[Federal Register Volume 78, Number 59 (Wednesday, March 27, 2013)]
[Proposed Rules]
[Pages 18547-18558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-07052]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3900, 3920, and 3930

[LLWO-3200000 L13100000.PP0000 L.X.EMOSHL000.241A]
RIN 1004-AE28


Oil Shale Management--General

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Land Management (BLM) is proposing to amend the 
BLM's commercial oil shale regulations by revising these regulations in 
order to address concerns about the royalty system in the existing 
regulations and to provide more detail to the environmental protection 
requirements.

DATES: Send your comments to reach the BLM on or before May 28, 2013. 
The BLM will not necessarily consider any comments received after the 
above date in making its decision on the final rule.

ADDRESSES: Mail: Director (630) Bureau of Land Management, U.S. 
Department of the Interior, Mail Stop 2143LM, 1849 C St. NW., 
Washington, DC 20240, Attention: 1004-AE28. Personal or messenger 
delivery: U.S. Department of the Interior, Bureau of Land Management, 
20 M Street SE., Room 2134 LM, Attention: Regulatory Affairs, 
Washington, DC 20003. Federal eRulemaking Portal: http://

[[Page 18548]]

www.regulations.gov. Follow the instructions at this Web site.

FOR FURTHER INFORMATION CONTACT: Mitchell Leverette, Chief, Division of 
Solid Minerals, at (202) 912-7113 for issues related to the BLM's 
commercial oil shale leasing program or Ian Senio, Chief, Division of 
Regulatory Affairs at (202) 912-7440 for regulatory process issues. 
Persons who use a telecommunications device for the deaf (TDD) may call 
the Federal Information Relay Service at 1-800-877-8339, 24 hours a 
day, 7 days a week to contact the above individuals.

SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Background
III. Discussion of the Proposed Rule
IV. Procedural Matters

I. Public Comment Procedures

    If you wish to comment, you may submit your comments by any one of 
several methods: You may mail comments to Director (630), Bureau of 
Land Management, U.S. Department of the Interior, Mail Stop 2143LM, 
1849 C St. NW., Washington DC 20240, Attention: 1004-AE28. You may 
deliver comments to U.S. Department of the Interior, Bureau of Land 
Management, 20 M Street SE., Room 2134LM, Attention: Regulatory 
Affairs, Washington, DC 20003; or you may access and comment on the 
proposed rule at the Federal eRulemaking Portal by following the 
instructions at that site (see ADDRESSES). Written comments on the 
proposed rule should be specific, should be confined to issues 
pertinent to the proposed rule, and should explain the reason for any 
recommended change. Where possible, comments should reference the 
specific section or paragraph of the proposed rule that the comment is 
addressing. The BLM need not consider or include in the Administrative 
Record for the proposed rule comments that it 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 and street addresses of respondents, will be available for public 
review at the U.S. Department of the Interior, Bureau of Land 
Management, 20 M Street SE., Room 2134LM, Washington, DC 20003 during 
regular hours (7:45 a.m. to 4:15 p.m.) Monday through Friday, except 
holidays. They also will be available at the Federal eRulemaking 
Portal: http://www.regulations.gov. Follow the instructions at this Web 
site.
    Before including your address, telephone number, email address, or 
other personal identifying information in your comment be advised that 
your entire comment--including your personal identifying information--
may be made publicly available at any time. While you can ask us in 
your comment for the BLM to withhold your personal identifying 
information from public review, we cannot guarantee that we will be 
able to do so.

II. Background

Advance Notice of Proposed Rulemaking

    The BLM published in the Federal Register an advance notice of 
proposed rulemaking (ANPR) on August 25, 2006 (71 FR 50378). The ANPR 
requested public comments on key components to be considered in the 
development of a commercial oil shale leasing and development program. 
On September 26, 2006, the BLM published in the Federal Register a 
notice reopening and extending the comment period on the ANPR (71 FR 
56085). The BLM received 48 comment letters on the ANPR and considered 
those comments in developing the proposed and final rules.

Proposed 2008 Rule

    On July 23, 2008, the BLM published in the Federal Register a 
proposed rule entitled Oil Shale Management--General (73 FR 42926). The 
comment period for the proposed rule closed on September 22, 2008. The 
BLM received over 75,000 comment letters on the proposed rule from 
individuals, Federal and state governments and agencies, interest 
groups, and industry representatives. The BLM considered those comments 
in developing the final rule.

Final 2008 Rule and This Proposal

    On November 18, 2008, the BLM published in the Federal Register the 
final oil shale regulations (73 FR 69414). The regulations were 
required by Section 369 of the Energy Policy Act of 2005 (42 U.S.C. 
15927) (EPAct). Section 369 addresses oil shale development and directs 
the Secretary of the Interior (Secretary) to establish regulations for 
a commercial leasing program. The Mineral Leasing Act of 1920 (30 
U.S.C. 241(a)) (MLA) also authorizes the BLM to lease oil shale 
resources on BLM-managed public lands. Additional statutory authorities 
for the 2008 regulations and for the amendments proposed in this notice 
are:
    (1) Section 32 of the Mineral Leasing Act of 1920 (30 U.S.C. 189);
    (2) Section 10 of the Mineral Leasing Act for Acquired Lands of 
1947 (30 U.S.C. 359); and
    (3) Section 310 of the Federal Land Policy and Management Act 
(FLPMA) of 1976 (43 U.S.C. 1740).
    For additional information on the ANPR, the 2008 proposed rule, and 
the final rule, please see the above-referenced Federal Register 
notices.
    After publication of the final rule in 2008, the regulations were 
challenged in Federal court. As part of the settlement agreement, the 
BLM agreed to propose certain revisions to the regulations, as 
presented below, relating to the royalty rate and other environmental 
protection requirements applicable to commercial oil shale leasing, in 
addition to clarifying certain other regulatory provisions. This 
proposed rule would revise the BLM's oil shale leasing regulations at 
43 CFR parts 3900, 3920, and 3930.

Programmatic Environmental Impact Statement

    On November 28, 2008, the BLM published in the Federal Register a 
Notice of Availability of the Approved Resource Management Plan 
Amendments/Record of Decision (ROD) for Oil Shale and Tar Sands 
Resources to Address Land use Allocations in Colorado, Utah, and 
Wyoming and the Final Programmatic Environmental Impact Statement (EIS) 
(73 FR 72519). The amendments and ROD expanded the acreage potentially 
available for commercial tar-sands leasing and amended 10 Resource 
Management Plans (RMP) in Utah, Colorado, and Wyoming to make 
approximately 1.9 million acres of public lands potentially available 
for commercial oil shale development and 431,224 acres potentially 
available for tar sands leasing and development. The oil shale 
resources are found in the Piceance and Washakie Basins in Colorado, 
the Uintah Basin in Utah, and the Green River and Washakie Basins in 
Wyoming. The tar sands resources are found in certain sedimentary 
provinces in the Colorado Plateau in Utah.
    The Programmatic EIS summarized information on oil shale and tar 
sands technologies and their potential environmental and socio-economic 
impacts, along with potential mitigating measures that would be 
evaluated and applied when subsequent site-specific National 
Environmental Policy Act (NEPA) analysis is undertaken for lease 
issuance or project approval.
    Concurrently with its review of the 2008 final oil shale 
regulations, the BLM has undertaken a new public planning process 
related to oil shale and tar sands. Specifically, on April 14, 2011, 
the BLM published in the Federal Register a Notice of Intent to Prepare 
a

[[Page 18549]]

