[Federal Register Volume 88, Number 140 (Monday, July 24, 2023)]
[Proposed Rules]
[Pages 47562-47648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14287]



[[Page 47561]]

Vol. 88

Monday,

No. 140

July 24, 2023

Part II





Department of the Interior





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Bureau of Land Management





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43 CFR Parts 3000, 3100, 3110, et al.

  Federal Register / Vol. 88 , No. 140 / Monday, July 24, 2023 / 
Proposed Rules  

[[Page 47562]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3000, 3100, 3110, 3120, 3130, 3140, 3150, 3160, 3170, 
and 3180

[BLM_HQ_FRN_MO4500172196]
RIN 1004-AE80


Fluid Mineral Leases and Leasing Process

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Land Management (BLM) is proposing to revise the 
BLM's oil and gas leasing regulations. Among other things, the proposed 
rule would reflect provisions of the Inflation Reduction Act pertaining 
to royalty rates, rentals, and minimum bids, and would update the 
bonding requirements for leasing, development, and production. The 
proposed rule would also improve the BLM's leasing process to ensure 
proper stewardship of public lands and resources and would revise some 
operating requirements.

DATES: Send your comments on this proposed rule to the BLM on or before 
September 22, 2023. The BLM is not obligated to consider any comments 
received after this date in making its decision on the final rule.
    Information Collection Requirements: This proposed rule includes 
revised and new information-collection requirements that must be 
approved by the Office of Management and Budget (OMB). If you wish to 
comment on the information-collection requirements, please note that 
those comments should be sent directly to OMB. OMB is required to make 
a decision concerning the collection of information contained in this 
proposed rule between 30 and 60 days after publication of this document 
in the Federal Register. Therefore, a comment to the OMB on the 
proposed information-collection revisions is best assured of being 
given full consideration if the OMB receives it by September 19, 2023.

ADDRESSES: Mail, personal, or messenger delivery: U.S. Department of 
the Interior, Director (630), Bureau of Land Management, 1849 C St. NW, 
Room 5646, Washington, DC 20240, Attention: 1004-AE80. Federal 
eRulemaking Portal: https://www.regulations.gov. In the Search-box, 
enter ``RIN 1004-AE80'' and click the ``Search'' button. Follow the 
instructions at this website.

For Comments on Information--Collection Activities

    Information-Collection Requirements: Written comments and 
suggestions on the information-collection requirements should be 
submitted by the date specified earlier in DATES to https://www.reginfo.gov/public/do/PRAMain. Find this specific information-
collection by selecting ``Currently under Review--Open for Public 
Comments'' or by using the search function.
    If you submit comments on these information-collection burdens, you 
should provide the BLM with a copy at one of the addresses shown 
earlier in this section so that we can summarize all written comments 
and address them in the final rulemaking. Please indicate ``Attention: 
Paperwork Reduction Act Comments (RIN 1004-AE80).'' Comments not 
pertaining to the proposed rule's information-collection burdens should 
not be submitted to OMB. The BLM is not obligated to consider or 
include in the Administrative Record for the final rule any comments 
that are improperly directed to OMB.

FOR FURTHER INFORMATION CONTACT: Peter Cowan, Senior Mineral Leasing 
Specialist, telephone: (720) 838-1641 or email: [email protected], for 
information regarding the substance of this proposed rule or Matt 
Warren, Acting Division Chief for the Division of Fluid Minerals, 
telephone: (505) 216-8832, or email: [email protected], for information 
about the BLM's fluid minerals program. For questions relating to 
regulatory process issues, contact Faith Bremner at email: 
[email protected]. Individuals in the United States who are deaf, blind, 
hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or 
TeleBraille) to access telecommunications relay services for contacting 
Mr. Warren. Individuals outside the United States should use the relay 
services offered within their country to make international calls to 
the point-of-contact in the United States.

SUPPLEMENTARY INFORMATION: 
I. List of Acronyms
II. Executive Summary
III. Public Comment Procedures
IV. Background
V. Discussion of the Proposed Rule
VI. Overview of Modifications
VII. Procedural Matters

I. List of Acronyms

ANWR = Arctic National Wildlife Refuge
BLM = Bureau of Land Management
CA = Communitization Agreement
CD = Certificate of Deposit
CFIUS = Committee on Foreign Investment in the United States
CFR = Code of Federal Regulations
DOI = Department of the Interior
E.O. = Executive Order
EOI = Expression of Interest
EPAct = Energy Policy Act of 2005
FLPMA = Federal Land Policy and Management Act
FOOGLRA = Federal Onshore Oil and Gas Leasing Reform Act of 1987
GAO = Government Accountability Office
IBLA = Interior Board of Land Appeals
IIJA = Infrastructure Investment and Jobs Act of 2021
IRA = Inflation Reduction Act of 2022
LOC = Letter of Credit
MLA = Mineral Leasing Act of 1920, as amended (MLA is also referred 
to as ``Act'' in the regulations.)
MLAAL = Mineral Leasing Act for Acquired Lands of 1947, as amended
MLRS = Mineral and Land Records System
NEPA = National Environmental Policy Act
NFLSS = National Fluids Lease Sale System
NPR-A = National Petroleum Reserve--Alaska
OIG = Office of the Inspector General
OMB = Office of Management and Budget
ONRR = Office of Natural Resources Revenue
OPM = Office of Personnel Management
PRA = Paperwork Reduction Act
RIA = Regulatory Impact Analysis
ROW = Right-of-way
SBA = Small Business Administration
SO = Secretarial Order
SME = Subject matter expert
U.S.C. = United States Code
USFS = United States Forest Service

II. Executive Summary

    This proposed rule aims to enhance the administration of oil and 
gas-related activities on America's public lands and reflects 
provisions in recently enacted laws that modify aspects of the Federal 
onshore oil and gas program. Specifically, the proposed rule would 
implement changes pertaining to royalty rates, rentals, and minimum 
bids for BLM-issued oil and gas leases and would update the bonding 
requirements for leasing, development, and production. The BLM has not 
comprehensively updated the Federal onshore oil and gas program's 
regulatory framework since 1988. As a result, many of the program's 
regulatory requirements are outdated, do not adequately protect the 
fiscal interests of the American public, and do not promote leasing 
practices that are consistent with diligent development requirements 
and multiple-use and sustained-yield principles. This proposed rule 
seeks to update the existing regulations accordingly.
    The Secretary of the Interior manages a Federal onshore oil and gas 
program pursuant to the requirements of various statutes, including the 
Federal Land Policy and Management Act of 1976, as amended (43 U.S.C. 
1701 et seq.) (FLPMA), the Mineral Leasing Act of

[[Page 47563]]

1920, as amended (30 U.S.C. 181 et seq.) (MLA), and the Mineral Leasing 
Act for Acquired Lands of 1947, as amended (30 U.S.C. 351 et seq.) 
(MLAAL), as well as the recently enacted Inflation Reduction Act (IRA) 
of 2022 and Infrastructure Investment and Jobs Act (IIJA) of 2021. 
Under FLPMA, the BLM manages approximately 245 million acres of public 
lands and approximately 700 million acres of federally owned subsurface 
minerals ``on the basis of multiple use and sustained yield,'' which 
requires the BLM to achieve ``a combination of balanced and diverse 
resource uses that takes into account the long-term needs of future 
generations for renewable and non-renewable resources.'' The BLM is 
required to avoid ``permanent impairment of the productivity of the 
land and the quality of the environment with consideration being given 
to the relative values of the resources and not necessarily to the 
combination of uses that will give the greatest economic return or the 
greatest unit output.'' Oil and gas-related activities are one of the 
multiple land uses that FLPMA authorizes and which the BLM administers 
in accordance with the MLA and MLAAL. Both of those Acts govern the 
leasing of public lands to explore for and develop petroleum, natural 
gas, coal, and other hydrocarbons, amongst other mineral deposits.
    Over the past 2 years, Congress has modified certain aspects of the 
Federal onshore oil and gas program through the IRA and IIJA. In the 
IRA, Congress updated the onshore oil and gas program's fiscal terms 
and established a new leasing scheme for Federal lands. In the IIJA, 
Congress directed the BLM to proactively ``reduce the inventory of 
idled wells on Federal land.'' Idled wells can cause a wide range of 
impacts on public lands, waters, wildlife, and nearby communities. 
There are currently thousands of idled wells on Federal lands, many of 
which have not produced oil or gas in years. The BLM intends to address 
the IRA and IIJA in this rulemaking.
    Prior to the enactment of the IRA and IIJA, the Government 
Accountability Office (GAO) and the Department of the Interior's (DOI) 
Office of the Inspector General (OIG) reviewed and audited the BLM's 
Federal onshore oil and gas program to identify problematic areas in 
this program and recommended actions to address them. As part of the 
GAO's and OIG's respective audits, they highlighted weaknesses in the 
onshore program's fiscal framework and recommended that the BLM take 
steps to ensure that the American public receives a fair return from 
oil and gas activities on public lands. The DOI and the BLM concurred 
with these recommendations in the Report on the Federal Oil and Gas 
Leasing Program issued in November 2021. Accordingly, the BLM is 
proposing to adjust its oil and gas bonding requirements, including by 
increasing minimum bond amounts for the first time in decades. The BLM 
believes that doing so, along with other proposed changes, would help 
ensure that reclamation costs reside primarily with oil and gas 
lessees, operating rights owners, and operators and not the American 
public. In the same vein, the BLM is proposing to adjust its cost 
recovery mechanisms so that project applicants provide a more 
appropriate share of up-front costs. Finally, the BLM is proposing 
several changes to encourage diligent development of leased lands and 
to direct leasing to areas with fewer multiple-use conflicts and a 
greater likelihood of achieving responsible development.

III. Public Comment Procedures

    If you wish to comment on this proposed rule, you may submit your 
comments to the BLM by mail, personal or messenger delivery, or through 
https://www.regulations.gov (see the ADDRESSES section). Please make 
your comments on the proposed rule as specific as possible, confine 
them to issues pertinent to the proposed rule, explain the reason for 
any changes you recommend, and include any supporting documentation. 
Where possible, your comments should reference the specific section or 
paragraph of the proposal that you are addressing. The BLM is not 
obligated to consider or include in the Administrative Record for the 
final rule any comments received after the close of the comment period 
(see DATES) or comments delivered to an address other than those listed 
previously (see ADDRESSES). Comments, including names and street 
addresses of respondents, will be available for public review at the 
address listed under ``ADDRESSES: Mail, personal or messenger 
delivery'' during regular hours (7:45 a.m. to 4:15 p.m. Eastern Time), 
Monday through Friday, except holidays. 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 to withhold 
from public review your personal identifying information, we cannot 
guarantee that we will be able to do so.
    As explained later, this proposed rule includes revisions to 
information collection requirements that must be approved by the OMB. 
If you wish to comment on the revised information collection 
requirements in this proposed rule, please note that such comments must 
be sent directly to the OMB in the manner described in the ADDRESSES 
section. The OMB is required to make a decision concerning the 
collection of information contained in this proposed rule between 30 
and 60 days after publication of this document in the Federal Register. 
Therefore, a comment to the OMB on the proposed information collection 
revisions is best assured of being given full consideration if the OMB 
receives it by September 19, 2023.

IV. Background

    The BLM is undertaking this rulemaking for two primary reasons: (1) 
to reflect provisions in recently enacted laws that modify aspects of 
the Federal onshore oil and gas program; and (2) to enhance the 
administration of the onshore program, consistent with the BLM's 
multiple-use and sustained-yield mission. As documented in a DOI report 
released in November 2021,\1\ and in numerous reports from the GAO and 
DOI's OIG,\2\ the onshore program, historically, has failed to provide 
the Federal Government with a fair return; exposed the Federal 
Government to significant reclamation-related liabilities; lacked 
adequate cost recovery mechanisms; and encouraged speculative leasing 
and wasteful development practices. Through this rulemaking, the BLM 
intends to adopt new procedures and requirements to address those 
issues.
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    \1\ DOI, ``Report on the Federal Oil and Gas Leasing Program'' 
(Nov. 2021).
    \2\ See, e.g., OIG, ``Inspector General's Statement Summarizing 
the Major Management and Performance Challenges Facing the U.S. 
Department of the Interior'' (Nov. 2022); GAO, ``OIL AND GAS 
LEASING--BLM Should Update Its Guidance and Review Its Fees'' (Nov. 
2021); GAO, ``OIL AND GAS--Onshore Competitive and Noncompetitive 
Lease Revenues'' (Nov. 2020); GAO, ``FEDERAL ENERGY DEVELOPMENT--
Challenges to Ensuring a Fair Return for Federal Energy Resources'' 
(Sept. 2019); GAO, ``OIL AND GAS--Bureau of Land Management Should 
Address Risk from Insufficient Bonds to Reclaim Wells'' (Sept. 
2019); GAO, ``OIL AND GAS LEASE MANAGEMENT--BLM Could Improve 
Oversight of Lease Suspensions with Better Data and Monitoring 
Procedures'' (June 2018); OIG, ``Bureau of Land Management's Idle 
Well Program'' (Jan. 2018).
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    The Secretary of the Interior manages Federal oil and gas resources 
pursuant to the MLA, MLAAL, and other statutes pertaining to specific 
categories of lands. The MLA and MLAAL prescribe

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the minimum bid amounts, minimum rental rates, and minimum percentage 
of royalty reserved to the United States under onshore oil and gas 
leases on most Federal lands. The BLM is the agency within DOI 
responsible for regulating onshore leasing activities for federally 
managed lands and the subsurface mineral estate. The BLM regulations 
governing onshore oil and gas leasing activities are set out in 43 CFR 
parts 3000 and 3100. Aside from updating certain application fees for 
consistency, the BLM is not proposing in this rule to revise the 
regulations at 43 CFR part 3130, which govern oil and gas activity in 
the National Petroleum Reserve--Alaska.
    In 1976, FLPMA established particular land and resource management 
authorities for the BLM, emphasizing multiple use, sustained yield, and 
environmental protection as the guiding principles for public land 
management. FLPMA directs the BLM to manage some areas for 
conservation, to consider the best use of public lands in a broader 
context than just economic return, and to take action necessary to 
prevent unnecessary or undue degradation of the lands.
    Today, Federal onshore oil and gas production accounts for 
approximately 10 percent of domestically produced oil and 8 percent of 
domestically produced natural gas. As of the end of Fiscal Year (FY) 
2022, the BLM managed 34,409 Federal oil and gas leases covering 23.7 
million acres with nearly 89,350 wells that are capable of production. 
Of the more than 23 million onshore acres under lease today, over 11 
million (approximately 48 percent) of those acres are non-producing.

A. Addressing Recently Enacted Laws Concerning the Federal Onshore Oil 
and Gas Program

    Over the past 2 years, Congress has enacted two laws--the IRA (Pub. 
L. 117-169) and the IIJA (Pub. L. 117-58)--that modify the Federal 
onshore oil and gas program's statutory framework. Through this 
rulemaking, the BLM will incorporate the provisions that are contained 
in these Acts into its oil and gas regulations.
1. Inflation Reduction Act
    In August 2022, Congress passed the IRA, two sections of which the 
BLM intends to implement, in part, through this rulemaking: (1) Section 
50262--Mineral Leasing Act Modernization; and (2) Section 50265--
Ensuring Energy Security.
Section 50262--Mineral Leasing Act Modernization
    In IRA section 50262, Congress modernized the onshore oil and gas 
program's fiscal terms. Over the past decade, the GAO and OIG have 
repeatedly raised concerns about the fiscal soundness of the onshore 
program.\3\ Furthermore, in 2011, the GAO added the ``Management of 
Federal Oil and Gas Resources'' to its list of ``high-risk'' Federal 
programs after determining that DOI ``does not have reasonable 
assurance that it is collecting its share of revenue from oil and gas 
produced on Federal lands.'' \4\ ``High-risk'' programs are 
``vulnerable to waste, fraud, abuse, or mismanagement, or in need of 
transformation.'' GAO reaffirmed this ``high-risk'' determination in 
2021 and specifically recommended that DOI ``needs to commit to 
developing policies that consistently lead towards improvements in . . 
. ensuring the government receives a fair return.'' \5\
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    \3\ See, e.g., OIG, ``Inspector General's Statement Summarizing 
the Major Management and Performance Challenges Facing the U.S. 
Department of the Interior'' (Nov. 2022); GAO, ``FEDERAL ENERGY 
DEVELOMPENT--Challenges to Ensuring a Fair Return for Federal Energy 
Resources'' (Sept. 2019).
    \4\ GAO, ``HIGH-RISK SERIES--An Update'' (Feb. 2011).
    \5\ GAO, ``HIGH-RISK SERIES--Dedicated Leadership Needed to 
Address Limited Progress in Most High-Risk Areas'' (Mar. 2021).
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    The IRA addressed some of the GAO and OIG's concerns by increasing 
the onshore program's statutory royalty rate, minimum rental rates, and 
minimum lease bid, and establishing a new fee on expressions of 
interest (EOI). The BLM proposes to incorporate these statutory changes 
into its oil and gas regulations.
Section 50265--Ensuring Energy Security
    In section 50265 of the IRA, Congress enacted new oil and gas 
leasing terms for Federal lands. Under these terms, the BLM ``may not 
issue a right-of-way for wind or solar energy development on Federal 
land'' unless it has: (1) held an onshore oil and gas lease sale during 
the 120-day period ending on the date of the issuance of the right-of-
way; and (2) ``the sum total of acres offered for lease in onshore 
lease sales during the 1-year period ending on the date of the issuance 
of the right-of-way . . . is not less than the lesser of . . . 
2,000,000 acres[ ] and 50 percent of the acreage for which expressions 
of interest have been submitted for lease sales during that period. . . 
.''
2. Infrastructure Investment and Jobs Act
    In November 2021, Congress passed the IIJA, which amended section 
349 of the Energy Policy Act of 2005 (EPAct) (Pub. L. 109-58). Section 
349 of EPAct directs the BLM to ``establish a program . . . to 
remediate, reclaim, and close orphaned, abandoned, or idled oil and gas 
wells located on land administered by the land management agencies 
within the Department of the Interior and the Department of 
Agriculture.'' Section 349 defines an ``idled well'' as ``a well . . . 
[that] has been nonoperational for at least 7 years'' and has ``no 
anticipated beneficial use.''
    Since EPAct's passage in 2005, the BLM has gained additional 
information, experience, and insights into its efforts to inventory and 
manage idled wells. In 2018, the OIG issued a report finding that 
``[i]dle wells pose notable financial risk to the U.S. Government and 
the taxpayer, as idle wells can fall into disrepair creating 
environmental, safety, and public health hazards. In addition, idle 
wells pose a risk of becoming orphaned, thus creating an undue 
financial burden on the taxpayer to pay for plugging and reclaiming. 
Idle wells have the potential to cost taxpayers millions of dollars if 
not properly reviewed and managed.'' \6\ The OIG also identified 
``various program management issues,'' including a ``lack of an 
accurate inventory of idle wells'' and ``unreliable data in managing 
idle wells,'' ``that have contributed to BLM's inability to reduce its 
idle well numbers.'' To address these issues, the OIG recommended that 
the BLM strengthen its procedures for monitoring and tracking idled 
wells.
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    \6\ OIG, ``Bureau of Land Management's Idle Well Program'' (Jan. 
2018).
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    The GAO also addressed the idled well program in a pair of reports 
issued in May 2018 and September 2019.\7\ In these reports, the GAO 
stated that the BLM has ``few policy tools to manage shut-in wells,'' 
which represent a ``large portion'' of wells that become idled and 
orphaned.\8\ The GAO also identified nearly 2,300 idled wells ``at 
increased risk of becoming orphaned because they have not produced 
since June 2008 and have not been reclaimed.'' The bonds for ``a 
majority of these at-risk wells'' were ``too low to cover'' their 
anticipated reclamation costs, which,

[[Page 47565]]

according to the GAO, may exceed $330 million.
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    \7\ GAO, ``OIL AND GAS--Bureau of Land Management Should Address 
Risk from Insufficient Bonds to Reclaim Wells'' (Sept. 2019); GAO, 
``OIL AND GAS WELLS--Bureau of Land Management Needs to Improve Its 
Data and Oversight of Its Potential Liabilities'' (May 2018).
    \8\ See Sec.  3160.0-5 for a proposed definition of shut-in 
well.
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    In the IIJA, Congress provided the BLM with additional direction 
concerning the idled well program. Specifically, the IIJA requires the 
BLM to ``periodically review'' and proactively ``reduce the inventory 
of idled wells on Federal land.'' The IIJA also reduces the 
nonoperational period after which a well is considered idled from 7 to 
4 years. In light of these statutory directives, as well as the 
recommendations from the OIG and GAO, the BLM is proposing to adopt 
additional requirements for operators of nonoperational wells 
(specifically, shut-in and temporarily abandoned wells). The BLM 
believes that these requirements would help the BLM reduce its 
inventory of idled wells through improved identification, tracking, and 
proactive management.

B. Enhancing the Administration and Functioning of the Federal Onshore 
Oil and Gas Program

    In addition to addressing recent Congressional directives, the BLM 
is undertaking this rulemaking for the purpose of adopting new 
procedures and requirements that would enhance the administration of 
the Federal onshore oil and gas program, consistent with the BLM's 
multiple use and sustained yield mission. The BLM has not updated its 
oil and gas regulations comprehensively since 1988 and believes that 
changes are needed to reduce taxpayer exposure to reclamation-related 
liabilities; provide adequate cost recovery mechanisms; direct oil and 
gas leasing to appropriate locations; and encourage diligent 
development by parties that are responsible and qualified to conduct 
such development.
1. Reducing Taxpayer Exposure to Reclamation-Related Liabilities
    The MLA requires the BLM to ``establish such standards as may be 
necessary to ensure that an adequate bond, surety, or other financial 
arrangement will be established prior to the commencement of surface-
disturbing activities on any lease, to ensure the complete and timely 
reclamation of the lease tract, and the restoration of any lands or 
surface waters adversely affected by lease operations after the 
abandonment or cessation of oil and gas operations on the lease'' (see 
30 U.S.C. 226(g)). The MLA further requires the BLM to include in oil 
and gas leases ``such provisions as [it] deem[s] necessary . . . for 
the protection of the interests of the United States . . . and for the 
safeguarding of the public welfare'' (see 30 U.S.C. 187). To comply 
with these statutory requirements, the BLM is proposing to update its 
bonding framework for the first time in over 60 years and adopt 
additional changes to limit the reclamation-related liabilities of the 
Federal Government.
    The BLM's current minimum bond amounts are outdated, expose the 
Federal Government to significant financial risks in the event of 
bankruptcies, and delay ``complete and timely'' reclamation and 
restoration of lease tracts, which can cause or exacerbate a range of 
environmental issues, including methane leaks, surface and groundwater 
contamination, interference with agricultural activities, and degraded 
wildlife habitat.\9\ The BLM has not increased its minimum bond 
amounts, which are currently $10,000 for individual lease bonds, 
$25,000 for statewide bonds, and $150,000 for nationwide bonds, since 
1951 (statewide and nationwide bonds) and 1960 (individual lease 
bonds). Accounting for inflation, the 2022 equivalents of those bond 
amounts are $100,105, $281,399, and $1,688,394 respectively. (See 
https://www.usinflationcalculator.com/). Consequently, the BLM's 
current bonding requirements ``may not create an incentive for 
operators to promptly reclaim wells after operations cease because it 
costs more to reclaim the wells than the operator could collect from 
its bond.'' \9\ According to the BLM's internal estimates, plugging 
costs alone typically range from $35,000 to $200,000 per well.
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    \9\ GAO, ``OIL AND GAS--Bureau of Land Management Should Address 
Risk from Insufficient Bonds to Reclaim Wells'' (Sept. 2019).
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    In addition to increasing minimum bond amounts, the BLM is 
proposing other measures to protect taxpayers from reclamation-related 
liabilities. These include enhanced oversight of idled wells, as 
discussed previously. The BLM also intends to streamline the process 
for adding noncompliant entities to its list of entities and their 
officers that may not receive new leases under section 17(g) of the 
MLA, 30 U.S.C. 226(g).
2. Providing Adequate Cost Recovery Mechanisms
    As explained in greater detail in the Discussion of the Proposed 
Rule, the BLM is proposing to revise the onshore program's cost 
recovery mechanisms. The BLM is doing so to ensure that the program's 
application fees reflect actual processing costs. In 2021, the GAO 
released a report on the BLM's fee structure for the onshore oil and 
gas program, which stated that the ``BLM does not have assurance that 
its current application fees reflect changes in conditions because its 
biennial fee review does not examine all the costs BLM intended to 
recover through its application fees.'' \10\ The BLM concurred with 
that finding, and, in conjunction with this rulemaking, evaluated those 
costs, which informed the proposed adjustments to the onshore program's 
application fees.
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    \10\ GAO, ``OIL AND GAS LEASING--BLM Should Update Its Guidance 
and Review Its Fees'' (Nov. 2021).
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3. Directing Oil and Gas Leasing to Appropriate Locations
    To assist with the consideration and selection of lease sale 
parcels, the BLM intends to incorporate preference criteria into its 
oil and gas regulations. Historically, the BLM has not employed 
nationwide criteria to inform its selection of sale parcels. The BLM 
has invested a considerable amount of time and resources on evaluating 
parcels that the public does not purchase and that lessees do not 
develop. Between 2013 and 2022, the BLM offered approximately 40.3 
million acres and leased approximately 9.5 million acres from 
competitive lease sales.\11\ Even when parcels sell at or above the 
minimum bid, they are rarely developed or generate royalties for the 
Federal Government. The GAO found that only about 7 percent of the 
leases reviewed produced oil and gas in the primary term of the 
lease.\12\ The BLM believes that by directing Federal oil and gas 
leasing towards areas that are more likely to produce, it can 
appropriately utilize the BLM's time and resources. When new technology 
becomes available, the BLM would reevaluate development potential in 
light of that technology, which could change the identified areas that 
are more likely to produce.
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    \11\ BLM Public Lands Statistics, Table 11, available at https://www.blm.gov/programs-energy-and-minerals-oil-and-gas-oil-and-gas-statistics.
    \12\ GAO, ``OIL AND GAS--Onshore Competitive and Noncompetitive 
Lease Revenues'' (Nov. 2020).
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    The lack of preference criteria to aid in the selection of sale 
parcels also leads to conflict when leases are offered in areas with 
sensitive cultural, wildlife, and recreation resources. By directing 
leasing toward areas that do not have such resources, the BLM believes 
it can proactively avoid some of these conflicts. Additionally, the BLM 
believes that this approach would provide stakeholders with greater 
certainty, as it would be understood at the outset of the leasing 
process that the

[[Page 47566]]

preference criteria would guide the BLM's decision-making.
    While the proposed rule text sets out a number of criteria to aid 
the BLM in selecting parcels for potential inclusion in lease sales, 
the analysis of the impacts of leasing these parcels would also address 
the potential impacts of direct, indirect, and cumulative greenhouse 
gas emissions from leasing in accordance with the National 
Environmental Policy Act (NEPA) and applicable legal precedent. While 
the preference criteria will also affect the environmental consequences 
of proposed leasing, the BLM requests comment on whether the preference 
criteria or other portions of this proposed rule should be expanded, or 
new provisions added, to discuss analysis of greenhouse gas emissions 
and related decision-making based on the analysis.
4. Encouraging Diligent Development of Federal Oil and Gas Leased 
Resources
    The BLM has added provisions to the proposed rule that would 
incentivize diligent development of leased resources by responsible and 
qualified parties. When oil and gas leases are not diligently 
developed, as required by the MLA and expressly stated in the BLM's oil 
and gas lease form,\13\ there can be significant opportunity costs. For 
example, the BLM expends time and resources processing and 
administering lease suspensions and drilling permit extensions that 
often do not lead to development.\14\ Additionally, leases that are not 
diligently developed can limit the BLM's ability to manage public lands 
for other uses and resources and fulfill its multiple-use and 
sustained-yield missions. For these reasons, the BLM is proposing to 
limit the use of lease suspensions and drilling permit extensions, and, 
prior to issuing or approving the transfer of leases, strengthen its 
oversight of whether the potential transferees are responsible and 
qualified to pursue development.
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    \13\ BLM Form 3100-11, ``Offer to Lease and Lease for Oil and 
Gas,'' available at https://www.blm.gov/sites/blm.gov/files/uploads/Services_National-Operations-Center_Eforms_Fluid-and-Solid-Minerals_3100-011.pdf.
    \14\ GAO, ``OIL AND GAS LEASE MANAGEMENT--BLM Could Improve 
Oversight of Lease Suspensions with Better Data and Monitoring 
Procedures'' (June 2018).
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V. Discussion of the Proposed Rule

A. Summary

    The proposed modifications to parts 3000, 3100, 3110, 3120, 3130, 
3140, 3150, 3160, 3170, and 3180 are described in detail in the 
following section-by-section discussion. In addition, minor non-
substantive changes, which do not warrant detailed discussion, are also 
proposed throughout the rule. For example, the rule proposes to change 
``the Bureau'' to ``the BLM,'' change ``Service'' to ``ONRR,'' spell 
out single-digit numbers, and change the question-and-answer formatting 
to be consistent with other regulations that appear in the CFR. 
Throughout the proposed rule, the existing term ``shall'' has been 
replaced with the words ``must,'' ``will,'' or ``may,'' as appropriate, 
to reduce confusion. The proposed rule would update all time frames to 
specify either business or calendar days in order to reduce confusion.
    In addition, all sections in the parts that are being revised and 
replaced would be redesignated to remove the hyphens from the existing 
section numbers to comply with the Office of the Federal Register's 
updated style requirements. For example, Sec.  3000.0-5 would be 
redesignated to Sec.  3000.5. Removing the hyphens would require the 
BLM to redesignate some of the existing section numbers with decimals 
by adding more place values to them, which would allow the BLM to 
subsequently delineate the different sections. For example, Sec.  
3000.1 would be redesignated as Sec.  3000.10, Sec.  3000.2 would be 
redesignated as Sec.  3000.20, and so on. This redesignation would be 
carried throughout the proposed rule, even in sections that are not 
otherwise being updated. Finally, the BLM would remove the regulatory 
section numbers for headings that have no text associated them. These 
are referred to as ``undesignated center headings'' and serve as 
section guideposts in the regulations.
    Each section of each subpart, and each provision within those 
sections, is separate and severable from the other sections and 
provisions. If any provision of this rule is stayed or determined to be 
invalid or unenforceable, that provision shall be severable from the 
rest of the rule and not affect any remaining provisions. The remaining 
provisions would remain in force. This rule should be construed to 
continue to give the maximum effect to each provision as permitted by 
law.

