[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)]
[Rules and Regulations]
[Pages 2906-2915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31752]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[WO-300-L13100000.PP0000]
RIN 1004-AE37


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

AGENCY: Bureau of Land Management, Interior.

ACTION: Final order.

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SUMMARY: The Bureau of Land Management (BLM) hereby amends its existing 
Onshore Oil and Gas Order Number 1 (Onshore Order 1) to require the 
electronic filing (or e-filing) of all Applications for Permit to Drill 
(APD) and Notices of Staking (NOS). Previously, Onshore Order 1 stated 
that an ``operator must file an APD or any other required documents in 
the BLM Field Office having jurisdiction over the lands described in 
the application,'' but allowed for e-filing of such documents as an 
alternative. This change makes e-filing the required method of 
submission, subject to limited exceptions. The BLM is making this 
change to improve the efficiency and transparency of the APD and NOS 
processes.

DATES: The final Order is effective on February 9, 2017.

FOR FURTHER INFORMATION CONTACT: Steven Wells, Division Chief, Fluid 
Minerals Division, 202-912-7143 for information regarding the substance 
of the final Order or information about the BLM's Fluid Minerals 
Program. Persons who use a telecommunications device for the deaf (TDD) 
may call the Federal Relay Service at 1-800-877-8339 to contact the 
above individuals during normal business hours. The Service is 
available 24 hours a day, 7 days a week to leave a message or question 
with the above individuals. You will receive a reply during normal 
business hours.

SUPPLEMENTARY INFORMATION: 

I. Background
II. Discussion of Final Order, Section-by-Section Analysis, and 
Response to Comments
III. Procedural Matters

I. Background

    The BLM regulations governing onshore oil and gas operations are 
found at 43 Code of Federal Regulations (CFR) part 3160, Onshore Oil 
and Gas Operations. Section 3164.1 provides for the issuance of Onshore 
Oil and Gas Orders to implement and supplement the regulations found in 
part 3160. Onshore Order 1 has been in effect since October 21, 1983, 
and was most recently revised in 2007 (see 72 FR 10308 (March 7, 2007)) 
as part of a joint effort with the Department of Agriculture and the 
Forest Service (FS), in response to new requirements imposed under 
Section 366 of the Energy Policy Act of 2005.
    On July 29, 2016, the BLM published in the Federal Register a 
proposed Order that would revise sections III.A., III.C., III.E., and 
III.I. in Onshore Order 1. The Order proposed to require e-filing of 
all APDs and NOSs. The comment period for the proposed Order closed on 
August 28, 2016. This final Order adopts all of the revisions 
identified in the proposed Order.
    Through this change, the BLM modifies Onshore Order 1 to require 
operators to submit NOSs and APDs through the e-filing system, 
Automated Fluid Mineral's Support System (AFMSS II), as opposed to the 
previous system, which allowed either hardcopy or electronic 
submission. Under the final Order, the BLM will consider granting 
waivers to the e-filing requirement for individuals who request a 
waiver because they would experience hardship if required to e-file 
(e.g., if an operator is prevented from e-filing or is in a situation 
that would make e-filing so difficult to perform that it would 
significantly delay an operator's APD submission).
    The change to Onshore Order 1 that the BLM is implementing in this 
final Order will not affect other provisions of Onshore Order 1 that 
are not discussed in this preamble or this final rulemaking, including 
the Onshore Order 1 provisions relating to the roles and 
responsibilities of the FS that are outlined in the 2007 rule. As a 
matter of practice, the FS will have the same access to the BLM's e-
filing system and the same user privileges as BLM employees to process 
APDs and NOSs electronically for wells proposed on National Forest 
Service (NFS) lands.
    An APD is a request to drill an oil or gas well on Federal or 
Indian lands. An operator must have an approved APD prior to drilling. 
Prior to submitting an APD, an applicant may file an NOS requesting the 
BLM to conduct an onsite review of an operator's proposed oil and gas 
drilling project. The purpose of an NOS is to provide the operator with 
an opportunity to gather information and better address site-specific 
resource concerns associated with a project while preparing its APD 
package. Operators are not required to submit an NOS prior to filing an 
APD.
    The BLM has recently experienced a decrease in the number of APDs 
received due to changes in market conditions. Since 2009, the BLM 
received an average of about 5,000 APDs per year for wells on Federal 
and Indian lands, of which Indian lands account for about 16%. In FY 
2015, the BLM received approximately 4,500 APDs. From October 1, 2015, 
through the end of September 2016 (FY 2016), the BLM estimates that it 
received only approximately 1,600 APDs. In coming years, due to the 
recent drop in oil prices and persistently low natural gas prices, the 
BLM conservatively estimates that an average of 3,000 APDs will be 
submitted per year. The BLM anticipates these market conditions to 
continue for the near term.
    The available data show that use of the BLM's e-filing system for 
APDs and NOSs is common and broad-based among operators, and therefore 
is not a novel concept. Specifically, over the last few years, roughly 
half of the APDs submitted to the BLM were submitted using the e-filing 
system (Well Information System, or WIS). The other half of the APDs 
were submitted in hard copy. More importantly, the data show that the 
use of e-filing has increased over time, with the rate nearly doubling 
from 26 percent in FY 2010 to 51 percent in FY 2014. As of 2014, 
approximately 411 operators had used the BLM's WIS to e-file NOSs, 
APDs, well completion reports, sundry notices, and other application 
materials. Those operators represent an estimated 85 percent of the 
operators that conduct drilling and completion operations on Federal 
and Indian leases nationwide.
    The BLM's WIS system is a web-based application that operators 
could use to submit permit applications and other types of information 
electronically over

[[Page 2907]]

the Internet. This includes APDs and NOSs, but also well completion 
reports and sundry notices. The WIS system is an extension of the BLM's 
current Automated Fluid Minerals Support System (AFMSS), which the BLM 
uses to track various types of oil and gas information on Federal and 
Indian lands, including the processing of NOSs and APDs.

Automated Fluid Minerals Support System II

    Since 2013, the BLM has been developing and deploying updates to 
its Automated Fluid Minerals Support System in order to gain 
efficiencies for both government and industry users of the system. The 
updated system, known as AFMSS II, is being implemented based on 
modules that will manage different types of data for the BLM's oil and 
gas program, such as NOSs and APDs, well completion reports, sundry 
notices, and inspection and enforcement-related operations. The NOS/APD 
module is the first module developed as part of the update, which 
phased in beginning in December 2015. As part of the phase in, the BLM 
conducted training for its staff and operators in order to understand 
how to use the new module. The NOS/APD module within AFMSS II replaces 
that portion of the WIS system that allowed operators to submit NOSs 
and APDs electronically over the internet. Once all the modules that 
will manage data from the existing system have been deployed for AFMSS 
II, the old version of AFMSS will be decommissioned. As of the date of 
this final Order, the NOS/APD module is fully operational with the NOS/
APD component of WIS now phased out. The NOS/APD module is ready to 
meet the demand of an increase in APD e-filing that is likely to result 
from this final Order.