Programmatic Environmental Impact Statement (EIS) and Possible Land Use 
Plan Amendments for Allocation of Oil Shale and Tar Sands Resources on 
Lands Administered by the BLM in Colorado, Utah, and Wyoming (76 FR 
21003). On February 6, 2012, the BLM published in the Federal Register 
a Notice of Availability of the Draft Programmatic Environmental Impact 
Statement for Allocation of Oil Shale and Tar Sands Resources on Lands 
Administered by the Bureau of Land Management in Colorado, Utah, and 
Wyoming (77 FR 5833). In addition to announcing the opening of the 90-
day comment period, the notice provided background information on the 
Draft Programmatic EIS and stated that the BLM planned to hold public 
meetings to provide an overview of the Draft Programmatic EIS, respond 
to questions, and take written comments.
    The BLM held Open House meetings during March 2012 to provide 
additional information on the Draft PEIS. During the comment period 
that closed on May 4, 2012, approximately 160,000 comment letters were 
received. Comments on the Draft PEIS received from the public and 
cooperating agencies, other federal agencies, as well as internal BLM 
review, were considered and incorporated, as appropriate, into the 
proposed plan amendments. The proposed plan amendments in the Final EIS 
would revise the current land use plans in the study area, which 
describe land allocations analyzed in the 2008 PEIS and approved in the 
subsequent Record of Decision.
    The BLM published the notice of availability of the Final PEIS on 
November 9, 2012. This began both the 30-day protest period, which 
ended December 10, 2012, and the 60-day Governor's Consistency Review, 
which ended January 9, 2013.
    The BLM received seventeen protest letters, including 1 from the 
State of Utah, 5 from county governments, 6 from industry-affiliated 
groups or companies, and 5 from environmental groups. Major protest 
issues raised by government and industry interests relate to: the 
rationale and need for revising decisions of the 2008 PEIS; the 
proposed reduction in the amount of lands available for leasing; the 
proposed requirement for Research, Development, and Demonstration (R, D 
and D) before issuance of commercial leases; the consideration of lands 
with wilderness characteristics; the consideration of sage-grouse 
habitat inventories and related State policies; and the consideration 
of new oil shale technologies in the PEIS analysis.
    Major protest issues raised by environmental groups relate to the 
adequacy of the NEPA analysis, particularly impacts related to climate 
change, air quality, cultural resources, water resources, and 
cumulative impacts.
    The BLM answered the protests on March 23, 2013 and responded to 
the Governor's Consistency Review letters on February 6, 2013. The 
Record of Decision (ROD) was signed on February 22, 2013.

Oil Shale Research, Development, and Demonstration (R, D and D) Program

First Round
    The BLM's Oil Shale R, D and D program began on June 9, 2005, with 
a call for nominations published in the Federal Register (70 FR 33753). 
The BLM received 20 nominations and after intense review, six tracts of 
160 acres each were determined to be suitable for R, D and D. These six 
tracts were evaluated under NEPA. On January 1, 2007, five R, D and D 
leases were issued in Colorado and on July 1, 2007, one lease was 
issued for BLM lands in Utah. These were the first R, D and D leases 
issued for public lands and the first Federal oil shale leases issued 
in 35 years. Most of the six leases are currently in various stages of 
testing and research for the potential production of oil shale 
resources.
Second Round
    On November 3, 2009, the BLM published a Notice in the Federal 
Register (74 FR 56867) calling for nominations for a second round of 
oil shale R, D and D leasing. The BLM received three nominations--two 
in Colorado and one in Utah. The three nominations were reviewed by an 
Interdisciplinary Review team to determine the:
    (1) Potential for the proposal to advance the knowledge of 
effective technology;
    (2) Economic viability of the applicant; and
    (3) Means of managing the environmental effects of the proposed oil 
shale technology.
    The Interdisciplinary Review Team found that all three nominations 
adequately addressed the evaluation criteria, and, on October 19, 2010, 
the proponents were notified that their nominations would be forwarded 
for NEPA review. The two Colorado tracts were evaluated under NEPA and 
leases were issued effective December 1, 2012. The Utah nomination was 
canceled and the case closed on December 7, 2012, because the proponent 
failed to initiate the NEPA process.

III. Discussion of the Proposed Rule

    This proposed rule provides the BLM with an opportunity to 
reconsider certain portions of the 2008 regulations, which were 
challenged in Federal court. As part of the settlement agreement, the 
BLM agreed to propose specific revisions to the 2008 regulations, as 
presented below, to address the royalty rate and certain environmental 
protection requirements applicable to commercial oil shale leasing.
    In this rulemaking proceeding, the BLM will consider several 
options for amending the current royalty rates for commercial oil shale 
production. The BLM will particularly consider whether a single royalty 
rate or rate structure should be set in advance in regulation to 
provide greater certainty to potential lessees or whether some 
administrative flexibility may be retained to make adjustments to 
royalty terms after more is known about the costs and resource impacts 
associated with emerging oil shale technologies, whether future 
applications to lease should include specified resource-protection 
plans, and whether other aspects of the regulations should be 
clarified.
    The proposed revisions are intended to clarify specific provisions, 
to ensure that the royalty rate provides a fair return to the American 
taxpayer while encouraging the development of Federal oil shale 
resources, and that adequate measures are in place to protect the 
environment.

Section 3903.52 Production royalties

    The Energy Policy Act of 2005 (Section 369(o)) directs the agency 
to establish royalties and other payments for oil shale leases that 
``shall
    (1) Encourage development of the oil shale and tar sands resources; 
and
    (2) Ensure a fair return to the United States.''
    The BLM extensively discussed the issue of the royalty rates for 
commercial oil shale production in the preamble to the 2008 oil shale 
rules. See 73 FR at 69419-69429. Those rules, which are currently in 
effect, set the royalty rate at 5 percent for the first 5 years of 
commercial production and increases it by 1 percent each year starting 
with the sixth year of commercial production, reaching a maximum 
royalty rate of 12 \1/2\ percent in the thirteenth year of commercial 
production.
    Notwithstanding the 2008 analysis, there are some concerns that 
cause the BLM to revisit the issue. On the one hand, the Federal lands 
open for oil shale leasing in Colorado, Utah, and Wyoming have, in many 
locations, vast quantities of oil shale per surface acre.