B. Section-by-Section Discussion

    The following discussion addresses the proposed changes to the 
existing regulations. If a provision is not specifically discussed in 
this section-by-section analysis, then the provision would be 
essentially the same as the existing regulation, except for the minor 
non-substantive changes discussed previously.
1. Section-by-Section Discussion for Changes to 43 CFR Subpart 3000
    The proposed rule would add a new section to the existing subpart 
3000 regulations and revise five section headings. The goal of the 
revisions is to replace the existing question-and-answer formats and 
use more commonly used terms, consistent with other changes made 
throughout this rule.
Section 3000.5 Definitions
    The BLM is proposing to alphabetize the definitions in this 
section.
    The proposed rule would add a definition for ``acreage for which 
expressions of interest have been submitted'' to refer to acreage that 
is identified in an expression of interest received by BLM, that has 
not been proposed for leasing in any pending sale or other expression 
of interest pending BLM disposition, and for which BLM may lawfully 
issue an oil and gas lease. This definition and the below definition of 
``acres offered for lease'' are intended to clarify the means by which 
BLM will internally track its leasing progress for purposes of the 
Inflation Reduction Act, as further specified in new Sec.  3120.42.
    The proposed rule would add a definition for ``acres offered for 
lease'' to mean all acres that BLM has offered for oil and gas lease, 
regardless of whether those acres are acreage for which expressions of 
interest have been submitted.
    The proposed rule would update the definition for ``Act'' to 
include the acronym MLA for the Mineral Leasing Act of 1920, as this 
acronym would appear in the proposed regulatory text.
    The proposed rule would replace the term ``Service'' in this 
section with ``ONRR'' because the relevant functions of the prior 
Minerals Management Service (also referred to throughout the existing 
regulations as ``Service'') are now performed by the ONRR. The proposed 
rule would likewise change the term ``Service'' to ``ONRR'' wherever it 
appears in the parts 3000 and 3100 regulations.
    The proposed rule would add a definition for ``Person'' to unify 
the terms ``person'' and ``entity.'' The proposed definition would 
define ``person'' to mean any individual or entity, such as a 
partnership, association, State, political subdivision of a State or 
territory, or a private, public, or municipal corporation.
    The proposed rule would modify the existing definition for ``Proper 
BLM office'' to remove the reference to the BLM Alaska State Office. 
The definition of this term would continue to refer the reader to Sec.  
1821.10, which contains the

[[Page 47567]]

location information for all BLM state offices.
    A new definition for ``Properly filed'' would be added to proposed 
Sec.  3000.5 to correspond to the use of the term in Sec.  3000.60. The 
new definition would describe ``Properly filed'' as a document or form 
submitted to the appropriate office with all necessary information and 
payments, as provided in 43 CFR subpart 1822.
    The proposed rule would modify the existing definition for 
``Surface managing agency'' to ensure that the definition includes 
other agencies within the DOI with which the BLM must coordinate, in 
addition to non-DOI agencies that have management responsibility for 
the surface resources that overlay federally owned minerals. The 
revised definition would replace the phrase ``any Federal agency 
outside of the Department of the Interior with jurisdiction over the 
surface overlying federally owned minerals'' with ``any Federal agency, 
other than the BLM, having management responsibility for the surface 
resources that overlay federally owned minerals.''
Section 3000.20 False Statements
    The purpose of this section is to inform the public that submitting 
false or fraudulent statements to the agency is a crime punishable by 
imprisonment or a fine, or both. The proposed rule would remove the 
references to specific imprisonment times and fine amounts for 
violations provided in 18 U.S.C. 1001. The purpose of this change is to 
ensure that this regulation does not become inaccurate or obsolete if 
the penalty provisions in 18 U.S.C. 1001 are updated. The penalties are 
already referenced at 18 U.S.C. 1001, which is cited in the BLM's 
regulation.
Section 3000.40 Appeals
    A BLM decision is subject to appeal to the Interior Board of Land 
Appeals (IBLA) in accordance with the regulations contained in 43 CFR 
part 4, when a decision accomplishes, authorizes, or prohibits some 
action. See International Petroleum, 190 IBLA 130, 134-35 (2017). The 
BLM will identify the applicable authority under which it made its 
decision. Actions under certain sections of BLM's oil and gas leasing 
regulations, for example the BLM's filing fees, are not subject to 
appeal, because such actions are authorized pursuant to a previous 
notice-and-comment process. The proposed rule would add a reference to 
Sec.  3000.120 to clarify that point, consistent with existing language 
found under Sec.  3000.12(b), which states the amount of a fixed fee is 
not an agency decision subject to appeal under Sec.  3000.40 and part 
4. The BLM also proposes to also add a reference to proposed Sec.  
3000.130, which includes a similar paragraph stating the financial 
terms for new leases are not subject to appeal. The proposed rule would 
update an existing CFR reference from Sec.  3101.7-3(b) to Sec.  
3101.53(b). This change reflects the proposed redesignation changes to 
the process for oil and gas lease issuances under Sec.  3101. The 
proposed rule would remove a reference to Sec.  3120.1-3, as the title 
and language in that section are proposed to change from ``protests and 
appeals'' to ``protest'' only. (See the discussion on the proposed 
Sec.  3120 later in this preamble.)
Section 3000.50 Limitations On Time To Institute Suit To Challenge a 
Decision of the Secretary
    The proposed rule would update the word ``contesting'' in this 
section to the more commonly used term ``challenging'' to provide 
clarity.
Section 3000.60 Filing of Documents
    This section describes how to file documents with the BLM. The 
proposed rule would update this section to enable the BLM to accept 
electronically filed documents. The provision would still allow the use 
of hard-copy mailing services. In addition, this section would update 
the reference to Sec.  1821.2 to the correct citation of subpart 1822.
Section 3000.90 Enforcement Actions Under 30 U.S.C. 195
    This section explains that the U.S. Department of Justice is the 
agency responsible for enforcement actions described in section 41 of 
the MLA. The proposed rule would update the title and language in this 
section to cite 30 U.S.C. 195. The U.S. Code reference is more 
informative than the current reference to ``provisions of section 41 of 
the Act.'' The proposed rule would add language from 30 U.S.C. 195 to 
make this provision more informative.
Section 3000.100 Fees in General
    The proposed rule would rename this section from ``What do I need 
to know about fees in general?'' to ``Fees in general.''
Section 3000.110 Processing Fees on a Case-by-Case Basis
    The proposed rule would rename this section from ``When and how 
does BLM charge me processing fees on a case-by-case basis?'' to 
``Processing fees on a case-by-case basis.'' In addition, the BLM 
proposes to add ``and in accordance with all other applicable laws and 
regulations'' into paragraph (b)(1) to avoid implying that an applicant 
may prepare or assist in the preparation of certain NEPA documents 
that, under CEQ regulations, are to be prepared solely by the 
applicable agency.
Section 3000.120 Fee Schedule for Fixed Fees
    Consistent with the IRA, the BLM has implemented a nonrefundable 
filing fee of $5 per acre, or fraction thereof, for EOIs. This fee is 
not considered a cost-recovery fee, and the monies collected are 
transferred to the Treasury as miscellaneous receipts (see 30 U.S.C. 
191).
    The proposed rule would update the existing fee for name changes, 
corporate mergers, or transfers to heirs and devisees to include 
corporate dissolutions and sheriff's deeds. The BLM accepts corporate 
dissolutions and sheriff's deeds to recognize the change in the 
ownership of interest in a lease per existing policy at H-3106-1, 
Transfers by Assignment, Sublease or Otherwise. The BLM processes these 
types of changes in the same manner as name changes, corporate mergers 
or transfers to heirs and devisees. Thus, these changes should also 
require a fixed filing fee.
    The BLM is also proposing to adjust the existing oil and gas filing 
fees for competitive lease applications, leasing under rights-of ways, 
class I lease reinstatements, and geophysical exploration permits. When 
these fees were initially set in 2005, the BLM explained that it 
reserved the right to amend the fees in future rulemakings to reflect 
new data or other evidence that the fees did not accurately reflect 
reasonable costs (70 FR 41532 (July 19, 2005)). The GAO has since found 
that the BLM has not reviewed its application fees in response to 
changing conditions. See GAO-22-103968, Oil and Gas Leasing: BLM Should 
Update Its Guidance and Review Its Fees. The BLM concurred with GAO's 
findings because the cost to the BLM of its oil and gas leasing process 
has changed since 2005. For example, the BLM moved to online auctions 
in 2016, and it no longer expends resources on holding auctions because 
the winning bidders pay the auction company directly for auction 
expenses. Previously, a portion of the competitive leasing application 
fees was intended to recover the BLM's costs for holding in-person 
auctions. Conversely, the BLM proposes to include the cost related to 
complying with the NEPA in the filing fee for a competitive lease 
application; that causes an increase to the filing fee. To reflect the 
cost changes, the BLM is

[[Page 47568]]

proposing to amend the fee for the following document filings or 
actions: competitive leasing application fee, leasing under rights-of 
ways, class I lease reinstatements, and geophysical exploration 
permits.
    The BLM is proposing to include new fixed filing fees for the 
following Federal oil and gas actions to reimburse the BLM for its 
reasonable processing costs: designation of successor operator; unit 
agreement applications; subsurface storage agreement applications; unit 
agreement expansion applications; and formal lease nominations. The BLM 
considered proposing new fixed filing fees for Federal communitization 
agreements (CA), Federal participating area applications, and royalty 
rate reduction applications, but it ultimately declined to propose 
these fees due to the low value and the public benefit related to these 
items. Royalty rate reductions occur at the end of a lease's life and 
allow the operator to continue producing from the property based on 
reduced royalties. This gives the American public the benefit of 
additional production and Federal revenue without additional surface 
disturbance or environmental impact.
    The BLM considered both case-by-case and fixed filing fees for the 
new fees proposed in this rule. Historically, the BLM has determined 
costs on a case-by-case basis for types of documents where the costs 
may differ significantly in each case. In this proposal, the BLM has 
opted to institute fixed filing fees for designation of successor 
operator; unit agreement applications; subsurface storage agreement 
applications; unit agreement expansion applications; and a formal lease 
nomination fee because charging processing costs on a case-by-case 
basis would be time consuming and would not be the most efficient use 
of BLM resources. Collecting cost data on a case-by-case basis for each 
document to be processed adds to the processing costs. The BLM decided 
that, for the oil and gas documents at issue, it would likely be more 
efficient and sufficiently reliable to set a fixed fee based on average 
costs and indexed to inflation. In addition, applicants benefit from 
knowing fees in advance.
    To determine the new oil and gas fixed filing fees, the BLM 
followed the same method it used in 2005 to set the current fixed fees: 
using a weighted average rather than a simple average to determine the 
processing cost for each type of document. This method gives greater 
weight to the processing cost data from state offices with a heavy 
workload and, thus, more expertise in processing a particular type of 
document. The BLM's fluid minerals program identified the processing 
steps and then asked the state office subject matter experts (SMEs) to 
identify the appropriate job position, salary level, and time required 
for particular steps specified by the BLM handbooks. The fluid minerals 
program considered changes to the processing of each type of document 
since the handbooks were last updated. The BLM then calculated a direct 
cost for each process and adjusted to 2021 salary rates without a 
locality factor. The BLM's fluid minerals program spot-checked the data 
and sent each state office a summary of the cost data that the office 
had previously submitted for these types of documents, along with the 
BLM-wide weighted average cost for each. State offices were asked to 
review the cost data and report whether that data, adjusted to current 
filing fee amounts, remained reasonable. They were also asked to re-
estimate costs if the state office found the re-examined adjusted cost 
data to be inaccurate. A re-examination verified that the BLM's data 
continued to be valid and ensured that figures, which varied 
significantly among offices, had not been submitted in error.
Processing Steps for the Fixed Fees
    The BLM reviewed the changes in processing steps due to changes in 
the law, regulations, and policy to determine how processing the 
different fixed fee applications have changed since the BLM established 
the fixed filing fee in 2005. The following table summarizes the 
results of this review.

----------------------------------------------------------------------------------------------------------------
                                          Current processing                                Removed processing
           Document/action                      steps            Added processing steps           steps
----------------------------------------------------------------------------------------------------------------
Formal lease nomination *............  Validating data
                                        received; Sorting
                                        parcels (developing
                                        parcel configuration/
                                        acreage); Preparing
                                        stipulations;
                                        Preparing sale notices.
Competitive lease application........  Preparing sale notices;  Adjudicating high bids;  Sorting parcels
                                        Noting land status       Conducting               (developing parcel
                                        records; Preparing and   environmental reviews.   configuration/
                                        conducting sale                                   acreage); Preparing
                                        auctions; Preparing                               sale notices;
                                        lease decisions;                                  Preparing and
                                        Entering and                                      conducting sale
                                        transmitting data                                 auctions; Entering
                                        updates.                                          data updates.
Leasing under right-of-way...........  Receiving, validating,   Adjudicating the         Sorting parcels
                                        and entering data;       application and          (developing parcel
                                        Examining land status;   preparing the notice/    configuration/
                                        Sorting parcels          invitation to bid;       acreage); Preparing
                                        (developing parcel       Conducting               sale notices;
                                        configuration/           environmental review.    Preparing and
                                        acreage); Preparing                               conducting sale
                                        stipulations;                                     auctions; Entering
                                        Preparing sale                                    data updates.
                                        notices; Noting land
                                        status records;
                                        Preparing and
                                        conducting sale
                                        auctions; Preparing
                                        lease decisions;
                                        Entering and
                                        transmitting data
                                        updates.
Lease consolidation..................  Receiving, validating,
                                        and entering data;
                                        Examining requests,
                                        lease term conditions,
                                        and production;
                                        Preparing new leases
                                        and decisions;
                                        Entering and
                                        transmitting updates.
Assignment and transfer of record      Receiving, validating,
 title or operating rights.             and entering data;
                                        Examining assignment
                                        and transfer forms;
                                        Reviewing leases and
                                        bonds; Approving,
                                        entering, and
                                        transmitting updates.
Overriding royalty transfer, payment   Receiving, validating,
 out of production.                     and entering data.

[[Page 47569]]

 
Name change, corporate merger,         Receiving, validating,
 sheriff's deed, corporate              and entering data;
 dissolution, or transfer to heir/      Examining requests;
 devisee.                               Determining successors-
                                        in-interest or other
                                        special requirements;
                                        Reviewing leases and
                                        bonds; Preparing
                                        decisions; Entering
                                        and transmitting
                                        updates.
Lease reinstatement, Class I.........  Receiving, validating,   Conducting
                                        and entering data;       environmental review.
                                        Examining eligibility;
                                        Preparing decisions;
                                        Entering and
                                        transmitting updates.
Geophysical exploration permit         Nominal filing fee for   For all states--
 application.                           Alaska only.             Receiving, validating,
                                                                 and entering data;
                                                                 Examining land status;
                                                                 Conducting
                                                                 environmental review;
                                                                 Preparing notices/
                                                                 decisions; Entering
                                                                 data updates.
Final application for Federal unit     Receiving, validating,
 approval, Federal unit agreement       and entering data;
 expansion, Federal subsurface gas      Technical review;
 storage application *.                 Determine commitment
                                        status; Preparing
                                        notices/decisions;
                                        Entering data updates.
Designation of successor operator for  Receiving, validating,
 Federal agreements *.                  and entering data;
                                        Technical review;
                                        Preparing notices/
                                        decisions; Entering
                                        and transmitting data
                                        updates.
----------------------------------------------------------------------------------------------------------------
* New proposed fixed filing fee.

    The fixed fee for lease renewals would be removed, as there are no 
longer any leases eligible for renewal. Under the MLA, any lease 
renewal issued on or after November 15, 1990, ``continue[s] for twenty 
years and so long thereafter as oil and gas is produced in paying 
quantities.'' 30 U.S.C. 188(f)(3). If a lease renewed on or after 
November 15, 1990, fails to produce oil and gas in paying quantities at 
the end of its renewal term, the lease expires with no further option 
of renewal.
    The current $500 fee for Class II lease reinstatements is located 
at existing 43 CFR 3108.2-3(b)(3)(vi). The BLM considered moving the 
existing fee to 43 CFR 3000.120 for inclusion alongside the fixed 
filing fees, increasing the fee to reflect the processing costs, and 
then adjusting the fee annually for inflation. However, the MLA, at 30 
U.S.C. 188(e), specifically states for Class II lease reinstatements 
that ``[t]he lessee of a reinstated lease shall reimburse the Secretary 
for the administrative costs of reinstating the lease, but not to 
exceed $500.'' Accordingly, the BLM proposes to leave the 
administrative fee of $500 in its current location at 43 CFR 
3108.23(b)(3)(vi).
FLPMA Factors and Processing Fees
    Section 304(b) of FLPMA lists six factors, commonly known as the 
``FLPMA reasonableness factors,'' that the BLM must consider when 
deciding the amount of a reasonable processing fee. Those factors are:
    (1) The BLM's actual costs to process a document not including 
management overhead, i.e., the processing time spent by the BLM State 
Directors, Deputy State Directors, and other management staff. Actual 
costs include (but are not limited to) time spent at the state and 
field office levels by SMEs who work on a specific authorization, such 
as a lease, and funds spent on environmental reviews, technical 
reviews, and analyses.
    (2) The monetary value, or objective worth, of the right or 
privilege that the applicant seeks.
    (3) The efficiency with which the BLM processes a document, i.e., 
minimizing of waste by carefully managing agency expenses and time.
    (4) Whether any of the BLM's processing costs, for actions such as 
studies or data collection, benefit the general public or the Federal 
Government, rather than just the applicant alone.
    (5) Whether the project provides any significantly tangible 
improvement, such as a road, or other direct service to the public. 
Occasionally, a negative factor, such as an adverse impact on wildlife, 
habitats, or surface drainage, may prevent an improvement from 
qualifying as a public service. Data collection that the BLM requires 
of an applicant for monitoring an activity is not a public service.
    (6) Other relevant factors.
    The BLM considered each of the FLPMA reasonableness factors for 
each type of document for which the BLM is proposing to adjust the 
existing fee or add a new fixed fee. The BLM first estimated the actual 
cost to process a type of document. When estimating the processing 
costs, the BLM determined a range based on the range of costs provided 
by the BLM State Offices. The BLM then considered each of the other 
FLPMA factors to determine if they warranted setting the fee at less 
than actual cost. If so, the BLM then considered whether any of the 
remaining factors acted as an enhancing factor that would mitigate 
against setting the fee at less than actual cost. Lastly, the BLM 
decided the amount of the fee, which cannot be more than the processing 
cost. For all of the fees in this proposal, this method resulted in 
fees set at the lower end of the BLM's processing cost.
Actual Costs
    Actual costs are the sum of both direct and indirect costs. Direct 
costs include such things as labor, material, and equipment. The BLM 
estimated the direct costs by reaching out to each BLM state office and 
requesting an estimate of the processing time for each application 
based on the steps detailed in the previous table. Then using the 
average hourly wage, the BLM calculated the direct cost for the BLM to 
process the application. Indirect costs include items such as rent and 
overhead, excluding State Director and management overhead. For an 
example of how the BLM would determine the sum of direct and indirect 
costs, assume the measured direct cost of processing a document is 
$200. To estimate the indirect cost for processing that document, the 
BLM uses a ratio that it calculates annually. Annually, the BLM 
calculates the indirect cost rate, which is assessed on these fixed 
filing fees. Indirect costs are the overhead costs, which remain after 
direct costs have been computed, and may include utilities, 
telecommunications, information

[[Page 47570]]

technology, space rental, and other administrative support functions. 
Currently that ratio is 10 to 2, or 20 percent, meaning for every $10 
of direct costs there would be $2 of indirect costs. The BLM would 
estimate the indirect cost using the ratio and direct cost figures. In 
this example, since the direct cost was $200 and the ratio is 10 to 2, 
the indirect cost is $40. The BLM then would add the direct and 
indirect cost figures to arrive at the actual cost figure of $240 to 
process the document. This method is generally accepted in the private 
and public sectors.
Monetary Value of the Right or Privilege
    Historically, the BLM concluded that its processing costs to 
prepare parcels for lease sale benefit three classes of beneficiaries: 
the party who requests that the parcel be included in the sale, all 
parties who bid on the parcel, and the successful bidder. The party who 
requests that a parcel be included in a lease sale benefits by 
influencing the selection of parcels offered. The BLM considered this 
benefit to be greatly outweighed by the benefit to the successful 
bidder who ultimately obtains the lease and can develop the minerals on 
the parcel. Similarly, while all bidders receive the benefit of being 
considered for a lease, the BLM considered this benefit to be greatly 
outweighed by the benefits to the successful bidder who obtains the 
lease. With respect to the new proposed fees for agreements, the 
operator benefits through economic gain if and when drilling activity 
occurs and through development of the lease. In addition, any benefit 
to the general public that would accrue from increased oil and gas 
availability or lower prices is considered too speculative and indirect 
to warrant consideration.
Monetary Value to the Applicant
    The BLM did not attempt to calculate the monetary benefit to each 
applicant because those values are not always knowable to the BLM, and 
it would be inefficient to attempt to calculate them for each 
application or submission.
Monetary Value of the Right or Privilege Granted
    To gauge the monetary value, the BLM considered the monetary value 
of similar rights or privileges granted to applicants historically. The 
BLM reviewed each type of document and compared the proposed filing fee 
for a given type of document with our professional judgment of the 
historical values of similar rights or privileges the BLM has granted. 
In each case, the BLM believes the value of the right or privilege is 
so much greater than the processing cost that a fee based on the 
average actual cost would not significantly affect the applicant's 
proposed action. This is not surprising considering that the costs 
pertain to documents related to the commercial development of minerals. 
The BLM did not reduce any fees because of this factor.
Monetary Value Change
    The BLM bases its decision about the monetary value of the benefit 
to the applicant on the value at the time the applicant submits its 
application. All leases have relatively large monetary value before 
exploration compared with the proposed fees. The basic value of the 
opportunity provided by a lease to explore for minerals is shown by the 
willingness of applicants to pay large sums before exploration for 
bonus bids, for lease transfers, and for exploration activities such as 
drilling. Because the monetary value of the right sought in a lease is 
much greater than the cost of processing the lease, the BLM considers 
it reasonable to charge a fee equal to processing costs for all lease 
applications.
The Efficiency Factor
    The BLM's fluid minerals program asked the state office's SMEs to 
provide a minimum, maximum, and average time spent on each application 
process. Some SMEs stated that their estimated range depended on the 
experience of the staff. The estimates from less experienced staff 
increased the amounts for the average and the high estimate for 
processing costs. In addition, some state offices receive fewer 
applications than compared with other state offices. This can increase 
the processing time spent for researching and processing applications 
when they are not frequently received in a particular office. 
Therefore, the BLM chose to use the lowest estimate for time spent on 
processing applications to create the weighted average so that 
applicants are not penalized for understaffed offices or offices with 
fewer seasoned employees.
    The BLM ensured that the field offices efficiently process the 
documents for which fees are charged. For all of the new and existing 
fees, the BLM based the processing procedures on standardized steps as 
outlined in the BLM Handbooks and Instruction Memoranda in order to 
eliminate duplication and extraneous procedures. The BLM developed 
these detailed and measurable processing steps to be efficient.
The Public Benefit Factor
    Possible public benefits from the BLM processing activities, such 
as studies or data collection, are also difficult to measure. For 
example, studies related to document processing often provide 
information about an area's natural resources. This is sometimes a 
public benefit, but the value of the information, or whether there will 
be a benefit at all, is not predictable. The BLM concluded that 
document processing for types of fixed fee documents in this rulemaking 
does not usually produce studies or data that significantly benefits 
the public. In addition, the BLM determined that for each type of 
document in this rulemaking, the monetary value to the applicant 
outweighs the possible benefit of such studies to the public. The BLM 
analysts used their knowledge of the historical values of such cases to 
make these determinations. The BLM has, therefore, decided that this 
factor does not warrant setting any fee in this rulemaking at less than 
its actual processing cost.
The Public Service Factor
    A project's service to the public concerns whether the applicant's 
project itself, as opposed to the BLM's processing of the related 
documents, provides some significant direct service or benefit to the 
general public. FLPMA refers to this as public service. Examples 
include improvements, such as roads, trails, or recreation facilities. 
Occasionally, a negative factor, such as an adverse impact on wildlife, 
habitats, or surface drainage, may prevent the BLM from regarding an 
improvement as a public service.
    The BLM reviewed exploration data shared with the government to 
consider whether it constitutes a public service. Applicants for 
geophysical exploration for the oil and gas program in Alaska are 
required to share with the government the mineral resource data they 
derive from exploration. However, that information likely would not be 
made public. Moreover, if the information is valuable for mineral 
development, the BLM expects the findings would result in oil and gas 
leases in that area. In that case, the monetary value of the 
information to the permittee would outweigh its value to the public. 
The BLM considered that even information that is not valuable to the 
permit holder for mineral development might still provide some 
geological or geophysical information of value to the government, which 
the BLM could sometimes use for some types of resource management, such 
as land classifications. However, because there is very little 
information

[[Page 47571]]

obtained in this way and because its use is unpredictable, the 
potential benefits of the information to the public are too small to 
warrant an adjustment to the proposed fee. Finally, the operator may 
consider geophysical information indicating low-development potential 
valuable because the identification of low-development potential helps 
the operator avoid unprofitable development; therefore, the value to 
the operator outweighs any public benefit.
    The projects with a proposed fixed fee do not generally provide a 
public service. Large projects could include road construction, but 
such roads are rarely open to the public or built to public safety 
standards. In addition, they eventually must be removed. Consequently, 
for fixed fee documents, the likelihood of providing such a public 
service is too remote and speculative to warrant charging a fee less 
than actual costs.
Other Factors
    The BLM did not find other factors that made it reasonable to 
adjust fees in this proposed rulemaking.
New Proposed Oil and Gas Fixed Fees

                      Table 1--Category: Fixed Fees
[Note that fees will be adjusted annually for inflation according to the
IPD-GDP and posted on the BLM's website. Revised fees are effective each
                               October 1]
------------------------------------------------------------------------
             Document/action               Existing fee    Proposed fee
------------------------------------------------------------------------
     Oil and Gas (parts 3100, 3110, 3120, 3130, 3150, 3160 and 3180)
------------------------------------------------------------------------
Formal lease nomination.................              $0            $125
Expression of Interest fee per acre, or                0               5
 fraction thereof.......................
Competitive lease application...........             185           3,100
Leasing under right-of-way..............             475             660
Leases consolidation....................             525             525
Assignment and transfer of record title              105             105
 or operating rights....................
Overriding royalty transfer, payment out              15              15
 of production..........................
Name change, corporate merger, sheriff's             250             250
 deed, corporate dissolution, or
 transfer to heir/devisee...............
Lease reinstatement, Class I............              90           1,260
Geophysical exploration permit                    \a\ 30       \b\ 1,150
 application--all states................
Renewal of exploration permit--Alaska...              30              30
Final application for Federal unit                     0           1,200
 agreement approval, Federal unit
 agreement expansion, Federal subsurface
 gas storage application................
Designation of successor operator for                  0             120
 Federal agreements.....................
------------------------------------------------------------------------
\a\ Alaska only.
\b\ All states.

