Please see the 
discussion of ``Executive Order 12866, Regulatory Planning and Review'' 
above.

Unfunded Mandates Reform Act

    The proposed and the further proposed rule do not impose an 
unfunded mandate on state, local, or tribal governments or the private 
sector of more than $100 million per year; nor do these proposed 
regulations have a significant or unique effect on state, local, or 
tribal governments or the private sector. The further proposed rule 
would codify decisions made by the Congress in the Energy Policy Act 
and the discretionary provisions would not have any significant effect 
monetarily, or otherwise, on the entities listed. Therefore, the BLM 
and the FS are not required to prepare a statement containing the 
information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 
et seq.).

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

    The proposed rule and the further proposed rule do not represent a 
government action capable of interfering with constitutionally 
protected property rights. The further proposed rule has no potential 
to affect property rights as the changes it would make reduce burdens 
on regulated parties. Therefore, the Department of the Interior 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 13132, Federalism

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

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    The BLM approves proposed operations on all Indian (except Osage) 
onshore oil and gas leases and agreements. The BLM has begun 
consultation on the proposed revisions to the Order and will continue 
to consult with tribes during the comment period on this further 
proposed rule. The provision on operating on split estate lands with 
Indian surface ownership merely codifies existing policy.

[[Page 12659]]

Executive Order 12988, Civil Justice Reform

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

Paperwork Reduction Act

    This further proposed rule contains no new information collection 
requirements.

National Environmental Policy Act

    The BLM and the FS have prepared an environmental assessment (EA) 
and have found that the proposed rule and the further proposed rule 
would not constitute a major Federal action significantly affecting the 
quality of the human environment under section 102(2)(C) of the NEPA, 
42 U.S.C. 4332(2)(C). A detailed statement under NEPA is not required. 
The BLM has placed the EA and the Finding of No Significant Impact on 
file in the BLM Administrative Record at the address specified in the 
ADDRESSES section.

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

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

Executive Order 13352, Facilitation of Cooperative Conservation

    In accordance with Executive Order 13352, BLM has determined that 
this rule primarily involves changes to the BLM and Forest Service 
administrative processes. This rule does not impede facilitating 
cooperative conservation; takes appropriate account of and considers 
the interests of persons with ownership or other legally recognized 
interests in land or other natural resources; has no effect on local 
participation in the Federal decision-making process; and provides that 
the programs, projects, and activities are consistent with protecting 
public health and safety.

Clarity of the Regulations

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

Authors

    The principal author of this further proposed rule is James Burd of 
the BLM, Washington Office Fluids Group assisted by the staff of the 
BLM's Regulatory Affairs Group and the Department of the Interior's 
Office of the Solicitor.

List of Subjects

36 CFR Part 228

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

43 CFR Part 3160

    Administrative practice and procedure; Government contracts; 
Indians-lands; Mineral royalties; Oil and gas exploration; Penalties; 
Public lands-mineral resources; Reporting and recordkeeping 
requirements.

    For the reasons set out in the preamble, the Bureau of Land 
Management proposes to amend the Appendix following the regulatory text 
of the proposed rule published in the Federal Register at 70 FR 43349 
as follows:
    1. In the Appendix following the regulatory text of the proposed 
rule, further amend the definition of ``Complete APD'' in section II, 
on page 43357, by revising the first paragraph of the definition as 
follows:
    Complete APD means that the information in the APD package is 
accurate and addresses all of the requirements identified in this 
Order. The onsite inspection verifies important information that is 
part of the APD package and is a critical step in determining if the 
package is complete. Therefore, the onsite inspection must be conducted 
before the APD package can be considered to be complete. The APD 
package must contain:
    2. Further amend section III.C.2. of the Appendix following the 
regulatory text of proposed rule by revising paragraph III.C.2, on page 
43357, to read as follows:
    2. Processing.
    The timeframes established in this subsection apply to both 
individual APDs and to the multiple APDs included in Master Development 
Plans and to leases of Indian minerals as well as leases of Federal 
minerals.
    (a) Within 10 days of receiving an application, BLM (in 
consultation with the FS if the application concerns NFS lands) will 
notify the operator whether or not the application is complete. The BLM 
will request additional information and correction if necessary. If an 
onsite inspection has not been performed, the applicant will be 
notified that the application is not complete. Within 10 days of 
receiving the application, BLM or the FS if appropriate, in 
coordination with the operator and Surface Managing Entity, including 
the non-Federal surface owner in the case of split estate minerals, 
will schedule a date for the onsite inspection (unless the onsite 
inspection has already been conducted as part of a Notice of Staking). 
The onsite inspection will be held as soon as practicable based on 
schedules and weather conditions. If there is enough information to 
begin processing the application, BLM (and the FS if applicable) will 
process it up to the point that missing information or uncorrected 
deficiencies render further processing impractical or impossible. The 
operator has 45 days after receiving

[[Page 12660]]

notice from BLM to provide any additional information necessary to 
complete the APD, or the APD may be returned to the operator.
    (b) Within 30 days after the operator has submitted a complete 
application, including incorporating any changes that resulted from the 
onsite inspection, the BLM will:
    (1) Approve the application, subject to reasonable conditions of 
approval, if the requirements of the NEPA, NHPA, ESA, and other 
applicable law have been met and, if on FS lands, FS has approved the 
SUPO; or
    (2) Notify the operator that it is deferring action on the permit.
    (c) The notice of deferral in paragraph (b)(2) of this section must 
specify:
    (1) Any action the operator could take that would enable BLM (in 
consultation with the FS if applicable) to issue a final decision on 
the application. The FS will notify the applicant of any action the 
applicant could take that would enable the FS to issue a final decision 
on the SUPO on NFS lands. Actions may include, but are not limited to, 
assistance with:
    (A) Data gathering; and
    (B) Preparing analyses and documents.
    (2) If applicable, a list of actions that BLM or the FS need to 
take before making a final decision on the application, including 
analysis required by NEPA or other applicable law and a schedule for 
completing these actions.
    (d) The operator has two years from the date of the notice under 
paragraph (c)(1) of this section to take the action specified in the 
notice. If all analyses required by NEPA, NHPA, ESA, and other 
applicable laws have been completed, BLM (and the FS if applicable), 
will make a decision on the permit and the SUPO within 10 days of 
receiving a report from the operator addressing all of the issues or 
actions specified in the notice under paragraph (c)(1) of this section 
and certifying that all required actions have been taken. If the 
operator has not completed the actions specified in the notice within 
two years from the operator's receipt of the paragraph (c)(1) notice, 
BLM will deny the permit.
    (e) For APDs on NFS lands, the decision to approve a SUPO or Master 
Development Plan may be subject to FS appeal procedures. Under current 
FS appeal procedures, resolution of the appeal may take up to 105 days 
before that decision can be implemented. BLM cannot approve an APD 
until the appeal of the SUPO is resolved.
    3. Further amend section VI. of the Appendix following the 
regulatory text of proposed rule by revising the last sentence of the 
first paragraph on page 43362 to read as follows:
    This section also applies to lands with Indian surface and Federal 
minerals. The operator must address surface use issues with the Bureau 
of Indian Affairs.

    Dated: March 2, 2006.
Dale N. Bosworth,
Chief, USDA--Forest Service.
    Dated: February 24, 2006.
Johnnie Burton,
Acting Assistant Secretary, Land and Minerals Management.
[FR Doc. 06-2371 Filed 3-10-06; 8:45 am]
BILLING CODE 4310-84-P