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If the royalty rates were set too low and the industry were to develop 
a highly efficient technology, then there could be immense private 
profits from Federal oil shale leases without a fair return to the 
American people.
    On the other hand, as has been previously explained, oil shale is a 
class of rocks such as marlstone containing not oil, but kerogen. See 
73 FR 69414. Oil shale is not like any of the shales or ``tight'' 
formations found in many parts of the United States that contain oil or 
gas that can be produced by hydraulic fracturing. All known 
technologies to convert the kerogen to liquid hydrocarbons require 
significant amounts of energy. Thus, there is a reasonable likelihood 
that developers will continue to view commercial oil shale production 
as a more expensive prospect than competing conventional oil and gas 
projects. If the royalty rates are set too high, they could discourage 
development of the oil shale resources.
    None of the R, D and D leases issued in 2006 and 2007 have yet 
demonstrated a commercially viable technology. The recently issued R, D 
and D leases are probably years away from demonstrating technologies. 
Although there are entities conducting various types of activities on 
other oil shale lands in the United States, the BLM does not have data 
showing that oil shale development is commercially viable at this time. 
Thus, even though the existing royalty rates might be appropriate for 
the oil shale industry when it comes into being, at present the BLM is 
faced with uncertainty.
    Pursuant to the settlement agreement, the BLM is proposing to 
remove the royalty rates currently in section 3903.52(b). Additionally, 
the BLM is proposing that the royalty rate will be set by the BLM in 
the notice of sale or, for R, D and D conversion, it will be 
established by the Secretary of the Interior. The BLM has not yet made 
a decision on what would replace the current rule's royalty rates, but 
rather is seeking comment on several different options as set forth 
below.
Option 1. Invite Comment on Proposed Lease Terms in a Proposed Notice 
of Lease Sale
    Under this option, the BLM would first publish a proposed notice of 
sale or conversion to a commercial lease for a period of not less than 
30 days. That proposed notice would include all proposed lease terms 
and stipulations, including proposed royalty and rental rates. It also 
would include an explanation of how the BLM determined the proposed 
royalty rate. This would give interested parties and the public an 
opportunity to comment on all the proposed terms, including the 
proposed royalty rate. Under this option and so as to allow adequate 
time for both comment and consideration of the comments, the BLM would 
amend Section 3924.5 to require at least 60 days between publication of 
the proposed notice of sale and the notice of sale.
Option 2. Invite Public Comment Using Coal Lease Sale Process
    As an alternative to publishing a proposed notice of sale, the BLM 
specifically seeks comments on a possible alternative procedure that 
would be modeled after a provision in the Federal coal leasing 
regulations at 43 CFR 3422.1. Instead of publishing a proposed notice 
of sale, the BLM would, at least 30 days before the notice of sale, 
solicit public comment on the fair market value of, and expected 
recovery from, the oil shale lands proposed to be offered for lease and 
on what royalty rate and other lease terms or stipulations commenters 
believe should be required. The authorized officer would prepare a 
report evaluating the comments and containing his or her 
recommendations for the minimum bid and for the royalty rate and other 
lease terms to be included in the leases offered.
Option 3. Sliding Scale Royalty Based on the Market Prices of Oil and 
Gas
    In the 2008 proposed oil shale rule, the BLM considered and sought 
comment on a sliding scale royalty. That approach was not adopted in 
the final 2008 rule, but in light of the need to reconsider the 
existing royalty rates under the terms of the settlement, we would like 
to reconsider this option and are seeking public comment on the best 
approach to implementing a sliding scale royalty structure.
    Although the BLM has expressed concerns in the past about the 
complexity of administering certain sliding scale royalty proposals, we 
recognize that a sliding scale royalty could prove useful in meeting 
the dual goals of encouraging production and ensuring a fair return to 
taxpayers from future oil shale development.
    One of the concerns that has been expressed regarding oil shale 
development is that potential oil shale developers may be reluctant to 
make the large upfront investments required for commercial operations 
if they believe there is a chance that crude oil prices might drop in 
the future below the point at which oil shale production would be 
profitable (i.e., competitive with conventional oil production). A 
sliding scale royalty system could allow the government to at least 
partially mitigate this development risk by providing for a lower 
royalty rate if crude oil prices fall below a certain price threshold.
    The basic concept is that in return for the government accepting a 
greater share of the price risk that an operator faces when prices are 
low (in the form of a lower royalty), the government would receive a 
greater share of the rewards (through a higher royalty) when prices are 
high.
    The BLM has not decided on the specific parameters of a sliding 
scale royalty system, but is considering a simplified two- or three-
tiered system based on the current royalty rates already in effect for 
conventional fuel minerals. The applicable royalty rate would be 
determined based on market prices of competing products (e.g., crude 
oil and natural gas) over a certain time period. In a two-tiered 
system, if prices remain below a certain point during the applicable 
period, the royalty rate on oil shale products would be the lower of 
two options. If prices are above that range for the period, a higher 
royalty would be charged. In a three-tiered system, a third royalty 
rate would apply if prices rise above a second price threshold during 
the applicable period.
    The BLM seeks comment on the specific parameters that could be 
applied to a sliding scale royalty system, should the BLM choose to 
adopt such a system in the final rule. More specifically, the BLM would 
like feedback on the following questions:
    1. Should a sliding scale system include two or three tiers? What 
would be appropriate royalty rates under a two-tiered system 
recognizing the dual goals of encouraging production and achieving a 
fair return to the government? What rates would be appropriate for a 
three-tier system?
    2. What are appropriate price thresholds to apply to each tier? 
Should the thresholds be fixed (in real dollar terms), or should they 
float relative to a published index?
    3. Should the sliding scale apply to all products, or should 
nonfuel products pay a traditional flat rate?
    4. Are there other ways to simplify a sliding scale royalty system 
so as to reduce the administrative costs for the BLM, the Office of 
Natural Resources Revenue, and producers while still providing a 
reasonable assurance that the public is receiving its fair share of 
revenue from production?

[[Page 18551]]

Option 4. Establish a Minimum Royalty of 12.5% in Regulation, With 
Secretarial Flexibility To Establish a Higher Rate Later
    Under this option, a minimum royalty of 12.5% would be established 
to address concerns about the existing rate and implement the terms of 
the settlement agreement. The minimum royalty rate at 12.5%, the same 
rate as currently applied in the BLM's oil and gas program, is being 
considered as it is contemplated that the primary products produced 
from oil shale will compete directly with those from onshore oil and 
gas production. However, the Secretary would have the authority to 
establish a higher rate, if determined to be appropriate, without 
completing a new rulemaking. This option would provide flexibility for 
the Secretary to adapt and respond accordingly to new information, such 
as emerging oil shale technologies and future oil shale production cost 
information, and changes to the price of this commodity, in order to 
help assure a fair return to the United States. Establishing a minimum 
royalty would be consistent with how other conventional fuels (e.g., 
oil, gas, and coal) are treated under existing statutes and 
regulations.
    In order to promote transparency in connection with the proposed 
change to allow a higher royalty rate to be established at a later 
time, the BLM would add a requirement to first publish a proposed 
notice of sale. That proposed notice would include all proposed lease 
terms and stipulations, including proposed royalty and rental rates. It 
also would include an explanation of how the BLM determined the 
proposed royalty rate.
    The notice would invite comment on the proposed lease terms for a 
period of not less than 30 days. This would give interested parties and 
the public an opportunity to comment on all the proposed terms, 
including the proposed royalty rate. So as to allow adequate time for 
both comment and consideration of the comments, the BLM would require 
at least 60 days between publication of the proposed notice of sale and 
the notice of sale.
    The BLM also invites comments on variations of the aforementioned 
options, including setting a minimum royalty rate as part of options 1 
and 2 or not setting a minimum royalty rate, as well as any other 
royalty systems rates that would meet the dual requirements of the 
EPAct to encourage production and ensure a fair return to the public. 
Comments with technical economic data and analysis would be most 
useful. The final rule will include a royalty provision that will be 
informed by public comments the BLM receives as a result of this 
proposed rule.