Efficiency and Transparency

    The goal of the AFMSS II system and the amendments to Onshore Order 
1 is to improve operational efficiency and transparency in the 
processing of APDs and NOSs by requiring operators to use BLM's updated 
e-filing system as the default approach to APD and NOS filing. Although 
data show that voluntary use of the e-filing system has increased over 
time, this Order is necessary to move towards 100 percent electronic 
APD and NOS submission.
    This shift to e-filing presents potential advantages to operators, 
including operators owned by individual Indian tribes,\1\ because the 
new AFMSS II system is expected to streamline the APD and NOS 
application process. The system will expedite processing and enhance 
transparency, resulting in savings to both operators and the U.S. 
Government by:
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    \1\ In some cases, operators are companies owned by individual 
Indian tribes. Such companies are usually established to produce the 
minerals owned by the tribe and, thus, are operated for the benefit 
of the tribe.
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     Reducing the number of applications with deficiencies by 
providing users the ability to identify and correct errors through 
automatic error notifications generated prior to the submission 
process;
     Automatically populating data fields based on users' 
previously submitted information;
     Allowing operators to electronically track the progress of 
their application throughout the BLM review process; and
     Facilitating the use of pre-approved plans, such as Master 
Development Plans and Master Leasing Plans that have already been input 
into the system.
    The AFMSS II system was developed in response to the Government 
Accountability Office's (GAO) and the Department of the Interior Office 
of the Inspector General's (OIG) recommendations in GAO report 13-572 
(GAO-13-572) and OIG report CR-EV-MOA-0003-2013 (Report No. CR-EV-MOA-
0003-2013). Both reports recommended that the BLM ensure that all key 
dates associated with the processing of APDs are completely and 
accurately entered and retained in AFMSS, and in any new system that 
replaces AFMSS, to help assess whether the BLM is meeting applicable 
processing deadlines and identify ways to improve the efficiency of the 
APD review process. Additionally, the OIG report recommends that the 
BLM: (1) Develop, implement, enforce, and report performance timelines 
for APD processing; (2) Develop outcome-based performance measures for 
the APD process that help enable management to improve productivity; 
and (3) Ensure that the modifications to AFMSS enable accurate and 
consistent data entry, effective workflow management, efficient APD 
processing, and APD tracking at the BLM Field Office level. The NOS/APD 
module developed for AFMSS II addresses these recommendations from the 
GAO and OIG.

II. Discussion of Final Order, Section-by-Section Analysis, and 
Response to Comments

    This final order revises existing Onshore Order 1, which primarily 
supplements 43 CFR 3162.3 and 3162.5. Section 3162.3 covers conduct of 
operations, section 3162.3-1 covers applications to drill on a lease, 
section 3162.3-2 covers subsequent well operations, section 3162.3-3 
covers other lease operations, and section 3162.3-4 covers well 
abandonment. Section 3162.5 covers environment and safety obligations.
    The BLM received 5 comments on the proposed Order, from trade 
organizations, members of industry, and non-governmental organizations.
    This section of the preamble describes the changes that the BLM is 
making to three existing provisions of Order 1. The BLM is making only 
slight modifications to these sections. However, to provide context for 
the changes, we have included the three complete sections, which are 
entitled, Where to File an APD, Where to File an NOS, and APD Posting. 
This Order does not make any changes to these subsections beyond those 
detailed below.

Where to File an APD

    The final order modifies subsection III.A. to require operators to 
file APDs using the BLM's electronic commerce application, AFMSS II, 
for oil and gas permitting and reporting. Through this revision, the 
BLM will move toward an electronic submission rate of 100 percent. In 
the past, the BLM has received a portion of the APDs electronically and 
a portion in hard copy, which introduced a number of inefficiencies and 
necessitated multiple records management systems. This process change 
will help to eliminate those problems. In addition, the BLM believes 
that requiring submission through the e-filing system will improve 
processing times, public participation, and transparency. The BLM did 
not make any changes to this section between the proposed and final 
Order because it did not receive any comments on section III.A., and 
the agency did not have any independent reason to make a change as part 
of the final Order.

Where to File an NOS

    Likewise, if an operator chooses to file an NOS, final Section 
III.C. requires operators to file NOSs using the BLM's e-filing system, 
the APD module of AFMSS II, for oil and gas permitting and reporting. 
As with APDs, receiving a portion of the NOSs electronically and a 
portion in hard copy introduced a number of inefficiencies that 
necessitated multiple records management systems. The BLM hopes that 
moving towards a 100-percent electronic submission rate for NOSs will 
eliminate those inefficiencies.

[[Page 2908]]

    The BLM received one comment on section III.C. that suggested that 
the BLM increase the time allowed for operators to submit an APD after 
completing an on-site inspection for an associated NOS. Under the 
existing requirements of section III.C. of Order 1, if an operator 
elects to submit an NOS prior to submitting an APD and conducts an on-
site inspection based on the NOS, the operator must submit the APD 
associated with that NOS within 60 days after conducting the onsite 
inspection. Failure to submit the APD within 60 days of the onsite 
inspection will result in the NOS being returned to the operator. The 
commenter recommended extending this timeframe from 60 days to 90 days, 
because previous analyses conducted by the commenter indicated that 60 
days did not afford enough time to complete the APD submission process. 
This comment is outside the scope of the revisions to Order 1, which 
pertain only to the e-filing of APDs and NOSs.

APD Posting

    Section III.E.1. of the pre-existing Onshore Order 1 already 
required the BLM to post information about the APD or NOS in an area of 
the local BLM Field Office that is readily accessible to the public. 
The pre-existing section III.E.1 also called for that information to be 
posted on the Internet when possible, though it was not required. Some 
offices were already posting information about APDs and NOSs on their 
local BLM Field Office Web sites. Final section III.E.1. of the final 
Order continues to require the BLM to post information about the APD or 
NOS in a publicly accessible area of the local BLM Field Office having 
jurisdiction. Final section III.E.1., also provides that the BLM will 
post information about the APD or NOS for Federal oil and gas leases on 
the Internet. This change will increase consistency, transparency, and 
efficiency for both operators who file APD submissions and the public. 
The information that the BLM posts online about APDs and NOSs will be 
consistent with what is already identified in 43 CFR 3162.3-1(g) and 
will not conflict with the BLM's statutory obligations to protect 
confidential business information.
    In accordance with 43 CFR 3162.3-1(g), information that will be 
posted online about APDs and NOSs includes: The company/operator name; 
the well name/number; and the well location described to the nearest 
quarter-quarter section (40 acres), or similar land description in the 
case of lands described by metes and bounds, or maps showing the 
affected lands and the location of all tracts to be leased, and of all 
leases already issued in the general area. Where the inclusion of maps 
in such posting is not practicable, the BLM provides maps of the 
affected lands available to the public for review. This posting 
requirement only applies to APDs or NOSs proposing to drill into and 
produce Federal minerals. The posting requirement derives from the 
Mineral Leasing Act, and does not apply to APDs or NOSs for Indian 
minerals, which are not made publicly available. The BLM received one 
comment on section III.E.1. The commenter provided a list of 
information that it believes the BLM should make publicly available on 
the Internet: Waiver applications and approvals for the e-filing 
requirement; APD and Master Development Plan packages (in their 
entirety); Geographical Information Systems data for each APD; well 
completion or recompletion reports; sundry notices; and a variety of 
other information related to the BLM's oil and gas program. 
Furthermore, the commenter recommended that a public portal be set up 
in AFMSS II to facilitate posting of this information.
    The BLM did not make a change in response to this comment because 
it is beyond the scope of the proposed amendments to the Order.