    We have rounded estimated fees down or up to the nearest $5.00, for 
ease of payment and administration. This is consistent with general 
business practices.
Annual Inflation Adjustments
    The BLM is also proposing to cease publishing the annual fee 
adjustments in the Federal Register and the CFR. The BLM would instead 
post the updated table on the BLM's web page with the historical fees 
posted in the same location. Revised fees would be effective each year 
on October 1. The BLM is requesting comments on this process change.
    Annual inflation adjustments would be calculated based on the 
percentage change in the Implicit Price Deflator for Gross Domestic 
Product (IPD-GDP) for the 1-year period between the fourth quarters of 
the previous 2 years, consistent with the 2005 Cost Recovery Rule. For 
example, the FY 2022 fees were set based on the change in the IPD-GDP 
from the fourth quarter of 2020 to the fourth quarter of 2021. The BLM 
would then multiply the current fee amounts by that multiplier to 
obtain the adjusted fee amounts. The resulting amounts would be rounded 
to the nearest $5 at the end of the calculation process for ease of 
payment and administration. This is consistent with general business 
practices.
Existing Applications
    The BLM would not charge a new fixed fee under this rule for 
processing a document that the BLM received before the effective date 
of the rule. Documents submitted before the effective date of the final 
rule will be processed with the appropriate fees under the regulations 
existing as of the submittal date.
Section 3000.130 Fiscal Terms of New Leases
    The BLM is proposing a new provision consisting of a table 
outlining the fiscal terms for new leases. Under the existing 
regulations, various subparts describe the base rental rate for leases. 
Likewise, various subparts describe the minimum bonus bids for 
competitive leases. In this rule, the BLM proposes to conform its 
regulations to the IRA by increasing the minimum bids and base rental 
rates. The BLM proposes to identify these rates in a new section and 
table so the rates can be regularly adjusted for inflation. The IRA 
precludes the adjustment of these fiscal terms until after August 16, 
2032. Each of the various sections would now refer to this new section, 
rather than itemizing the relevant fees. The BLM proposes to include a 
paragraph (b) to state that these rates are not subject to appeal, 
since these base rates would be applied through the publication of a 
final rule in the Federal Register.
    Consistent with 43 CFR 3000.120, the BLM is also proposing to no 
longer publish the annual fee adjustments in the Federal Register and 
the CFR. The BLM would instead post the updated table on the BLM's 
website before October 1 of each year. Revised fees would be effective 
each year on October 1. The BLM is requesting comments on this process 
change.
    Annual inflation adjustments would be calculated based on the 
percentage change in the Implicit Price Deflator for Gross Domestic 
Product (IPD-GDP) for the 1-year period between the fourth quarters of 
the previous 2 years, consistent with the 2005 Cost Recovery Rule. For 
example, the FY 2022 fees were set based on the change in the IPD-GDP 
from the fourth quarter of 2020 to the fourth quarter of 2021. The BLM 
would then multiply the current fee amounts by that multiplier to 
obtain the adjusted fee amounts. The resulting amounts would be rounded 
to the

[[Page 47572]]

nearest $5 at the end of the calculation process for ease of payment 
and administration. This is consistent with general business practices.
2. Section-by-Section Discussion for Changes to 43 CFR Subpart 3100
    The proposed rule does not make any revisions to the section 
headings in the existing subpart 3100 regulations.
Section 3100.3 Authority
    The purpose of this section is to describe lands that are subject 
to leasing. The proposed changes to this section were made to provide 
clarity and to conform the regulations to various other laws. This 
proposed section would remove the reference to the National Petroleum 
Reserve--Alaska (NPR-A) from the exceptions listed under both Public 
Domain and Acquired lands to reduce confusion. The NPR-A is 
appropriately listed under 43 CFR 3100.3(c) and would remain as lands 
that are subject to leasing under the Department of the Interior 
Appropriations Act, FY 1981 (42 U.S.C. 6508). These lands are subject 
to leasing under the regulations found under 43 CFR part 3130.
    The proposed rule updates the exceptions for lands within the 
National Wilderness Preservation System to cite to 16 U.S.C. 1133. The 
proposed reference to the United States Code is more informative than 
the current reference to ``section 4(d)(3) of the Wilderness Act.''
    This proposed section would also add lands within Wild and Scenic 
Rivers to the exceptions listed under both Public Domain and Acquired 
lands. Subject to valid existing rights, the Wild and Scenic Rivers Act 
(16 U.S.C. 1280) withdraws from leasing lands within designated Wild 
and Scenic Rivers that constitute the bed or bank or are situated 
within one-quarter mile of the bank of any river designated a wild 
river.
    This proposed rule would move the reference to lands within 
wildlife refuges in existing 43 CFR 3101.5-1 to the exceptions listed 
under both Public Domain and Acquired lands in the proposed 
redesignated 43 CFR 3100.3. This change would not impose new 
requirements. The proposed rule would remove the reference to 
noncompetitive lease offers, consistent with changes made by the IRA.
    Currently, existing 43 CFR 3101.6 states that lands within 
Recreation and Public Purposes leases and patents are subject to lease 
under 43 CFR part 3100. The proposed rule would move that statement to 
Sec.  3100.3(h) because it belongs in the list of authorities. It would 
not result in any substantive regulatory change.
    Finally, this proposed section would add a reference to the Fish 
and Wildlife Coordinating Act (16 U.S.C. 661) in paragraphs (j)(1) 
through (3) dealing with coordination lands and refuges in Alaska. 
These references are currently found in the existing 43 CFR 3101.5-
2(a), Sec.  3101.5-2(b), and Sec.  3101.5-3, but are more appropriately 
listed under the authority for leasing. These are not new requirements.
Section 3100.5 Definitions
    The purpose of this section is to provide definitions of terms used 
through subpart 3100. The proposed rule would alphabetize the 
definitions and remove embedded definitions, so the terms are defined 
separately.
    The proposed rule would update the definition for the term ``bid'' 
to include a specific definition corresponding to the term's use in 43 
CFR 3109 as, in the BLM's experience, this has caused confusion in the 
past. For leases or compensatory royalty agreements issued under 43 CFR 
3109, the term ``bid'' would mean an amount or percent of royalty or 
compensatory royalty that the owner or lessee must pay for the 
extraction of the oil and gas underlying the ROW, which is different 
from the bonus bids received on competitive leases.
    The proposed rule would add a definition for ``competitive 
auction,'' which would mean an in-person or internet-based bidding 
process where leases are offered to the highest bidder. The addition of 
this term would help the BLM to streamline the regulations by obviating 
the need to use the longer phrase ``oral or internet-based auction'' 
throughout the regulations.
    The proposed rule would add a new definition for the term 
``exception'' which would mean a limited exemption, for a particular 
site within the leasehold, to a stipulation. The addition of this term 
would help to provide clarity in the regulations. The term is used in 
43 CFR subpart 3101 and is further discussed later.
    The proposed rule would add a new definition for the term 
``modification'' which would mean a change to the provisions of a lease 
stipulation for some or all sites within the leasehold and either 
temporarily or for the term of the lease. The term is used in 43 CFR 
subpart 3101 and is further discussed later. The addition of this term 
would allow the BLM to incorporate existing policy into its regulations 
and help to provide clarity in the regulations.
    The proposed rule would add a new definition for the term ``oil and 
gas agreement'' which would mean an agreement between lessees and the 
BLM to govern the development and allocation of production for existing 
leases, including, but not limited to, CAs, unit agreements, secondary 
recovery agreements, and gas storage agreements. The BLM would add this 
term to identify regulations that apply to multiple types of 
agreements. The term is used in the proposed rule in 43 CFR subpart 
3105 and is further discussed later.
    The proposed rule would update the definition for ``operating right 
(working interest)'' to include the holder's obligations under the 
lease. The amended rule would state, ``Operating rights include the 
obligation to comply with the terms of the original lease, as it 
applies to the area or horizons for the interest acquired, including 
the responsibility to plug and abandon all wells that are no longer 
capable of producing, reclaim the lease site, and remedy environmental 
problems.'' The update to this term would provide clarity in the 
regulations.
    The proposed rule would update the definition for the ``primary 
term of all other leases'' to state that it means the initial term of 
the lease, which is set at 10 years. The change in this definition 
updates the outdated reference to 5-year terms for competitive leases 
used prior to FOOGLRA.
    The proposed rule would update the definition for ``record title'' 
to include the lessee's obligations under the lease. The lessee's 
interest, which is also referred to as the record title, includes the 
obligations to perform and bear ultimate responsibility to adhere to 
lease terms, including requirements relating to well operations and 
abandonment. The update to this term would provide clarity in the 
regulations.
    The proposed rule would add a new definition for ``qualified 
bidder'' to mean any person in compliance with the laws and regulations 
governing a bid. The addition of this term would provide clarity in the 
regulations.
    The proposed rule would add a new definition for ``qualified 
lessee'' to mean any person that is compliant with the laws and 
regulations governing the BLM issued leases held by that person. The 
addition of this term would provide clarity in the regulations.
    The proposed rule would add a new definition for ``responsible 
bidder'' to mean any person who has not defaulted on winning bids, is 
capable of fulfilling the requirements of onshore BLM oil and gas 
leases, and does not have a history of noncompliance with applicable 
statutes and regulations or the terms of a BLM-issued oil and gas

[[Page 47573]]

lease. The term ``responsible bidder'' would not include persons who 
bid with no intention of paying a winning bid or persons who default on 
a winning bid. The addition of this term would provide clarity in the 
regulations.
    The proposed rule would add a new definition for ``responsible 
lessee'' to mean any person who has not defaulted on previous winning 
bids, is capable of fulfilling the requirements of onshore Federal oil 
and gas leases, and does not have a history of noncompliance with 
applicable statutes or the terms of a BLM-issued oil and gas lease. The 
addition of this term would provide clarity in the regulations.
    The proposed rule would add a new definition for the term 
``waiver'' which would mean a permanent exemption from a lease 
stipulation. The term is used in subpart 3101 and is further discussed 
later. The addition of this term would allow the BLM to incorporate 
existing policy into its regulations and help to provide clarity in the 
regulations.
    Finally, the BLM split out the definitions for ``assignment'' and 
``sublease'' from the current definition of ``transfer'' in the 
existing regulations. This will assist the public in finding the 
applicable definition as well as highlight the differences between an 
assignment and a sublease.
Section 3100.9 Information Collection
    The current regulation lists out-of-date OMB control numbers for 
information collection requirements. The proposed rule would update 
those control numbers and restructure the format of this section to 
include the authority for and purpose of the section, including a table 
that lists the current OMB control numbers.
Section 3100.31 Enforceability
    The proposed rule would streamline the section on options. The MLA 
expressly authorizes and restricts options to acquire an interest in a 
lease. See 30 U.S.C. 184(d). While the BLM has not previously received 
option statements from the industry, the BLM cannot prohibit options 
and will continue to accept option statements for the record if they 
are submitted to the BLM. Under the ``Enforceability'' section (43 CFR 
3100.31(a)), the BLM would remove the phrase ``without the approval of 
the Secretary.'' That would eliminate the discretion to authorize 
options for a period of more than 3 years. Paragraph (b)(3) would be 
revised for clarity to change the reference to ``the number of acres 
covered by the option and of the interests and obligations of the 
parties to the option, including the date and expiration date of the 
option'' to read ``the number of acres and the type and percentage of 
interest to be conveyed and retained by the parties to the option, 
including the expiration date of the option.''
Section 3100.40 Public Availability of Information
    The proposed rule would not make any substantive changes to this 
section; however, the BLM is considering adding language that would 
provide notice that names and addresses of the nominator, lessee, 
operating rights holders, and operators would be made public through 
the BLM's automated system. The BLM's lease and agreement case files 
are already public records, and any change to this section would merely 
reflect the BLM's current practice.
3. Section-by-Section Discussion for Changes to 43 CFR Subpart 3101
    The proposed rule would remove 10 sections in the existing subpart 
3101 as outlined in Section VI of this preamble titled Overview of 
Modifications. The removal of these sections would cause some of the 
sections to be redesignated accordingly. The purpose of this removing 
and redesignating is to achieve consistency and ease of reference 
throughout subpart 3101, as sections were consolidated and reorganized.
Section 3101.12 Surface Use Rights
    This section was promulgated in 1988 to clarify the BLM's authority 
to use the terms and conditions of the standard lease form to control 
site-specific environmental impacts on leaseholds, as opposed to lease-
specific protective measures, addressed in lease stipulations, to 
mitigate impacts to specific resources values identified on leased 
lands. The standard lease form authorizes the BLM to require 
``reasonable measures'' to the extent that such measures would be 
consistent with the lessee's rights. However, this revised section 
would more clearly outline the measures that the BLM may require to 
promote development practices that are consistent with multiple use and 
sustained yield and the terms of the BLM's oil and gas leases.
    Specifically, this section would be updated to state that the 
authorized officer may require and detail reasonable measures to avoid, 
minimize, or mitigate adverse impacts to other resource values, land 
uses or users, federally recognized Tribes, and underserved 
communities. Such reasonable measures may include, but are not limited 
to, relocation or modification to siting or design of facilities, 
timing of operations, specification of interim and final reclamation 
measures, and specification of rates of development and production in 
the public interest. These measures are consistent with the BLM's 
standard lease form, which has been in effect since October 2008 and 
which states that the BLM ``reserves [the] right to specify rates of 
development and production in the public interest. . . .'' 
Additionally, the MLA authorizes the BLM to adopt ``such other 
provisions as [it] may deem necessary . . . for the protection of the 
interests of the United States . . . and for the safeguarding of the 
public welfare.'' 30 U.S.C. 187. The BLM may also manage the manner of 
development under this section, which may include waste prevention 
measures, containment of fluids, and monitoring both water and air 
quality in the project area. As set out in E.O. 14035, ``[t]he term 
`underserved communities' refers to populations sharing a particular 
characteristic, as well as geographic communities, who have been 
systematically denied a full opportunity to participate in aspects of 
economic, social, and civic life.'' E.O. 14008 provides additional 
guidance on securing environmental justice by requiring agencies to 
``[develop] programs, policies, and activities to address the 
disproportionately high and adverse human health, environmental, 
climate-related and other cumulative impacts on disadvantaged 
communities, as well as the accompanying economic challenges of such 
impacts.'' For the purposes of E.O. 14008, the Council on Environmental 
Quality has provided interim guidance on the definition of community to 
``mean either a group of individuals living in geographic proximity to 
one another, or a geographically dispersed set of individuals (such as 
migrant workers or Native Americans), where either type of group 
experiences common conditions.'' \15\ These underserved communities can 
be impacted as a result of greater vulnerability to environmental 
hazards, lack of opportunity for public participation, or other 
factors. Increased vulnerability may be attributable to an accumulation 
of negative or lack of positive environmental, health, economic, or 
social conditions within these populations or places. The term 
describes situations where multiple factors, including both 
environmental and socio-economic stressors, may act cumulatively to 
affect health and the environment and contribute to

[[Page 47574]]

persistent environmental health disparities.
---------------------------------------------------------------------------

    \15\ M-21-28, July 20, 2021, https://www.whitehouse.gov/wp-content/uploads/2021/07/M-21-28.pdf.
---------------------------------------------------------------------------

    Due to the advances in horizontal and directional drilling, and in 
an effort to strike the best multiple use balance, the BLM proposes to 
update the following language: ``At a minimum, measures shall be deemed 
consistent with lease rights granted, provided that they do not: 
require relocation of proposed operations by more than 200 meters; 
require that operations be sited off the leasehold; or prohibit new 
surface-disturbing operations for a period in excess of 60 days in any 
lease year.'' The proposed language would state, ``Modifications that 
are consistent with lease rights include, but are not limited to: 
requiring relocation of proposed operations by more than 800 meters and 
prohibiting new surface disturbing operations for a period of 90 days 
in any lease year.'' With the changes in technology allowing 3-mile 
laterals and \1/2\-mile directional wells, the BLM considers 800 meters 
(approximately \1/2\ mile) to be a reasonable floor for moving 
operations due to resource concerns. The BLM proposes updating the 
floor to account for changes in technology.
    The BLM also proposes these changes because the existing provision 
has been misconstrued as limiting BLM's authority to require relocation 
only up to 200 meters. The IBLA has upheld the BLM's authority to move 
operations and confirmed that the siting and timing parameters in the 
current regulations are minimums. The BLM has the authority to impose 
measures higher than those in the regulations as long as they 
``constitute [ ] reasonable measure[s] to minimize adverse impacts 
under 43 CFR 3101.1-2.'' Yates Petroleum, 176 IBLA 144, 156 (2008). The 
BLM is requesting comments on the proposed distance standard for 
reasonable measures.
Section 3101.13 Stipulations and Information Notices
    The proposed rule would split the existing content of this section 
into two paragraphs for clarity and would add a new paragraph (a) to 
state that, when developing stipulations, the BLM would consider the 
sensitivity and importance of potentially affected resources and any 
uncertainty concerning the present or future condition of those 
resources. The BLM is proposing this change to more explicitly 
recognize its mandate to manage the Federal lands for multiple use and 
to provide for the protection of the resources on those lands. When 
evaluating stipulations to be included in a lease, the BLM will assess 
whether a resource is adequately protected by stipulation without 
regard to the restrictiveness of the stipulation on operations.
    The proposed rule also would update the existing content of this 
section (paragraph (b)) to reflect the IRA's elimination of the 
noncompetitive leasing process. Paragraph (b) refers to lease 
stipulations, and paragraph (c) refers to lease information notices. No 
other substantive changes have been made to the language that now 
constitutes these two paragraphs. In addition, the BLM proposes to move 
the language and requirements from the existing regulation found at 
Sec.  3101.5-4 (which refers to stipulations applied to leases for 
lands managed by the Fish and Wildlife Service) to a new paragraph (d) 
under this section to consolidate all stipulation requirements in one 
section.
Section 3101.14 Modification, Waiver, or Exception
    The proposed rule would update the title of this section from 
``Modification or waiver of lease terms and stipulations'' to 
``Modification, waiver, or exception.'' The first paragraph in this 
section describes the standards the BLM will use when evaluating 
modifications, waivers, or exceptions. It states that a public review 
period will be required when a change to a lease term or stipulation is 
substantial or involves a major concern to the public.
    In paragraph (a), the proposed rule proposes to add the existing 
modification, waiver, or exception policy for lease stipulations into 
the regulations based on Instruction Memorandum Number 2022-003, 
Documentation and Tracking Requirements for Waivers, Exceptions, and 
Modifications for Fluid Minerals Exploration and Development 
Activities. Unlike the existing policy, the BLM is proposing to remove 
the provision that allows the BLM to grant modifications, waivers, or 
exceptions (MWEs) to lease stipulations if the authorized officer 
determines that the ``proposed operations would not cause unacceptable 
impacts.'' This very subjective standard has been overused at times and 
has led to unnecessary adverse environmental impacts in some instances. 
The BLM would consider a change to the lease terms to be substantial if 
the change would have an important, considerable, consequential, major, 
or meaningful effect on the environment that was not previously 
considered, thus requiring public notification (30-day public review) 
of a lease term or stipulation.
    In paragraphs (b) and (c), the proposed rule would split an 
existing provision in the regulations related to modifications of 
stipulations into two provisions, one of which would address 
modifications made before lease issuance and the other of which would 
address modifications made after lease issuance. This regulatory change 
reflects decisions of the IBLA, which have stated that if a lease is 
issued without prior notice of an additional stipulation, the 
stipulation is not binding on the potential lessee and is without 
effect in the absence of the potential lessee's acceptance of the 
stipulation. See Emery Energy, Inc, 64 IBLA 175 (1982). For 
modifications to stipulations prior to lease issuance, the BLM proposes 
to add language clarifying that the potential lessee must be given an 
opportunity to accept the additional or modified stipulation. If the 
potential lessee does not accept the additional or modified 
stipulation, the BLM may reject the bid and include the lands in the 
next Notice of Competitive Lease Sale. If the modification in 
stipulation(s) increases the value of the parcel, the BLM, following 
current policy, will reject the bid and include the lands in the next 
Notice of Competitive Lease Sale. For example, if the lease is 
currently subject to a no-surface-occupancy stipulation, and the BLM 
determines a controlled-surface-use stipulation is appropriate instead, 
this could increase the value of the lease. After lease issuance, if 
the BLM adds or modifies a stipulation without notice to the lessee, 
the additional or modified stipulation is not binding on the lessee and 
is without effect in the absence of the lessee's acceptance of the 
stipulation. When a stipulation is required by the relevant Resource 
Management Plan and the BLM inadvertently omits it, a lessee's failure 
to sign and accept modifications to the stipulations when requested by 
the authorized officer may subject the lease to cancellation.
Section 3101.22 Acquired Lands
    For clarity, the BLM proposes to repeat the language found in the 
existing 43 CFR 3101.2-1(a) for public domain lands to describe the 
same acreage limitations that also apply to acquired lands.
Section 3101.23 Excepted Acreage
    The proposed rule would update the existing 43 CFR 3101.2-3(a)(1) 
to change the language from ``unit or cooperative plan or 
communitization agreement'' to read ``oil and gas agreement.'' Under 
this proposed rule, unit agreements and CAs would no longer be referred 
to as cooperative plans and, as discussed earlier in this preamble, a 
new definition would be added to define ``oil and gas

[[Page 47575]]

agreements,'' which includes unit agreements and CAs. In addition, the 
BLM has noticed that the phrase ``operating, drilling, or development 
contract'' in the existing 43 CFR 3101.2-3(a)(3) has often been 
confused with approved Applications for Permit to Drill. A reference to 
43 CFR 3105.30 would be added to this section to clarify the phrase 
since ``operating, drilling, or development contract'' has a specific 
regulatory meaning.
Section 3101.25 Computation
    The proposed rule would remove as outdated all language referencing 
an entity's ownership in a company, parties to a contract, and acreage 
held in common by the same persons. In 1982, the BLM eliminated the 
requirement to submit documents related to qualifications and now 
requires entities to certify their compliance with law on the lease or 
assignment application, subject to the criminal sanctions in 18 U.S.C. 
1001 (see 47 FR 8544, February 28, 1982). Accordingly, the BLM no 
longer keeps documents related to qualifications and does not collect 
information on stock ownership, company or corporate structures 
(resolutions or company formation documents), or ownership in a 
company.
Section 3101.2-6 Showing Required
    As explained in the previous section, the BLM eliminated 
qualification statements in 1982. The proposed rule would remove this 
section in its entirety, as it is outdated and no longer necessary. The 
BLM can run reports through its Mineral and Lands Record System to 
obtain the data confirming compliance with acreage limitations. When an 
entity exceeds its acreage limitation, the BLM provides the company 
with a list of the entity's leases for a particular State and provides 
the entity with an appropriate timeframe to identify inconsistencies or 
to relinquish, transfer, or otherwise divest sufficient interests 
before the BLM takes appropriate action to cancel the entity's 
excessive leases or interests.
Section 3101.30 Leases Within Unit Areas, Joinder Evidence Required
    It is the policy of the BLM not to include lands that are partly 
within and partly outside the boundary of an oil and gas agreement in 
any one parcel listed in a Notice of Competitive Lease Sale. The 
proposed rule would remove 43 CFR 3101.3-2, ``Separate Leases to 
Issue,'' in its entirety due to the elimination of noncompetitive 
offers from the IRA. Incorporating this change, the heading of 43 CFR 
3101.30 would now read, ``Leases within unit areas, joinder evidence 
required.'' In the remaining language regarding joinder evidence, the 
BLM proposes to change the term ``operator'' to ``lessee'' because this 
section is referring to the time of lease issuance.
Section 3101.40 Terminated Leases
    The proposed rule would remove the existing 43 CFR 3101.4, ``Lands 
Covered by Application to Close Lands to Mineral Leasing'' in its 
entirety, since this section only applies to noncompetitive leases, 
which the IRA eliminated. Section 3101.40 would now be referred to as 
``Terminated leases.'' The BLM proposes to move the content of the 
existing regulations at 43 CFR 3108.2-2(d) and 43 CFR 3108.2-3(c) to 
this section to consolidate the requirements for issuing a lease for 
previously leased lands that have terminated.
Section 3101.5-1 Wildlife Refuge Lands (Existing Rule)
    The BLM proposes to move the content of this existing section to 
the Authority for leasing section (43 CFR 3100.3), for ease of 
reference. The BLM proposes to move paragraph (a) and the first 
sentence of paragraph (b), which refer to lands subject to leasing, to 
the Authority for leasing section at 43 CFR 3100.3(b)(2)(xiv). The BLM 
proposes to move the remaining language in paragraph (b) to 43 CFR 
3101.52(d), to consolidate it with the regulations addressing consent 
from other Federal agencies.
Section 3101.5-2 Coordination Lands (Existing Rule)
    The BLM proposes to move the content of this existing section to 
the Authority for leasing section (43 CFR 3100.03) for ease of 
reference.
Section 3101.53 Alaska Wildlife Areas (Existing Rule)
    The BLM proposes to move the content of this existing section to 
the Authority for leasing section (43 CFR 3100.3(k)) for ease of 
reference.
Section 3101.5-4 Stipulations (Existing Rule)
    The BLM proposes to move the content of this existing section, 
which refers to stipulations prescribed by the Fish and Wildlife 
Service, to the general stipulations section (43 CFR 3101.13) for ease 
of reference.
Section 3101.6 Recreation and Public Purposes Lands (Existing Rule)
    The BLM proposes to move the content of this existing section, 
which refers to lands subject to leasing, to the Authority for leasing 
section (43 CFR 3100.3(i)) for ease of reference.
Section 3101.50 Federal Lands Administered by an Agency Outside of the 
Department of the Interior
    The proposed rule would redesignate this section from 43 CFR 3101.7 
to 43 CFR 3101.50 because of the consolidation and reorganization of 
neighboring sections.
Section 3101.51 General Requirements
    The proposed rule would consolidate the three paragraphs under this 
existing section into one paragraph. Currently, there are separate 
paragraphs for (a) Acquired lands, (b) Public Domain lands, and (c) 
National Forest System lands. The new paragraph would provide that all 
lands will be leased only with the consent of the surface managing 
agency and that the surface management agency will report to the BLM 
whether it consents to leasing with stipulations, or, alternately, 
withholds consent or objects to leasing. On acquired lands, National 
Forest System lands, and public lands reserved for the use of the 
Department of Defense, the consent of the surface management agency is 
statutorily required prior to offering the lands for oil and gas lease. 
The surface management agency has the authority to refuse to consent to 
lease. Pursuant to longstanding BLM policy, public domain lands 
withdrawn or reserved for the use of another agency will be leased only 
after consultation with the surface management agency or upon 
recommendation for leasing by the surface management agency. The BLM 
deems a surface management agency's recommendation to not lease to have 
the same effect as the agency withholding consent or objecting to 
leasing. Regardless of whether the lands are acquired or public domain 
lands, the BLM will not lease lands when a surface management agency 
objects to leasing or withholds its consent. Consolidating these 
paragraphs would reduce any confusion. When an agency has given its 
consent to leasing, the BLM incorporates all the stipulations provided 
by the agency for a lease parcel. The BLM may add its own stipulations 
to the lease parcel. The Secretary of the Interior has the final 
authority and discretion to decide to offer and issue a lease. 
Therefore, although an agency agrees that the lands may be leased, the 
BLM has the authority, on behalf of the Secretary, to not issue a lease 
for all or a portion of the lands.

[[Page 47576]]

Section 3101.52 Action by the Bureau of Land Management
    The proposed rule would update paragraph (b) to remove the phrase 
``and shall reject any lease offer,'' because the IRA, by eliminating 
noncompetitive leasing, eliminated such offers. For ease of reference, 
the proposed rule would add a paragraph (d) from language now found at 
43 CFR 3101.5-1(b), which references the consent required for lands 
managed by the Fish and Wildlife Service. The proposed rule would also 
remove from paragraph (d) the phrase ``on a form approved by the 
director,'' as there is no such standard form for stipulations.
4. Section-by-Section Discussion for Changes to 43 CFR Subpart 3102
    The proposed rule would revise one section heading in the existing 
subpart 3102. The purpose of this revision is to replace outdated 
terminology.
Section 3102.20 Non-U.S. Citizens
    The BLM proposes to rename the section on ``aliens'' and to replace 
this outdated, derogatory terminology with the phrase ``non-U.S. 
citizens'' in both the heading of the section and the language used in 
the paragraph. The BLM proposes to add a new paragraph (b) due to a 
final rule from the Office of Investment Security, Department of the 
Treasury, implementing the provisions relating to real estate 
transactions in section 721 of the Defense Production Act of 1950, as 
amended by the Foreign Investment Risk Review Modernization Act of 
2018. That final rule was published at 85 FR 3158 (Jan. 17, 2020) and 
codified at 31 CFR part 802. The rule sets forth the process relating 
to the national security review by the Committee on Foreign Investment 
in the United States (CFIUS) of certain transactions, referred to in 
the rule as ``covered real estate transactions,'' that involve the 
purchase or lease (including an assignment or other transfer) by, or 
concession to, a foreign person of certain real estate in the United 
States. Covered real estate transactions may include certain 
transactions involving the Federal mineral estate. The CFIUS looks not 
only at the entities that are lessees, but also to any (legal) person 
with the ability to exercise control, as defined by the regulations of 
the Department of Treasury's implementing regulations, over the lessee. 
The CFIUS review could result in the modification, suspension, or 
prohibition of the acquisition of a lease or interest therein. 
Accordingly, the BLM recommends that each potential bidder, lessee, or 
other interest holder review the regulations at 31 CFR part 802 before 
bidding on or acquiring an interest in a Federal oil and gas lease.
Section 3102.40 Signatures
    The BLM proposes to add a new introductory paragraph to clarify 
that this section applies to signatures on all applications and forms. 
When applicants submit a form or application to the BLM, they are 
certifying their acceptance of lease terms and stipulations, as well as 
their compliance with the regulations under subpart 3100. The BLM may, 
in its discretion, accept electronic signatures and submissions. 
Paragraph (a) would be updated to include that when copies of the BLM-
approved forms are submitted to the BLM, they must be exact 
reproductions without additions, omissions, or other changes. The 
existing paragraph (b), referring to assignments and transfers, would 
be removed from this section since this language is already covered in 
the existing 43 CFR 3106.4-1. The existing paragraph (d), which refers 
to qualification numbers, would be removed as obsolete: the BLM 
discarded qualification statements in favor of self-certifications in 
1982.
Section 3102.51 Compliance
    The proposed rule would revise the introductory paragraph to more 
clearly define the qualifications to hold interest in a lease. The BLM 
proposes to update paragraph (a) to change the term ``alien 
stockholders'' to ``non-U.S. citizens who own stock'' for consistency 
with the changes described earlier. Paragraph (d) would be updated to 
remove the sentence, ``The term entity is defined at 43 CFR 3400.0-
5(rr) of this title,'' because the proposed rule would add a new 
definition for ``person,'' which would include ``entities'' as 
explained earlier in 43 CFR 3000.5. Paragraphs (d), (e), and (f) would 
be updated to include the appropriate references to the United States 
Code, which are more meaningful than ``sections 2(a)(2)(A) of the 
Act,'' ``section 41 of the Act,'' ``section 17(g) of the Act,'' and 
``section 30A of the Act.''
    In addition, the BLM proposes to revise paragraph (f) to emphasize 
that reclamation obligations reside primarily with oil and gas lessees, 
operating rights owners, and operators and not the American public and 
to ensure that those who are in non-compliance with section 17(g) of 
the MLA are not qualified to hold a lease. The BLM reviewed the 
timeframe it takes to add a person to the list of persons in 
noncompliance with MLA section 17(g). Under the current policy, it 
takes a minimum of 100 days from the date when the BLM first issues an 
incident of noncompliance (INC), or 130 days from the date when the BLM 
first issues a written order, due to the time it takes to complete each 
enforcement action. The timeframe to complete each enforcement action 
is generally as follows:

 Written Order (30 days)
 First INC (30 days)
 Second INC (30 days)
 Impose civil penalties (40 days)

    Therefore, the BLM proposes to modify paragraph (f) and specify 
that noncompliance with MLA section 17(g) begins when a person has 
failed to comply with their reclamation obligations in the time 
specified by notice from the BLM, not, as under the current 
regulations, when the authorized officer has imposed a civil penalty or 
collected a bond, whichever is first. The new language would more 
closely track the language of the MLA at 30 U.S.C. 226(g) and would 
recognize the changes that were made in 2016 to 43 CFR 3163.1 and 
3163.2 (81 FR 81609, Nov. 17, 2016) regarding notice of noncompliance. 
This language clearly states that a person's failure to timely comply 
with a notice of noncompliance with reclamation requirements or other 
standards would trigger the noncompliance with section 17(g); it would 
not rely on a specific follow-up action (assessment, civil penalty, or 
bond collection) by the BLM. This would allow the BLM flexibility in 
how it responds to a person's failure to comply, while clearly stating 
when noncompliance with section 17(g) begins.
    With the regulations matching the law, the BLM would expect to 
quickly identify persons in noncompliance and prevent these persons 
from acquiring future Federal leases. The BLM would add a person to the 
list of persons in noncompliance with MLA section 17(g) after the 
abatement date has passed for the first enforcement action, either a 
written order or the first INC. This would result in a person being 
added to the 17(g) list in a minimum of 30 days, instead of the current 
minimum of 100 or 130 days.
    Finally, the BLM proposes to add a new paragraph (h) to state that, 
in accordance with 2 CFR parts 180 and 1400, compliance means that the 
lessee, potential lessee, and all parties described at the beginning of 
the section are not excluded or disqualified from participating in a 
transaction covered by Federal non-procurement debarment and 
suspension, unless the DOI explicitly approves an exception for a