Section 3925.10 Award of Lease

    Section 3925.10(a) currently provides that a lease will be awarded 
to the qualified bidder submitting the highest bid that meets or 
exceeds the BLM's estimate of fair market value (FMV). The section 
would be revised by substituting the word ``may'' for the word ``will'' 
in the first sentence to clarify that issuing a lease is a 
discretionary action on the part of the BLM, rather than mandatory. In 
the case of a competitive lease sale, the BLM may award a lease to the 
highest qualified bidder, but has no obligation to do so (see 30 U.S.C. 
241(a)(1).
    Paragraph (a) would also be revised to add that the BLM would not 
issue a commercial lease unless it determines that oil shale operations 
could occur without unacceptable environmental risk (UER). This 
proposal is one of those required by the settlement agreement. 
Conditioning the issuance of a commercial oil shale lease on the BLM's 
determination that operations could occur without UER would add a new 
standard for lease issuance. The paragraph would also be revised to add 
the requirement that commercial oil shale leases would be issued only 
under the procedures in 43 CFR part 3900.
    In addition, the BLM proposes to employ the UER standard in the 
context of approval of a Plan of Development (POD), as described in 
section 3931.10(e), as well as in the context of conversion of an R, D 
and D lease to commercial operations, as described in section 
3926.10(c)(6).
    The MLA grants the Secretary, as the Federal land manager, wide 
latitude in decision making with regard to all leasable minerals. Under 
the MLA, the decision to withhold issuance of a minerals lease is 
discretionary, and need not be based upon any particular standard 
contained in the regulations. Under FLPMA section 302(b), the general 
environmental standard for managing the public lands is the prevention 
of unnecessary or undue degradation (UUD). The UER standard proposed in 
this rule would be one basis for exercising the Secretary's statutory 
discretion under the MLA and would be in addition to the UUD standard. 
It would not, however, be the only possible basis for withholding lease 
issuance, because the Secretary continues to retain his statutory 
discretion in awarding new leases.
    The proposed UER standard should not be confused with assessment or 
regulation of environmental risk by any other agency, acting under any 
other statutory or regulatory authority. For instance, the public might 
be most familiar with the risk assessments that provide the framework 
for human health and ecosystem health evaluations developed by the 
Environmental Protection Agency (EPA) under laws that govern hazardous 
or toxic substances. Such risk assessments characterize the probability 
of adverse effects from exposure to environmental stressors and differ 
from the proposed UER standard in that they are quantitative 
characterizations derived from scientific processes that use 
statistical and biological models to calculate numerical estimates of 
ecological and health risks. See Office of Emergency and Remedial 
Response, U.S. EPA, Risk Assessment Guidance for Superfund Volume I 
Human Health Evaluation Manual (Part A) Interim Final (EPA/540/1-89/
002) (1989). Available at http://www.epa.gov/oswer/riskassessment/ragsa/index.htm. These types of risk assessments are required under 
environmental statutes such as the Resource Conservation and Recovery 
Act of 1976, as amended (RCRA), 42 U.S.C. 6901 et seq., and the 
Comprehensive Environmental Response Compensation and Liability Act/
Superfund Amendments and Reauthorization Act (CERCLA/SARA), 42 U.S.C. 
9601 et seq., where they are used to characterize the current and 
potential threats to human health and the environment from potentially 
hazardous or toxic substances. See e.g., CERCLA/SARA Sections 104, 
105(a)(2), 121(b)-(d); 40 CFR 300; EPA, RCRA Risk Assessment. http://www.epa.gov/oswer/riskassessment/risk_rcra.htm. Agencies such as the 
Agency for Toxic Substances and Disease Registry, within the Department 
of Health and Human Services, as well as the Occupational Safety and 
Health Administration employ a similar approach with respect to the 
potentially hazardous or toxic substances whose use and/or regulation 
is within their purview.
    The BLM's implementation of the UER standard in the management of 
oil shale resources, if adopted, is likely to evolve with its 
application, but in no event does the BLM intend to impose upon itself 
the requirement to perform a quantitative risk assessment, as a 
threshold to exercising its discretion. A quantitative risk analysis 
under the proposed UER standard could be difficult in the context of 
decisions on leasing and development where pertinent data and 
information about potentially catastrophic events and/or the risk of 
occurrence would not likely

[[Page 18552]]

be reasonably available. Because of the nascent character of the oil 
shale industry and the diverse nature of possible environmental 
concerns associated with particular oil shale mining operations, risk 
assessments the BLM would prepare are likely to be qualitative, and 
involve uncertainty to a greater degree than those developed by EPA 
with respect to specific hazardous or toxic substances. To assist it in 
making its determination, the BLM intends that the proponent of a 
commercial lease demonstrate that future operations would likely occur 
without UER and that appropriate mitigation would be available to 
assure that the possible environmental risks remain low.
    As an alternative to the proposed UER standard, the BLM also 
specifically requests comments on whether ``unacceptable environmental 
consequences'' (UEC) might be a more appropriate standard for issuance 
of commercial leases in proposed section 3925.10(a), for conversion of 
R, D and D leases in section 3926.10, and for approval of plans of 
development in section 3931.10. The standard for conversion in the 
eight existing R, D and D leases is that commercial operations can 
occur without UEC. That language originates with a Federal Court of 
Appeals decision concerning NEPA. See Sierra Club v. Peterson, 717 F.2d 
1409, 1415 (D.C. Cir. 1983). However, while the BLM considers the 
environmental consequences of its proposed actions, UEC has not been 
defined or employed as a standard for decision-making by the BLM. It 
should be noted here that the UEC standard in R, D and D leases would 
not be interpreted to require the BLM, before it could deny a lease 
conversion or disapprove a Plan of Development (POD), or condition its 
approval, to prove that unacceptable consequences would ``with 
certainty'' occur. Rather than imposing a burden upon the BLM to 
establish a proposition, the alternative proposal would require the 
applicant for a lease conversion or POD approval to demonstrate that 
the proposed operations associated with the lease or plan would not 
likely result in UEC.
    To assist in our decision making, the BLM also invites comment on 
whether, if UEC were to be adopted as the regulatory standard in lieu 
of UER, ``environmental consequences'' should be construed consistently 
with the regulations implementing NEPA and be limited to impacts which 
are reasonably foreseeable. In addition, we invite comment on whether, 
if UEC were to be the regulatory standard, ``environmental 
consequences'' should be construed consistently with the regulations 
implementing NEPA to include reasonably foreseeable impacts that ``have 
catastrophic consequences, even if their probability of occurrence is 
low, provided that the analysis of the impacts is supported by credible 
scientific evidence, is not based on pure conjecture, and is within the 
rule of reason.'' (See 40 CFR 1502.22(b)).
    The BLM's review under either UER or UEC could encompass a broad 
range of considerations appropriate for each particular proposal, which 
might include such issues as impacts to water resources, wildlife, 
post-abandonment land uses, air quality, or greenhouse gas emissions 
including relevant energy balance considerations. Note also that UER, 
UEC, or any other threshold used in the regulations would not be less 
protective of the public lands than the ``unnecessary or undue 
degradation'' standard in Section 302(b) of FLPMA, 43 U.S.C. 1732(b).
    In fact, in light of the existence of the FLPMA statutory standard, 
the BLM may determine that no additional substantive standard is 
necessary, either for determining whether or not to issue an R, D and D 
lease, or determining whether or not to approve a POD, or conversion 
from an R, D and D lease to a commercial lease.