Waiver From Electronic Submissions

    Section III.E.1. of the pre-existing Onshore Order 1 already 
required the BLM to post information about the APD or NOS in an area of 
the local BLM Field Office that was readily accessible to the public. 
The pre-existing section III.E.1 also called for that information to be 
posted on the Internet when possible, though it was not required. 
Consequently, some BLM Field Offices were already posting information 
about APDs and NOSs on their local BLM Field Office Web sites. Section 
III.I. is a new section that allows operators to request a waiver from 
the requirements in sections III.A. and III.C. of this Order. This 
section is different from section X., which addresses the requirements 
for requesting a variance from this Order. Unlike a variance from the 
other provisions or standards of Order 1, a waiver under this section 
is limited to the means of submission of an APD (electronic or 
hardcopy). A waiver under section III.I. is also different from a 
waiver under section XI., which addresses lease stipulations. Unlike a 
waiver from the requirement(s) of a lease stipulation, a waiver under 
this Order is not a permanent exemption from the BLM's requirement to 
file applications electronically.
    When submitting a waiver request under section III.I, the applicant 
must explain what prevents them from using the e-filing system, plans 
for complying with the Order's electronic submission requirement in the 
future, and a timeframe for compliance, all of which is subject to BLM 
approval. If the applicant would like the waiver to apply to a 
particular set of APDs or NOSs, then the request must identify the APDs 
or NOSs to which the waiver request applies. Otherwise, the waiver 
would apply to all submissions made during the compliance timeframe 
identified as part of the BLM's approval. The BLM will not consider an 
APD or NOS that the operator did not submit through the e-filing 
system, unless the BLM approves a waiver from the e-filing requirement 
under section III.I.

Changes to Section III.I--Waiver From Electronic Submissions

    As part of the final Order, the BLM made four changes to this 
section in response to comments and additional internal reviews, all of 
which are discussed in the following paragraphs. Two changes are worth 
noting at the outset. First, in addition to the proposed Order's 
requirement to explain what prevents an operator from using the e-
filing system, the final Order now also requires operators to identify 
what their plans are for complying with the electronic submission 
requirement in the future, and a timeframe for achieving compliance. 
Second, recognizing that it would be helpful to provide operators time 
after the effective date of the Order to determine whether or not they 
need to submit a waiver request, the BLM has delayed the compliance 
date for the electronic submission requirement in this Order by 30 
days. During the interim period, APDs and NOSs may be submitted using 
existing procedures.
    The BLM received a few substantive comments on the waiver section 
of the proposed Order. One commenter disagreed with the need for 
operators to make a waiver request for every APD or NOS they file, 
particularly if the operator was granted a waiver from a prior request. 
The commenter said chances are that the same circumstances will exist 
with subsequent APD and NOS waiver requests. The commenter recommended 
that after the BLM grants a waiver, then that waiver needs to remain in 
force until no longer needed. The BLM did not entirely accept the 
commenter's recommendation because it would inject needless uncertainty 
as to when the applicant will start to use the electronic system. Such 
a provision would run counter to the BLM's efforts

[[Page 2909]]

to bring efficiency and modernization to its permitting process. The 
BLM recognizes that an applicant may need to request a waiver for 
multiple APDs or NOSs, which is why a waiver request applies to all 
applications identified in the waiver request. However, the BLM also 
recognizes that there could be instances when not all APDs and NOSs 
could be identified at the time an applicant submits a waiver request. 
Therefore, the BLM modified this section of the final Order. Unlike the 
proposed Order, which required that the waiver request identify all 
covered applications, the final Order makes this an option for the 
applicant. If an applicant does not identify any specific APDs or NOSs 
in their waiver request, then the waiver request will apply to all 
submissions made by the applicant until such time as the applicant is 
able to come into compliance with the electronic submission 
requirement. The timeframe required to come into compliance is subject 
to BLM review as part of the waiver approval process, which addresses 
the BLM's concerns about open-ended waiver approvals. The options 
provided through this modification are expected to help eliminate 
delays associated with submitting multiple waiver applications.
    Another commenter stated that the Order should define the term 
``hardship'' in order to promote consistency in the application of the 
waiver provision across BLM Field Offices and limit the amount of 
unwarranted waiver approvals. The commenter suggested that the BLM 
adopt language from the proposed Waste Prevention, Production Subject 
to Royalties, and Resource Conservation rule (Waste Prevention rule) 
(81 FR 6616) that states that an exemption will be approved if 
``compliance with this requirement would impose such costs as to cause 
the operator to cease production and abandon significant recoverable 
oil reserves under the lease.''
    The BLM did not make a change in response to the commenter's 
recommendation. The language cited from the proposed Waste Prevention 
rule, which also appears in the final Waste Prevention rule, (see 81 FR 
83008 (November 18, 2016)), is meant to address circumstances in which 
new BLM requirements are being applied to existing well operations. In 
the case of these revisions to Order 1, the electronic submission 
requirement pertains to applications of wells not yet drilled. 
Moreover, we do not believe an electronic submission requirement under 
this rulemaking will deter an operator from deciding to drill a well or 
group of wells.
    However, we do believe there are conditions or circumstances that 
may prevent an operator from e-filing or would make e-filing so 
difficult to perform that it would significantly delay an operator's 
APD submission. For example, an operator could encounter technical 
problems, such as network or operating system failures, that are 
delaying or preventing use of the e-filing system. The BLM would 
evaluate such a case, and the circumstances associated with it, and 
determine whether it qualifies as a hardship. As previously stated in 
the proposed Order, however, the BLM cannot conceive of every scenario 
that may qualify as a hardship, which is why the Order's criteria are 
broad.

Miscellaneous Comments

    The BLM received several comments expressing concern with AFMSS 
II's current state of implementation, noting the need for more industry 
training and correction of issues experienced by some users. The 
commenters stated that the technical problems being experienced are not 
necessarily significant, but are an indication that the system is not 
yet fully operational. While these commenters are supportive of AFMSS 
II and do not object to 100 percent e-filing of APDs and NOSs, they 
believe there is too much at stake (additional delays in approval of 
drilling permits) to make the use of AFMSS II a requirement right now. 
The commenters recommended that the BLM should transition the 
implementation of the APD and NOS e-filing requirement through AFMSS II 
for at least one year to allow for more agency staff and end-user 
training and until all technical flaws have been resolved.
    The BLM assessed whether the technical problems identified by the 
commenters related to the functionality of the system, and determined 
that the cases were instead related to user error rather than system 
error. After receiving this comment, the BLM contacted its field 
offices and none reported having this issue with operators under their 
jurisdiction. A revision to the final Order was not made in response to 
this comment.
    With regard to the commenter's recommendation to phase in the 
requirement to use the e-filing system, the BLM has in fact phased in 
AMFSS II over the past year and conducted numerous training for 
operators and BLM staff. The following table illustrates the steps 
taken to phase out the operation of the previous electronic permitting 
system, WIS, and phase in AFMSS II.