[[Page 47577]]

transaction pursuant to the regulations in those parts.
Section 3102.52 Certification of Compliance
    The BLM proposes to update the last sentence of this paragraph to 
remove the phrase ``an offer,'' because the IRA, by eliminating 
noncompetitive leasing, eliminated such offers.
5. Section-by-Section Discussion for Changes to 43 CFR Subpart 3103
    The proposed rule would revise one section heading and remove two 
others in the existing 43 CFR subpart 3103 regulations, necessitating 
redesignating throughout the subpart.
Section 3103.11 Form of Remittance
    The BLM proposes to update the existing paragraph by changing the 
reference from the Minerals Management Service to the successor agency, 
the ONRR.
Section 3103.12 Where Remittance Is Submitted
    The proposed rule would rename this section from ``Where 
submitted'' to ``Where remittance is submitted.'' The BLM proposes to 
update paragraph (a)(1) to clarify that the processing fees for various 
applications would be found in the fee schedule in 43 CFR 3000.120. The 
BLM proposes to update paragraph (a)(2) to replace the ONRR's mailing 
address and direct rental payments to the ONRR's online rental payment 
system to conform to ONRR's regulations at 30 CFR 1218.51. The BLM 
proposes to update paragraph (b) to replace the phrase ``communitized 
leases in producing well units'' with the more commonly used language 
of ``communitized leases in producing spacing units.'' In addition, the 
BLM proposes to remove the phrase ``and easements for directional 
drilling,'' as this is an outdated reference, and the BLM has never 
issued easements for directional drilling.
Section 3103.21 Rental Requirements
    The proposed rule would update paragraph (a) to remove the phrases 
``or competitive nomination'' and ``List of Lands Available for 
Competitive Nominations or'' consistent with the changes made to 43 CFR 
part 3120. The proposed rule would also remove the reference to 
noncompetitive lease offers, the phrase ``if known, and, if not known, 
shall be based on 40 acres for each smallest legal subdivision,'' as 
well as the last two sentences in their entirety, because the IRA ended 
noncompetitive leasing. The proposed rule would update paragraph (b) in 
this section to remove the phrase ``List of Lands Available for 
Competitive Nominations or a'' due to modifications made to 43 CFR part 
3120 to make nominations nonbinding.
Diligent Development
    The BLM is considering adding a new requirement for diligent 
development obligations under Federal oil and gas leases and is 
particularly interested in receiving comments on this topic. As stated 
in the DOI's Report on the Federal Oil and Gas Leasing Program, dated 
November 2021, noncompetitive leases are frequently less developed than 
competitive leases. Similarly, the GAO reported (see GAO 22-103968 and 
GAO 21-138) that competitive leases with higher bonus bids were more 
likely to produce than competitive leases with lower bonus bids or 
noncompetitive leases. Accordingly, the BLM is considering adding a 
section to further promote development of leases by specifying the 
steps that must be taken to meet diligent development obligations. For 
example, the lessee would meet the diligent development obligation if, 
at the end of the fifth year of the lease term, the lessee: (a) has 
established actual production in paying quantities on the lease; (b) 
has established allocated production in paying quantities on the lease; 
(c) has filed a complete Application for Permit to Drill; (d) has 
extended the lease term by committing it to an oil and gas agreement, 
43 CFR 3107.30; (e) has filed a Notice of Intent to undertake 
geophysical exploration. The BLM reviewed existing leases and the 
development milestones on those leases and determined that 56 percent 
of the current leases have met the proposed diligent development 
obligation under one of the options set out here prior to the fifth 
lease year.
    In addition, the BLM is considering requiring the lessee to provide 
notice to the BLM of how and when the lessee met the diligent 
development obligation, and a provision increasing the rent if the 
lessee has not satisfied the diligent development obligation by the end 
of the fifth lease year. Under this provision, the lease would be 
subject to a supplemental escalating rental rate of an additional $1 
per acre, or fraction thereof, for each lease year between the sixth 
and tenth lease years until the diligent development obligation is met. 
The BLM solicits comments as to whether the increased rental rates 
prescribed by the IRA may render a diligent development obligation 
unnecessary.
Section 3103.22 Annual Rental Payments
    This section provides information on the royalty rate for existing 
and future leases. The proposed rule would revise the phrase ``timely 
payment'' in the introductory paragraph to ``payment on or before the 
lease anniversary date'' to more clearly specify what constitutes a 
timely payment. The proposed rule would update paragraph (a) to simply 
state that the annual rental for all leases is as stated in the lease.
    To implement the IRA, for all new oil and gas leases issued in the 
next 10 years, rentals are set at $3 per acre, or fraction thereof, for 
lease years 1 and 2; $5 per acre, or fraction thereof, for years 3 
through 8; and $15 per acre, or fraction thereof, thereafter. After 10 
years following the enactment of the IRA, those rental rates become 
minimums and are subject to increase. Paragraph (b) reflects that 
following the commencement of production, the rental requirement 
converts to a minimum royalty in lieu of rental. The minimum royalty is 
``not less than the rental which otherwise would be required for that 
lease year'' when production begins in paying quantities. (See Sec.  
3103.32(a)(2)).
    The proposed rule would revise paragraph (b) because the existing 
paragraph (b) is obsolete. The proposed rule would eliminate the 
existing introductory paragraph (b). The proposed rule would remove the 
existing paragraph (d) because, due to the IRA's amendment of the MLA, 
reinstatements will no longer be available for noncompetitive leases 
issued for public domain lands. The proposed paragraph (c) would now 
state the annual rental for a reinstated lease is located in 43 CFR 
3000.130. As required by the IRA, the rental rate for reinstated 
competitive leases is $20 per acre, or fraction thereof. The proposed 
rule would redesignate the existing paragraph (f) to paragraph (d) to 
state that each succeeding time a specific lease is reinstated, the 
rental rate will increase by an additional $10 per acre, or fraction 
thereof, as required by the IRA.
Section 3103.31 Royalty on Production
    All updates to this section would implement provisions of the IRA. 
The proposed rule would update paragraph (a)(1) to state that leases 
issued before the passage of the IRA will have a rate as prescribed in 
the lease or applicable regulations at the time of lease issuance. In 
paragraph (a)(2), the proposed rule would increase the royalty rates 
for leases issued on or after the effective

[[Page 47578]]

date of the IRA and for the next 10 years to 16.67 percent. Paragraph 
(a)(3) would be updated to state that for leases issued after the 10-
year period following the passage of the IRA, the royalty rate will be 
not less than 16.67 percent. The proposed paragraph (a)(4) would state 
that ROW leases issued under subpart 3109 would have a minimum royalty 
rate of 16.67 percent.
    The proposed paragraph (a)(5) would be updated to state that for 
reinstated leases, the royalty rate is the rate used for royalty 
determination that applies to new leases at the time of the 
reinstatement plus 4 percentage points, plus an additional 2 percentage 
points for each succeeding reinstatement. In no case will the 
reinstated lease have royalties at a rate less than 20 percent. The IRA 
amended the MLA to state that competitive leases may be reinstated 
under a condition that ``a requirement for future royalties at a rate 
of not less than 20 percent computed on a sliding scale based upon the 
average production per well per day, at a rate which shall be not less 
than 4 percentage points greater than the competitive royalty schedule 
then in force [i.e., at the time of the lease] and used for royalty 
determination for competitive leases issued pursuant to such section, 
as determined by the Secretary.'' (30 U.S.C. 188(e)(3)). To implement 
this provision of the IRA, the reinstatement of a terminated lease with 
a royalty rate of 12.5 percent would be conditioned on a reinstated 
royalty rate of not less than 20 percent. Leases issued after the 
enactment of the IRA that carry a royalty rate of 16.67 percent royalty 
would be conditioned on a reinstated royalty rate of not less than 4 
percentage points greater than the competitive royalty schedule in 
force at the time of the lease, or 20.67 percent. The current 
regulation increases the royalty rate 2 percentage points for each 
succeeding reinstatement. This language would remain in the regulation.
Section 3103.32 Minimum Royalties
    The proposed rule would revise the exception clause in paragraph 
(a) by changing ``except that on unitized leases'' to ``except on 
unitized leases that lack production.'' This change clarifies the 
intended exception without suggesting that rental should be paid on the 
leased area outside the participating area, even when the producing 
well for the participating area is located on the leasehold. In 
general, once oil and/or gas is discovered in paying quantities on the 
lands committed to a unit, all lands included in the participating area 
are charged a minimum royalty per acre per year in lieu of rental. 
Rental for those portions of unitized leases that are not within such 
participating areas continue at the rental rate established in the 
lease. That is, the portion of a lease inside the participating area 
will pay minimum royalty and the portion outside the participating area 
is subject to rental. However, if there is actual production on a 
unitized lease, then minimum royalty should apply to the entire lease 
(i.e., both portions within and outside the participating area). The 
proposed changes clarify that for leases partly inside and partly 
outside the participating area and containing a producing well (or a 
well that was once capable of production in paying quantities), the 
entire lease is obligated to pay minimum royalty.
    Paragraph (a)(2) would be updated to change ``competitive leases 
issued from successful bids placed at oral or internet-based auctions 
conducted after December 22, 1987'' to read ``competitive leases issued 
after December 22, 1987.'' The extra language was necessary to 
implement changes from FOOGLRA in 1987, but it no longer applies, since 
the BLM does not have pending competitive lease applications that date 
back to 1987.
    Paragraph (d) would be updated to remove the reference to 43 CFR 
3108.2-4, since the section for Class III reinstatements would be 
eliminated, as further described in the discussion of subpart 3108.
    The proposed rule would add a new paragraph (e) to state that if 
the royalty paid during any year aggregates to less than the minimum 
royalty, then the lessee must pay the difference at the end of the 
lease year. This is not a new requirement or a change in the BLM's 
policy; it is only added to clarify the pre-existing requirement.
Section 3103.41 Royalty Reductions
    The proposed rule would revise paragraph (a) to change the phrase 
``successfully operated'' to ``produced in paying quantities,'' which 
has a clearly understood meaning within the oil and gas industry. This 
change is to clarify the prerequisite for obtaining this relief as the 
previous term ``successfully operated'' is not a term that is easily 
defined.
    The BLM considered additional changes to this section due to the 
GAO's report entitled, ``Federal Oil and Gas Revenue: Actions Needed to 
Improve BLM's Royalty Relief Policy'' GAO-21-169T. In this report, the 
GAO found that the BLM's decisions to grant royalty relief during the 
COVID-19 pandemic were not made efficiently and equitably across the 
states. The BLM considered using the Bureau of Ocean Energy Management 
(BOEM) regulations and policy on royalty rate reductions. The BOEM has 
multiple authorities to provide royalty relief. The BOEM regulations 
include the authority to grant royalty relief for deep water leases and 
for development and expansion projects (see 30 CFR 203.60 to 203.80), 
drilling ultra-deep wells on leases not subject to deep water royalty 
relief (see 30 CFR 203.30 to 203.36), drilling deep gas wells on leases 
not subject to deep water royalty relief (see 30 CFR 203.40 to 203.49), 
and end-of-life leases (see 30 CFR 203.50 to 203.56). The BLM provides 
royalty relief only for a lease's end-of-life (equivalent to the BOEM's 
regulations at 30 CFR 203.50 through 203.56). After reviewing BOEM's 
authority, the BLM concluded that the BOEM's regulations were based on 
specific legal authorities that the BLM does not have. Therefore, the 
BLM is not proposing any changes to this section at this time. The 
existing regulations require evaluation of royalty reduction 
applications on a lease-by-lease basis, require applicants to provide a 
detailed statement with ``all facts tending to show whether the wells 
can be successfully operated upon the fixed royalty or rental,'' and 
generally provide for royalty rate reductions. The BLM is committed to 
adhering to those rules and will ensure that they are consistently and 
faithfully applied to future royalty relief applications.
    The BLM solicits feedback to improve the royalty rate reduction 
section. Revised regulations could provide explicit criteria on royalty 
rate reductions, which could include setting a limit on the lower end 
of a royalty rate reduction, implementing a calculation to decide if 
the BLM should approve a royalty rate reduction, implementing an 
automatic lifting provision similar to BOEM (see 30 CFR 203.55), or 
making it explicit that a royalty rate reduction would transfer to the 
new lessee when a lease is assigned.
Sections 3103.4-2 Stripper Well Royalty Reductions and 3103.4-3 Heavy 
Oil Royalty Reductions
    The proposed rule would eliminate both of these sections in their 
entirety because they are obsolete. Both sections were revised on 
October 6, 2010 (75 FR 61624), to eliminate these types of royalty 
relief. However, these provisions were retained in the final rule 
because, while these types of royalty relief were no longer available 
for current production, prior production subject to this relief 
continued to be subject to audits. In addition, the 7-year statute of 
limitations period during which ONRR could pursue a demand for royalty

[[Page 47579]]

continued to apply. Since that statute of limitations period has passed 
for all production that qualified for relief under these sections, they 
are no longer necessary and are being removed.
Section 3103.42 Suspension of Operations and/or Production
    This section of the existing regulations implements the provisions 
of 30 U.S.C. 226(i) and 209 for suspending oil and gas leases. The 
proposed rule would redesignate this section from 43 CFR 3103.4-4 to 43 
CFR 3103.42 as discussed at the beginning of the preamble. The proposed 
rule would change the language in paragraph (b) to clarify that the 
term of a suspended lease will be adjusted to account for the time of 
suspension, i.e., by calculating the running of the primary term 
without including the time during which the lease was suspended. In the 
BLM's experience, the language in the current regulations--providing 
that the primary term of a lease will be ``extended by adding the 
period of the suspension''--has been incorrectly interpreted to mean 
that the length of the suspension is added to the lease term when the 
suspension is lifted. For example, consider a lease issued for a 
primary term of 10 years. In the ninth year, a suspension is granted. 
The suspension lasts for 2 years. When the suspension is lifted, the 
time remaining on the primary term is the 1 year that was left prior to 
the suspension. The 2 years of the suspension are not added to the 
primary term.
    Paragraph (d) would be clarified to state that if there is any 
production sold or removed during the month the suspension is granted, 
the lessee must pay royalty on that production. Paragraph (d) would 
also be split into three sections due to the length of the paragraph 
and for clarity. The other two sections would become new paragraphs (e) 
and (f), and the remaining paragraphs would be redesignated.
    Redesignated paragraph (g) would update the term ``terminating a 
suspension'' to ``lifting a suspension,'' since ``termination'' is a 
term of art that refers to a lease ending through operation of law when 
the rental is not paid.
    The proposed rule would update redesignated paragraph (h) to change 
the language from ``unit or cooperative plan'' to read ``agreement'' to 
conform to the definitional change made earlier in this proposed rule.
6. Section-by-Section Discussion for Changes to 43 CFR Subpart 3104
    The BLM proposes to revise its oil and gas bonding requirements in 
several respects. The BLM proposes to increase minimum bond amounts for 
the first time since 1951 (statewide and nationwide bonds) and 1960 
(lease bonds). In addition, the proposed rule would add one section, 
Sec.  3104.90, into the existing subpart 3104 regulations to address 
when lessees must come into compliance with the new bond amounts and 
would revise two section headings in the existing subpart 3104 to more 
accurately reflect the contents of those sections. The proposed rule 
would also remove nationwide and unit operator's bonds and add surface 
owner protection bonds. The BLM believes these proposed changes, 
particularly the increased bond amounts and the elimination of 
nationwide bonding, would help ensure that reclamation responsibilities 
reside primarily with oil and gas lessees and operators and not the 
American public.
    The MLA authorizes the Secretary to establish standards ``as may be 
necessary to ensure that an adequate bond, surety, or other financial 
arrangement will be established prior to the commencement of surface-
disturbing activities on any lease, to ensure the complete and timely 
reclamation of the lease tract, and the restoration of any lands or 
surface waters adversely affected by lease operations after the 
abandonment or cessation of oil and gas operations on the lease.'' (30 
U.S.C. 226(g)). The existing regulations at Sec.  3104.1 implement this 
authority and require that, prior to surface-disturbing activities 
related to drilling operations, the lessee, sublessee, or operator 
submit a surety or personal bond. The purpose of the bond is to ensure 
the ``complete and timely plugging of the well(s), reclamation of the 
lease area(s), and the restoration of any lands or surface waters 
adversely affected by lease operations after the abandonment or 
cessation of oil and gas operations.'' (43 CFR 3104.1(a)). The 
regulations at Sec. Sec.  3104.2 through 3104.4 currently set forth 
four different bond types:
    [cir] Lease/Individual Bonds, which provide coverage for one lease 
and must be in an amount of not less than $10,000;
    [cir] Statewide Bonds, which cover all leases and operations in one 
State and must be in an amount of not less than $25,000;
    [cir] Nationwide Bonds, which cover all leases and operations 
nationwide and must be in an amount of not less than $150,000; and
    [cir] Unit Operator's Bonds, which may be used in lieu of 
individual lease, statewide, or nationwide bonds for operations 
conducted on leases committed to an approved unit agreement.
    Existing regulations set a minimum amount for these types of bonds. 
The BLM has not increased its minimum bond amounts since 1951 
(statewide and nationwide bonds) and 1960 (individual lease bonds). In 
September of 2019, the GAO issued a report recommending that the BLM 
address risks from insufficient bonding (GAO-19-615). The GAO found the 
bonds held by the BLM were insufficient to prevent wells from becoming 
orphan wells and thereby shifting the costs to plug and abandon and 
reclaim these wells onto the taxpayer. Specifically, GAO found that 84 
percent of the bonds reviewed were not sufficient to cover the costs to 
reclaim the wells covered by the bonds. Further, GAO determined the 
bond amounts, which were usually set at the regulatory minimum, ``does 
not account for variables such as the number of wells [the bonds] cover 
or other characteristics that affect reclamation costs, such as well 
depth.''
    Currently, the BLM uses Instruction Memorandum 2019-014, Oil and 
Gas Bond Adequacy Reviews, to review existing Federal bond amounts and 
request increases to the bond amount based on the potential risk or 
liability posed by the operators. Similar policy has been in place for 
the past decade, see Instruction Memorandums 2013-151, 2010-161, 2008-
122, and 2006-206. The BLM is proposing to increase the minimum bond 
amounts to reflect inflation and the minimum coverage that would be 
required for operations on Federal land, based on the BLM's estimate of 
current plugging and reclamation costs. The proposed minimum bond 
amounts would provide sufficient protection to allow an operator to 
begin drilling; however, the BLM would still need to review bond 
amounts periodically to determine whether the bond amount should be 
increased based upon the risk of default posed by the operator or the 
risk to the environment posed by the operations. In the past 2 fiscal 
years, the BLM has spent $2.7 million annually on orphaned wells. 
Without an increase in the bond amounts, the BLM expects to continue to 
incur similar annual costs to address orphaned wells. Because of 
inflation, the lack of increased bond amounts for almost 40 years, and 
the increased number of orphaned wells resulting from insufficient 
funds available under current bonds and associated costs ultimately 
borne by the American taxpayer, the revisions to the bond amounts 
proposed here are justified.

[[Page 47580]]

    In addition to the proposed rule, the BLM also considered two 
alternatives: adjusting the bond only for inflation (alternative 2) and 
requiring a full liability bond (alternative 3). The second 
alternative, only adjusting the bond amount for inflation, would 
increase the lease/individual bond to $100,000 and the statewide bond 
to $300,000. The third alternative considered adjusting the bond to 
cover the full plugging and reclamation cost of all Federal onshore 
operations covered by the bond. In this alternative, the BLM would 
allow the operator to use either a statewide bond or an individual 
bond; however, the operator would be required to submit a bond rider 
for each additional well drilled to ensure the bond amount covers the 
full cost for plugging and reclamation for all wells covered by the 
bond. In this instance, the BLM estimated an average lease/individual 
bond of $994,000 would cover 14 wells and an average statewide bond of 
$4,686,000 would cover 66 wells. The BLM concluded that implementing 
the third alternative would require increased staffing at the field and 
state offices to manage increased workload surrounding the additional 
bond riders. In addition, it is expected that the BLM's application for 
permit to drill processing time would slow down due to waiting for 
additional bond riders.
    Although the BLM analyzed the second and third alternatives in the 
economic analysis, the BLM did not propose either of these alternatives 
in the proposed rule. The BLM is requesting commenters to provide 
information on additional alternatives for bonding that the BLM might 
consider.
    Additionally, the BLM is requesting comments on whether it should 
propose to adjust the minimum bond amounts by inflation. Currently, the 
BLM is not proposing this in the rule; however, the BLM would prefer to 
have a method to adjust minimum bond amounts by inflation factors. 
Please provide comments on if and how the BLM should adjust minimum 
bond amounts in the future.
    Finally, the BLM also proposes to remove the nationwide and unit 
operator bond types to reduce the cost and burden on the American 
public for administering these types of bonds. For nationwide bonds, 
the state office that is administering a nationwide bond must 
coordinate with not only the field offices within the state, but also 
every other state office. With the proposed elimination of nationwide 
bonds, the BLM would not need to coordinate with all the other state 
offices for a bond adequacy review. In addition, the BLM state office 
could more easily ensure that the field offices within the State have 
completed the required bond reviews. As a result, the BLM would be able 
to better tailor the bond amounts to the local conditions and State-
specific requirements when reviewing a bond for adequacy. The BLM also 
would be able to review statewide bond amounts and ensure that the bond 
amount is adjusted before an operator defaults, thus reducing the 
financial burden on the American taxpayer. Overall, the elimination of 
nationwide bonding in favor of the proposed increase in the amount of 
the statewide and lease bonds would allow the agency to ensure improved 
bonding, with an appropriate focus on specific areas and fields, which 
should reduce the burden to the taxpayer if an operator fails to 
complete proper plugging and abandonment.
Section 3104.10 Bond Obligations
    To enhance the administration of oil and gas bonding on America's 
public lands, the BLM is proposing to remove paragraphs (c)(1) and (5), 
which allow certificates of deposits (CDs) and letters of credit (LOCs) 
to secure a personal bond. The BLM is proposing to remove CDs because 
they are difficult to manage: the face of these instruments do not 
include the BLM's required language that Secretarial approval is 
required prior to redemption of the CD by any party. The BLM is 
proposing to remove LOCs because the BLM has found it is difficult for 
banks to include the BLM's requirements in LOCs. Under the proposed 
rule, any existing personal bond that is secured by a CD or a LOC need 
not change the security until the bond is replaced. However, the BLM 
would not accept CDs or LOCs as security for a new personal bond after 
the final rule takes effect. Finally, the BLM requests comments with 
any supporting information on whether the final regulation should 
provide for any other types of approved financial arrangements and the 
types of financial arrangements that the BLM should consider.
Section 3104.20 Lease Bond
    The proposed rule would change the specifications regarding who 
must post a bond to state that the operator must be covered by a bond 
in its name as principal or obligor. The existing regulations authorize 
a lessee, owner of operating rights (sublease), or operator to post a 
lease bond. The proposed change would not result in any administrative 
changes for the BLM, because under the existing regulations, when a 
lessee or an operating rights owner posts the bond for the operator, 
the bond must include the operator as principal. The proposed language 
is intended to simplify these provisions by requiring an operator to 
have a bond in its own name and removing the requirement for lessees 
and sublessees to ensure their bonds cover the operator. The BLM 
recognizes that lessees and owners of operating rights (sublessees) 
have certain obligations and are ultimately responsible for operations 
on their lease, as required by 43 CFR 3106.76, and additional bonding 
may be required by the authorized officer when, for example, an 
operator is noncompliant.
    The proposed rule would increase the minimum lease bond amount to 
be not less than $150,000. The existing lease bond amount of $10,000, 
established in 1960, no longer provides an adequate incentive for 
companies to meet their reclamation obligations, nor does it cover the 
potential costs to reclaim a well should this obligation not be met. 
This current bond requirement increases the risk that taxpayers will 
cover the cost of reclaiming wells in the event the operator refuses to 
do so or declares bankruptcy. According to a GAO report entitled, 
Federal Energy Development, Challenges to Ensuring a Fair Return for 
Federal Energy Resources, GAO-19-718T, ``weaknesses with bonds for coal 
mining and for oil and gas development pose a financial risk to the 
Federal Government as laws, regulations, or agency practices have not 
been adjusted to reflect current economic circumstances.''
    To determine the appropriate minimum lease bond amount, the BLM 
reviewed its existing lease bonds and the number of wells tied to the 
lease bonds. The BLM currently manages 933 lease bonds; however, only 
369 lease bonds cover existing wells or liability. The lease bonds that 
do not cover any existing liability are usually put in place for a well 
that has not yet been drilled or where the principal forgot to request 
termination of the bond after transferring or plugging and abandoning 
its prior oil and gas liability. For the lease bonds with existing 
wells, each lease bond, on average, covers 14 wells; however, lease 
bonds cover a median number of one well per bond. In addition, the 
lease bonds covering existing wells average $26,000 per bond. For 
background, the BLM calculated the average by adding up all the lease 
bond amounts and dividing this total by the number of lease bonds. The 
BLM calculated the median by taking the middle value, i.e., the value 
for which half of the lease bonds are larger and half are smaller. 
Thus, half of the lease

[[Page 47581]]

bonds with existing liability cover one well per bond. The cost to plug 
one well and reclaim the surface, however, can vary significantly based 
on the depth of the well. The proposed rule would require the minimum 
bond amount to be sufficient to reclaim two wells to account for the 
uncertainty surrounding the depth of wells and the large variability in 
reclamation costs for orphaned wells. The BLM would conduct bond 
adequacy reviews on all bonds and increase the required bond amount 
based upon the risk of the operations. This review would include 
several risk factors regarding the wells covered by the bond and the 
operator's compliance history.
    Between 1960 and 2022, the cumulative inflation rate, as measured 
by the U.S. Consumer Price Index was 901 percent and, accordingly, the 
2022 equivalent of $10,000 (the 1960 lease bond amount) would be 
$100,105 (https://www.usinflationcalculator.com). After reviewing the 
costs to plug orphaned wells, the BLM determined the cost to plug a 
well and reclaim the surface ranges from $35,000 to $200,000, with an 
average cost of $71,000. Considering that the median number of wells is 
one well per lease bonds, the BLM is proposing to set the new minimum 
lease bond amount at $150,000 (rounded up from $142,000), which would 
cover the estimated plugging and reclamation costs for two wells. The 
BLM is proposing to round the bond amount up to the nearest $50,000 for 
ease of payment and administration. Through the BLM's current policy 
for bond adequacy reviews, the BLM will increase the lease bond amount 
for operators with more than two wells tied to the bond. The proposed 
minimum lease bond amount would provide sufficient coverage for an 
operator starting operations with a lease bond.
    Based upon a review of the lease bond and related operations, the 
BLM determined that the minimum lease bond amount should be not less 
than $150,000. In addition, the minimum lease bond amount of $150,000 
matches the amounts proposed in Congress by Senator Michael Bennet (S. 
2177) and Representative Teresa Leger Fernandez (H.R. 2415). The BLM 
believes this update would help ensure that reclamation 
responsibilities reside primarily with oil and gas lessees and 
operators and not the American public. The BLM requests comments with 
any supporting information on whether the final regulation should 
provide a higher or lower amount for lease bonds.
Section 3104.30 Statewide Bonds
    The proposed rule would rename this section from ``Statewide and 
nationwide bonds'' to ``Statewide Bonds'' as BLM proposes to remove 
nationwide bonds. The proposed rule increases the statewide bond amount 
to not less than $500,000, covering all leases and operations in any 
one State to reflect current economic circumstances. The BLM 
established the previous statewide bond amount of $25,000 in 1951. As 
stated earlier, insufficient bonding levels provide an inadequate 
incentive for companies to meet their reclamation obligations and do 
not provide sufficient funding in the event a company fails or refuses 
to meet its obligations, thereby ultimately shifting the reclamation 
obligations on the taxpayer.
    To determine the appropriate minimum statewide bond amount, the BLM 
reviewed its existing statewide bonds, and the number of wells tied to 
the statewide bonds. The BLM currently manages 1,815 statewide bonds; 
however, only 1,007 statewide bonds cover existing wells. For the 
statewide bonds with wells, each statewide bond, on average, covers 66 
wells; however, the statewide bonds cover a median number of seven 
wells per bond. The larger number of wells covered provides the BLM 
more time to conduct a bond adequacy review and increase bond amounts 
if needed. In addition, the statewide bonds covering existing wells 
averaged $387,000 per bond. For background, the BLM calculated the 
average by adding up all the statewide bond amounts and dividing this 
total by the number of statewide bonds. The BLM calculated the median 
by taking the middle value, i.e., the value for which half of the 
statewide bonds are larger and half are smaller. Since half of the 
statewide bonds, with existing liability, cover seven wells per bond, 
the proposed rule would require the minimum bond amount to cover seven 
wells, the median number of wells. Unlike bonds for individual leases 
where the BLM is proposing to cover more than the median number of 
wells, for statewide bonds, the larger number of wells covered (7) 
reduces the uncertainty related to depth of individual wells and the 
variability of reclamation costs. It also gives the BLM more time to 
conduct a bond adequacy review and increase bond amounts if needed. The 
BLM would conduct bond adequacy reviews on all bonds and increase the 
required bond amount based upon the risk of the operations. This review 
would include the number of wells covered by the bond.
    Between 1951 and 2022, the cumulative inflation rate, as measured 
by the U.S. Consumer Price Index was 1,040 percent and, accordingly, 
the 2022 equivalent of $25,000 (the 1951 statewide bond amount) would 
be $284,914 (https://www.usinflationcalculator.com). After researching 
the BLM's data on orphaned wells, the cost to plug a well and to 
reclaim the surface ranged from $35,000 to $200,000, with an average 
cost of $71,000. Considering that the median number of wells is seven 
wells per statewide bond, the BLM opted to have the minimum statewide 
bond cover seven wells, which resulted in a statewide bond of $500,000, 
rounded from $497,000. The BLM rounded the bond to the nearest $50,000 
for ease of payment and administration. Through the BLM's current 
policy for bond adequacy reviews, the BLM will increase the statewide 
bond amount for operators with more than seven wells tied to the bond. 
The new minimum statewide bond amount would provide sufficient coverage 
for an operator starting operations with a statewide bond.
    Based upon a review of the statewide bond and related operations, 
the BLM determined that the minimum statewide bond amount should be not 
less than $500,000. In addition, the minimum statewide bond amount of 
$500,000 matches the amounts proposed in congress by Senator Michael 
Bennet (S. 2177) and Representative Teresa Leger Fernandez (H.R. 2415). 
The BLM believes this update would help ensure that end-of-life 
liabilities reside primarily with oil and gas lessees and operators and 
not the American public. The BLM requests comments with any supporting 
information on whether the final regulation should provide a higher or 
lower amount for statewide bonds.
    Finally, the proposed rule would rescind the use of nationwide 
bonds, which call upon the BLM to manage nationwide risks and 
liabilities and are therefore administratively inefficient. The 
elimination of nationwide bonding in favor of the proposed increase in 
the amount of the statewide and lease bonds described earlier would 
allow the agency to ensure improved bonding, with an appropriate focus 
on specific areas and fields, which should reduce the burden to the 
taxpayer if an operator fails to complete proper plugging and 
abandonment.
    For more background, the BLM reviewed its existing nationwide 
bonds, and the number of wells tied to the nationwide bonds. The BLM 
currently manages 241 nationwide bonds; however, only 129 nationwide 
bonds

[[Page 47582]]

cover existing wells or liability. For the nationwide bonds with wells, 
each nationwide bond, on average, covers 295 wells; however, the 
nationwide bonds cover a median number of 35 wells per bond. The 
nationwide bonds covering existing wells averaged $198,000 per bond. 
Compared to statewide bonds, nationwide bonds cover more wells and 
averaged lower amounts per bond. The BLM believes the increased 
administrative burden related to managing nationwide bonds has caused 
nationwide bonds to lag behind statewide bonds for bond increases and 
reviews. Overall, the BLM believes the elimination of nationwide bonds 
would result in prompt adjustments to bond amounts with changing 
circumstances of the bonded parties' operations. The BLM seeks public 
comment on the appropriate minimum amount for a nationwide bond, if it 
opts to retain the nationwide bonding provision.
Section 3104.4 Unit Operator's Bond
    The proposed rule would eliminate unit operator bonds in their 
entirety, as currently found in 43 CFR 3104.4. Currently, these bonds 
are treated like statewide bonds and may be used in lieu of individual 
lease, statewide, or nationwide bonds for operations conducted on 
leases committed to an approved unit agreement. The language for the 
unit operator bond can be found at 43 CFR 3186.2. The BLM has less than 
20 active unit operator's bonds nationwide. The BLM's review of bonds 
shows that the forms predating June 1987 did not clearly cover the 
principal in the capacity of a unit operator where the operator does 
not hold an interest in the lease. Prior to June 1987, the BLM required 
the principal or obligor to provide a rider to a statewide or 
nationwide bond extending the bond's coverage to include all 
obligations of the principal or obligor under the terms and conditions 
of unit agreements. The current bond forms do not have this deficiency 
as they contain the statement, ``WHEREAS the principal and surety 
agree(s) that with notice to the surety the coverage of this bond, in 
addition to the present holding(s) of and/or authorization(s) granted 
to the principal, shall extend to and include: [. . .] Any activity 
subsequent hereto of the principal as operator under a lease(s) issued 
pursuant to the Acts cited in this bond.'' Today, unit operator bonds 
are usually submitted to the BLM when a unit agreement includes lands 
located in more than one State as it costs less to post a single unit 
operator bond for $25,000 rather than posting two statewide bonds for 
$50,000 or a nationwide bond for $150,000. This was not BLM's intention 
for the unit operator bond in 1987 when the bond forms were updated. 
Therefore, eliminating and replacing the unit operator's bond, which is 
already treated and managed like statewide bonds, would bring 
efficiencies to the program.
Section 3104.40 Surface Owner Protection Bond
    The proposed rule would add a provision related to surface owner 
protection bonds to consolidate all of the bonding provisions in one 
place. The BLM promulgated the current requirements for surface owner 
protection bonds through Onshore Order 1 in 2007. The BLM recently 
codified these requirements in 43 CFR subpart 3171. In this proposed 
rule, the BLM would incorporate the existing bonding requirements set 
out in Onshore Order 1. It also would add a new requirement that the 
surface owner protection bond must be filed on the BLM approved form 
and specify that the type of bond can either be a personal or surety 
bond. The BLM requests supporting documentation and comments on whether 
the final rule should change the minimum bond amount for surface owner 
protection bonds.
Section 3104.60 Where Filed and Number of Copies
    The proposed rule would remove the last sentence in this paragraph, 
which states that nationwide bonds may be filed in any BLM state 
office. As noted previously, this rule would eliminate nationwide 
bonds.
Section 3104.70 Default
    The proposed rule would divide the current paragraph (b) into three 
paragraphs for clarity. Paragraph (b)(1) would state that all the 
leases covered by the bond may be subject to cancellation if the 
principal fails to comply with the paragraph (b) requirements. The BLM 
proposes to add information on failure to comply by referencing section 
17 of the MLA and the DOI's suspension and debarment program to ensure 
the bonded principal understands the risks that incur for a default 
under the bond. The rule proposes to add paragraphs (b)(2) and (3). 
Paragraph (b)(2) would state that the bonded party may be prevented 
from acquiring any new lease or interest when the entity is in 
violation of section 17 of the MLA; it references the provisions for 
qualifications to hold a lease at 43 CFR 3102.51(f). Paragraph (b)(3) 
would state that the bonded party may be referred to the DOI's 
Suspension and Debarment Program under 2 CFR part 1400 to determine if 
the person will be suspended or debarred from doing business with the 
Federal Government for failure to comply with the paragraph (b) 
requirements.
Section 3104.90 Bonds Held Prior to [EFFECTIVE DATE OF THE FINAL RULE]
    The proposed rule would add a new section entitled ``Bonds Held 
Prior to [EFFECTIVE DATE OF THE FINAL RULE]'' to manage the elimination 
of existing nationwide and unit bonds. Paragraph (a) would state that 
the current unit operator bonds accepted by the BLM prior to the 
effective date of the final rule must be replaced by a statewide bond 
within 2 years from the effective date of the final rule. The BLM would 
no longer accept new unit operator bonds. Paragraph (b) would provide a 
phase-in period within which bonds held prior to the final rule must 
meet the increased minimum bond amounts. The phase-in period for 
individual, state, and nationwide bonds would be 1, 2, and 3 years, 
respectively (for nationwide bonds, the phase-in period refers to the 
time in which nationwide bonds must be converted into state bonds).
    The phase-in period should be as short as possible to account for 
the large number of inadequate bonds and the associated taxpayer 
exposure. The BLM opted for a 3-year phased approach based on the 
workload related to reviewing and accepting new bonds or bond riders. 
This approach would spread out the workload of replacing bonds over a 
3-year period and allow the BLM to process the bond increases without 
requiring additional adjudication staff to manage the increased 
workload. The BLM opted to start with individual bonds as these are 
usually smaller operations with an increased risk of bankruptcies. The 
BLM requests supporting documentation and comments on whether the final 
regulation should change the priority order for the phase-in period.
7. Section-by-Section Discussion for Changes to 43 CFR Subpart 3105
    The proposed rule would add one section and remove five sections in 
existing 43 CFR subpart 3105. The proposed rule would revise one 
section heading in the existing 43 CFR subpart 3105 to remove an 
unnecessary reference to drilling agreements.