3926.10 Conversion of an R, D and D Lease to a Commercial Lease

    Section 3926.10 provides application procedures and requirements to 
convert R, D and D leases, including preference rights areas, into 
commercial leases. Paragraph (a) of this section would be expanded to 
clarify that the BLM may, in its discretion, deny an application to 
convert an R, D and D lease to a commercial lease based on 
environmental or other resource considerations. Similarly, paragraph 
(c) of this section would be expanded by adding a sentence to clarify 
that the BLM may, in its discretion, deny an application to convert an 
R, D and D lease based on environmental or other resource 
considerations. This reference to ``other resource considerations'' 
reflects the wide latitude afforded the Secretary's discretion under 
the MLA and FLPMA, as discussed above. Those considerations are likely 
to depend, in large part, on the specifics pertaining to each project. 
Some examples of ``other resource considerations'' might include, but 
are not limited to requirements to: (1) Protect and conserve other 
mineral resources which may occur in the same lands, such as nahcolite 
and dawsonite in the ``Multi-mineral zone'' in the White River Field 
Office area, Colorado; (2) Honor pre-existing rights, such as oil-and-
gas leases, mining claims, etc.; (3) Achieve the ultimate maximum 
recovery of the mineral resources; (4) Prove that commercial quantities 
of shale oil will be produced from the lease; (5) Consult with State, 
local, or tribal officials to develop a plan for mitigating the 
socioeconomic impacts of commercial development.
    Considering the various examples of what constitutes ``other 
resource considerations,'' it may be helpful to further define the 
term. One alternative is to state, ``other resource considerations 
pursuant to the terms of that R, D and D lease.'' The BLM seeks comment 
on this phrase or any other language that the public believes adds 
clarity to the term.
    The last sentence of paragraph (c) would also be revised by adding 
the words ``in its discretion'' and substituting the word ``may'' for 
the word ``will.'' These changes to paragraph (c) are intended to 
clarify that approval of conversion of an R, D and D lease to a 
commercial lease is a discretionary action on the part of the BLM and 
is, therefore, not mandatory. Nothing in EPAct's provisions concerning 
R, D and D leases requires that such leases be converted to commercial 
leases (see 42 U.S.C. 15927(c)). New paragraphs (c)(6) would require 
that commercial scale operations be conducted without UER.

Section 3931.10 Exploration Plans and Plans of Development for Mining 
and In Situ Operations

    Section 3931.10 provides requirements for submission of exploration 
plans and PODs. This rule would revise paragraph (e) by adding a 
sentence stating that the BLM will not approve a POD unless it 
determines that operations under the POD can occur without UER.
    Additionally, we propose adding a new paragraph (g) to make it 
clear that the BLM may deny a POD based on environmental or other 
resource considerations or the BLM may require a modification of or 
condition a POD to protect the environment or other resources. As noted 
above, with respect to considerations pertaining to conversion of R, D 
and D leases, this reference to ``other resource considerations'' as 
well as, here, ``other resources,'' reflects the wide latitude afforded 
the Secretary's discretion under the MLA and FLPMA, as discussed above. 
The reference is broad to reflect that these considerations are likely 
to depend, in large part, on the specifics pertaining to each project.

[[Page 18553]]

Section 3931.11 Content of Plan of Development

    Section 3931.11 lists the required contents of a POD. This section 
would be revised to include additional information that the BLM would 
require in a POD. For instance, in the surface management regulations 
at 43 CFR part 3809 there is a similar list of specific information 
required; however in most program areas, the BLM requests detailed 
information from private proponents on a project specific basis in 
order to inform environmental analysis. The new requirements would 
include submission of a watershed and groundwater-protection plan under 
new paragraph (h); an airshed review under new paragraph (i); an 
integrated waste-management plan under new paragraph (j); and an 
environmental-protection plan under new paragraph (k). The new proposed 
requirements are intended to ensure that adequate measures are in place 
to protect the environment.
    A watershed and groundwater-protection plan under paragraph (h) 
would require details on how operations would be conducted in a manner 
that protects surface and groundwater resources from adverse effects on 
the quality, quantity, timing, and distribution of water resulting from 
operations, and how monitoring, adaptive management, and mitigation of 
adverse impacts would be conducted, both during and after operations.
    An airshed review under paragraph (i) is a review of the scientific 
data and analyses currently available at a reasonable cost relevant to 
the potential effects of commercial oil shale operations on the air 
quality of the pertinent airshed. The review would require providing 
the BLM with useful information to assess the effects of operations on 
the airshed.
    An integrated waste-management plan under paragraph (j) would 
require information on conducting operations in a manner that would 
minimize the production of mine waste, and would provide for 
monitoring, adaptively managing, and mitigating the impacts of waste 
both during and after operations.
    An environmental protection plan under paragraph (k) would be a 
plan to conduct operations in a manner that would minimize the adverse 
effects of oil shale operations on the quality of the air and water; 
wildlife and native plants; and productivity of soils and to also 
monitor, adaptively manage, and mitigate such adverse effects both 
during and after operations.
    These plans and reviews are intended to facilitate both better 
decisions by the BLM in reviewing proposed PODs, and better 
environmental performance of operations under an approved POD. These 
plans and reviews are likely to be necessary to properly analyze a POD 
under NEPA, and thus would be required pursuant to 43 CFR 3931.11(k) in 
most if not all cases, even in the absence of the proposed amendments 
to section 3931.11.

IV. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

    Executive Order 12866 requires agencies to assess the benefits and 
costs of regulatory actions, and for significant regulatory actions, 
submit a detailed report of their assessment to the Office of 
Management and Budget (OMB) for review. A rule may be significant under 
Executive Order 12866 if it meets any of four criteria. A significant 
regulatory action is any rule that may:
     Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local, or tribal governments or 
communities;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
     Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    The proposed regulation would modify the commercial oil shale 
leasing and management regulations that were promulgated in 2008. The 
main proposal provisions include changes in the royalty applied to 
production, changes in the information required prior to authorization, 
and changes in the standards applied to an authorization.
    Royalty payments are recurring income to the government and costs 
to the operator/lessee. As such, they are transfer payments that do not 
affect total resources available to society. Changes in the royalty 
rate have the potential to significantly alter the future 
distributional effects; however, they would not represent a cost or 
benefit to the economy. OMB defines ``transfer payment'' to include 
payments to the government in addition to the unearned payments from 
the government (Economic Analysis of Federal Regulations Under 
Executive Order 12866, January 11, 1996, http://www.whitehouse.gov/omb/inforeg_riaguide). In addition, the definition OMB uses encompasses 
the revenue collected through a fee, surcharge, or tax (in excess of 
the cost of any service provided) as a transfer payment. Since a 
royalty is not a payment for service, this OMB transfer payment 
definition holds that a royalty is a transfer payment and is not to be 
included in the annual effect to the economy calculation. Thus, even 
though oil shale royalties may someday amount to billions of dollars of 
annual revenue, that revenue is excluded from the annual effect to the 
economy calculation because royalties are transfer payments for 
purposes of this analysis and as defined in OMB guidance.
    Royalty income is dependent on how much oil shale may be produced 
and the market price of the commodity. Currently, no oil shale product 
is being commercially produced. However, under the existing royalty 
provision, and using the production projections, production schedule, 
U.S. Energy Information Administration (EIA) reference oil price, and 
other assumptions discussed in the agency's economic analysis, for the 
period of analysis, total royalty payments could have a net present 
value of $4.4 billion. This analysis depends on production estimates 
generated by the Task Force on Strategic Unconventional Fuels, called 
for in the Energy Policy Act of 2005. To the extent that conditions 
differ from those assumed by the Task Force, actual royalty estimates 
could be significantly different. Given the range of uncertainties 
involved in whether or to what extent oil shale development may take 
place in the future, the BLM has not attempted to project the potential 
change in these transfer payments due to this rule. The amount of these 
transfer payments would also be impacted by which, if any, of the 
royalty options presented in the rule is ultimately selected for 
inclusion in the final rule. Thus, the BLM cannot at present state what 
the applicable rate will be to establish the distributional effects.
    In addition to the proposed royalty provision, there are a number 
of provisions addressing information and standards associated with 
lease issuance and approval of the POD. These changes primarily codify 
in regulation current BLM practices, procedures, and policies. Assuming 
compliance with existing practices, procedures, and policies, there 
should not be any increased costs associated with complying with these 
proposed changes. As proposed, the BLM will not approve a POD unless it 
determines that

[[Page 18554]]

operations under the plan can occur without UER. Also under 
consideration is an alternative standard of UEC. How either standard 
would be implemented may increase costs to both the BLM and the 
proponent; however, there is no practical way to make defensible 
estimates concerning the increased costs.
    Based on the available information, we estimate the annual effect 
on the economy of the regulatory changes will be less than $100 million 
and will not adversely affect in a material way the economy, a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or state, local or tribal governments or 
communities. This rule will not create inconsistencies or otherwise 
interfere with an action taken or planned by another agency. This rule 
would not change the relationships of the oil shale programs with other 
agencies' actions. This rule does not materially affect the budgetary 
impact of entitlements, grants, loan programs, or the rights and 
obligations of their recipients. In addition, the proposed rules do not 
raise any novel legal or policy issues arising out of legal mandates, 
the President's priorities, or the principles set forth in the 
Executive Order.