                         WIS Phase-Out Schedule
------------------------------------------------------------------------
   BLM Office transitioned out of WIS                  Dates
------------------------------------------------------------------------
Farmington, Vernal, Dickinson, Meeker,    Jan-Feb 2016.
 Grand Junction, Pinedale, Miles City,
 Great Falls.
Durango, Canon City, Roswell, Buffalo,    Apr-May 2016.
 Newcastle, Moab, Price, Kemmerer, Salt
 Lake, Rawlins, Lander, Rock Springs,
 Anchorage, Milwaukee, Jackson, Casper,
 Worland, Tulsa, Bakersfield, Reno.
Carlsbad/Hobbs..........................  May-Jun 2016.
------------------------------------------------------------------------

    As noted in the proposed Order, the BLM has already provided 
training opportunities to its staff and to operators on how to use the 
APD module for AFMSS II. The following table outlines when that 
training was provided:

                       Completed Training Sessions
------------------------------------------------------------------------
                                                       Operator/Agent
           Location                   Dates            Participation
------------------------------------------------------------------------
Operator WebEx: BLM National    Dec 2015.........  Over 110 operators
 Training Center.                                   trained/47
                                                    companies.
BLM Offices...................  Jan-May 2016.....  Over 230 BLM
                                                    employees trained.
Operator WebEx: BLM National    Mar-May 2016.....  Over 150 operators
 Operations Center.                                 trained.
------------------------------------------------------------------------


[[Page 2910]]

    Because this training captured only a specific group of 
individuals, the BLM also provides permanent training materials for 
external users that are available at all times. Operators may access 
materials at: http://www.ntc.blm.gov/krc/viewresource.php?courseID=869. 
In addition, the BLM will provide one-on-one training (delivered 
through Webex, demonstrations, or classroom training) whenever 
requested. The BLM has provided ample opportunities for AFMSS II 
training and will continue to do so. Therefore, the BLM did not make 
changes to the Order in response to this comment.
    One commenter expressed frustration with a limitation in the BLM's 
electronic system for paying APD fees. If an operator prefers to make 
payments electronically and not by check to the BLM, then operators 
must make their payments through pay.gov. After making a payment, the 
operator receives a receipt number that is generated and must be 
entered into AFMSS II when an APD is submitted. AFMSS II will not 
accept an APD unless the receipt number is entered into the system. The 
problem encountered when making electronic payments is that pay.gov is 
currently able to accept credit card payments only. A $24,999 daily 
limit is placed on payments made to the Federal Government using a 
credit card. At a cost of $9,500 per APD, operators are able to pay the 
fee for only two APDs per day. This could present a delay for operators 
that typically submit APDs in bulk--20 to 50 APDs in some cases. The 
commenter recommended that the BLM provide a means to accept other 
forms of payment commonly used by industry, in particular Automated 
Clearing House (ACH) payments.
    The BLM recognizes this as a valid concern, but it cannot address 
this issue in this rulemaking. However, we are in the process of 
evaluating how our current billing systems can be modified to accept 
ACH payments through pay.gov.

III. Procedural Matters

Considerations

    The final Order requires that all operators e-file NOSs and APDs. 
As a practical matter, however, it will have a greater impact on 
operators that do not currently use the BLM's e-filing system, as these 
changes do not alter the requirements related to the content of an APD 
or NOS. Thus, operators that already use the e-filing system will 
likely continue to use the system, regardless of the Order, and 
therefore will not be impacted by the changes.
    The requirements are estimated to pose relatively small compliance 
costs (see discussion in the Affected Entities section) associated with 
administrative compliance and access to the BLM's e-filing system. In 
particular, operators that have not purchased access to the Internet or 
cannot access the Internet due to the remoteness of their location are 
likely to have to hire a permit agent to e-file their APDs, acquire 
Internet access depending on the coverage and the availability of 
service providers, or find another work-around solution. The 
requirements may also result in cost savings to impacted operators by 
reducing the amount of time spent correcting deficiencies in APDs. The 
filing of APDs through the modernized AFMSS II is expected to reduce 
the number of APD submissions that have deficiencies, and reduce the 
time it takes operators to correct any deficiencies that occur. Reduced 
APD processing times will benefit impacted operators in that they will 
be able to commence drilling and develop the mineral resources sooner. 
On Indian lands, this will benefit tribes and Indian allottees since 
they are the direct recipients of the royalties generated from the 
minerals they own.
    There will also be improved transparency during the application and 
review process for APDs that are e-filed. With the transition to AFMSS 
II, the operator is able to check the status of the APD, and the public 
is able to find and access information, all in one online location. 
Until all operators are able to e-file, the BLM will continue to 
maintain hard copy records for APDs submitted in hard copy, consistent 
with records management and retention requirements.

Affected Entities

    All entities involved in the exploration and production of crude 
oil and natural gas resources on Federal and Indian leases and that 
submit APDs or NOSs after the effective date of the final Order will be 
subject to its requirements.
    We estimate that the amendments will impact about 484 operators,\2\ 
and that these operators might experience a small increase in 
administrative costs associated with submitting an APD and NOS to the 
BLM through the new APD module, due to the newness of the system. 
Operators that comply by submitting a waiver request that is accepted 
by the BLM might also experience a small increase in costs associated 
with preparing the waiver request. We estimate the annual average costs 
per operator to be approximately $3,920 per operator during the Order's 
initial implementation period; however, we expect those costs to 
decrease quickly over time as operators become familiar with the new 
AFMSS II. In total, we estimate that the amendments might pose annual 
administrative costs of $2.2 million (about $1.9 million per year to 
the industry and $315,000 per year to the BLM) during the initial 
phases. We believe this is a generous estimate of costs given the 
relatively high proportion of APDs already submitted using BLM's 
existing e-filing systems.
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    \2\ We examined AFMSS data over a 5-year period (from 2008 to 
2012) and found that there were 484 operators that completed wells 
on Federal and Indian leases. We believe that this pool of operators 
is a good basis for an estimate about the entities that are likely 
to file APDs in the future and are, therefore, subject to the 
requirements.
---------------------------------------------------------------------------

    In addition, we estimate that the amendments will pose additional 
costs for those operators that currently do not use the BLM's e-filing 
system. Specifically, those 73 entities \3\ might face additional 
compliance costs of $1,200 per operator per year for Internet access, 
using the conservative assumption that they do not already have such 
access. In total, these compliance costs could be about $90,000 per 
year for all 73 affected operators. The increased e-filing rates that 
the BLM has observed during the rollout of the AFMSS II APD module 
suggest, however, that some of these operators would choose to e-file 
even without the Order.
---------------------------------------------------------------------------