[[Page 47583]]

Section 3105.10 Cooperative or Unit Agreement
    The proposed rule would add a new paragraph (b) to this section to 
require that all applications to form a unit agreement, a unit 
expansion, or a designation of a successor operator include the new 
processing fee found in the fee schedule in 43 CFR 3000.120 of this 
chapter.
Communitization Agreements
    This section of the regulations covers the BLM's management and 
approval of communitization agreements, which are oil and gas 
agreements covering one or more Federal leases that cannot be 
independently developed due to well-spacing or well development 
programs. The CA allows the lessees to cooperatively develop such 
tracts. The proposed rule would rename this section from 
``Communitization or Drilling Agreements'' to ``Communitization 
Agreements.'' The proposed rule would eliminate ``drilling agreements'' 
in this section, since the BLM has determined that such agreements are 
rarely if ever used.
Section 3105.21 Where Filed
    The proposed rule would remove the triplicate filing requirement in 
paragraph (a) as the BLM believes this requirement is no longer needed 
given electronic filing. The proposed rule would replace the language 
in current paragraph (b) with a list of three items that an application 
for a CA must include. Paragraph (b)(1) would require that all 
applications to form a CA must include a statement as to whether the 
proposed CA deviates from the BLM's current model CA form and a 
certification that the applicant received the required signatures. 
Paragraph (b)(2) would require an Exhibit A to display a map of the 
area covered by the agreement and the separate agreement tracts, and 
paragraph (b)(3) would require the filing of an Exhibit B displaying 
the separate tracts and ownership. The new paragraph (c) would state 
that all applications to form a CA should be submitted at least 90 
calendar days prior to first production to ensure accurate reporting to 
the ONRR. Finally, the new paragraph (d) would require operators to 
file the designation of successor operator with the filing fee in the 
fee schedule at 43 CFR 3000.120.
Section 3105.22 Purpose
    The proposed rule would remove the unnecessary reference to 
drilling agreements.
Section 3105.23 Requirements
    The proposed rule would remove the unnecessary reference to 
drilling agreements.
Section 3105.24 Communitization Agreement Terms
    The proposed rule would add a new section to outline CA terms to 
provide clarity. The new paragraph in this section would provide that 
these agreements would remain in effect for a period of 2 years from 
the effective date of the CA or approval date, whichever is later, and 
as long thereafter as communitized substances may be produced in paying 
quantities, or as otherwise specified in the agreement.
Section 3105.31 Where Filed
    The proposed rule would remove the requirement for five copies of 
an operating, drilling, or development contract to be submitted when 
these contracts are submitted to the BLM for approval as the BLM 
believes this requirement is no longer necessary because of electronic 
filing.
Section 3105.4 Combination for Joint Operations or for Transportation 
of Oil
    The proposed rule would eliminate the section on the combination 
for joint operations or for transportation of oil. These provisions are 
not used by the BLM or operators and are therefore obsolete. A ROW for 
pipelines may be granted, as provided in 43 CFR part 2880, without 
retaining the duplicative language under this subpart. A ROW grant is 
an authorization to use a specific piece of public land for a certain 
project, such as a road, pipeline, transmission line, or communication 
site. A more complete explanation of the BLM ROW program is found in 
Title 43 CFR parts 2800 and 2880.
Subsurface Storage of Oil and Gas
    The proposed rule would change the existing 43 CFR 3105.5 to just 
the heading ``Subsurface storage of oil and gas.''
Section 3105.41 Where Filed
    The proposed rule would update paragraph (a) to include designation 
of successor operators for gas storage agreements among the 
applications to be filed in the proper BLM office. This information 
needs to be filed with the BLM when there is a change in operator. The 
proposed rule would update paragraph (b) to remove the requirement for 
five copies of a gas storage agreements to be submitted when these are 
filed with the BLM as the BLM believes this requirement is no longer 
necessary because of electronic filing. A new paragraph (c) would 
require that all applications for a subsurface gas storage agreement or 
a designation of a successor operator must include the new processing 
fee found in the fee schedule in 43 CFR 3000.120.
Section 3105.42 Purpose
    The proposed rule would add clarification that a gas storage 
agreement will require a bond under 43 CFR part 3104.
Section 3105.43 Requirements
    The proposed rule would update the language in this section to 
mirror the language found in 43 CFR 3105.42 for clarity.
Section 3105.50 Consolidation of Leases
    The proposed rule would split the single paragraph under this 
section into several paragraphs for clarity. These paragraphs would 
also incorporate language from 43 CFR 3135.17 to provide a consistent 
approach across leasing in the NPR-A and under the MLA. Paragraph (a) 
would incorporate language stating that leases may be consolidated upon 
written request of the lessee filed with the proper BLM office. This 
change is proposed to identify who should submit the request for 
consolidation. The request must identify each lease involved by serial 
number and must explain the factors that justify the consolidation. 
Paragraph (b) would state that all parties holding any undivided 
interest in any lease involved in the consolidation must agree to enter 
into the same lease consolidation. Consistent with the existing 
language, paragraph (c) would clarify the circumstances under which 
leases cannot be consolidated. Paragraph (d) would state that a 
consolidated lease will not exceed acreage limits of 2,560 acres for 
competitive leases and 10,240 acres for noncompetitive leases, as 
required by 30 U.S.C. 226. Paragraph (e) would require the effective 
date, anniversary date, and the primary term of the consolidated lease 
to be those of the oldest original lease included in the consolidation. 
It would also allow the term of a consolidated lease to be extended 
beyond the primary lease term pursuant to 43 CFR subpart 3107. 
Paragraph (f) would state that the highest royalty and rental rates of 
the each of the leases to be consolidated would apply to the 
consolidated lease. Paragraph (g) would state that lease stipulations 
and other terms and conditions of each original lease would, in 
general, continue to apply to the lease to which they originally 
applied, regardless of the lease becoming a part

[[Page 47584]]

of a consolidated lease. These additions bring consistency between 
Sec. Sec.  3135.17 and 3105.50.
8. Section-by-Section Discussion for Changes to 43 CFR Subpart 3106
    The proposed rule would add one section and remove two sections in 
existing subpart 3106. The proposed rule would revise five section 
headings in the existing subpart 3106 to provide clarity and replace 
the existing question-and-answer formats.
Section 3106.10 Transfers, General
    The proposed rule would split paragraph (a) into two paragraphs and 
add a provision regarding transfers of operating rights to provide 
clarity and reduce the confusion the BLM has seen in applications. The 
new paragraph (b) would state that an assignment of a separate zone, 
deposit, depth, formation, a specific well, or part of a legal 
subdivision will be denied. The proposed rule would add a new paragraph 
(c) to state that operating rights may only be divided with respect to 
legal subdivisions, depth ranges, and formations within the boundaries 
of a Federal lease. Terms, such as stratigraphic equivalent, pools, 
reservoirs, wellbores, and references to unnamed formations occurring 
at a specified depth within a specific well are not allowed, as they 
are not definitive, and introduce ambiguity into the boundaries along 
which lease rights are split.
    The proposed language more clearly states the BLM's current 
obligations. The current regulation at 43 CFR 3106.1(a) states: 
``Leases may be transferred by assignment or sublease as to all or part 
of the acreage in the lease or as to either a divided or undivided 
interest therein. An assignment of a separate zone or deposit, or of 
part of a legal subdivision, shall be disapproved.'' The 
``stratigraphic equivalent'' of a formation (i.e., a division that 
extends beyond that formation) meets the definition of a ``zone.'' A 
``pool'' of oil or gas trapped in the rocks below the ground surface 
meets the definition of a ``deposit.'' Under the current regulations, 
therefore, the BLM must disapprove these types of assignments.
    The BLM's practice is sound as a practical matter. The BLM cannot 
approve assignments or transfers that attempt to separate rights along 
boundaries that cannot be defined without geological interpretation 
(for example, ``the stratigraphic equivalent of the formation 
encountered in Well X, at a depth of Y feet below the surface''). A 
boundary that requires geological interpretation is inherently 
imprecise. As for wellbore-only transfers, a wellbore is essentially a 
line, not a spatial region within a leasehold. The BLM cannot define a 
distribution of lease rights relative to a linear feature in three-
dimensional space below the surface of the ground. Wellbore-only rights 
that purportedly encompass the area drained by that wellbore pose the 
problem of defining the boundaries of the area drained, which may 
require geological interpretation and/or engineering analysis.
    The proposed rule would also split the existing paragraph (b) into 
five paragraphs due to the length of the paragraph and for clarity. The 
proposed paragraph (d) would revise the second sentence to simply 
reference 43 CFR 3102.51(g) for certification of compliance rather than 
repeating the language set out in 43 CFR 3102.51(g). The proposed rule 
would redesignate the existing paragraph (c) to paragraph (i) because 
of the previously mentioned reorganization.
Section 3106.20 Qualifications of Transfers
    The purpose of this section is to ensure new lessees and operating 
rights owners comply with the provisions of 43 CFR subpart 3102. The 
proposed rule would update the title of the section from 
``Qualifications of transferees'' to ``Qualifications of assignees and 
transferees.'' The proposed rule would also update the paragraph to 
include ``assignees'' as well as ``transferees.'' The purpose of these 
changes is to clarify that this section on qualifications applies to 
both assignments of record title as well as transfers of operating 
rights. The proposed rule would add a sentence that states ``Only 
qualified and responsible lessees may own, hold, or control an interest 
in a lease.'' This addition is made to conform the language in this 
provision with similar proposed changes.
Section 3106.30 Fees
    This section includes the requirement to submit the requisite 
filing fees with assignment and transfer applications. The proposed 
rule would split the current paragraph into two paragraphs for clarity. 
The reference to the filing fee for assignments and transfers would now 
be found under paragraph (a). The reference to the filing fee for 
transfer of overriding royalty or payment out of production would now 
be found under paragraph (b). References to the filing fees for mergers 
and name changes and for transfers to heirs or devisees would be 
removed from this section as the filing fee requirement is included in 
the sections for those specific topics.
Section 3106.41 Transfers of Record Title and of Operating Rights 
(Subleases)
    This section describes the forms required for assignment and 
transfers. The proposed rule would update this section to allow for the 
acceptance of electronic submissions. The proposed rule would reduce 
the triplicate filing to a duplicate filing so that the BLM can keep 
one copy for the official case file and return one copy of the approved 
assignment or transfer for the applicant's records. The BLM does not 
require a duplicate copy of the assignment or transfer when it is 
electronically submitted.
    The proposed rule would also require assignments and transfers to 
be submitted on a current form and would no longer allow the use of 
obsolete forms. All current forms can be located on the BLM's web 
pages. The BLM believes that lessees may locate the current form far 
easier now than in the days prior to widespread internet access.
    The current regulations allow for the assignee or transferee to 
sign only one copy of the assignment or transfer, while the assignor or 
transferor must sign all three copies of the form. In light of the 
proposal to reduce the triplicate filing to (at most) a duplicate 
filing, the BLM believes it would no longer be a burden for the 
assignee or transferee to sign both copies of the form submitted to the 
BLM. This change would streamline the BLM's verification of the 
required signatures.
Section 3106.42 Transfers of Other Interest, Including Royalty 
Interests and Production Payments
    The proposed rule would update paragraphs (a) and (b) to ensure 
overriding royalty transfers are submitted on the BLM's current 
assignment or transfer forms.
Section 3106.43 Mass Transfers
    This section allows an assignor or transferor to make a mass 
assignment or transfer when conveying any type of interest in a large 
number of Federal leases to the same assignee or transferee. The 
proposed rule would update paragraph (a) to include the words 
``assignor'' and ``assignee.'' As explained earlier, the term 
``transferees'' usually refers to transfers of operating rights, but 
this section has always functioned to apply to both assignments of 
record title as well as transfers of operating rights. The BLM believes 
that adding assignors and assignees to this

[[Page 47585]]

language would reduce any confusion on this matter. In addition, the 
regulatory language was clarified to ensure that the minimum number of 
leases for a mass transfer is more than one lease.
    The proposed rule would update paragraph (b) to reduce the 
triplicate filing to a duplicate filing so the BLM can keep one copy 
for the official case file and return one copy of the approved 
assignment or transfer for the applicant's records. The proposed rule 
would update paragraph (c) to state that the BLM does not require a 
duplicate copy of the assignment or transfer when it is electronically 
submitted. In addition, a new paragraph (c)(2) would be added to state 
that when the BLM does not receive the requisite number of copies for 
mass transfers, the applicant would reimburse the BLM for the full 
costs incurred to make the required number of copies. The BLM would 
waive any copy fees under one dollar.
Section 3106.50 Description of Lands
    The proposed rule would update the language in this paragraph from 
``transfer of record title'' to ``assignment of record title'' for 
consistency. In addition, the reference to 43 CFR 3110.5 would be 
removed to more simply state that each assignment must describe the 
lands in the same manner as the lands described in the lease.
Section 3106.60 Bond Requirements
    The purpose of this section is to ensure the new lessee or 
operating rights owner obtains a bond equivalent in coverage to the 
assignor's or transferor's bond before approval of the assignment or 
transfer. The proposed rule would update the title of this section from 
``Bonds'' to ``Bond requirements.'' This section would also consolidate 
the separate sections for ``Lease bond'' (43 CFR 3106.6-1) and 
``Statewide/nationwide bond'' (43 CFR 3106.6-2) into one paragraph to 
streamline the regulations. In addition, the rule would remove 
references to a transferee or a new operator as a co-principal on the 
transferor's or operator's bond. In the BLM's experience, this dynamic 
does not occur. An assignee assumes all the obligations incurred by the 
assignor as well as the benefits that have accrued to the assignor. The 
bond the assignee, transferee, or new operator must provide is a proper 
bond that would cover any obligations arising under the lease to the 
same extent as the assignor's bond. The BLM's practice is to ascertain 
the adequacy of such bond before approving the assignment.
Approval of Transfer or Assignment
    The proposed rule would change the existing 43 CFR 3106.7 
``Approval of transfer'' to the heading ``Approval of transfer or 
assignment.'' The reference to both assignments and transfers conforms 
the title of this section with similar proposed changes.
Section 3106.71 Failure To Qualify
    The proposed rule would update the paragraph in this section to 
active voice and update the language from ``transfer of record title or 
of operating rights (sublease)'' to ``assignment of record title or 
transfer of operating rights (sublease),'' consistent with the other 
changes made to this subpart. In addition, the term ``qualified 
lessee'' is used in place of the existing language ``qualified to hold 
the transferred interest.'' i.
Section 3106.72 Continuing Obligation of an Assignor or Transferor
    The purpose of this section is to describe the continuing 
obligation of the assignor or transferor after the BLM approves the 
assignment or transfer. The proposed rule would update the title and 
paragraphs of this section to remove the question-and-answer format. 
The title would change from ``If I transfer my lease, what is my 
continuing obligation?'' to read ``Continuing obligation of an assignor 
or transferor.'' In paragraph (a), the proposed rule would change ``you 
are responsible'' to ``the lessee or sublessee remains responsible'' 
and paragraph (b) would change ``you'' to ``the assignor or 
transferor.'' This is intended to clarify who ``you'' is in this 
section.
Section 3106.73 Lease Account Status
    The proposed rule would update this section to active voice and 
revise the phrase ``unless the lease account is in good standing'' to 
clarify that the lease account must not be delinquent with respect to 
royalty payments; lease obligations, such as, but not limited to, rent 
and minimum royalty; or production reporting to the ONRR for a lease in 
non-terminable status.
Section 3106.75 Effect of Transfer
    This section requires that an assignment to 100 percent of a 
portion of the lease segregates the transferred and retained portions 
into separate leases. The proposed rule would update the language in 
this paragraph from ``transfer of record title'' to ``assignment of 
record title,'' consistent with the other changes made to this subpart. 
The proposed rule would also update the paragraph in this section to 
clarify the meaning of undivided interest to the more commonly used 
phrase of ``less than 100 percent of a portion of the lease.''
Section 3106.76 Obligations of Assignee or Transferee
    The purpose of this section is to describe the obligations the 
lessee or sublessee assumes after the BLM approves the assignment or 
transfer. By seeking approval of the assignment or transfer and being 
substituted in place of the assignor or transferor, the assignee or 
transferee assumes the responsibility for complying with all lease 
obligations in existence and that a purchaser exercising reasonable 
diligence should have known existed at the time of the transfer. The 
proposed rule would update the title and paragraphs of this section to 
remove the question-and-answer format. The title would change from ``If 
I acquire a lease by an assignment or transfer, what obligations do I 
agree to assume?'' to read ``Obligations of assignee or transferee.'' 
This formatting change brings overall consistency with the other 
regulations in this subpart. The proposed rule would also replace 
``you'' in this section with ``the record title holder'' or 
``transferee of operating rights,'' as appropriate. It would also state 
more clearly that the transferee assumes the responsibility to plug and 
abandon all wells that are no longer capable of producing.
Section 3106.81 Heirs and Devisees
    The proposed rule would split paragraph (a) into two paragraphs for 
clarity. The existing paragraph (b) would become paragraph (c) due to 
the reorganization of the section. The language in paragraph (a) would 
be updated to state that the lease interest would be assigned or 
transferred to the heirs, devisees, executor, or administrator of the 
estate, as appropriate, upon the filing of a court order, death 
certificate, or other legal document demonstrating that the assignee is 
to be recognized as the successor of the deceased. New paragraph (b) 
would contain the requirement for the filing fee. Newly redesignated 
paragraph (c) would include a requirement to file a qualification 
statement, as well as the current language found in existing paragraph 
(b). The proposed rule would add a new paragraph (d) that would contain 
the bonding requirements that are found in paragraph (a) in the current 
regulation.
Section 3106.82 Change of Name
    The proposed rule would split the reference to the filing fee and 
bond into

[[Page 47586]]

three separate paragraphs for clarity. The current regulation requires 
a notice of the name change to be accompanied by a list of the serial 
numbers of the leases affected by the name change. This requirement 
would be removed, as it is outdated. In practice, the BLM generates a 
report of the leases affected by the name change and returns that list 
to the lessee with a notice that recognizes the name change. The 
proposed paragraph (a) would be updated to require that for a corporate 
name change, the request must include the Secretary of State's 
Certificate of Name Change, along with the Articles of Incorporation, 
or Amendment, if available. This is consistent with the BLM's current 
approach for processing these types of documents. New paragraph (b) 
would contain the requirement for the filing fee. The proposed rule 
would add a new paragraph (c) that would contain the bonding 
requirements that are found in the current regulation.
Section 3106.83 Corporate Mergers and Dissolution of Corporations, 
Partnerships, and Trust
    The proposed rule would update the title of this section from 
``Corporate merger'' to ``Corporate Mergers and Dissolution of 
Corporations, Partnerships, and Trust.'' The goal of renaming the 
section is to incorporate other types of changes to lease ownership 
interests that may occur without any intention by the holder of an 
interest to assign or transfer the interest. The proposed rule would 
split the current paragraph into three paragraphs for clarity.
    The current regulation requires a notification of merger to be 
accompanied by a list of the serial numbers of the leases affected by 
the merger. This requirement would be removed, as it is outdated. In 
practice, the BLM does not rely on a list of leases provided by a 
lessee and, instead, generates its own report of the leases affected by 
the merger. The BLM returns that list to the lessee with a notice that 
recognizes the corporate merger.
    This section would be updated to require that, for a merger, the 
request must include the Secretary of State's Certificate of Merger, 
along with the Articles of Incorporation, or Amendment, if available. 
This requirement is consistent with the BLM's current approach for 
processing these types of documents. New paragraphs would be added 
allowing the BLM to recognize lease interests assigned through 
dissolutions of corporations and dissolutions of partnerships and 
trust. The new provision would state that the BLM would not recognize 
any transfers provided by the Articles of Dissolution unless an entity 
has filed with the BLM a Certificate of Dissolution of an incorporated 
entity, certified as accepted by the State where the entity was 
incorporated. Dissolution of a partnership or trust through an order or 
decree that authorizes settlement, discharge, and distribution of the 
lease holdings and/or interests must be filed with the BLM for official 
recognition of the assignment of lease interests. These requirements 
are consistent with the BLM's current approach for processing these 
types of documents.
Section 3106.84 Sheriff's Sale/Deed
    The proposed rule would add a new section under Sec.  3106.80, to 
include sheriff's sales as another type of transfer. The BLM accepts 
these types of assignments to recognize lease interests assigned to 
other parties through foreclosure actions. The proposed rule would 
state that where a notice of sale of the leasehold interest is 
published pursuant to State law applicable to the execution of sales of 
real property, the purchaser must submit to the proper BLM office a 
copy of the Sheriff's Certificate of Sale after any redemption period 
has passed. Additional paragraphs under this new section would include 
a filing fee requirement, a qualification statement, and bonding 
requirements. These requirements are consistent requirements with the 
BLM's current approach for processing these types of documents.
9. Section-by-Section Discussion for Changes to 43 CFR Subpart 3107
    The proposed rule would remove six sections in existing 43 CFR 
subpart 3107. The proposed rule would change the title of this subpart 
from ``Continuation, Extension or Renewal'' to ``Continuation and 
Extension'' due to the removal of the sections on renewal of leases, as 
explained later. The proposed rule would revise two section headings in 
the existing 43 CFR subpart 3107. The goal of the revisions is to 
replace ``plans'' with ``agreements'' to provide clarity and to conform 
this language with other changes in this proposed rule.
Section 3107.10 Extension by Drilling
    The proposed rule would split the existing paragraph into two 
separate paragraphs for clarity. In paragraph (a), a sentence would be 
added to state that the BLM would not grant a drilling extension for a 
lease in its extended term. This change would clarify and complement 
the first sentence of this section, which states that a drilling 
extension would only be granted for a lease on which actual drilling 
operations are being diligently pursued at the end of the primary lease 
term or any lease that is committed to an approved oil and gas 
agreement. A new paragraph (c) would be added to address directional or 
horizontal wells on off-lease locations by stating that when a BLM-
approved directional or horizontal well is drilled within the leased 
area from an off-lease location with the intent to produce from the 
leased area, the BLM would consider drilling to have commenced on the 
leased area when drilling is commenced at the off-lease location. This 
addition is consistent with the leasing regulations under 43 CFR part 
3130.
Section 3107.22 Cessation of Production
    The proposed rule would update this section because the IBLA has 
held that the current regulations--which provide that ``[t]he 60-day 
period commences upon receipt of notification from the authorized 
officer''--directly conflicts with the statutory provision of section 
17(i) of the MLA (30 U.S.C. 226(i)). Refer to Two Bay Petroleum, Inc, 
166 IBLA 329 (2005), International Metals & Petroleum Corp, 158 IBLA 15 
(2002), and Merit Productions, et al., 144 IBLA 156 (1998). In summary, 
these cases explain that through operation of law a lease in its 
extended term expires 60 days following cessation of production, not 60 
days after the lessee receives the BLM notice.
    The paragraph in the proposed rule would now read that a lease in 
its extended term because of production (and lacking a well capable of 
production in paying quantities) would not expire upon cessation of 
production, if, within 60 calendar days of cessation of production, 
reworking or drilling operations on the leasehold are commenced and are 
thereafter conducted with reasonable diligence during the period of 
nonproduction. The proposed rule would also add a sentence stating, 
``If these reworking or drilling operations fail to result in 
production in paying quantities, the lease will expire by operation of 
law, effective as of the date production ceased.''
Section 3107.23 Leases Capable of Production
    The proposed rule would update the existing paragraph to specify 60 
``calendar days'' in order to be clearer.