Clarity of Regulations

    Executive Order 12866 requires each agency to write regulations 
that are simple and easy to understand. The BLM invites 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. 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.

Small Business Regulatory Enforcement Fairness Act

    For a major rule, as defined by the Small Business Regulatory 
Enforcement Fairness Act (SBREFA), the BLM must prepare an initial 
regulatory flexibility analysis. For SBREFA, a rule may be major if it 
meets any of three criteria:
     Have an annual effect on the economy of $100 million or 
more;
     Create a major increase in costs or prices for consumers, 
individual industries, Federal, state, or local government agencies, or 
geographic regions; or
     Have significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises in domestic and export markets.
    If determined to be a major rule SBREFA requires an agency to 
prepare an analysis when issuing a proposed rule that will have a 
significant impact on a substantial number of small entities.
    The proposed regulation would modify the commercial oil shale 
leasing and management regulations that were promulgated in 2008. The 
main proposal provisions include changes in the royalty applied to 
production, changes in the information required prior to authorization, 
and changes in the standards applied to an authorization.
    In addition to the proposed royalty provision, there are several 
provisions addressing information and standards associated with lease 
issuance and approval of the POD. These changes primarily codify in 
regulation what are current BLM practices, procedures, and policies. 
Assuming compliance with existing practices, procedures, and policies, 
there should not be any increased cost associated with complying with 
these proposed changes. As proposed, the BLM will not approve a POD 
unless it determines that operations under the plan can occur without 
UER. Also under consideration is an UEC standard. How either standard 
would be implemented may increase costs to both the BLM and the 
proponent; however, there is no practical way to make defensible 
estimates concerning the increased costs.
    Based on the available information, the BLM estimates the annual 
effect on the economy of the regulatory changes will be less than $100 
million. This rule will not create a major increase in costs or prices 
for consumers, individual industries, Federal, state, or local 
government agencies, or geographic regions. In addition, this proposed 
regulation will not have any significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets.

National Environmental Policy Act (NEPA)

    The proposed regulatory amendments are categorically excluded from 
the requirement to prepare an environmental assessment (EA) pursuant to 
the regulations at 43 CFR 46.205 and 46.210. Nonetheless, the BLM has 
prepared an EA (DOI-BLM-WO-3900-2012-0001-EA) to inform the decision-
maker and the public. The EA concludes that this proposed rule would 
not constitute a major Federal action significantly affecting the 
quality of the human environment under Section 102(2)(C) of NEPA, 42 
U.S.C. 4332(2)(C). A detailed statement under NEPA is not required.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
the economic impact of proposed and final regulations to determine the 
extent to which there is a significant economic impact on a substantial 
number of small entities. Executive Order 13272 reinforces executive 
intent that agencies give serious attention to impacts on small 
entities and develop regulatory alternatives to reduce the regulatory 
burden on small entities. When the proposed regulation will impose a 
significant economic impact on a substantial number of small entities, 
the agency must evaluate alternatives that would accomplish the 
objectives of the rule without unduly burdening small entities. 
Inherent in the RFA is a desire to remove barriers to competition and 
encourage agencies to consider ways of tailoring regulations to the 
size of the regulated entities.
    The Small Business Administration (SBA) has developed size 
standards to carry out the purposes of the Small Business Act; those 
size standards can be found in 13 CFR 121.201. The SBA defines small 
entities involved in the oil and gas industry, which includes oil 
shale, as individuals, limited partnerships, or small companies 
considered at ``arm's length'' from the control of any parent 
companies, with fewer than 500 employees. For firms involved in oil and 
gas field exploration services and other field services SBA defines a 
small entity as having annual receipts of less than $5 million.
    There are currently no active commercial oil shale operations on 
Federal lands. Six firms hold R, D and D leases. Of those six 
companies, three are major oil companies, one is a multi-national oil 
shale company, one is a small mining company, and one is a

[[Page 18555]]

small research and development firm. In addition to the current make up 
of those firms operating on Federal lands, past efforts primarily 
involved the Federal government or large corporations. Smaller firms 
were involved, but their involvement was primarily to support larger 
organizations.
    Entities that would be directly affected by this commercial oil 
shale leasing rule would include most, if not all, firms involved in 
the exploration and development of oil shale resources on Federal 
lands. Such firms are a subset of entities involved in the domestic oil 
shale industry.
    The U.S. Census data on firms involved in oil shale research, 
exploration, and development by number of employees is not available; 
or at least not available in a form that allows the BLM to separate 
those firms from the much larger oil and gas industry. Information on 
firms involved in the oil shale industry is included in the broader 
categories of Crude Petroleum and Natural Gas Extraction, Support 
Activities for Oil and Gas Operations, and Petroleum Refineries. Within 
the Crude Petroleum and Natural Gas Extraction category, over 98 
percent of the firms have fewer than 500 employees (U.S. Department of 
Commerce, Economics and Statistics Administration, U.S. Census Bureau, 
Number of Firms, Number of Establishments, Employment, and Annual 
Payroll by Employment Size of the Enterprise for the United States). 
Seventy-five percent of all firms in the Petroleum Refineries category 
had fewer than 500 employees. Ninety-two percent of the firms involved 
in providing oil and gas field service support had average annual 
receipts of less than $5 million. This data indicates that the 
preponderance of firms in the domestic oil and gas industry are small 
entities as defined by the SBA.
    With technological advances and favorable market conditions that 
will support oil shale development, the BLM anticipates an increase in 
the number of firms involved in oil shale development. However, the 
number of firms, large or small, involved in oil shale development on 
Federal lands will likely remain quite limited. Estimates for the size 
of the industry in the next 30 years range from 3 to 17 operations 
involved in the extracting and retorting of shale oil. To put these 
numbers in perspective, in 2009 there were approximately 6,500 
establishments directly involved in the extraction of crude oil and 
natural gas in the United States. This count does not include 
establishments primarily engaged in performing drilling and support 
activities for oil and gas operations, which adds an additional 10,000 
more establishments to that count.
    The BLM expects that future oil shale development will involve both 
large and small firms. If past development efforts are an accurate 
indicator of the future, most leasing and development will be led by a 
large, well-capitalized organization, supported by smaller entities. 
Given the likely size of the industry that may eventually be involved 
in the leasing and development of Federal oil shale resources, it is 
our conclusion that this rule would not impact a substantial number of 
small entities.
    Oil shale development is characterized by high capital investment 
and long periods of time between expenditure of capital and the 
realization of production revenues and return on investment. Revenues 
are uncertain because future market prices for oil shale production and 
by-products are unknown. Therefore, a key economic barrier to private 
development is the inability to predict when profitable operations will 
begin. The economic risk associated with this uncertain outcome is 
magnified by the unusually large capital exposure, measured in billions 
of dollars per project, required for development.
    There are significant barriers to oil shale development, including 
technological unknowns and potentially significant environmental 
impacts. But the proposed regulatory changes, including proposed 
changes to production royalties, are not likely to impede development 
or have a significant economic impact on lessees or operators, 
regardless of the firm's size.
    The BLM therefore does not anticipate the proposed rule to have a 
significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 
et seq.) the proposed rule would not impose an unfunded mandate on 
state, local, or tribal governments or the private sector, in the 
aggregate, of $100 million or more per year; nor would this rule have a 
significant or unique effect on state, local, or tribal governments. 
The rule imposes no requirements on any of those entities. Therefore, 
the BLM is not required to prepare a statement containing the 
information required by the Unfunded Mandates Reform Act.