    \3\ According to BLM records, as of 2014, there were 
approximately 411 WIS users, representing 85 percent of the 
operators that would be subject to the requirements. By extension, 
we estimate that there are 73 entities that did not use WIS, 
representing 15 percent of the operators that would be subject to 
the requirements. These 73 entities were not users of the e-filing 
system and will be most impacted by the Order.
---------------------------------------------------------------------------

    We estimate that the amendments will also benefit operators, since 
operators are expected to receive cost savings from more expedited APD 
processing. We estimate that submitting an APD via the e-filing system 
rather than in hard-copy will reduce processing time by 27 percent or 
60 days. Furthermore, we estimate the cost savings to the operator of 
that increased efficiency to be $6,195 per APD. Given that the Order 
will impact about 1,500 APDs per year, we estimate that the total cost 
savings could be about $9.3 million per year.
    Together, the total benefits are expected to exceed the total 
costs, and the Order is expected to result in total cost savings of 
about $7 million per year on aggregate. We expect these aggregate 
benefits to translate to individual operators. To illustrate, even if 
we

[[Page 2911]]

assume an individual operator incurs costs as a result of the 
amendments because they do not currently use BLM's existing e-filing 
system and have to learn the new system, such an operator would still 
be expected to receive a net cost savings on a per-APD basis, given 
that the cost savings will exceed the combined administrative and other 
compliance costs. On a per APD basis, we expect increased costs of 
$1,716 per year--$516 in administrative burden/compliance costs, plus 
$1,200 in other compliance costs. Those costs are expected to be 
offset, however, by cost savings of $6,195 per APD. Therefore, on net, 
an operator submitting one APD per year would be expected to realize a 
net reduction in costs of $4,479 ($6,195 minus $1,716). That expected 
net benefit would increase as an operator's familiarity with the new e-
filing system increases, as administrative costs would be reduced by 
such familiarity.
    As noted elsewhere in the preamble, some operators are owned by 
individual Indian tribes. Those operators typically develop the 
minerals owned by and for the benefit of the tribe. We expect the 
impacts and benefits of these Order revisions to apply to these 
operators to the same extent and in the same manner as to other 
entities operating on Federal or Indian lands. On net, we anticipate 
that the benefits of permitting-time efficiencies associated with 100% 
e-filing, will significantly outweigh any costs, especially as 
operators become more familiar with AFMSS II.

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs in the Office of Management and Budget will review 
all significant rules. The Office of Information and Regulatory Affairs 
has determined that this rule is not significant.
    Executive Order 13563 reaffirms the principles of E.O. 12866 while 
calling for improvements in the nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
The executive order directs agencies to consider regulatory approaches 
that reduce burdens and maintain flexibility and freedom of choice for 
the public where these approaches are relevant, feasible, and 
consistent with regulatory objectives. E.O. 13563 emphasizes further 
that regulations must be based on the best available science and that 
the rulemaking process must allow for public participation and an open 
exchange of ideas. We have developed this rule in a manner consistent 
with these requirements.

Regulatory Flexibility Act and Small Business Regulatory Enforcement 
Fairness Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act (SBREFA), generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act, unless the agency certifies that the rule 
will not have a significant economic impact on a substantial number of 
small entities (see 5 U.S.C. 601-612). Congress enacted the RFA to 
ensure that government regulations do not unnecessarily or 
disproportionately burden small entities. Small entities include small 
businesses, small governmental jurisdictions, and small not-for-profit 
enterprises.
    The Small Business Administration (SBA) has developed size 
standards to carry out the purposes of the Small Business Act and those 
size standards can be found in 13 CFR 121.201. The BLM reviewed the SBA 
classifications and found that the SBA specifies different size 
standards for potentially affected industries. The SBA defines a small 
business in the crude petroleum and natural gas extraction industry 
(North American Industry Classification System or NAICS code 211111) as 
one with 1,250 or fewer employees. However, for the natural gas liquid 
extraction industry (NAICS code 211112), it defines a small business as 
one with 750 or fewer employees.
    The BLM reviewed the SBA size standards for small businesses and 
the number of entities fitting those size standards as reported by the 
U.S. Census Bureau in the 2012 Economic Census. The data show the 
number of firms with fewer than 100 employees and those with 100 
employees or more (well below the SBA size standards for the respective 
industries). According to the available data, over 95% and 91% of firms 
in the crude petroleum and natural gas extraction industry and the 
natural gas liquid extraction industry, respectively, have fewer than 
100 employees. Therefore, we would expect that an even higher 
percentage of firms will be considered small according to the SBA size 
standards. Thus, based on the available information, the BLM believes 
that the vast majority of potentially affected entities will meet the 
SBA small business definition.
    We examined the potential impacts of the final Order and determined 
that up to 484 small entities will be subject to the Order's 
requirements and could face administrative burdens of about $3,920 per 
entity per year. In addition, up to 73 small entities could face other 
compliance costs of $1,200 per entity per year. However, we estimate 
that the administrative and other compliance costs will be offset as a 
result of improved APD processing times. We estimate that cost savings 
from faster APD processing could be $6,195 per APD. Moreover, we expect 
that the administrative burdens of the final Order will lessen over 
time as operators become more familiar with the BLM's new e-filing 
system.
    Based on this review, we have determined that, although the 
revisions to the Order will impact a substantial number of small 
entities, it will not have a significant economic impact on a 
substantial number of small entities. Therefore, a regulatory 
flexibility analysis is not required.
    This Order is also not a major rule under 5 U.S.C. 804(2) of the 
RFA, as amended by the SBREFA. This Order will not have an annual 
effect on the economy of $100 million or more. In fact, the BLM 
estimates that the benefits will exceed the costs, and that the 
rulemaking could result in net savings of $7 million per year. 
Similarly, the revisions to the Order will not cause a major increase 
in costs or prices for consumers, individual industries, Federal, 
State, tribal, or local government agencies, or geographic regions, nor 
do the revisions have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
revisions to the Order are administrative in nature and only affect the 
method for submitting APDs and NOSs. The BLM prepared an economic 
threshold analysis as part of the record, which is available for 
review.

Unfunded Mandates Reform Act

    Under the Unfunded Mandates Reform Act (UMRA), agencies must 
prepare a written statement about benefits and costs before issuing a 
proposed or final rule that may result in aggregate expenditure by 
State, local, and tribal governments, or by the private sector, of $100 
million or more in any one year.
    The revisions to the Order do not contain a Federal mandate that 
may result in expenditures of $100 million or more for State, local, 
and tribal governments, in the aggregate, or for the private sector, in 
any one year. Thus, the revisions to the Order are also not subject to 
the requirements of sections

[[Page 2912]]

202 or 205 of UMRA. This Order is also not subject to the requirements 
of section 203 of UMRA because the revisions contain no regulatory 
requirements that might significantly or uniquely affect small 
governments, because the revisions contain no requirements that apply 
to such governments, nor do they impose obligations on them.