[[Page 47587]]

Section 3107.30 Extension for Terms of Agreements
    The proposed rule would update the title of this section from 
``Extension for terms of cooperative or unit plan'' to ``Extension for 
Terms of Agreements.'' This conforms this language to other changes in 
this proposed rule.
Section 3107.31 Leases Committed to an Agreement
    The proposed rule would update the title of this section from 
``Leases committed to plan'' to ``Leases committed to an agreement.'' 
The proposed rule would also remove the reference to the existing 43 
CFR 3107.3-3 (renewal leases) due to the changes made to that section, 
as further described later.
    The proposed rule would add a new paragraph (b) because IBLA cases 
have held that a well that is capable of production in paying 
quantities on a lease basis and that is completed on a committed tract 
within a unit agreement will extend the term of all expiring Federal 
leases committed to the unit agreement for the term of the unit 
agreement and/or for so long as the well is capable of production in 
paying quantities. Refer to Yates Petroleum Corp. 67 IBLA 246 (1982).
Section 3107.32 Segregation of Leases Committed in Part
    This section addresses any lease committed to a unit agreement that 
covers less than the entirety of the lands covered by the lease. In 
paragraph (a), a sentence would be added to state that, for unproven 
areas, segregation would occur only when the public interest 
requirement is satisfied pursuant to 43 CFR 3183.4(b). The sentence 
would also provide that, upon satisfaction of the public interest 
requirement, the BLM would deem the segregation to have been effective 
as of the date of commitment of the lands to the unit. Segregating a 
lease after the public interest requirement is met would create 
efficiencies in the program. If the public interest requirement is not 
met, the BLM would not be required to consolidate the improperly 
segregated leases, and the ONRR would not be required to consolidate 
improperly segregated lease accounts for payments.
    The proposed rule would delete the portion of existing paragraph 
(b), which described how a lease segregation would be declared invalid 
if the public interest requirement was not met. This change is 
consistent with the changes made to paragraph (a).
    The proposed rule would add a new paragraph (b)(2) to clarify that 
the base or segregated lease may be extended by production on the 
associated lease by stating that, if a partially committed lease is in 
an extended term because of production, the segregated, non-producing 
lease would continue in effect so long as the producing lease exists 
and rentals are paid, and so long thereafter as oil or gas is produced 
from the committed lease.
Section 3107.3-3 20-Year Lease or Any Renewal Thereof.
    The proposed rule would eliminate this section because it is 
outdated. All 20-year leases, also known as renewal leases, have either 
expired or are held by production. Renewal leases are further described 
in detail under 43 CFR 3107.80.
Section 3107.51 Extension After Discovery on Other Segregated Portions
    The proposed rule would update the language in this paragraph from 
``the date of first discovery of oil or gas in paying quantities'' to 
read ``the date a well capable of production in paying quantities is 
established.'' The change reflects language more commonly used by the 
BLM.
Section 3107.7 Exchange Leases: 20-Year Term
    The proposed rule would eliminate this section because it is 
obsolete. Exchange leases were outstanding MLA leases that could be 
exchanged for a new lease under the Act of August 21, 1935, Public Law 
74-295 Sec.  2(a), 49 Stat. 674, 679. The August 8, 1946, Act 
eliminated the 1935 Act provisions for exchange leases, and the BLM no 
longer accepts these types of applications. Public Law 79-696 sec. 3, 
60 Stat. 950, 951.
Section 3107.8 Renewal Leases
    The proposed rule would eliminate Sec. Sec.  3107.8-1 through 
3107.8-3, which are the provisions related to renewal leases, in their 
entirety because they are obsolete. Renewal leases that had an 
expiration date after November 15, 1990, were eligible for a final 
renewal under the provisions of the November 15, 1990, Act, (for 10 
years and for so long thereafter as oil and gas is produced in paying 
quantities). Public Law 101-567, 104 Stat. 2802. If a lease was renewed 
after the 1990 amendment and was not producing oil or gas at the end of 
its 10-year renewal term, the lease expired with no further option for 
renewal. The BLM no longer accepts these types of applications.
Section 3107.71 Payment of Compensatory Royalty
    The proposed rule would redesignate this section from Sec. Sec.  
3107.9-1 to 3107.71 pursuant to the reorganization identified earlier.
Section 3107.72 Subsurface Storage of Oil and Gas
    Instead of citing to 43 CFR 3105.5-4, the proposed rule would add 
the language from 43 CFR 3105.5-4 to this section. This change negates 
the need to refer to another section of the rule.
10. Section-by-Section Discussion for Changes to 43 CFR Subpart 3108
    The proposed rule would remove one section and revise two section 
headings in the existing 43 CFR subpart 3108. The goal of the revisions 
is to replace the question-and-answer format and to remove obsolete 
language related to Class III reinstatements.
Section 3108.10 Relinquishment
    The proposed rule would update the title from ``As a lessee, may I 
relinquish my lease?'' to read ``Relinquishment.'' The proposed rule 
would also change references to ``you'' to ``the lessee(s).'' In 
addition, the proposed rule would update paragraph (c) to allow either 
the BLM or the appropriate surface management agency to approve a plan 
for the reclamation of the oil and gas operations on a relinquished 
lease.
Section 3108.21 Automatic Termination
    The proposed rule would update paragraph (b) to remove the phrase 
``bill rendered by the designated Service Office, or,'' because the 
ONRR updated its policy in 2015 to eliminate the mailing of courtesy 
notices. The proposed rule would add a new paragraph (c) to incorporate 
caselaw providing that Congress intended the automatic termination 
provision of 30 U.S.C. 188 to apply to the regular, annual rental 
payment, the necessity for which a lessee had continuous notice, and 
that the automatic termination provision was not intended to apply to a 
case where a lessee had no way of knowing that the obligation had 
accrued, e.g., where a lease suspension is lifted or where the lease 
account reverts from a royalty to a rental status. See Husky Oil 
Company of Delaware Depco, Inc., 5 IBLA 7 (1972). This might happen 
where a lease suspension is lifted or where the leases were held by 
allocated production from an agreement and the agreement terminates, 
thus reverting the lease account from a royalty to a rental status. The 
new paragraph (c) would state that the

[[Page 47588]]

automatic termination provision does not apply where, due to other 
contingencies such as a suspension being lifted or unit terminating, 
additional rental is due on a date other than the lease anniversary 
date and where the lessee did not receive notice that the obligation 
had accrued, unless the lessee fails to pay the rental within the 
period prescribed in the BLM notice.
Section 3108.22 Reinstatement at Existing Rental and Royalty Rates: 
Class I Reinstatements
    The proposed rule would update paragraph (a)(2) to replace the 
reference to a postmark by the U.S. Postal Service with a reference to 
the ONRR's online rental payment system, since the ONRR updated its 
policy in 2015 to require only electronic rental payments. The proposed 
rule would move paragraph (d)--which provides that the BLM would not 
issue a new lease for lands that have been covered by a lease that 
terminated automatically until 90 days after the date of termination--
to 43 CFR 3101.40(a). The intent is to ensure that this language is not 
overlooked by placing it more prominently with lease issuance 
provisions. The IRA did not make any changes to the grounds and 
conditions for Class I reinstatements.
Section 3108.23 Reinstatement at Higher Rental and Royalty Rates: Class 
II Reinstatements
    To further implement the IRA, the proposed rule would update 
paragraph (a) so that the grounds for a Class II reinstatement only 
apply to competitive leases. The IRA explicitly rescinded the BLM's 
authority to approve Class II reinstatements for noncompetitive leases 
issued for public domain lands under the MLA and implicitly did the 
same for the MLAAL (by eliminating references to higher rental 
requirements for reinstated, noncompetitive leases). In any event, 
reinstatements are discretionary; had Congress not directed the BLM to 
eliminate reinstatement of noncompetitive leases under the MLAAL, the 
BLM has concluded that such reinstatements are not prudent because the 
grounds for a reinstatement should be based on the type of lease and 
not be based on the land status.
    The proposed rule would eliminate the existing paragraph (b)(1) in 
its entirety. This provision addresses the timeliness of Class II 
reinstatement petitions for leases that terminated on or before August 
8, 2005, and is no longer applicable. The proposed rule would update 
the proposed redesignated paragraph (b)(2)(iii) to remove the reference 
to funds held in escrow, as this is outdated. The BLM would not approve 
a reinstatement if the BLM does not collect all back rentals and 
royalties at the rates established in the reinstated lease, but the BLM 
would not require the funds to be held in escrow until a reinstatement 
is approved.
    The proposed rule would move existing paragraph (c)--which states 
that the BLM will not issue a new lease for lands covered by a 
terminated lease until all action on the petition is final--to 43 CFR 
3101.40(a). The intent is to ensure that this language is not 
overlooked by placing it more prominently with lease issuance 
provisions. The proposed rule would update the reference to the 
Committee on Interior and Insular Affairs (which no longer exists) to 
the current House Committee on Natural Resources. The proposed rule 
would remove existing paragraph (f), which refers to royalty 
reductions, as this language would already be covered under the 
proposed 43 CFR 3103.41(c).
Section 3108.2-4 Conversion of Unpatented Oil Placer Mining Claims: 
Class III Reinstatements (Existing Rule)
    The purpose of the existing section is for converting unpatented 
oil placer mining claims validly located prior to February 24, 1920, to 
an oil and gas lease. The proposed rule would remove the language 
related to Class III reinstatements in its entirety because the IRA 
removed the authority for Class III reinstatements.
Section 3108.30 Cancellation
    The proposed rule would update the last sentence in paragraph (a) 
to remove the phrase ``after notice to the lessee in accordance with 
section 31(b) of the Act and only.'' This phrase does not add anything 
to the existing regulation and has therefore led to confusion. The 
proposed rule would state instead that ``The lease may be canceled only 
after default continues for 30 calendar days after a notice of default 
has been delivered in accordance with 43 CFR 1810.2.'' The proposed 
rule would update paragraphs (b) and (c) to change the phrase from ``by 
judicial proceedings'' to ``by court order'' to align with the text 
found in 43 CFR 3136.3(b), bringing consistency to the regulations.
11. Section-by-Section Discussion for Changes to 43 CFR Subpart 3109
    The proposed rule would not make any revisions to the section 
headings in the existing subpart 3109 regulations. This subpart covers 
the process for leasing lands under the provisions in 30 U.S.C. 301-
306, which addresses leasing under railway and other rights-of-ways.
Section 3109.12 Application
    The proposed rule would split the existing paragraph into four 
separate paragraphs by topic (no specific form is required, who can 
file, the filing fee, and what an application must include) for 
clarity. The proposed rule would also add a new requirement (proposed 
paragraph (d)(5)) that the applicant must include a map of the 
applicable lands, which would support the bidding process related to 
the lease or compensatory royalty agreement. In many cases, the 
adjacent mineral owners or lessees, who can bid upon the parcel, 
require a map to identify the lands. The requirement for the applicant 
to provide a map would reduce the cost to the public and would ensure 
that the BLM is reviewing the correct lands for a lease.
Section 3109.13 Notice
    The proposed rule would update the phrase ``a bid for the amount or 
percent of compensatory royalty'' to read ``a bid for the percent of 
compensatory royalty.'' This change aligns with the BLM's existing 
process and reduces confusion.
Section 3109.15 Compensatory Royalty Agreement or Lease
    The proposed rule would adjust the terms of a ROW lease to match 
the terms of a competitive lease issued under the MLA with respect to 
the rental, royalty, and primary term of the lease (10 years). The 
proposed rule would also specify for clarity that the provisions of 43 
CFR part 3100 apply to the issuance and administration of leases for 
oil and gas deposits underlying a ROW issued under this part.
12. Section-by-Section Discussion for Changes to 43 CFR Part 3110
    The proposed rule would remove the existing 43 CFR part 3110 in its 
entirety. The IRA removed the BLM's authority to issue a noncompetitive 
lease. The BLM is rejecting all pending noncompetitive lease 
applications received before enactment of the IRA.
13. Section-by-Section Discussion for Changes to 43 CFR Subpart 3120
    The proposed rule would add two new sections and remove four 
sections in existing 43 CFR subpart 3120. The proposed rule would 
revise four section headings. The goal of the revisions is to 
streamline and provide clarity and consistency with other changes in 
this proposed rule.

[[Page 47589]]

Section 3120.11 Lands Available for Competitive Bidding
    The proposed rule would update the introductory paragraph from 
``All lands available for leasing shall be offered'' to ``All lands 
eligible and available for leasing may be offered'' to conform this 
section with the language of 30 U.S.C 226(a) and (b). This language 
will also better reflect Interior's statutory discretion to identify 
lands available for oil and gas leasing.
    The proposed rule would update paragraph (a) to change the language 
from ``Lands in oil and gas leases'' to ``Lands that were covered by 
previously issued oil and gas leases'' to provide clarity.
    The proposed rule would update paragraph (c) to clarify that a 
lease interest forfeited through a bankruptcy to the United States may 
be reoffered through a competitive auction.
    The proposed rule would also revise existing paragraph (e) to 
reflect the IRA's removal of noncompetitive leasing.
    The proposed rule would add a new paragraph (g) to implement 
provisions of the IRA by stating that lands offered in a previous sale 
for which no bids were accepted or received may be offered for 
competitive auction under this subpart. Prior to the IRA, these lands 
would have been eligible for noncompetitive leasing.
Section 3120.12 Requirements
    The proposed rule would update paragraph (a) to conform this 
section with the language of 30 U.S.C 226(a) and (b). The proposed rule 
would update paragraph (b) to change ``competitive oral or internet-
based bidding process'' to read ``a competitive auction process.'' A 
definition for competitive auction would be added to 43 CFR 3100.5 as 
explained previously.
    The proposed rule would add a new paragraph (c) to codify existing 
policy and strengthen the bidder registration process. The MLA provides 
that leases may be issued only to a ``responsible qualified bidder'' 
(30 U.S.C. 226(b)(1)(A)). A bid submitted at a competitive auction 
represents a good-faith intention to acquire an oil and gas lease, and 
any winning bid constitutes a legally binding commitment to accept the 
lease and pay monies owed. Any bidder who has not paid the minimum 
monies owed on the day of sale is not a ``responsible qualified 
bidder'' and would be referred to the DOI's Office of the Inspector 
General, Administrative Remedies Division, for appropriate action, 
including potential suspension and debarment. Definitions for qualified 
bidder and responsible bidder would be added to 43 CFR 3100.5 as 
explained previously.
    The proposed rule would redesignate the existing paragraph (c) to 
paragraph (d). The proposed rule would update this paragraph to refer 
to the increased national minimum bid of $10 per acre, or fraction 
thereof, in 43 CFR 3000.130. The cross-reference to Sec.  3000.130 
allows BLM to adjust the minimum bid regularly for inflation. The IRA 
raised the national minimum bid from $2 per acre to $10 per acre. 
Notably, the IRA specifically authorizes the Secretary to, at the 
conclusion of the 10-year period established by the statute, 
``establish by regulation a higher national minimum acceptable bid for 
all leases based upon a finding that such action is necessary: (i) To 
enhance financial returns to the United States; and (ii) to promote 
more efficient management of oil and gas resources on Federal lands.'' 
The minimum acceptable bid is important because it establishes the 
starting bid at the BLM's oil and gas lease sale auctions.
Section 3120.13 Protests
    The proposed rule would rename this section from ``Protests and 
appeals'' to ``Protests'' and would update the paragraphs in this 
section to change the term ``appeal'' to ``protest.'' This change 
reflects IBLA decisions providing that the current use of the term 
``appeal'' is imprecise and creates confusion. Refer to Wyoming Outdoor 
Council, et al., 156 IBLA 377 (2002). The BLM's issuance of a Notice of 
Competitive Lease Sale is not an appealable action, because a notice 
merely distributes and communicates general information about a 
proposed action. The term ``protest,'' which is any objection raised by 
any person before an action is taken by the BLM, is the proper term. 
Appeals are covered under 43 CFR 3000.40 and do not need to be repeated 
in this section.
Section 3120.30 Nomination Process
    The BLM is proposing to update the process by which it formally 
nominates parcels for sale at a competitive auction. The BLM is 
considering using this process for certain BLM state offices or for 
future leases sales and requests comments on whether the regulations 
should retain this process and, if so, what changes to the formal 
nomination process should be made.
    In 1988, following the passage of FOOGLRA, the BLM published new 
oil and gas regulations that established two separate processes for 
leasing public lands: (1) the informal process, which primarily relies 
on EOIs from the public; and (2) the formal nomination process. 53 FR 
22829 (``the final rulemaking provides administrative flexibility to 
allow for either informal EOIs or a formal nomination process to 
determine the lands offered competitively''). Aside from a few test 
sales following the enactment of FOOGLRA, the BLM has never employed 
the formal nomination process. See 53 FR 22829 (``the Director elects 
to permit informal expressions of interest to be submitted to the 
proper BLM office but declines at this time to employ formal 
nominations under 43 CFR 3120.30''). However, the existing regulations, 
as well as the BLM's current competitive leasing handbook, continue to 
provide for the use of the formal nomination process, following notice 
to the public in the Federal Register.
    The BLM believes that aspects of this process could be used as a 
possible mechanism to implement the recommendations from the DOI's 
November 2021 ``Report on the Federal Oil and Gas Leasing Program,'' 
including ``carefully consider[ing] what lands make the most sense to 
lease in terms of expected yields of oil and gas, prospects of earning 
a fair return for U.S. taxpayers, and conflicts with other uses'' and 
``evaluat[ing] operational adjustments to its leasing program that will 
avoid nomination or leasing of low potential lands.'' \16\ The proposed 
rule would update the following sections for the formal nomination 
process with the intent to make these nominations nonbinding as the BLM 
considered a nomination to be similar to the noncompetitive pre-sale 
leasing process, and the IRA removed the noncompetitive leasing 
process. In addition, the rule proposes to eliminate the allowance for 
unnominated parcels to become available for noncompetitive leasing.
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    \16\ https://www.doi.gov/sites/doi.gov/files/report-on-the-federal-oil-and-gas-leasing-program-doi-eo-14008.pdf.
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Section 3120.31 General
    The proposed rule would update this paragraph to remove the 
requirement that a nomination be submitted with a national minimum bid. 
The purpose of removing this requirement is to make formal nominations 
nonbinding. To provide the BLM with flexibility, this paragraph would 
also be updated to remove the citation to 43 CFR 3120.4; that would 
remove the requirement that a List of Lands Available for Competitive 
Nominations be posted in the same manner as the Notice of Competitive 
Lease Sale. This paragraph would also be updated to include language 
stating that nominations may

[[Page 47590]]

be filed on a form or by a method approved by the Director, providing 
the BLM with flexibility and discretion to continue to improve the 
program (by, for example, allowing the public to send electronic 
nominations).
Section 3120.32 Filing of a Nomination for Competitive Leasing.
    The proposed rule would revise the introductory paragraph under 
this section to state that nominations may be filed ``on a form or 
using a method approved by the Director'' similar to the change in 
Sec.  3120.31 described earlier. The existing paragraph (b) would be 
revised to remove the second sentence referring to the execution of a 
nomination constituting a legally binding offer, due to the removal of 
the noncompetitive leasing process as prescribed by the IRA. The 
existing paragraph (c) would be updated to remove the reference to 
refunding all moneys if the nomination has not been completed or timely 
filed, since the administrative filing fees are nonrefundable. The 
existing paragraph (d) would be updated to remove the requirement that 
a nomination must be submitted with a minimum bid and first year rental 
to reflect the nonbinding nature of the nomination. Through these 
changes, the only fee that would be required to be submitted with a 
nomination is the nonrefundable, administrative filing fee, as 
specified in the proposed 43 CFR 3000.120.
Section 3120.3-3 Minimum Bid and Rental Remittance
    The proposed rule would remove this existing section in its 
entirety, consistent with the changes made to the nomination process, 
to make formal nominations nonbinding.
Section 3120.3-4 Withdrawal of a Nomination
    The proposed rule would remove this existing section in its 
entirety, consistent with the changes made to the nomination process, 
to make formal nominations nonbinding.
Section 3120.33 Parcels Receiving Nominations
    The proposed rule would redesignate this section from 43 CFR 
3120.3-5 to 43 CFR 3120.33 due to the proposed removal of the sections 
preceding this one. The language for parcels receiving nominations 
would be updated to use ``may'' (rather than ``shall'') be included in 
a Notice of Competitive Lease Sale to be consistent with the BLM's 
statutory discretion to lease.
Section 3120.3-6 Parcels Not Receiving Nominations
    The proposed rule would remove this section in its entirety, due to 
the removal of the noncompetitive leasing process, consistent with 
changes made by the IRA.
Section 3120.3-7 Refund
    The proposed rule would remove this section because the minimum bid 
and first year's rental would not be required for nominations, as 
explained earlier. The administrative filing fees found under the 
proposed 43 CFR 3000.120 are nonrefundable and would not be refunded to 
nominators who are unsuccessful at the competitive auction.
Expression of Interest
    The proposed rule would add a new heading, ``Expression of 
Interest,'' to include rules for receiving EOIs for competitive 
leasing.
Section 3120.41 Process
    The proposed rule would add requirements for submitting an EOI to 
the BLM. Paragraph (a) would state that a party submitting an EOI must 
include the submitter's name and address and must submit the EOI 
through the BLM's online leasing system. The National Fluids Lease Sale 
System (NFLSS) supports BLM administration of the leasing program for 
Federal onshore oil and gas and geothermal leasing. Using the NFLSS for 
the submittal of EOIs gives the BLM the capability for real-time 
reporting, which can streamline the leasing process and reduce the 
BLM's costs by (1) eliminating data entry by BLM staff, placing the 
onus for correct EOI submissions on the submitter; (2) automatically 
publishing EOIs in the NFLSS, which facilitates transparency of the EOI 
process; and (3) supporting the BLM's communication with submitters by 
allowing them to track the status of their EOIs through the NFLSS.
    Paragraph (b) would require the use of legal land descriptions in 
EOIs. The scenarios cover: (1) lands surveyed under the public land 
survey system; (2) unsurveyed lands; (3) lands approved by protracted 
surveys; (4) lands that have water boundaries; (5) fractional mineral 
interest in lands; and (5) fractional interest lands. The proposed rule 
would add the requirement under paragraph (b)(6) that the submitter 
provide the surface owner information for split estate lands to reflect 
current policy in Handbook H-3120-1, Competitive Leases, and add 
paragraph (7) to allow the BLM to accept an acquisition or tract number 
in lieu of the legal land description, if it constitutes an adequate 
description of the lands.
    Paragraph (c) would allow the submission of more than one EOI by a 
submitter, so long as each expression separately satisfies the 
requirements of paragraph (b).
    Paragraph (d) would state that each EOI must include the filing fee 
set out in the proposed 43 CFR 3000.120.
    Paragraph (e) would allow the BLM to include lands in a lease sale 
on its own initiative.
    Paragraph (f) would state that, when determining whether the BLM 
should offer lands specified in an EOI at a lease sale, the BLM would 
evaluate the Secretary's obligations to manage public lands for 
multiple use and sustained yield and to take any action required to 
prevent unnecessary or undue degradation of the lands and their 
resources, along with other applicable legal requirements. At a 
minimum, the BLM would consider: (1) proximity to oil and gas 
development existing at the time of the BLM's evaluation, giving 
preference to lands upon which a prudent operator would seek to expand 
existing operations; (2) the presence of important fish and wildlife 
habitats, including wetland habitats, or connectivity areas, giving 
preference to lands that would not impair the proper functioning of 
such habitats or corridors; (3) the presence of historical properties, 
sacred sites, and other high-value leasing lands, giving preference to 
lands that would not impair the cultural significance of such 
resources; (4) the presence of recreation and other important uses or 
resources, giving preference to lands that would not impair the value 
of such uses or resources; and (5) the potential for oil and gas 
development, giving preference to lands with high potential for 
development.
    Although paragraph (f) lists specific criteria for the BLM to 
review, the listed criteria do not limit the BLM's authority to fulfill 
its legal obligations under FLPMA, NEPA, and MLA. The BLM would 
consider additional criteria and factors when evaluating parcels for a 
lease sale. The BLM requests comments on additional criteria the BLM 
might consider when giving preference to leasing parcels. Should this 
rule include among the listed criteria compliance with the goals and 
objectives of applicable land use plans and protecting communities with 
environmental justice concerns? How can the rule better achieve the 
BLM's intent to give preference to leasing parcels where development 
would have less impacts on nearby communities?

[[Page 47591]]

    The BLM proposes that promulgating rules for this EOI preference 
process would provide a mechanism for implementing the recommendations 
from the DOI's ``Report on the Federal Oil and Gas Leasing Program,'' 
including the recommendation to ``carefully consider what lands make 
the most sense to lease in terms of expected yields of oil and gas, 
prospects of earning a fair return for U.S. taxpayers, and conflicts 
with other uses'' and to ``evaluate operational adjustments to its 
leasing program that will avoid nomination or leasing of low potential 
lands.'' This process would ensure that oil and gas leasing on public 
lands occurs in a way that is consistent and deliberate, focus 
development where there is the most potential for recovery, and allow 
the agency to manage public lands for other uses as well, including 
conservation and restoration of wildlife habitat. For example, offering 
leases where current infrastructure exists should reduce the overall 
footprint of energy development and limit wildlife impacts and habitat 
fragmentation. Giving preference to leasing outside of important 
wildlife habitat would help to ensure that important seasonal ranges 
remain connected, and that species can access important resources 
undeterred as they move across the landscape.
    The BLM would implement this EOI preference process to conserve 
certain public lands while ensuring the American taxpayer receives a 
fair return and meeting the energy demands of the future. The BLM does 
not intend that parcels must meet all five of the preference criteria 
in order to be available for leasing, and the term ``preference'' 
should not be interpreted to mean ``absolute.'' The BLM recognizes the 
need for balance and for the preference criteria to be situational and 
considered on a case-by-case basis. The preference criteria generally 
would be applied before the NEPA analysis is completed. A summary of 
how the criteria apply would be included for public comment. The BLM 
could then take the public comments into account when considering 
current and future sales.
    The BLM requests comments addressing whether or how the preference 
criteria should be applied when the Federal surface lands are 
administered by another Federal agency. For example, in National Forest 
System lands, the Forest Service typically prepares a pre-leasing NEPA 
analysis that the BLM subsequently relies upon when making its leasing 
determination.
    Paragraph (g) would allow the BLM to reconfigure the lands that are 
included in an expression of interest in the parcels that the BLM 
offers for sale.
Section 3120.42 Agency Inventory of Leasing
    The proposed rule would add this new section to provide that 
periodically the BLM will calculate the acreage for which EOIs have 
been submitted in the previous year, along with the total acreage 
offered for lease. This would clarify how the BLM will comply with 
section 50265 of the IRA, consistent with Instruction Memorandum 2023-
006, Implementation of Section 50265 in the Inflation Reduction Act for 
Expressions of Interest for Oil and Gas Lease Sales. The BLM requests 
public comments on this point.
Section 3120.50 Notice of Competitive Lease Sale
    The proposed rule would redesignate this section from 43 CFR 3120.4 
to 43 CFR 3120.50 per the previously mentioned reorganization.
Section 3120.51 General
    The proposed rule would redesignate this section from 43 CFR 
3120.4-1 to 43 CFR 3120.51 per the previously mentioned reorganization.
Section 3120.52 Posting Timeframes
    The proposed rule would revise the title of this section from 
``Posting of notice'' to ``Posting timeframes.'' The proposed rule 
would add a new paragraph (a), providing that, after identifying a 
preliminary list of lands for a lease sale, the BLM would provide a 
scoping period, of not less than 30 calendar days, for public comment. 
The BLM uses preliminary parcel lists to roughly organize potential 
parcels for sale and to initiate environmental review. While the BLM 
invites public feedback on the parcel list, preliminary parcel lists do 
not constitute an official notice of a proposed BLM action or final 
action and are not subject to protests or appeals.
    The proposed rule would add a new paragraph (b) providing that, 
after drafting a preliminary NEPA document for a lease sale, the BLM 
would provide a comment period, not less than 30 calendar days. Similar 
to preliminary parcel lists, preliminary NEPA documents do not 
constitute an official notice of a proposed BLM action or a final 
action and are not subject to protests or appeals.
    The proposed rule would add a new paragraph (c) providing that the 
BLM would post the Notice of Competitive Lease Sale at least 60 
calendar days prior to the sale and would make available to the public 
a list of lands to be offered for competitive sale. This is an 
additional 15 calendar days from the BLM's current practice. The 
extended posting timeframe would provide the BLM more time to resolve 
protests prior to any proposed lease sale. The BLM routinely receives 
one or more protests on posted sale offerings, but it often does not 
receive the protests until shortly before or on the morning of the 
protest deadline. The BLM state offices need a reasonable amount of 
time to review the reasons for the protest in advance of the sale and 
decide if withdrawing the protested parcel from the sale is 
appropriate. Consequently, in new paragraph (d), the BLM would provide 
that the protest period is allowed only for the first 30 days that the 
sale notice is posted to provide the second 30 days as the time in 
which the BLM would review protests.
    The proposed rule would also remove the requirement for the notice 
to be posted in the BLM office or any surface managing agency office. 
In the BLM's experience, the public finds information concerning 
Notices of Competitive Lease Sale through the NFLSS or on the 
individual state office web page, rather than a posted sale notice in 
the individual offices. The BLM believes that remaining silent in the 
regulations on how the sale notice would be made available to the 
public allows the BLM the flexibility and discretion to continue to 
improve the program. This silence, however, does not in any way 
abnegate any applicable legal obligations to provide notice in the 
first instance.
    The proposed rule would also add a new paragraph (d) to state that 
the BLM would provide a protest period, of not less than 30 days, for 
public input on the upcoming lease sale during the first 30 days of the 
60-day public notice period provided for in paragraph (c) earlier. 
Establishing a deadline for filing protests ensures an orderly and 
efficient leasing process. Finally, the proposed rule would add a new 
paragraph (e) to state that ``the BLM will make available the final 
NEPA compliance documents prior to issuing a lease from the lease 
sale.'' The BLM plans to post the NEPA compliance documents on 
ePlanning, but the proposed rule would not codify that practice so that 
BLM retains flexibility for future sales.
Competitive Auction
    The proposed rule would redesignate this section from 43 CFR 3120.5 
to remove the regulatory section number, as this is a heading that has 
no text associated it. The proposed rule would revise the title of this 
section from ``Competitive sale'' to ``Competitive

[[Page 47592]]

auction,'' consistent with the proposed definition.
Section 3120.61 Competitive Auction
    The proposed rule would redesignate this section from 43 CFR 
3120.5-1 to 43 CFR 3120.61 due to the previously mentioned 
reorganization. The proposed rule would rename this section from ``Oral 
or internet-based auction'' to ``Competitive auction'' and update the 
paragraphs in this section to replace the reference to oral or 
internet-based bidding with the term ``competitive auction,'' 
consistent with the proposed definition.
    Paragraph (a) would also be updated to remove the reference to the 
formal nominations process, consistent with the changes made to the 
nomination process.
    For this same reason, paragraph (c) would be removed in its 
entirety.
Section 3120.62 Payments Required
    The proposed rule would redesignate this section from 43 CFR 
3120.5-2 to 43 CFR 3120.62 due to the previously mentioned 
reorganization.
    The proposed rule would update paragraph (b)(1) to increase the 
minimum bonus bid to reference 43 CFR 3000.130, consistent with the 
change described earlier in the proposed 43 CFR 3120.12.
    The proposed rule would update paragraph (c) to replace ``10 
working days'' with ``10 business days'' and would replace the 
reference to ``oral or internet-based auction'' with the term 
``competitive auction.''
Section 3120.63 Award of Lease
    The proposed rule would redesignate this section from 43 CFR 
3120.5-3 to 43 CFR 3120.63 due to the previously mentioned 
reorganization.
    The proposed rule would update paragraph (c) to remove the 
reference to noncompetitive offers, consistent with the proposed 
removal of 43 CFR part 3110.
    The proposed rule would revise paragraph (d) to remove the 
reference to noncompetitive lease offers as required by the IRA. The 
proposed rule would update Paragraph (d) to require the BLM to resolve 
all protests covering the lands to be leased prior to issuing a lease 
to comport with the BLM's longstanding policy not to issue a lease 
until all protests covering the lands to be leased have been resolved 
by the BLM.
    Finally, the proposed rule would add a statement that leases would 
be issued within 60 calendar days following resolution of any protests 
not resolved prior to the sale and payment by the successful bidder of 
the remainder of the bonus bid, if any, and the annual rental for the 
first lease year. This text corresponds to the provisions in the MLA at 
30 U.S.C. 226(b)(1)(A). The proposed rule would also add to paragraph 
(e) a provision stating that, if the BLM cannot issue the lease within 
60 days, the BLM may reject the offer. The BLM has received an 
increased number of protests and legal challenges to its decision to 
offer lands for lease or issue leases. These protests and challenges 
may require the BLM to complete a corrective environmental analysis to 
reach resolution. The protests, challenges, and new analysis can lead 
to lengthy delays after the sale before the BLM can issue the lease, 
with the BLM holding the first-year rentals and bonus bids collected 
from the sales. In these cases, the BLM's policy is to reach out to the 
successful bidder to see if they want to decline the lease or continue 
to wait until there is a resolution. If the successful bidder declines 
the lease, the BLM would reject the lease offer.
Section 3120.70 Parcels Not Bid on at Auction
    The proposed rule would redesignate this section from 43 CFR 3120.6 
to 43 CFR 3120.70 due to the previously mentioned reorganization. The 
proposed rule would update the paragraph to replace the reference to 
``oral or internet-based'' auction with the term ``competitive 
auction,'' consistent with the changes made earlier in this subpart. 
The section would also remove references to noncompetitive leases 
pursuant to the IRA and would provide that parcels not bid on at 
auction would be available for future competitive sale.
Section 3120.80 Future Interest
    The proposed rule would redesignate this section from 43 CFR 3120.7 
to 43 CFR 3120.80 due to the previously mentioned reorganization.
Section 3120.81 Nomination or Expression of Interest To Make Lands 
Available for Competitive Lease
    The proposed rule would redesignate this section from 43 CFR 
3120.7-1 to 43 CFR 3120.81 due to the previously mentioned 
reorganization. The proposed rule would update the title and paragraph 
of this section from ``Nomination'' to ``Nomination or Expression of 
Interest to make lands available for competitive lease,'' consistent 
with the changes made in this subpart.
Section 3120.82 Future Interest Terms and Conditions
    The proposed rule would redesignate this section from 43 CFR 
3120.7-2 to 43 CFR 3120.82 due to the previously mentioned 
reorganization.
Section 3120.83 Compensatory Royalty Agreements
    The proposed rule would redesignate this section from 43 CFR 
3120.7-3 to 43 CFR 3120.82 due to the previously mentioned 
reorganization.
14. Section-by-Section Discussion for Changes to 43 CFR Subpart 3137
    The proposed rule would revise two of the sections and their 
headings in the existing subpart 3137 regulations. The purpose of 
updating these sections is to add the processing fees for unit 
applications and successor operators.
Section 3137.23 NPR-A Unitization Application
    The proposed rule would update the title from ``What must I include 
in my NPR-A unitization application?'' to ``NPR-A unitization 
application.'' The proposed rule would update paragraphs (d)(1) and (4) 
to change ``you'' to ``the operator.'' This is intended to clarify who 
``you'' is in this section. The proposed rule would add a new paragraph 
(i) to include the required new processing fee for unit agreement 
applications found in the fee schedule in 43 CFR 3000.120 of this 
chapter.
Section 3137.61 Change in Unit Operators
    The proposed rule would update the title from ``How do I change 
unit operators?'' to ``Change in unit operators.'' The proposed rule 
would update paragraph (a)(1)(i) by changing ``It'' to ``The new 
operator.'' This is intended to clarify who ``it'' references in this 
section. The proposed rule would add a new paragraph (a)(3) to include 
the required new processing fee for designation of a successor operator 
found in the fee schedule in 43 CFR 3000.120 of this chapter.
15. Section-by-Section Discussion for Changes to 43 CFR Subpart 3138
    The proposed rule would revise one section and its headings in the 
existing 43 CFR subpart 3138 regulations. The purpose of updating this 
section is to add the processing fee for subsurface storage agreement.
Section 3138.11 Applications for a Subsurface Storage Agreement
    The proposed rule would revise the title from ``How do I apply for 
a subsurface storage agreement?'' to