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

    This rule is a not a government action capable of interfering with 
constitutionally protected property rights. A takings implication 
assessment is not required. The rule would not authorize any specific 
activities that would result in any effects on private property. 
Therefore, the Department 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 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 
levels of government. It would not apply to states or local governments 
or state or local governmental entities. The management of Federal oil 
shale leases is the responsibility of the Secretary of the Interior and 
the BLM. This rule does not alter any lease management or regulatory 
role of the states or the rules governing revenue sharing with the 
states. In addition, this rule does not impose any costs on the states. 
Therefore, in accordance with Executive Order 13132, the BLM has 
determined that this 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 BLM has determined that this 
proposed rule would not unduly burden the judicial system and that it 
would meet 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, the BLM has found that 
this rule may include policies that have tribal implications. The rule 
implements the Federal oil shale leasing and management program, which 
does not apply on tribal or allotted Indian lands. At present, there 
are no oil shale leases or agreements on tribal or allotted Indian 
lands. If tribes or allottees should ever enter into any leases or 
agreements with the approval of the Bureau of Indian Affairs, the BLM 
would then likely be responsible for the approval of any proposed 
operations on Indian oil

[[Page 18556]]

shale leases and agreements. In light of this possibility, and because 
tribal interests could be implicated in oil shale leasing on Federal 
lands, the BLM has begun consultation on this proposed rule with 
potentially affected tribes and will continue consulting during the 
comment period.

Information Quality Act

    In developing this rule the BLM did not conduct or use experiments 
or surveys requiring peer review under the Information Quality Act 
(Section 515 of Pub. L. 106-554).

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 would not be likely to have a substantial direct 
effect on the supply, distribution, or use of energy. Executive Order 
13211 requires an agency to prepare a Statement of Energy Effects for a 
rule that is a significant regulatory action under Executive Order 
12866, or any successor order, and is likely to have a significant 
adverse effect on the supply, distribution, or use of energy.
    As discussed earlier in this preamble, under the proposal on future 
leases, the Secretary is considering several options for replacing the 
royalty rate structure established by the 2008 final rule. Additional 
information about oil shale production may be available in the future 
that would inform the Secretary's decision on royalty rates. The 
royalty rate and other proposed changes are not anticipated to have a 
significant negative effect on the economic viability of industry or on 
the nation's supply, distribution, or use of energy. The BLM believes 
the proposed rules would not have an adverse effect on the supply, 
distribution, or use of energy, and therefore has determined that the 
preparation of a Statement of Energy is not required.

Executive Order 13352, Facilitation of Cooperative Conservation

    In accordance with Executive Order 13352, the BLM has determined 
that this rule would not impede facilitating cooperative conservation; 
takes appropriate account of and considers the interests of persons 
with ownership or other legally recognized interests in the land or 
other natural resources; properly accommodates local participation in 
the Federal decision-making process; and provides that the programs, 
projects, and activities are consistent with protecting public health 
and safety. The proposed revisions to the oil shale regulations are in 
accordance with the terms of settlement agreement to a lawsuit relating 
to the 2008 final rule. Several of the proposed revisions are 
procedural in nature and provide clarification of existing provisions. 
The proposed rule also includes new environmental protection 
requirements for plans of development. The proposed rule will not 
affect opportunities under existing regulatory provisions for 
governors, state, local, and tribal governments to provide comments 
prior to the BLM offering the tracts for competitive oil shale leasing.

Paperwork Reduction Act

    The proposed rule contains information collection requirements that 
are subject to review by OMB under the Paperwork Reduction Act (PRA) 
(44 U.S.C. 3501-3520). The PRA provides that an agency may not conduct 
or sponsor, and no response is required for, a ``collection of 
information'' unless it displays a currently valid control number. 
Collections of information include any request or requirement that an 
individual, partnership, or corporation obtain information, and report 
it to a Federal agency (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)). OMB has 
approved existing information collection requirements associated with 
the 2008 Oil Shale Final Rule, and has assigned control number 1004-
0201 to those requirements.
    In accordance with the PRA, the BLM is inviting public comment on 
proposed new information collection activity for which the BLM is 
requesting that OMB revise control number 1004-0201, Oil Shale 
Management (43 CFR parts 3900, 3910, 3920, and 3930) (expiration date 
January 31, 2015; 1,795 burden hours; and $526,597 non-hour cost 
burdens). The collection of information under the existing and proposed 
regulations is required to obtain or retain a benefit in connection 
with oil shale operations. The BLM is requesting an expiration date of 
January 31, 2015, which is the same expiration date as the existing 
control number.
    The information collection request for this proposed rule has been 
submitted to OMB for review under 44 U.S.C. 3504(h) of the PRA. A copy 
of the request can be obtained from the BLM by telephone request to 
Mary Linda Ponticelli at (202) 912-7115.
    The BLM requests comments to:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the Agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    If you wish to comment on the information collection aspects of 
this proposed rule, please send your comments directly to OMB via fax 
or electronic mail:
    Fax: Office of Management and Budget, Office of Information and 
Regulatory Affairs, Desk Officer for the Department of the Interior, 
fax (202) 395-5806).
    Electronic mail: [email protected]. Please indicate 
``Attention: OMB Control Number 1004-0201,'' regardless of the method 
used to submit comments on the information collection burdens. If you 
submit comments on the information collection burdens, please provide 
the BLM with a copy of your comments by mail, fax, or electronic mail:
    Mail: U.S. Department of the Interior, Bureau of Land Management, 
1849 C Street NW. Room 2134LM, Attention: Jean Sonneman, Washington, 
DC. 20240.
    Fax to: Jean Sonneman at (202) 245-0050.
    Electronic mail: [email protected].
    OMB is required to make a decision concerning the collection of 
information contained in this proposed rule between 30 to 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it by April 26, 2013.
    The new collections of information in the proposed rule would be 
included in revisions to 43 CFR 3931.11, which lists the required 
contents of a plan of development. At present, control number 1004-0201 
authorizes 308 burden hours and no non-hour costs for each plan of 
development.
    The proposed rule would revise section 3931.11 to require the 
following additional information in a plan of development:

[[Page 18557]]