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

    In accordance with Executive Order 12630, the BLM has determined 
that the revisions to the Order will not have significant takings 
implications. The revisions to the Order are not a governmental action 
capable of interfering with constitutionally protected property rights. 
Therefore, the revisions to the Order will not cause a taking of 
private property or require a takings implication assessment under the 
Executive Order.

Executive Order 13132, Federalism

    The revisions to the Order will not have federalism implications. 
The revisions will not have substantial direct effects 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. Therefore, in accordance with Executive Order 
13132, a Federalism Assessment is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    The BLM evaluated possible effects of the revisions to the Order on 
federally recognized Indian tribes. Since the BLM approves proposed 
operations on all Indian onshore oil and gas leases (other than those 
of the Osage Tribe), the Order has the potential to affect Indian 
tribes, particularly those tribes with tribally-owned and -operated oil 
and gas drilling or exploration companies, which currently submit APDs 
and/or NOSs.
    In conformance with the Secretary's policy on tribal consultation, 
the BLM extended an invitation to consult on the proposed Order to 
affected tribes, including tribes that either: (i) Own an oil and gas 
company; or (ii) Own minerals for which the BLM has recently received 
an APD. Over the years, oil and gas development on Indian and allotted 
lands has been focused in Colorado, Montana, New Mexico, North Dakota, 
Oklahoma, Texas, and Utah. Based on BLM records, the BLM anticipates 
that there are nearly 40 tribes for which the BLM has received or will 
foreseeably receive APDs or NOSs in connection with the development of 
tribal or allotted mineral resources. In advance of issuing the 
proposed Order, the BLM sent letters to these 40 tribes extending an 
invitation to consult on this rulemaking. When the BLM published the 
proposed Order, BLM also sent letters of invitation to consult to the 
larger group of tribes who own minerals, but do not play a direct role 
in the development of those resources. The BLM received one comment 
from a tribe recommending that the BLM consider creating a similar e-
filing system for the tribes for the development of tribal or allotted 
mineral resources. The current e-filing system is not restricted to the 
filing of APDs on Federal lands. The system also allows for the 
submission of APDs on Tribal or allotted lands. Therefore, there 
already is a system in place to do what the tribe requested. Multiple 
attempts were made to contact the Tribal representative, but were 
unsuccessful.

Executive Order 12988, Civil Justice Reform

    This Order complies with the requirements of Executive Order 12988. 
Specifically, the revisions to the Order do not unduly burden the 
Federal court system and meet the requirements of sections 3(a) and 
3(b)(2) of the Executive Order. The BLM has reviewed the Order to 
eliminate drafting errors and ambiguity and the Order has been written 
to minimize litigation and provide clear legal standards.

Paperwork Reduction Act of 1995

Overview
    The Paperwork Reduction Act (PRA) \4\ provides that an agency may 
not conduct or sponsor, and a person is not required to respond to, a 
collection of information, unless it displays a currently valid OMB 
control number. Collections of information include requests and 
requirements that an individual, partnership, or corporation obtain 
information, and report it to a Federal agency. See 44 U.S.C. 3502(3); 
5 CFR 1320.3(c) and (k).
---------------------------------------------------------------------------

    \4\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

    This Order contains information collection activities that require 
approval by the OMB under the PRA. The BLM included an information 
collection request in the proposed Order. OMB has approved the 
information collection for the final Order under control number 1004-
0213.
    The BLM plans to seek OMB approval to incorporate the burdens of 
this Order into control number 1004-0137 after this Order becomes 
effective. For reference, the current burdens for control number 1004-
0137 (920,464 hours and $32.5 million in non-hour costs) can be viewed 
at http://www.reginfo.gov/public/. After the Order goes into effect, 
the BLM intends to ask OMB to combine the requirements and burdens of 
the Order with control number 1004-0137.
Summary of Information Collection Requirements
     Title: Approval of Operations (43 CFR part 3160).
     Forms: Form 3160-3, Application for Permit to Drill or 
Reenter; and Sample Format for Notice of Staking (Attachment 1 to 2007 
Onshore Order 1, 72 FR at 10338).
     OMB Control Number: 1004-0213.
     Description of Respondents: Holders of Federal and Indian 
(except Osage Tribe) oil and gas leases.
     Respondents' Obligation: Required to obtain or retain a 
benefit.
     Frequency of Collection: On occasion.
     Abstract: The Order will improve the efficiency and 
transparency of the APD and NOS processes via e-filing, and provide for 
waivers from e-filing when appropriate.
     Estimated Number of Responses: 3,450 responses.
     Estimated Total Annual Burden Hours: 29,400 hours.
    Compliance with the new collection of information is required to 
obtain or retain a benefit for the operators of Federal and Indian 
onshore oil and gas leases, or units or communitization agreements that 
include Federal and Indian leases (except on the Osage Reservation or 
the Crow Reservation, or in certain other areas). The frequency of the 
collection is ``on occasion.''
Discussion of the Collection Activities
    APDs: As revised here, section III.A. of Onshore Order 1 requires 
an operator to file an APD and associated documents using the BLM's 
electronic commerce application for oil and gas permitting and 
reporting.
    NOSs: Section III.C. of Onshore Order 1 continues to provide that 
an NOS may be submitted voluntarily. Section III.C. also requires an 
operator who chooses to file an NOS to use the BLM's electronic 
commerce application for oil and gas permitting and reporting. Except 
for the new e-filing requirement, this is an existing collection in use 
without a control number. The purpose of submitting an NOS is to 
provide an operator an opportunity to gather information and better 
address site-

[[Page 2913]]