[[Page 47593]]

``Applications for a subsurface storage agreement.'' The proposed rule 
would update paragraphs (a)(6), (b), and (c) to change ``you'' to ``the 
operator.'' This is intended to clarify who ``you'' references in this 
section. The proposed rule would add a new paragraph (a)(12) to include 
the required new processing fee for subsurface gas storage agreement 
applications found in the fee schedule in 43 CFR 3000.120 of this 
chapter.
16. Section-by-Section Discussion for Changes to 43 CFR Subpart 3140
    The proposed rule would not make any revisions to the section 
headings in the existing 43 CFR subpart 3140 regulations.
Section 3140.5 Definitions
    The BLM is proposing to alphabetize the definitions in this 
section.
Section 3140.11 Existing Rights
    The proposed rule would update paragraph (a) to state the 
application time period ended on November 15, 1983. These regulations 
are not proposed for elimination because the BLM is still processing 
applications. The BLM has been working on the planning efforts 
surrounding the special tar sand areas and the environmental analysis 
under NEPA to support the conversion to a combined hydrocarbon lease. 
This process has delayed the BLM in issuing decisions related to the 
applications.
Section 3140.12 Notice of Intent To Convert
    The proposed rule would update paragraphs (a) and (c) to have the 
specific effective date of November 15, 1983, to ensure there is no 
confusion related to this rulemaking. In addition, the language in this 
section would be updated to past tense.
Section 3140.14 Other Provisions
    The proposed rule would increase the rental rate in paragraph (b) 
from $2 per acre to the annual rental, as specified in 43 CFR 3000.130, 
consistent with the rental increases in this proposed rule.
    The proposed rule would update paragraph (c)(2) to update the 
royalty rate for a combined hydrocarbon lease from 12.5 percent to 
16.67 percent to implement provisions of the IRA. The proposed rule 
would update paragraph (c)(3) to clarify that the royalty rate 
reduction requested for tar sands will not apply to the oil and gas and 
vice versa. Due to the different methods to extract tar sands versus 
oil and gas, the lessee may need a royalty rate reduction for one 
resource to continue operations and no royalty rate reduction for 
another resource.
Section 3140.23 Application Requirements
    The proposed rule would update paragraph (a) to clarify that the 
application window has closed. The remaining paragraphs under this 
section would remain unchanged because the BLM continues to process 
applications; however, the BLM proposed to update the language to past 
tense.
Section 3140.42 Issuance of the Combined Hydrocarbon Lease
    The proposed rule would update paragraph (d) to state that the BLM 
would issue one combined hydrocarbon lease to cover the existing oil 
and gas lease or valid claim based on mineral locations which have been 
approved for conversion within the special tar sand area. The existing 
paragraph (d)(2) is eliminated in its entirety as the BLM would not 
issue a combined hydrocarbon lease covering multiple oil and gas 
leases. Together, these changes permit the existing lease to be 
converted to a combined hydrocarbon lease without changes to the legal 
land description or leased area. The BLM believes that converting 
multiple leases into a combined hydrocarbon lease is not necessary, 
because combined hydrocarbon leases can be unitized. Unitization allows 
for the joining together of large areas such as an entire reservoir or 
field to optimize operations. Existing combined hydrocarbon leases have 
already been unitized, and the BLM believes there is no need to 
maintain the conversion of multiple leases in the regulations.
Section 3140.50 Duration of the Lease
    The proposed rule would update the paragraph in this section to 
state that if the applicant withdraws the combined hydrocarbon lease 
application or the BLM denies the conversion application, the 
suspension on the oil and gas lease would be lifted and the term would 
be adjusted by the time remaining on the term of the lease.
Section 3140.70 Lands Within the National Park System
    The proposed rule would update the paragraph in this section to 
make it clear that the conversion application window closed in 1983, 
consistent with the previously described proposed changes.
17. Section-by-Section Discussion for Changes to 43 CFR Subpart 3141
    The proposed rule would not make any revisions to section headings 
in the existing 43 CFR subpart 3141 regulations.
Section 3141.10 General
    The proposed rule would update paragraph (b) to remove the 
reference to noncompetitive leasing, as described in 43 CFR subpart 
3110. This change is consistent with the implementation of the IRA. The 
proposed rule would update paragraph (g) to increase the minimum 
acceptable bid from $2 per acre to reference the minimum bid in 43 CFR 
3000.130, consistent with the change described earlier in 43 CFR 
3120.12.
Section 3141.22 Exploration Licenses
    The proposed rule would update paragraph (b)(2) to refer to the fee 
schedule in 43 CFR 3000.120. The proposed rule would update paragraph 
(b)(4) to remove the triplicate filing requirement. The proposed rule 
would update paragraph (e)(2) to increase the rental from $2 per acre 
for new oil and gas leases issued after August 16, 2022, to the rental 
rate in 43 CFR 3000.130, consistent with the requirements of the IRA.
Section 3141.52 Term of Lease
    The proposed rule would update paragraph (a) to clarify that this 
section pertains to the primary term of oil and gas leases in special 
tar sands areas.
Section 3141.53 Royalties and Rentals
    The proposed rule would increase the royalty in paragraph (a) from 
12.5 percent to 16.67 percent and change the reference from the 
``Minerals Management Service'' to the ``ONRR,'' consistent with the 
other changes in this proposed rule and the IRA.
    The proposed rule would update paragraph (b) to reference the oil 
shale lease procedures for reducing the royalty rate applicable to a 
tar sand lease prior to the commencement of commercial operations, 
currently at 43 CFR 3903.54. The BLM considers the current regulations 
to be unclear on which procedures to reference to reduce the royalty 
rate applicable to a tar sand lease prior to the commencement of 
commercial operations.
    The proposed rule would update paragraph (c) to simply state that 
the annual rental for all combined hydrocarbon leases is as stated in 
the lease. The BLM will increase the rentals for combined hydrocarbon 
leases issued after the effective date of the final rule using 43 CFR 
3000.130 for the rental rate, consistent with the changes described 
previously.
    The proposed rule would likewise update paragraph (d) to simply 
state that

[[Page 47594]]

the annual rental for all tar sand leases is as stated in the lease. 
The BLM will increase the rentals for tar sand leases issued after the 
effective date of the final rule using 43 CFR 3000.130 for the rental 
rate, consistent with the changes described previously.
Section 3141.62 Publication of a Notice of Competitive Lease Offering
    The proposed rule would remove paragraph (a) in its entirety, 
eliminating the requirement that the BLM publish a lease sale notice in 
the Federal Register and in a newspaper and providing the BLM with 
flexibility when determining the appropriate notice method. The 
remaining paragraph in this section, which refers to making a sale 
notice available to the public, would be extended to combined 
hydrocarbon leases in addition to the tar sand and oil and gas leases 
listed in this paragraph. The proposed rule would change the remaining 
paragraph to make the Notice of Competitive Lease Sale requirements 
consistent with the proposed 43 CFR 3120.61 requirements.
Section 3141.63 Conduct of Sales
    The proposed rule would eliminate paragraph (a) in its entirety and 
update the proposed paragraph (b) so there is a single consistent 
approach for conducting lease sales by competitive auction for both 
combined hydrocarbon leases and tar sand leases. This change would 
remove the written sealed bid approach for combined hydrocarbon leases.
    The proposed paragraph (b)(2) would be updated to increase the 
minimum bonus bids for combined hydrocarbon leases and tar sand leases 
issued after the effective date of the final rule, and it moves the 
bids to 43 CFR 3000.130 for the Fiscal Terms of New Leases, consistent 
with the changes described earlier. Finally, the BLM proposes to set 
the minimum bonus bid for hydrocarbon leases based upon an economic 
evaluation, which the BLM will complete prior to holding a competitive 
sale for a hydrocarbon lease.
Section 3141.65 Rejection of Bid
    The proposed rule would eliminate existing Sec.  3141.6-4. Since 
the BLM would hold competitive auctions in a similar manner for oil and 
gas leases, tar sand leases, and hydrocarbon leases and would use the 
economic analysis to set the minimum bonus bid, the BLM would not need 
to reject a bid based upon the fair market value. The reference to the 
``one-fifth bonus'' was changed to ``minimum bonus'' as needed to 
reflect the proposed changes to have a consistent sale approach for 
both tar sand leases and hydrocarbon leases.
Section 3141.70 Award of Lease
    The proposed rule would eliminate the requirement for triplicate 
copies of the lease forms to be executed by the successful bidder. In 
addition, the proposed rule would update this section to specify the 
30th ``calendar day'' in order to reduce confusion.
18. Section-by-Section Discussion for Changes to 43 CFR Subpart 3142
    The proposed rule would rename the title of this subpart from 
``Paying Quantities/Diligent Development for Combined Hydrocarbon 
Leases'' to ``Paying Quantities/Diligent Development for Combined 
Hydrocarbon and Tar Sand Leases.'' The proposed rule would not make any 
revisions to the section headings in the existing 43 CFR subpart 3142 
regulations.
Section 3142.1 Purpose
    The proposed rule would add ``and tar sand leases'' so that this 
subpart applies to both combined hydrocarbon and tar sand leases.
Section 3142.5 Definitions
    The proposed rule would amend the first defined term to be 
``Production in paying quantities for combined hydrocarbon leases.'' 
The proposed rule would add definitions for the terms ``Production in 
paying quantities for oil and gas leases'' and ``Production in paying 
quantities for tar sand leases.''
Section 3142.21 Minimum Production Schedule
    The proposed rule would add a new paragraph (b) to specify that the 
minimum annual tar sand production schedule for the lease or unit 
operations would be set at an economical level. The proposed new 
paragraph (b) would also state that, if the operator or lessee cannot 
establish economic production, the lease would terminate at the end of 
the lease's primary term.
19. Section-by-Section Discussion for Changes to 43 CFR Subpart 3151
    The proposed rule would revise Sec.  3151.10 and add a new Sec.  
3151.30. The BLM proposes these changes to protect the fiscal and 
scientific interests of the American public by ensuring the BLM has 
adequate cost recovery mechanisms for geophysical exploration permits 
and that it has access to the information obtained by the permittees.
Section 3151.10 Notice of Intent To Conduct Oil and Gas Geophysical 
Exploration Operations
    The introductory paragraph would be updated to include the 
requirement for the filing fee.
Section 3151.30 Collection and Submission of Data
    The proposed rule would add a new section entitled ``Collection and 
submission of data'' that would require the permittee to submit to the 
BLM all data and information obtained from the exploration permit. This 
new requirement is consistent with exploration permits carried out in 
Alaska, as set forth in the existing regulations at 43 CFR 3152.6.
20. Section-by-Section Discussion for Changes to 43 CFR Subpart 3160
    The proposed rule would not make any revisions to the numbering or 
section headings in the existing 43 CFR 3160.0-5 regulations.
Section 3160.0-5 Definitions
    The BLM is proposing to modify the existing definition for ``New or 
resumed production under section 102(b)(3) of the Federal Oil and Gas 
Royalty Management Act.'' The revised definition would remove the 
sentence describing circumstances in which a gas well would be 
considered to have been off of production, providing consistency in the 
BLM's management of both oil wells (which does not include this 
language) and gas wells. The BLM is proposing to add a new requirement 
for operators to notify the BLM when they shut-in a gas well, as 
described in greater detail under the proposed changes for 43 CFR 
3162.3-4. The potential amount of plugging and remediation liability 
related to long-term shut-in wells is often difficult to identify. The 
update would therefore require operators to notify the BLM when it is 
shutting in a well and would allow the BLM to adequately track and 
evaluate the risk of nonproducing wells.
    The BLM proposes new definitions for ``Shut-in well'' and 
``Temporarily abandoned well.'' These definitions would clarify the 
terms for the new proposed requirements. The definition would describe 
a ``Shut-in well'' as a nonoperational well that can physically and 
mechanically operate by opening valves or activating existing 
equipment. The definition would describe a ``Temporarily abandoned 
well'' as a nonoperational well that is not physically or mechanically 
capable of production or injection without additional equipment or 
without

[[Page 47595]]

servicing the well, but that may have future beneficial use.
    These definitions were pulled from the BLM's existing policy and 
are similar to existing industry standard definitions for the two well 
statuses. The International Association of Drilling Contractors (IADC) 
and the Alaska Oil and Gas Conservation Commission defines ``shut in'' 
as ``to close a well's surface, wellhead, or subsurface valves to halt 
flow from or into the well, with the completion interval remaining open 
to the tubing below the closed valve'' (see https://iadclexicon.org/shut-in/). The IADC and the Colorado Oil and Gas Conservation 
Commission defines ``temporarily abandoned well'' to ``mean a well 
which is incapable of production or injection without the addition of 
one or more pieces of wellhead or other equipment, including valves, 
tubing, rods, pumps, heater-treaters, separators, dehydrators, 
compressors, piping or tanks'' (see https://iadclexicon.org/temporarily-abandoned-well/). The BLM proposes to add the statement 
``may have future beneficial use'' into the temporarily abandoned well 
definition to clarify that the BLM expects an operator to promptly plug 
a well without future beneficial use. In some cases, the operator could 
use a nonproductive well bore for enhanced recovery operations or water 
disposal, even though the well cannot produce hydrocarbons.
21. Section-by-Section Discussion for Changes to 43 CFR Subpart 3162
    The proposed rule would not make any revisions to the numbering or 
section headings in the existing 43 CFR 3162.3-4 regulations.
Section 3162.3-4 Well Abandonment
    The proposed rule would modify paragraph (c) to state that no well 
may be temporarily abandoned for more than 30 days without the prior 
approval of the authorized officer and unless the operator provides 
adequate and detailed justification for the abandonment, verifies the 
mechanical integrity of the wells, and isolates the completed 
interval(s). The BLM would not accept vague assertations that the well 
may produce. See Goldmark Engineering, Inc., 146 IBLA 225, 227 (1998). 
The BLM requests comments on whether a temporary abandonment should 
trigger a bond review in addition to the adequate and detailed 
justification for the abandonment.
    In addition, except in extraordinary circumstances, the proposed 
rule would provide that the maximum period of time for an operator to 
delay permanent abandonment of a temporarily abandoned well would not 
exceed 4 years. The Energy Policy Act of 2005, as amended by the IIJA, 
defines an idled well as ``a well that has been nonoperational for at 
least 4 years and for which there is no anticipated beneficial use'' 
(see 42 U.S.C. 15907). Therefore, to help avoid wells becoming idled in 
the first place, the BLM is proposing new reporting and operational 
requirements for operators of temporarily abandoned wells. When an 
operator does not address a temporarily abandoned well by returning the 
well to production in paying quantities (i.e., production sufficient to 
cover the operator's operational costs) or plugging and permanently 
abandoning the well, historical data available to the BLM indicates 
that such wells are at an increased risk of becoming orphaned.
    The proposed rule would add a new paragraph (d) outlining new 
requirements for operators of shut-in wells. Paragraph (d)(1) would 
require notification to the BLM of the well's shut-in status and shut-
in date within 90 days of well shut-in. Paragraph (d)(2) would require, 
within 3 years of well shut-in, the operator to provide the authorized 
officer with verification of the mechanical integrity of the well and 
confirmation that the well remains capable of producing in paying 
quantities. Currently, an operator is not required to inform the BLM 
when they shut-in a well, and these additions would allow the BLM to 
better track its shut-in well inventory and to take proactive steps to 
ensure that those wells do not become idled, as directed by Congress at 
42 U.S.C. 15907.
    The proposed rule would add a paragraph (d)(3) stating that, within 
4 years of well shut-in, the operator must: (i) permanently abandon the 
well; (ii) resume production in paying quantities; or (iii) provide the 
authorized officer with a detailed plan and timeline for future 
beneficial use for the well. The proposed rule would further provide 
that if the BLM determines that there is a legitimate future beneficial 
use for the well, it may allow the operator to delay permanent 
abandonment by 1 year. The proposed rule would provide that the 
authorized officer may grant additional delays in 1-year increments, 
provided that the operator confirms the future beneficial use of the 
well and is making verifiable progress on returning the well to a 
beneficial use. The BLM believes these new requirements with yearly 
interval checks would help operators manage shut-in wells, preventing 
them from becoming orphaned in the future.
22. Section-by-Section Discussion for Changes to 43 CFR Subpart 3165.1
    The proposed rule would revise the 43 CFR 3165.1 heading from 
``Relief from operating and producing requirements'' to ``Relief from 
operating and/or producing requirements.''
Section 3165.1 Relief From Operating and/or Producing Requirements
    The purpose of this section is to describe the requirements for 
lease suspension applications. The BLM proposes to update this section 
to encourage diligent development of leased lands and ensure lease 
suspensions are justified and tied to an end date. The BLM is proposing 
to modify paragraph (b) to clarify who may apply for a lease 
suspension.
    The proposed rule would add a new paragraph (c) to state the BLM 
would not approve an application for a suspension of a lease in 
circumstances where an APD on the subject lease is filed less than 90 
calendar days before the expiration date of the lease. Applications for 
lease suspensions are often filed late in the primary term of a lease. 
Although lessees and operating rights owners are entitled to the full 
primary term of the lease, they are also responsible for timely filing 
required plans and necessary applications. Lessees and operating rights 
owners should not assume the BLM will grant a suspension merely to 
relieve them of their obligations of diligence and timeliness when 
complying with these and related requirements. See Vaquero Energy Inc., 
185 IBLA 233, 237 (2015). On average, the BLM requires 90 days to 
complete the required reviews and analysis before issuing a decision on 
an APD. This change would encourage lessees and operators to diligently 
pursue development when APDs are filed with the BLM near the end of the 
primary term of the lease; otherwise, the lease would expire.
    The proposed rule would also update the proposed paragraph (d) to 
ensure lease suspensions would not exceed 1 year when they are 
requested by the operator. If the circumstances that warranted the 
suspension are still applicable, a request to extend the suspension 
prior to the lifting date of the suspension would be required.
    The proposed rule would add a new paragraph (e) to state that BLM-
directed suspensions may exceed 1 year.
    The proposed rule would add a new paragraph (f) to state that lease 
suspensions would lift when they are no longer justified, when lifting 
the suspension is in the public interest of the lessor, or as stated in 
the approval

[[Page 47596]]

letter. The BLM requests comments on the best approach for making 
determinations on lease suspensions that would reduce the cost to the 
American public and encourage diligent development of leased lands. In 
June 2018, the GAO issued a final report entitled, ``BLM Could Improve 
Oversight of Lease Suspensions with Better Data and Monitoring 
Procedures'' (GAO-18-411). In summary, oil and gas leases on Federal 
lands generate billions of dollars in rents and royalty payments each 
year, but these revenues decline if leases are suspended (i.e., the 
lease term is placed on hold). In response to GAO recommendations, the 
BLM issued policy guidance requiring the BLM state offices to regularly 
review suspended leases and monitor lease suspensions to ensure that 
lease suspensions in effect are warranted.\17\ The BLM believes the 
proposed additions and updates are warranted to ensure lease 
suspensions are justified and tied to an end date.
---------------------------------------------------------------------------

    \17\ PIM 2019-007, Monitoring and Review of Lease Suspensions. 
https://www.blm.gov/policy/pim-2019-007.
---------------------------------------------------------------------------

23. Section-by-Section Discussion for Changes to 43 CFR Subpart 3171
    The proposed rule would not make any revisions to the numbering or 
section headings in the existing 43 CFR subpart 3171.6 regulations.
Section 3171.6 Components of a Complete APD Package
    The proposed rule would update the existing paragraph (b)(1)(i) to 
replace the phrase ``referenced to the National Spatial Reference 
System, North American Datum 1983 or latest edition'' with the phrase 
``generated by an electronic navigation system, and document the datum 
referenced to generate these coordinates.'' The BLM is proposing this 
change to modernize the existing language that dates to 2007 and avoid 
the need to incorporate by reference the National Spatial Reference 
System, North American Datum 1983.
Section 3171.14 Valid Period of Approved APD
    The proposed rule would not make any revisions to the numbering or 
section headings in the existing subpart 43 CFR 3171.14 regulations and 
proposes to adjust the valid period of time for approved APDs and 
address instances when an operator does not drill to total depth.
    The BLM reviewed the number of APD extensions granted in the past 
and estimates that operators request extensions on approximately 33 
percent or one-third of the APDs approved. The BLM approved 4,859 APDs 
in FY 2021 and expects to receive approximately 1,600 APD extension 
requests in FY 2023. This would result in an estimated 3,800 hours of 
BLM staff time and $136,000 annually to process APD extension requests, 
based upon an average processing time of 2.4 hours and processing cost 
of $85 per APD extension application. Therefore, the BLM proposes 
adjusting the valid period of time for approved APDs to reduce the cost 
to the American public and encourage diligent development of leased 
lands.
    To find the correct approach, the BLM reviewed the timeframe for 
operators to drill an approved APD based on well spuds from calendar 
year 2015 through calendar year 2021. On average, an operator spuds a 
Federal well 0.78 years after APD approval. Based on the data reviewed, 
74 percent of the wells were spud in the first year after APD approval, 
15 percent of the wells were spud in the second year after APD 
approval, 6 percent of the wells were spud in the third year after APD 
approval, and 5 percent of the wells were spud in fourth year after APD 
approval. Therefore, because APD approvals are ordinarily valid for 2 
years, only 11 percent of the wells spud required an APD extension 
approval from the BLM.
    The BLM also reviewed the valid period for State permits to drill 
based upon State regulations or conditions tied to the permits. The 
State permits are valid for different times depending on the state; 
however, the time frame ranges from 6 months to 2 years with some 
states granting extensions and some states requiring the operator to 
resubmit the APD for a new permit if the well is not drilled. The BLM 
summarizes the State's permit to drill terms in the following table:

------------------------------------------------------------------------
                                 Term for State
            State                permit to drill          Reference
------------------------------------------------------------------------
California..................  1-year permit with    Chapter 4.
                               an optional 1-year    Subchapter 1.
                               extension upon        Article 3. Sec.
                               application of the    1722(d).
                               operator.             Regulations here.
Colorado....................  3-year permit with    Permitting Process
                               no extensions..       Regulations: 311.a.
                                                     & b. Regulations
                                                     here.
Louisiana...................  6-month or 1-year     Title 30. RS 30:28.
                               permit. Must re-      section 28(B).
                               apply for the APD     Regulations here.
                               after it expires.
Montana.....................  6-month permit. Must  36.22.604 Permit
                               re-apply for the      Issuance--Expiratio
                               APD after the 6-      n--Extensions.
                               months.               Regulations here.
New Mexico..................  2-year permit with    Based on conditions
                               an optional 1-year    of approval tied to
                               extension upon        the permit, found
                               application by the    here. NM
                               operator on C-103.    regulations do not
                                                     specify permit
                                                     validity.
North Dakota................  1-year permit with    Found on ND DMR
                               the ability to        website here.
                               extend the APD with
                               a $100 filing fee.
Oklahoma....................  18-month permit with  Okla. Admin. Code
                               an optional 6-month   Sec.   165:10-3-
                               extension without     1(j). Regulations
                               fee. Only one         here.
                               extension may be
                               granted.
Texas.......................  2-year permit.......  Title 16. Part 1.
                                                     Chapter 3. section
                                                     3.5(g). Regulations
                                                     here.
Utah........................  1-year permit.......  R649-3-4. 6.
                                                     Regulations here.
Wyoming.....................  2-year permit with    WY OGCC Chapter 3.
                               the ability to        section 8(h).
                               resubmit the APD      Regulations here.
                               with an extension
                               filing fee for an
                               additional 2 years.
------------------------------------------------------------------------

    Therefore, the BLM is considering changes to this section and is 
requesting comments on the best approach to adjust APD extensions that 
would reduce the cost to the American public and encourage diligent 
development of leased lands. The BLM is considering two options. The 
first option would involve removing the option to extend APDs and 
changing the APD term from 2 years to 3 years. The second option would 
retain the 2-year APD term with

[[Page 47597]]

a potential for a 1-year extension. The BLM would require a filing fee 
based upon the required review in Instruction Memorandum 2023-011, 
Approved Application for Permit to Drill Extensions, and incorporate 
this policy for APD extensions into the regulations. Either option 
would continue to allow operators to spud 95 percent of the wells 
approved in the initial APD based upon the current time between APD 
approval and well spud. If the operator does not drill the APD in the 
time provided, then the operator would need to apply for a new APD.
    At this time, the BLM is proposing the first option to change the 
APD term from 2 years to 3 years with no extensions to reduce the 
administrative burden. This would reduce the cost for both the American 
public and the operators by eliminating the need for operators to file 
and BLM to review applications for APD extensions. The current proposal 
would update the existing paragraph (a) to state that an APD is valid 
for 3 years. The BLM proposes to remove the sentence describing the 2-
year extension.
    The BLM is proposing to add two new paragraphs to this section to 
address the many partially drilled and uncompleted wells remaining on 
Federal lands and to require operators to comply with the approved APD 
prior to the permit's expiration date. Under the BLM's current 
regulations, operators can spud wells near the APD's expiration date by 
setting conductor or surface casing. The operators could then extend 
past the APD's primary term and delay reclamation of the disturbed land 
by arguing that it would return and drill to total depth in the future. 
The BLM is proposing to add paragraphs (b) and (c) to remove the 
loophole and encourage operators to pursue diligent development of 
leased lands.
    The proposed rule would add a new paragraph (b) to state that the 
approved APD expires on the date as written unless the operator has: 
(1) drilled the well to the approximate total depth in the approved 
APD; (2) is drilling the well with a rig capable of drilling the well 
to total depth; or (3) submits a plan, approved by the BLM, for 
continuously drilling the well to reach the proposed total depth in the 
approved APD. If the APD expiration date passes without satisfying one 
of these three requirements, the operator would need to submit a new 
APD to drill or continue drilling the well under the expired APD.
    The proposed rule adds a new paragraph (c) to address outstanding 
surface disturbance or wellbores upon the APD's expiration. The new 
section states that upon expiration of the approved APD, if the 
operator created surface disturbance or began drilling the well under 
the approved APD, the operator or lessee must comply with plugging, 
abandonment, and reclamation requirements. The BLM proposes to add this 
section to ensure operators will promptly resolve any surface 
disturbance or wellbores upon expiration of the APD.
24. Section-by-Section Discussion for Changes to 43 CFR Subpart 3186
    The proposed rule would remove the existing Sec.  3186.2 
regulations in their entirety, consistent with the changes in 43 CFR 
3104.4 to remove the unit operator's bond.