    Proposed section 3931.11(h) would add a requirement for a watershed 
and groundwater protection plan:
    (1) To conduct operations in a manner that protects surface and 
groundwater resources from adverse effects on the quality, quantity, 
timing and distribution of water resulting from operations, and
    (2) To provide for monitoring, adaptive management, and mitigation 
of adverse impacts, both during and after operations. This plan would 
assist the BLM in assessing and managing potential impacts on an 
ongoing basis.
    Proposed section 3931.11(i) would add a requirement for a review of 
the scientific data and analyses currently available at a reasonable 
cost, relevant to the potential effects of commercial oil shale 
operations on the air quality of the pertinent airshed.
    Proposed section 3931.11(j) would require an integrated waste 
management plan:
    (1) To conduct operations in a manner that minimizes the production 
of mine waste, and
    (2) To provide for monitoring, adaptive management, and mitigation 
of adverse impacts, both during and after operations.
    Proposed section 3931.11(k) would require an environmental 
protection plan:
    (1) To conduct operations in a manner that minimizes adverse 
effects of oil shale operations on the:
    (a) Quality of the air and water;
    (b) Wildlife and native plants; and
    (c) Productivity of soils; and
    (2) To provide for monitoring, adaptive management, and mitigation 
of adverse impacts, both during and after operations.
    The BLM estimates that the watershed and groundwater protection 
plan, airshed review, integrated waste management plan, and 
environmental protection plan that would be required under proposed 
section 3931.11(h), (i), (j), and (k) would each require 10 hours to 
prepare/assemble. The proposed revisions to section 3911.11 would 
increase the burden hours associated with the plan of development from 
308 hours to 348 hours.

Authors

    The principal authors of this proposed rule are Mitchell Leverette, 
Mary Linda Ponticelli, Larry Jackson, and Paul McNutt, Division of 
Solid Minerals (Washington Office) and the BLM's Division of Regulatory 
Affairs (Washington Office).

List of Subjects

43 CFR Part 3900

    Administrative practice and procedure, Environmental protection, 
Intergovernmental relations, Mineral royalties, Oil shale reserves, 
Public lands-mineral resources, Reporting and recordkeeping 
requirements, Surety bonds.

43 CFR Part 3920

    Administrative practice and procedure, Environmental protection, 
Intergovernmental relations, Oil shale reserves, Public lands-mineral 
resources, Reporting and recordkeeping requirements.

43 CFR Part 3930

    Administrative practice and procedure, Environmental protection, 
Mineral royalties, Oil shale reserves, Public lands-mineral resources, 
Reporting and recordkeeping requirements, Surety bonds.
    Accordingly, for the reasons stated in the preamble and under the 
authorities stated below, the BLM proposes to amend 43 CFR parts 3900, 
3920, and 3930 as set forth below:

PART 3900--OIL SHALE MANAGEMENT--GENERAL

0
1. The authority citation for part 3900 continues to read as follows:

    Authority:  30 U.S.C. 189, 359, and 241(a), 42 U.S.C. 15927, 43 
U.S.C. 1732(b) and 1740.

0
2. Amend Sec.  3903.52 by revising paragraph (b) to read as follows:

Subpart 3903--Fees, Rentals, and Royalties


Sec.  3903.52  Production royalties.

* * * * *
    (b) The royalty rate will be set by the BLM in the notice of sale 
as provided in section 3924.5(b)(3) of this part or, for R, D and D 
conversion, will be established by the Secretary of the Interior.

PART 3920--OIL SHALE LEASING

0
3. The authority citation for part 3920 continues to read as follows:

    Authority: ; 30 U.S.C. 241(a), 42 U.S.C. 15927, 43 U.S.C. 
1732(b) and 1740.

Subpart 3925--Award of Lease

0
4. Amend Sec.  3925.10 by revising paragraph (a) to read as follows:


Sec.  3925.10  Award of lease.

    (a) The lease may be awarded to the highest qualified bidder whose 
bid meets or exceeds the BLM's estimate of FMV, except as provided in 
Sec.  3924.10. The BLM will not issue a commercial lease unless it 
determines that oil shale operations can occur without unacceptable 
environmental risk. When the BLM determines that the lease should be 
issued, it will provide the successful bidder 3 copies of the oil shale 
lease form for execution. Commercial oil shale leases will be issued 
only under the procedures in this part.
* * * * *

Subpart 3926--Conversion of Preference Right for Research, 
Development, and Demonstration (R, D and D) Leases

0
5. Amend Sec.  3926.10 by revising paragraph (a) by adding a sentence 
to the end of the paragraph, by revising the introductory text of 
paragraph (c), and by adding paragraph (c)(6) to read as follows:


Sec.  3926.10  Conversion of an R, D and D lease to a commercial lease.

    (a) * * * The BLM may, in its discretion, deny an application to 
convert an R, D and D lease to a commercial lease based on 
environmental or other resource considerations.
* * * * *
    (c) The lessee of an R, D and D lease has the exclusive right to 
acquire any and all portions of the preference right area designated in 
the R, D and D lease, up to a total of 5,120 acres in the lease. The 
BLM may, in its discretion, deny an application to convert an R, D and 
D lease to a commercial lease based on environmental or other resource 
considerations. The BLM may approve the conversion application, in 
whole or in part, if it determines that:
* * * * *
    (6) Commercial scale operations can be conducted without 
unacceptable environmental risk.
* * * * *

PART 3930--MANAGEMENT OF OIL SHALE EXPLORATION AND LEASES

0
6. The authority citation for part 3930 continues to read as follows:

    Authority:  25 U.S.C. 396d and 2107, 30 U.S.C. 241(a), 42 U.S.C. 
15927, 43 U.S.C. 1732(b), 1733, and 1740.

Subpart 3931--Plans of Development and Exploration Plans

0
7. Amend Sec.  3931.10 by revising paragraph (e) and adding new 
paragraph (g) to read as follows:

[[Page 18558]]

Sec.  3931.10  Exploration plans and plans of development for mining 
and in situ operations.

* * * * *
    (e) All development and exploration activities must comply with the 
BLM-approved POD or exploration plan. The BLM will not approve a POD 
unless it determines that operations under the POD can occur without 
unacceptable environmental risk.
* * * * *
    (g) The BLM may deny a POD based on environmental or other resource 
considerations, or may require a modification of, or condition the POD 
to protect the environment or other resources.
0
8. Amend Sec.  3931.11 by adding new paragraphs (h), (i), (j), and (k) 
and redesignating existing paragraphs (h) as (l); (i) as (m); (j) as 
(n); and (k) as (o).


Sec.  3931.11  Content of plan of development.

* * * * *
    (h) A watershed and groundwater protection plan, which is a plan to 
conduct operations in a manner that protects surface and groundwater 
resources from adverse effects on the quality, quantity, timing, and 
distribution of water resulting from operations, and to monitor, 
adaptively manage, and mitigate adverse impacts, both during and after 
operations;
    (i) An airshed review, which is a review of the scientific data and 
analyses currently available at a reasonable cost relevant to the 
potential effects of commercial oil shale operations on the air quality 
of the pertinent airshed. The review must provide the BLM with useful 
information to assess the effects of operations on the airshed;
    (j) An integrated waste management plan, which is a plan to conduct 
operations in a manner that minimizes the production of mine waste, and 
to monitor, adaptively manage, and mitigate the impacts of waste both 
during and after operations;
    (k) An environmental protection plan, which is a plan to:
    (1) Conduct operations in a manner that minimizes adverse effects 
of oil shale operations, on the:
    (i) Quality of the air and water;
    (ii) Wildlife and native plants; and
    (iii) Productivity of soils; and
    (2) Monitor, adaptively manage, and mitigate such adverse effects 
both during and after operations;
* * * * *

    Dated: March 22, 2013.
Tommy P. Beaudreau,
 Acting Assistant Secretary of the Interior, Land and Minerals 
Management.
[FR Doc. 2013-07052 Filed 3-26-13; 8:45 am]
BILLING CODE 4310-84-P