specific resource concerns associated with a project while preparing an 
APD package.
    Waiver Requests: Section III.I. is a new provision that allows 
operators to request a waiver from the requirements in final sections 
III.A. and III.C. The request must be supported by an explanation of 
why the operator is not able to use the e-filing system, the operator's 
plans for complying with the electronic submission requirement, and a 
timeframe for achieving compliance. If the operator would like the 
waiver to apply to a particular set of APDs or NOSs, then the request 
must identify the APDs or NOSs to which the waiver applies. If the 
request does not specify a particular set of APDs or NOSs, the waiver 
will apply to all submissions made by the operator during the 
compliance timeframe included as part of the BLM's waiver approval. In 
those exceptional cases, the BLM will review the operator's request and 
determine whether a waiver allowing the operator to submit hard copies 
is warranted.
    Between the proposed and the final Order, the BLM added 
requirements for operators to submit their plans for complying with the 
electronic submission requirement and a timeframe for achieving 
compliance, both of which are in addition to the requirement from the 
proposed Order for operators to explain why they are unable to use the 
e-filing system. In the final Order, the BLM is also providing an 
option for operators to request that its waiver approval apply to a 
specific set of APDs or NOSs. The operator's waiver request would need 
to identify which APDs or NOSs that the BLM's approval would apply.
    As previously discussed, the BLM made these changes in response to 
a commenter's recommendation that after the Bureau grants a waiver, 
that waiver needs to remain in force until no longer needed. The BLM 
did not accept the commenter's recommended change because it would 
inject needless uncertainty as to when the applicant will start to use 
the electronic system and would run counter to the Bureau's efforts to 
bring efficiency and modernization to its permitting process. However, 
the BLM also recognizes that there could be instances when not all APDs 
and NOSs could be identified at the time an applicant submits a waiver 
request, which could lead to the operator submitting another waiver 
request at a later time if they are still prevented from using the e-
filing system. The BLM believes this change will help eliminate the 
commenter's concerns about delays associated with submitting multiple 
waiver applications and, at the same time, addresses the Bureau's 
concerns about open-ended waiver approvals.
    Although the BLM is requiring the submission of this additional 
information, we do not believe this will result in additional burden 
hours. If an operator is prevented from using the e-filing system and 
requests a waiver, the operator likely understands and has a reasonable 
idea as to what steps it needs to take and the length of time necessary 
to overcome the challenges that prevent its use of the system. 
Therefore, assessing those steps will not impose any additional burden 
hours.
    Although the final Order directs the method by which operators must 
submit an APD or NOS, it does not direct operators to obtain, maintain, 
retain, or report any more information than what is already required by 
the existing Onshore Order 1. The BLM recognizes operators may 
encounter a learning curve as they familiarize themselves with the 
database system, like any new software system to which users must 
adapt. For that reason, the BLM intends to adjust the existing 80 hours 
per response for APDs upwards to 88 hours per response. However, any 
costs or delays in adapting to the e-filing system will be temporary, 
and may be subject to a downward adjustment sometime in the future.
    The BLM has sponsored multiple outreach strategies and training 
forums for its AFMSS clients, which should further mitigate the extent 
of industry's learning curve. These outreach efforts include:
     Easily accessible Internet-based resources, including 
user-guides, audiovisual modules, user toolkits, and FAQs that are 
available to operators or their agents, and
     Live trainings provided to users to allow for a more 
robust discussion with the BLM on how to use the system.
    The previously discussed table entitled, ``Completed Training 
Sessions'' outlines the locations where the BLM has sponsored these 
trainings.
    The following table itemizes the estimated burdens of APDs, NOSs, 
and waivers as a result of this Order. In the case of APDs, these 
burdens are in addition to the 80 burden-hours per response estimated 
under OMB control number 1004-0137, and the number of responses (3,000 
per year) is less than the 5,000 responses currently authorized under 
OMB control number 1004-0137. Both the number of responses and the 
burden hours will be adjustments to that control number.
    For NOSs and waiver requests, these burdens are new, and will be 
program changes for control number 1004-0137.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per
                        Type of  response                            responses       response       Total hours
A.                                                                            B.              C.              D.
----------------------------------------------------------------------------------------------------------------
Application to Drill or Re-Enter 43 CFR 3162.3-1 and Section           \5\ 3,000               8          24,000
 III.A. of Onshore Order 1 Form 3160-3..........................
Notice of Staking Section III.C. of Onshore Order 1.............         \6\ 300              16           4,800
Waiver Request Section III.I. of Onshore Order 1................         \7\ 150               4             600
                                                                 -----------------------------------------------
    Totals......................................................           3,450              28          29,400
----------------------------------------------------------------------------------------------------------------
\5\ This will be an adjustment in the number of responses for APDs in control number 1004-0137. At present,
  control number 1004-0137 authorizes the BLM to collect 5,000 APDs annually.
\6\ Estimated as 10 percent of the roughly 3,000 APDs filed annually.
\7\ Estimated as 10 percent of the 1,500 APDs likely to be impacted by the final Order. BLM data show that half
  of APDs were already e-filed through the WIS.

National Environmental Policy Act

    The revisions to the Order do not constitute a major Federal action 
significantly affecting the quality of the human environment. The BLM 
has analyzed the revisions to the Order and determined it meets the 
criteria set forth in 43 CFR 46.210(i) for a Departmental Categorical 
Exclusion in that the revisions to the Order are ``. . . of an 
administrative, financial, legal, technical or procedural nature . . 
..'' Therefore, it is categorically excluded from environmental review 
under the National Environmental Policy Act,

[[Page 2914]]

pursuant to 43 CFR 46.205 and 46.210(c) and (i). The BLM also has 
analyzed this Order to determine if it involves any of the 
extraordinary circumstances that would require an environmental 
assessment or an environmental impact statement, as set forth in 43 CFR 
46.215, and concluded that this Federal action does not involve any 
extraordinary circumstances.

Data Quality Act

    In developing this Order, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554, app. C 515, 114 Stat. 2763, 2763A-153 to 154).

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

    Under Executive Order 13211, agencies are required to prepare and 
submit to OMB a Statement of Energy Effects for significant energy 
actions. This Statement is to include a detailed statement of ``any 
adverse effects of energy supply, distribution, or use (including a 
shortfall in supply, price increases, and increase use of foreign 
supplies)'' for the action and reasonable alternatives and their 
effects.
    Section 4(b) of Executive Order 13211 defines a ``significant 
energy action'' as ``any action by an agency (normally published in the 
Federal Register) that promulgates or is expected to lead to the 
promulgation of a final rule or regulation, including notices of 
inquiry, advance notices of proposed rulemaking, and notices of 
proposed rulemaking: (1) (i) That is a significant regulatory action 
under Executive Order 12866 or any successor Order, and (ii) is likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy; or (2) that is designated by the Administrator of the 
Office of Information and Regulatory Affairs (OIRA) as a significant 
energy action.'' The revisions to the Order will not be a significant 
regulatory action under Executive Order 12866 as they will not have a 
significant adverse effect on the supply, distribution, or use of 
energy. The revisions to the Order have also not been designated by the 
Administrator of OIRA as a significant energy action.

Executive Order 13352, Facilitation of Cooperative Conservation

    The BLM determined that this Order involves changes to BLM 
processes. In accordance with Executive Order 13352, this Order will 
not impede facilitating cooperative conservation. The Order takes 
appropriate account of and respects the interests of persons with 
ownership or other legally recognized interests in 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.

Authors

    The principal authors of this final Order are Cathy Cook and 
Michael Riches, Division of Fluid Minerals, and Bryce Barlan and James 
Tichenor, Division of Business Management, assisted by Mark Purdy and 
Jean Sonneman, Division of Regulatory Affairs, Dylan Fuge, Counselor to 
the Director, and the Department of the Interior's Office of the 
Solicitor.

List of Subjects in 43 CFR Part 3160

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

    Dated: December 21, 2016.
Amanda Leiter,
Acting Assistant Secretary, Land and Minerals Management.

0
For reasons set out in the preamble, the Bureau of Land Management 
amends the appendix following the regulatory text of the final rule 
published in the Federal Register at 72 FR 10308 at 10328 (March 7, 
2007), corrected on March 9, 2007 (72 FR 10608), effective March 7, 
2007, as follows:

    Note:  This appendix does not appear in the BLM regulations in 
43 CFR part 3160.

Appendix--Text of Oil and Gas Onshore Order

    Amend the Onshore Oil and Gas Order Number 1 by revising 
sections III.A, III.C, and III.E, and adding section III.I to read 
as follows:

Onshore Oil and Gas Order Number 1

* * * * *

III. Application for Permit to Drill

* * * * *

A. Where to File

    On or after March 13, 2017, the operator must file an APD and 
associated documents using the BLM's electronic commerce application 
for oil and gas permitting and reporting. The operator may contact 
the local BLM Field Office for information on how to gain access to 
the electronic commerce application. Prior to March 13, 2017, an 
operator may file an APD and associated documents in the BLM Field 
Office having jurisdiction over the application.
* * * * *

C. Notice of Staking Option

    Before filing an APD or Master Development Plan, the operator 
may file a Notice of Staking with the BLM. The purpose of the Notice 
of Staking is to provide the operator with an opportunity to gather 
information to better address site-specific resource concerns while 
preparing the APD package. This may expedite approval of the APD. On 
or after March 13, 2017, if an operator chooses to file an NOS, the 
operator must file the Notice of Staking using the BLM's electronic 
commerce application for oil and gas permitting and reporting. 
Attachment I, Sample Format for Notice of Staking, provides the 
information required for the Notice of Staking option. Prior to 
March 13, 2017, an operator may file a Notice of Staking in the BLM 
Field Office having jurisdiction.
    For Federal lands managed by other Surface Managing Agencies, 
the BLM will provide a copy of the Notice of Staking to the 
appropriate Surface Managing Agency office. In Alaska, when a 
subsistence stipulation is part of the lease, the operator must also 
send a copy of the Notice of Staking to the appropriate Borough and/
or Native Regional or Village Corporation.
    Within 10 days of receiving the Notice of Staking, the BLM or 
the FS will review it for required information and schedule a date 
for the onsite inspection. The onsite inspection will be conducted 
as soon as weather and other conditions permit. The operator must 
stake the proposed drill pad and ancillary facilities, and flag new 
or reconstructed access routes, before the onsite inspection. The 
staking must include a center stake for the proposed well, two 
reference stakes, and a flagged access road centerline. Staking 
activities are considered casual use unless the particular activity 
is likely to cause more than negligible disturbance or damage. Off-
road vehicular use for the purposes of staking is casual use unless, 
in a particular case, it is likely to cause more than negligible 
disturbance or damage, or otherwise prohibited.
    On non-NFS lands, the BLM will invite the Surface Managing 
Agency and private surface owner, if applicable, to participate in 
the onsite inspection. If the surface is privately owned, the 
operator must furnish to the BLM the name, address, and telephone 
number of the surface owner if known. All parties who attend the 
onsite inspection will jointly develop a list of resource concerns 
that the operator must address in the APD. The operator will be 
provided a list of these concerns either during the onsite 
inspection or within 7 days of the onsite inspection. Surface owner 
concerns will be considered to the extent practical within the law. 
Failure to submit an APD within 60 days of the onsite inspection 
will result in the Notice of Staking being returned to the operator.
* * * * *

[[Page 2915]]

E. APD Posting and Processing

1. Posting

    The BLM and the Federal Surface Managing Agency, if other than 
the BLM, must provide at least 30 days public notice before the BLM 
may approve an APD or Master Development Plan on a Federal oil and 
gas lease. Posting is not required for an APD for an Indian oil and 
gas lease or agreement. The BLM will post information about the APD 
or Notice of Staking for Federal oil and gas leases to the Internet 
and in an area of the BLM Field Office having jurisdiction that is 
readily accessible to the public. Posting to the Internet under this 
provision will not be required until after March 13, 2017. If the 
surface is managed by a Federal agency other than the BLM, that 
agency also is required to post the notice for at least 30 days. 
This would include the BIA where the surface is held in trust but 
the mineral estate is federally owned. The posting is for 
informational purposes only and is not an appealable decision. The 
purpose of the posting is to give any interested party notification 
that a Federal approval of mineral operations has been requested. 
The BLM or the FS will not post confidential information.
    Reposting of the proposal may be necessary if the posted 
location of the proposed well is:
    a. Moved to a different quarter-quarter section;
    b. Moved more than 660 feet for lands that are not covered by a 
Public Land Survey; or
    c. If the BLM or the FS determine that the move is substantial.

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.
    If there is enough information to begin processing the 
application, the 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.
    a. Within 10 days of receiving an application, the BLM (in 
consultation with the FS if the application concerns NFS lands) will 
notify the operator as to whether or not the application is 
complete. The BLM will request additional information and correction 
of any material submitted, if necessary, in the 10-day notification. 
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, the BLM, in coordination with the 
operator and Surface Managing Agency, including the private 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 participants' schedules 
and weather conditions. The operator will be notified at the onsite 
inspection of any additional deficiencies that are discovered during 
the inspection. The operator has 45 days after receiving notice from 
the 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 appropriate requirements of the NEPA, National 
Historic Preservation Act, Endangered Species Act, and other 
applicable law have been met and, if on NFS lands, the FS has 
approved the Surface Use Plan of Operations;
    2. Notify the operator that it is deferring action on the 
permit; or
    3. Deny the permit if it cannot be approved and the BLM cannot 
identify any actions that the operator could take that would enable 
the BLM to issue the permit or the FS to approve the Surface Use 
Plan of Operations, if applicable.
    c. The notice of deferral in paragraph (b)(2) of this section 
must specify:
    1. Any action the operator could take that would enable the 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 Surface Use Plan of Operations 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 the BLM or the FS need 
to take before making a final decision on the application, including 
appropriate analysis under NEPA or other applicable law and a 
schedule for completing these actions.
    d. The operator has 2 years from the date of the notice under 
paragraph (c)(1) of this section to take the action specified in the 
notice. If the appropriate analyses required by NEPA, National 
Historic Preservation Act, Endangered Species Act, and other 
applicable laws have been completed, the BLM (and the FS if 
applicable), will make a decision on the permit and the Surface Use 
Plan of Operations 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 2 years from 
the operator's receipt of the paragraph (c)(1) notice, the BLM will 
deny the permit.
    e. 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. The BLM cannot approve an APD until the appeal of 
the Surface Use Plan of Operations is resolved.
* * * * *

I. Waiver From Electronic Submission Requirements

    The operator may request a waiver from the electronic submission 
requirement for an APD or Notice of Staking if compliance would 
cause hardship or the operator is unable to file these documents 
electronically. In the request, the operator must explain the 
reason(s) that prevent its use of the electronic system, plans for 
complying with the electronic submission requirement, and a 
timeframe for compliance. If the request applies to a particular set 
of APDs or Notices of Staking, then the request must identify the 
APDs or Notices of Staking to which the waiver applies. The waiver 
request is subject to BLM approval. If the request does not specify 
a particular set of APDs or Notices of Staking, then the waiver will 
apply to all submissions made by the operator during the compliance 
timeframe included as part of the BLM's waiver approval. The BLM 
will not consider an APD or Notice of Staking that the operator did 
not submit through the electronic system, unless the BLM approves a 
waiver.

[FR Doc. 2016-31752 Filed 1-9-17; 8:45 am]
 BILLING CODE 4310-84-P