VI. Overview of Modifications

    The following is an overview table of the proposed significant 
modifications to parts 3000, 3100, 3110, 3120, 3130, 3140, 3150, 3160, 
3171, and 3180:

            43 CFR Subpart 3000--Minerals Management: General
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3000.0-5--             43 CFR 3000.5--       No significant
 Definitions..                 Definitions.          change.
43 CFR 3000.1--               43 CFR 3000.10--      No significant
 Nondiscrimination.            Nondiscrimination.    change.
43 CFR 3000.2--False          43 CFR 3000.20--      No significant
 statements.                   False statements.     change.
43 CFR 3000.3--Unlawful       43 CFR 3000.30--      No significant
 interests.                    Unlawful interests.   change.
43 CFR 3000.4--Appeals......  43 CFR 3000.40--      No significant
                               Appeals.              change.
43 CFR 3000.5--Limitations    43 CFR 3000.50--      No significant
 on time to institute suit     Limitations on time   change.
 to contest a decision of      to institute suit
 the Secretary.                to challenge a
                               decision of the
                               Secretary.
43 CFR 3000.6--Filing of      43 CFR 3000.60--      No significant
 documents.                    Filing of documents.  change.
43 CFR 3000.7--Multiple       43 CFR 3000.70        No significant
 development.                  Multiple              change.
                               development.
43 CFR 3000.8--Management of  43 CFR 3000.80--      No significant
 Federal minerals from         Management of         change.
 reserved mineral estates.     Federal minerals
                               from reserved
                               mineral estates.
43 CFR 3000.9--Enforcement..  43 CFR 3000.90--      No significant
                               Enforcement actions   change.
                               under 30 U.S.C. 195.
43 CFR 3000.10--What do I     43 CFR 3000.100--     No significant
 need to know about fees in    Fees in general.      change.
 general?
43 CFR 3000.11--When and how  43 CFR 3000.110--     No significant
 does BLM charge me            Processing fees on    change.
 processing fees on a case-    a case-by-case
 by-case basis?                basis.
43 CFR 3000.12--What is the   43 CFR 3000.120--Fee  The proposed rule
 fee schedule for fixed        schedule for fixed    would add a new fee
 fees?                         fees.                 for EOIs, as
                                                     required by the
                                                     IRA;
                                                    Would propose a new
                                                     fixed filing fees
                                                     for various oil and
                                                     gas applications;
                                                     and
                                                    Would propose an
                                                     update to existing
                                                     oil and gas fixed
                                                     filing fees.
New.........................  43 CFR 3000.130--     The proposed rule
                               Fiscal terms of new   would add a new
                               leases.               section covering
                                                     the financial terms
                                                     of new leases
                                                     (including rentals
                                                     and minimum bonus
                                                     bids).
------------------------------------------------------------------------


[[Page 47598]]


                43 CFR Subpart 3100--Oil and Gas Leasing
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3100.0-3--Authority..  43 CFR 3100.3--       The proposed rule
                               Authority.            would add or remove
                                                     legal references
                                                     for lands
                                                     identified as
                                                     eligible for
                                                     leasing; and
                                                    Would move wildlife
                                                     refuge lands, as
                                                     well as lands
                                                     patented under the
                                                     Recreation and
                                                     Public Purposes
                                                     Act, formerly found
                                                     under subpart 3101,
                                                     to this part's
                                                     authority section;
43 CFR 3100.0-5--Definitions  43 CFR 3100.5--       The proposed rule
                               Definitions.          would alphabetize
                                                     and add new
                                                     definitions for
                                                     ``competitive lease
                                                     sale,''
                                                     ``exception,''
                                                     ``modification,''
                                                     ``oil and gas
                                                     agreements,''
                                                     ``qualified
                                                     bidder,''
                                                     ``qualified
                                                     lessee,''
                                                     ``responsible
                                                     bidder,''
                                                     ``responsible
                                                     lessee,'' and
                                                     ``waiver.''
43 CFR 3100.0-9--Information  43 CFR 3100.9--       The proposed rule
 collection.                   Information           would remove the
                               collection.           outdated Paperwork
                                                     Reduction Act
                                                     Information
                                                     Collection (IC)
                                                     Control Numbers and
                                                     updates the IC
                                                     section to include
                                                     a table summarizing
                                                     the current OMB-
                                                     approved Control
                                                     Numbers for oil and
                                                     gas leasing; and
                                                     would add a new
                                                     section to allow
                                                     the BLM to accept
                                                     electronic
                                                     signatures and
                                                     submission of
                                                     documents.
43 CFR 3100.1--Helium.......  43 CFR 3100.10--      No significant
                               Helium.               change.
43 CFR 3100.2--Drainage.....  Drainage............  No significant
                                                     change.
43 CFR 3100.2-1--             43 CFR 3100.21--      No significant
 Compensation for drainage.    Compensation for      change.
                               drainage.
43 CFR 3100.2-2--Drilling     43 CFR 3100.22--      No significant
 and production or payment     Drilling and          change.
 of compensatory royalty.      production or
                               payment of
                               compensatory
                               royalty.
43 CFR 3100.3--Options......  Options.............  No significant
                                                     change.
43 CFR 3100.3-1--             43 CFR 3100.31--      No significant
 Enforceability.               Enforceability.       change.
43 CFR 3100.3-2--Effect of    43 CFR 3100.32--      No significant
 option on acreage.            Effect of option on   change.
                               acreage.
43 CFR 3100.3-3--Option       43 CFR 3100.33--      No significant
 statements.                   Option statements.    change.
43 CFR 3100.4--Public         43 CFR 3100.40--      No significant
 availability of information.  Public availability   change.
                               of information.
------------------------------------------------------------------------


                 43 CFR Subpart 3101--Issuance of Leases
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3101.1--Lease terms    Lease terms and       No significant
 and conditions.               conditions.           change.
43 CFR 3101.1-1--Lease form.  43 CFR 3101.11--      No significant
                               Lease form.           change.
43 CFR 3101.1-2--Surface use  43 CFR 3101.12--      No significant
 rights.                       Surface use rights.   change.
43 CFR 3101.1-3--             43 CFR 3101.13--      No significant
 Stipulations and              Stipulations and      change.
 information notices.          information notices.
43 CFR 3101.1-4--             43 CFR 3101.14--      The proposed rule
 Modification or waiver of     Modification,         would update the
 lease terms and               waiver, or            provisions on
 stipulations.                 exception.            modification or
                                                     waiver of lease
                                                     terms and
                                                     stipulations.
43 CFR 3101.2--Acreage        Acreage limitations.  No significant
 limitations.                                        change.
43 CFR 3101.2-1--Public       43 CFR 3101.21--      No significant
 domain lands.                 Public domain lands.  change.
43 CFR 3101.2-2--Acquired     43 CFR 3101.22--      No significant
 lands.                        Acquired lands.       change.
43 CFR 3101.2-3--Excepted     43 CFR 3101.23--      No significant
 acreage.                      Excepted acreage.     change.
43 CFR 3101.2-4--Excess       43 CFR 3101.24--      No significant
 acreage.                      Excess acreage.       change.
43 CFR 3101.2-5--Computation  43 CFR 3101.25--      No significant
                               Computation.          change.
43 CFR 3101.2-6 Showing       Removed.............  The proposed rule
 required.                                           would remove this
                                                     section and other
                                                     portions of the
                                                     regulations related
                                                     to qualification
                                                     statements declared
                                                     out of date (see 47
                                                     FR 8544 (Feb. 26,
                                                     1982)).
43 CFR 3101.3--Leases within  43 CFR 3101.30--      No significant
 unit areas.                   Leases within unit    change.
                               areas, joinder
                               evidence required.
43 CFR 3101.3-1--Joinder      Removed.............  The proposed rule
 evidence required.                                  would remove this
                                                     title since the
                                                     next section would
                                                     be removed.
43 CFR 3101.3-2--Separate     Removed.............  The proposed rule
 leases to issue.                                    would remove this
                                                     section, as well as
                                                     references to the
                                                     nomination process
                                                     based on proposed
                                                     changes to part
                                                     3120.
43 CFR 3101.4--Lands covered  Removed.............  The proposed rule
 by application to close                             would remove this
 lands to mineral leasing.                           section, as well as
                                                     references to the
                                                     nomination process
                                                     based on proposed
                                                     changes to part
                                                     3120.

[[Page 47599]]

 
New.........................  43 CFR 3101.40--      The proposed rule
                               Terminated leases.    would move 43 CFR
                                                     3108.2-2(d) and 43
                                                     CFR 3108.2-3(c) on
                                                     issuing leases for
                                                     lands that were
                                                     previously covered
                                                     by a terminated
                                                     lease to this
                                                     section on lease
                                                     issuance.
43 CFR 3101.5--National       Removed.............  The proposed rule
 Wildlife Refuge System                              would move this
 lands.                                              part to 43 CFR
                                                     3100, which is in
                                                     the Authority
                                                     section.
43 CFR 3101.5-1--Wildlife     Removed.............  The proposed rule
 refuge lands.                                       would move this
                                                     section to 43 CFR
                                                     3100.0-3(a)(2)(xii)
                                                     and 3100.0-
                                                     3(b)(2)(xiv), which
                                                     are in the
                                                     Authority section.
43 CFR 3101.5-2--             Removed.............  The proposed rule
 Coordination lands.                                 would move this
                                                     section to 43 CFR
                                                     3100.3, which is in
                                                     the Authority
                                                     section.
43 CFR 3101.5-3--Alaska       Removed.............  The proposed rule
 wildlife areas.                                     would move this
                                                     section to 43 CFR
                                                     3100.3, which is in
                                                     the Authority
                                                     section.
43 CFR 3101.5-4--             Removed.............  The proposed rule
 Stipulations.                                       would consolidate
                                                     this section with
                                                     43 CFR 3101.13.
43 CFR 3101.6--Recreation     Removed.............  The proposed rule
 and public purposes lands.                          would move this
                                                     section to 43 CFR
                                                     3100.3, which is in
                                                     the Authority
                                                     section.
43 CFR 3101.7--Federal lands  Federal lands         No significant
 administered by an agency     administered by an    change.
 outside of the Department     agency outside of
 of the Interior.              the Department of
                               the Interior.
43 CFR 3101.7-1--General      43 CFR 3101.51        The proposed rule
 requirements.                 General               would consolidate
                               requirements.         the separate
                                                     paragraphs under
                                                     this section into
                                                     one paragraph.
43 CFR 3101.7-2--Action by    43 CFR 3101.52--      No significant
 the Bureau of Land            Action by the         change.
 Management.                   Bureau of Land
                               Management.
43 CFR 3101.7-3--Appeals....  43 CFR 3101.53--      No significant
                               Appeals.              change.
43 CFR 3101.8--State's or     43 CFR 3101.60--      No significant
 charitable organization's     State's or            change.
 ownership of surface          charitable
 overlying federally owned     organization's
 minerals.                     ownership of
                               surface overlying
                               federally owned
                               minerals.
------------------------------------------------------------------------


             43 CFR Subpart 3102--Qualifications of Lessees
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3102.1 Who may hold    43 CFR 3102.10 Who    No significant
 leases.                       may hold leases.      change.
43 CFR 3102.2 Aliens........  43 CFR 3102.20 Non-   The proposed rule
                               U.S. Citizens.        would change the
                                                     terminology for
                                                     referring to
                                                     citizens of other
                                                     countries; and
                                                     Would add language
                                                     from the Treasury
                                                     Department
                                                     regulations at 31
                                                     CFR part 802, where
                                                     the Committee on
                                                     Foreign Investment
                                                     in the United
                                                     States (CFIUS) is
                                                     authorized to
                                                     review covered real
                                                     estate transactions
                                                     and to mitigate any
                                                     risk to the
                                                     national security
                                                     of the United
                                                     States that arises
                                                     as a result of such
                                                     transactions.
43 CFR 3102.3 Minors........  43 CFR 3102.30        No significant
                               Minors.               change.
43 CFR 3102.4 Signature.....  43 CFR 3102.40        The proposed rule
                               Signature.            would update this
                                                     section to give the
                                                     BLM the ability to
                                                     accept documents
                                                     with electronic
                                                     signatures;
                                                    Would remove the
                                                     requirement for
                                                     multiple copies of
                                                     assignments or
                                                     transfers to be
                                                     submitted to the
                                                     BLM; and
                                                    Would remove the
                                                     reference to
                                                     qualification
                                                     numbers, which were
                                                     declared obsolete
                                                     (see 47 FR 8544
                                                     (Feb. 26, 1982)).
43 CFR 3102.5 Compliance,     Compliance,           No significant
 certification of compliance   certification of      change.
 and evidence.                 compliance and
                               evidence.

[[Page 47600]]

 
43 CFR 3102.5-1 Compliance..  43 CFR 3102.51        The proposed rule
                               Compliance.           would update the
                                                     current section to
                                                     refer to
                                                     reclamation
                                                     obligations to be
                                                     compliant with
                                                     requirements of
                                                     section 17(g) of
                                                     the MLA start at
                                                     the Notice of
                                                     Proposed Civil
                                                     Penalties instead
                                                     of the imposition
                                                     of a civil penalty;
                                                     and Would add a
                                                     qualification
                                                     requirement to
                                                     ensure compliance
                                                     with 2 CFR parts
                                                     180 and 1400, based
                                                     on which the BLM
                                                     would reject any
                                                     lease issuance,
                                                     assignment, or
                                                     transfer to any
                                                     entity excluded
                                                     from doing business
                                                     with the Federal
                                                     government through
                                                     suspension and
                                                     debarment.
43 CFR 3102.5-2               43 CFR 3102.52        No significant
 Certification of compliance.  Certification of      change.
                               compliance.
43 CFR 3102.5-3 Evidence of   43 CFR 3102.53        No significant
 compliance.                   Evidence of           change.
                               compliance.
------------------------------------------------------------------------


             43 CFR Subpart 3103--Fees, Rentals and Royalty
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3103.1--Payments.....  Payments............  No significant
                                                     change.
43 CFR 3103.1-1--Form of      43 CFR 3103.11--Form  No significant
 remittance.                   of remittance.        change.
43 CFR 3103.1-2--Where        43 CFR 3103.12--      No significant
 submitted.                    Where remittance is   change.
                               submitted.
43 CFR 3103.2--Rentals......  Rentals.............  No significant
                                                     change.
43 CFR 3103.2-1--Rental       43 CFR 3103.21--      No significant
 requirements.                 Rental requirements.  change.
43 CFR 3103.2-2--Annual       43 CFR 3103.22--      The proposed rule
 rental payments.              Annual rental         would remove
                               payments.             outdated phase-in
                                                     language from past
                                                     rulemakings; and
                                                     Would update the
                                                     following financial
                                                     terms of new leases
                                                     as required by the
                                                     IRA:
                                                     Rental
                                                     amount for
                                                     competitive leases
                                                     is to be $3 per
                                                     acre, or fraction
                                                     thereof, for the
                                                     first 2 years, then
                                                     $5 per acre, or
                                                     fraction thereof,
                                                     for lease years 3
                                                     through 8, and then
                                                     $15 per acre, or
                                                     fraction thereof,
                                                     thereafter;
                                                        For
                                                        Class II
                                                        reinstated
                                                        competitive
                                                        leases, the rent
                                                        increases to $20
                                                        per acre;
                                                     Royalty
                                                     percentage is
                                                     proposed to be not
                                                     less than 16.67
                                                     percent for
                                                     competitive leases;
                                                     and
                                                     For
                                                     reinstated
                                                     competitive leases,
                                                     the royalty
                                                     increases to not
                                                     less than 20
                                                     percent, plus 2
                                                     percentage points
                                                     for each succeeding
                                                     reinstatement.
43 CFR 3103.3--Royalties....  Royalties...........  No significant
                                                     change.
43 CFR 3103.3-1--Royalty on   43 CFR 3103.31--      No significant
 production.                   Royalty on            change.
                               production.
43 CFR 3103.3-2--Minimum      43 CFR 3103.32--      The proposed rule
 royalties.                    Minimum royalties.    would clarify the
                                                     intent of minimum
                                                     royalty to be
                                                     reduced by the
                                                     actual royalty paid
                                                     throughout the
                                                     year.
43 CFR 3103.4--Production     Production            No significant
 incentives.                   incentives.           change.
43 CFR 3103.4-1--Royalty      43 CFR 3103.41--      No significant
 reductions.                   Royalty reductions.   change.
43 CFR 3103.4-2--Stripper     Removed.............  The proposed rule
 well royalty reductions.                            would remove the
                                                     regulations
                                                     governing stripper
                                                     well royalty
                                                     reductions.
43 CFR 3103.4-3--Heavy oil    Removed.............  The proposed rule
 royalty reductions.                                 would remove the
                                                     regulations
                                                     governing heavy oil
                                                     royalty reductions.
43 CFR 3103.4-4--Suspension   43 CFR 3103.42        No significant
 of operations and/or          Suspension of         change.
 production.                   operations and/or
                               production.
------------------------------------------------------------------------


                       43 CFR Subpart 3104--Bonds
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3104.1--Bond           43 CFR 3104.10--Bond  The proposed rule
 obligations.                  obligations.          would remove
                                                     Certificates of
                                                     Deposits (CD) and
                                                     Letters of Credit
                                                     (LOC) as forms of
                                                     security for
                                                     personal bonds.

[[Page 47601]]

 
43 CFR 3104.2--Lease bond...  43 CFR 3104.20--      The proposed rule
                               Lease bond.           would increase the
                                                     minimum bonding
                                                     amounts to $150,000
                                                     per lease bond.
43 CFR 3104.3--Statewide and  43 CFR 3104.30--      The proposed rule
 nationwide bonds.             Statewide bonds.      would increase the
                                                     minimum bonding
                                                     amounts to $500,000
                                                     per statewide bond;
                                                     and would remove
                                                     nationwide bonds.
43 CFR 3104.4--Unit           43 CFR 3104.40--      The proposed rule
 operator's bond.              Surface owner         would remove unit
                               protection bond.      operator's bonds.
43 CFR 3104.5--Increased      43 CFR 3104.50--      No significant
 amount of bonds.              Increased amount of   change.
                               bonds.
43 CFR 3104.6--Where filed    43 CFR 3104.60--      No significant
 and number of copies.         Where filed and       change.
                               number of copies.
43 CFR 3104.7--Default......  43 CFR 3104.70--      The proposed rule
                               Default.              would update the
                                                     language to state
                                                     reference that
                                                     noncompliance is in
                                                     violation of
                                                     section 17 of the
                                                     MLA; and would add
                                                     language stating
                                                     that being in
                                                     noncompliance would
                                                     result in not being
                                                     able to acquire new
                                                     lease interests, as
                                                     well as referring
                                                     the entity for a
                                                     determination as to
                                                     whether the entity
                                                     should be suspended
                                                     or debarred from
                                                     doing business with
                                                     the Federal
                                                     government in
                                                     accordance with 2
                                                     CFR part 1400.
43 CFR 3104.8--Termination    43 CFR 3104.80--      No significant
 of period of liability.       Termination of        change.
                               period of liability.
New.........................  43 CFR 3104.90--      The proposed rule
                               Bonds held prior to   would add a phase-
                               [EFFECTIVE DATE OF    in period for the
                               FINAL RULE].          new minimum bond
                                                     amounts.
------------------------------------------------------------------------


        43 CFR Subpart 3105--Cooperative Conservation Provisions
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3105.1--Cooperative    43 CFR 3105.10--      The proposed rule
 or unit agreement.            Cooperative or unit   would add a
                               agreement.            reference to the
                                                     new fixed filing
                                                     fees proposed in 43
                                                     CFR 3000.120.
43 CFR 3105.2--               Communitization       The proposed rule
 Communitization or drilling   agreements.           would remove
 agreements.                                         references to
                                                     drilling agreements
                                                     that the BLM does
                                                     not create or
                                                     manage.
43 CFR 3105.2-1--Where filed  43 CFR 3105.21--      The proposed rule
                               Where filed.          would remove the
                                                     requirement for
                                                     multiple copies of
                                                     applications to be
                                                     filed with the BLM.
43 CFR 3105.2-2--Purpose....  43 CFR 3105.22--      No significant
                               Purpose.              change.
43 CFR 3105.2-3--             43 CFR 3105.23--      The proposed rule
 Requirements.                 Requirements.         would add
                                                     conditions and
                                                     requirements for
                                                     Communitization
                                                     Agreements (self-
                                                     certification
                                                     statement, maps,
                                                     exhibits showing
                                                     tracts and
                                                     ownership).
New.........................  43 CFR 3105.24--      The proposed rule
                               Communitization       would add the
                               agreement terms.      primary term of
                                                     communitization
                                                     agreements.
43 CFR 3105.3--Operating,     Operating, drilling   No significant
 drilling or development       or development        change.
 contracts.                    contracts.
43 CFR 3105.3-1--Where filed  43 CFR 3105.31--      The proposed rule
                               Where filed.          would remove the
                                                     requirement for
                                                     multiple copies of
                                                     applications to be
                                                     filed with the BLM.
43 CFR 3105.3-2--Purpose....  43 CFR 3105.32--      No significant
                               Purpose.              change.
43 CFR 3105.3-3--             43 CFR 3105.33--      No significant
 Requirements.                 Requirements.         change.
43 CFR 3105.4--Combination    Removed.............  The proposed rule
 for joint operations or for                         would remove this
 transportation of oil.                              section as it is
                                                     not used by the BLM
                                                     or operators.
43 CFR 3105.4-1--Where filed  Removed.............  The proposed rule
                                                     would remove this
                                                     section as it is
                                                     not used by the BLM
                                                     or operators.
43 CFR 3105.4-2--Purpose....  Removed.............  The proposed rule
                                                     would remove this
                                                     section as it is
                                                     not used by the BLM
                                                     or operators.
43 CFR 3105.4-3--             Removed.............  The proposed rule
 Requirements.                                       would remove this
                                                     section as it is
                                                     not used by the BLM
                                                     or operators.
43 CFR 3105.4-4--Rights-of-   Removed.............  The proposed rule
 way.                                                would remove this
                                                     section as it is
                                                     covered under 43
                                                     CFR part 2880.
43 CFR 3105.5--Subsurface     Subsurface storage    No significant
 storage of oil and gas.       of oil and gas.       change.

[[Page 47602]]

 
43 CFR 3105.5-1--Where filed  3105.41--Where filed  The proposed rule
                                                     would add a
                                                     reference to the
                                                     new fixed filing
                                                     fees proposed in 43
                                                     CFR 3000.120; and
                                                     would remove the
                                                     requirement for
                                                     multiple copies of
                                                     applications to be
                                                     filed with the BLM.
43 CFR 3105.5-2--Purpose....  43 CFR 3105.42--      No significant
                               Purpose.              change.
43 CFR 3105.5-3--             43 CFR 3105.43--      No significant
 Requirements.                 Requirements.         change.
43 CFR 3105.5-4--Extension    43 CFR 3105.44--      No significant
 of lease term.                Extension of lease    change.
                               term.
43 CFR 3105.6--Consolidation  43 CFR 3105.50--      The proposed rule
 of leases.                    Consolidation of      would split this
                               leases.               section into
                                                     multiple paragraphs
                                                     to increase
                                                     readability.
------------------------------------------------------------------------


  43 CFR Subpart 3106--Transfers by Assignment, Sublease, or Otherwise
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3106.1--Transfers,     43 CFR 3106.10--      The proposed rule
 general.                      Transfers, general.   would clarify the
                                                     requirements for
                                                     transfers of
                                                     operating rights.
                                                     The proposed rule
                                                     would state that
                                                     operating rights
                                                     may only be divided
                                                     with respect to
                                                     legal subdivision,
                                                     depth ranges, and
                                                     formations, within
                                                     the boundaries of a
                                                     Federal lease.
43 CFR 3106.2--               43 CFR 3106.20--      No significant
 Qualifications of             Qualifications of     change.
 transferees.                  assignees and
                               transferees.
43 CFR 3106.3--Fees.........  43 CFR 3106.30--Fees  No significant
                                                     change.
43 CFR 3106.4--Forms........  Forms...............  No significant
                                                     change.
43 CFR 3106.4-1--Transfers    43 CFR 3106.41--      The proposed rule
 of record title and of        Transfers of record   would change the
 operating rights              title and of          triplicate filing
 (subleases).                  operating rights      requirement to a
                               (subleases).          duplicate filing
                                                     requirement.
43 CFR 3106.4-2--Transfers    43 CFR 3106.42--      The proposed rule
 of other interests,           Transfers of other    would require
 including royalty interests   interests,            transfers of
 and production payments.      including royalty     overriding royalty
                               interests and         to be submitted on
                               production payments.  a BLM form.
43 CFR 3106.4-3--Mass         43 CFR 3106.43--Mass  The proposed rule
 transfers.                    transfers.            would change the
                                                     triplicate filing
                                                     requirement to a
                                                     duplicate filing
                                                     requirement and
                                                     would waive the
                                                     need for the
                                                     duplicate when the
                                                     filing is submitted
                                                     electronically.
43 CFR 3106.5--Description    43 CFR 3106.50--      No significant
 of lands.                     Description of        change.
                               lands.
43 CFR 3106.6--Bonds........  43 CFR 3106.60--Bond  No significant
                               Requirements.         change.
43 CFR 3106.6-1--Lease bond.  Removed.............  The proposed rule
                                                     would update the
                                                     bond section
                                                     related to a new
                                                     interest owner's
                                                     responsibility for
                                                     holding a bond.
43 CFR 3106.6-2--Statewide/   Removed.............  No significant
 nationwide bond.                                    change.
43 CFR 3106.7--Approval of    Approval of transfer  No significant
 transfer.                     or assignment.        change.
43 CFR 3106.7-1--Failure to   43 CFR 3106.71--      No significant
 qualify.                      Failure to qualify.   change.
43 CFR 3106.7-2--If I         43 CFR 3106.72--      No significant
 transfer my lease, what is    Continuing            change.
 my continuing obligation?     obligation of an
                               assignor or
                               transferor.
43 CFR 3106.7-3--Lease        43 CFR 3106.73--      No significant
 account status.               Lease account         change.
                               status.
43 CFR 3106.7-4--Effective    43 CFR 3106.74--      No significant
 date of transfer.             Effective date of     change.
                               transfer.
43 CFR 3106.7-5--Effect of    43 CFR 3106.75--      No significant
 transfer.                     Effect of transfer.   change.
43 CFR 3106.7-6--If I         43 CFR 3106.76--      No significant
 acquire a lease by an         Obligations of        change.
 assignment or transfer,       assignee or
 what obligations do I agree   transferee.
 to assume?
43 CFR 3106.8--Other types    Other types of        No significant
 of transfers.                 transfers.            change.
43 CFR 3106.8-1--Heirs and    43 CFR 3106.81--      No significant
 devisees.                     Heirs and devisees.   change.
43 CFR 3106.8-2--Change of    43 CFR 3106.82--      No significant
 name.                         Change of name.       change.
43 CFR 3106.8-3--Corporate    43 CFR 3106.83--      The proposed rule
 merger.                       Corporate mergers     would include the
                               and dissolution of    new filing fee and
                               corporations,         requirements for
                               partnerships, and     other types of
                               trust.                transfers that the
                                                     BLM accepts (for
                                                     example,
                                                     dissolutions of
                                                     corporations).
New.........................  43 CFR 3106.84--      The proposed rule
                               Sheriff's sale/deed.  would include the
                                                     new filing fee and
                                                     requirements for
                                                     other types of
                                                     transfers that the
                                                     BLM accepts (for
                                                     example, Sheriff's
                                                     sale/deeds).
------------------------------------------------------------------------


[[Page 47603]]


             43 CFR Subpart 3107--Continuation and Extension
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3107.1--Extension by   43 CFR 3107.10--      The proposed rule
 drilling.                     Extension by          would add language
                               drilling.             pertaining to lease
                                                     extensions to
                                                     address
                                                     circumstances where
                                                     directional or
                                                     horizontal wells
                                                     are drilled from an
                                                     off-lease location
                                                     with the intent to
                                                     produce from the
                                                     leased area.
43 CFR 3107.2--Production...  Production..........  No significant
                                                     change.
43 CFR 3107.2-1--             43 CFR 3107.21--      No significant
 Continuation by production.   Continuation by       change.
                               production.
43 CFR 3107.2-2--Cessation    43 CFR 3107.22--      The proposed rule
 of production.                Cessation of          would rephrase the
                               production.           provision regarding
                                                     cessation of
                                                     production to
                                                     better reflect
                                                     section 17(i) of
                                                     the MLA.
43 CFR 3107.2-3--Leases       43 CFR 3107.23--      No significant
 capable of production.        Leases capable of     change.
                               production.
43 CFR 3107.3--Extension for  Extension for terms   No significant
 terms of cooperative or       of agreements.        change.
 unit plan.
43 CFR 3107.3-1--Leases       43 CFR 3107.31--      No significant
 committed to plan.            Leases committed to   change.
                               an agreement.
43 CFR 3107.3-2--Segregation  43 CFR 3107.32--      The proposed rule
 of leases committed in part.  Segregation of        would revise the
                               leases committed in   section for the
                               part.                 segregation of
                                                     leases committed in
                                                     part to units to
                                                     state this would
                                                     occur only after
                                                     the public interest
                                                     requirement has
                                                     been met; and would
                                                     clarify when leases
                                                     may be extended by
                                                     production from
                                                     associated leases.
43 CFR 3107.3-3--20-year      Removed.............  The proposed rule
 lease or any renewal                                would remove this
 thereof.                                            section and all
                                                     references to
                                                     renewal leases as
                                                     this was removed by
                                                     the Act of November
                                                     15, 1990.
43 CFR 3107.4--Extension by   43 CFR 3107.40--      No significant
 elimination.                  Extension by          change.
                               elimination.
43 CFR 3107.5--Extension of   Extension of leases   No significant
 leases segregated by          segregated by         change.
 assignment.                   assignment.
43 CFR 3107.5-1--Extension    43 CFR 3107.51--      No significant
 after discovery on other      Extension after       change.
 segregated portions.          discovery on other
                               segregated portions.
43 CFR 3107.5-2--Undeveloped  43 CFR 3107.52--      No significant
 parts of leases in their      Undeveloped parts     change.
 extended term.                of leases in their
                               extended term.
43 CFR 3107.5-3--Undeveloped  43 CFR 3107.53--      No significant
 parts of producing leases.    Undeveloped parts     change.
                               of producing leases.
43 CFR 3107.6--Extension of   43 CFR 3107.60--      No significant
 reinstated leases.            Extension of          change.
                               reinstated leases.
43 CFR 3107.7--Exchange       Removed.............  The proposed rule
 leases: 20-year term.                               would remove this
                                                     section and all
                                                     references to
                                                     exchange leases as
                                                     these have either
                                                     expired or are held
                                                     by production.
43 CFR 3107.8--Renewal        Removed.............  The proposed rule
 leases.                                             would remove this
                                                     section and all
                                                     references to
                                                     renewal leases as
                                                     this was removed by
                                                     the Act of November
                                                     15, 1990.
43 CFR 3107.8-1--             Removed.............  The proposed rule
 Requirements.                                       would remove this
                                                     section and all
                                                     references to
                                                     renewal leases as
                                                     this was removed by
                                                     the Act of November
                                                     15, 1990.
43 CFR 3107.8-2--Application  Removed.............  The proposed rule
                                                     would remove this
                                                     section and all
                                                     references to
                                                     renewal leases as
                                                     this was removed by
                                                     the Act of November
                                                     15, 1990.
43 CFR 3107.8-3--Approval...  Removed.............  The proposed rule
                                                     would remove this
                                                     section and all
                                                     references to
                                                     renewal leases as
                                                     this was removed by
                                                     the Act of November
                                                     15, 1990.
43 CFR 3107.9--Other types..  Other types.........  No significant
                                                     change.
43 CFR 3107.9-1--Payment of   43 CFR 3107.71--      No significant
 compensatory royalty.         Payment of            change.
                               compensatory
                               royalty.
43 CFR 3107.9-2--Subsurface   43 CFR 3107.72--      No significant
 storage of oil and gas.       Subsurface storage    change.
                               of oil and gas.
------------------------------------------------------------------------


     43 CFR Subpart 3108--Relinquishment, Termination, Cancellation
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3108.1--As a lessee,   43 CFR 3108.10--      No significant
 may I relinquish my lease?.   Relinquishment.       change.

[[Page 47604]]

 
43 CFR 3108.2--Termination    Termination by        No significant
 by operation of law and       operation of law      change.
 reinstatement.                and reinstatement.
43 CFR 3108.2-1--Automatic    43 CFR 3108.21--      The proposed rule
 termination.                  Automatic             would remove the
                               termination.          reference to ``a
                                                     bill rendered by
                                                     the designated
                                                     Service office''
                                                     from the section on
                                                     automatic
                                                     terminations, since
                                                     the Office of
                                                     Natural Resources
                                                     Revenue's (ONRR) no
                                                     longer sends
                                                     courtesy notices;
                                                     and would specify
                                                     that the automatic
                                                     termination
                                                     provision does not
                                                     apply when rental
                                                     becomes due on a
                                                     date other than the
                                                     anniversary date,
                                                     unless the lessee
                                                     fails to pay the
                                                     rental within the
                                                     period prescribed
                                                     by the BLM notice
                                                     to reflect
                                                     developments in
                                                     case law.
43 CFR 3108.2-2--             43 CFR 3108.22--      The proposed rule
 Reinstatement at existing     Reinstatement at      would revise the
 rental and royalty rates:     existing rental and   explanation of
 Class I reinstatements.       royalty rates:        ``reasonable
                               Class I               diligence'' to
                               reinstatements.       reference payment
                                                     to the ONRR's
                                                     online rental
                                                     payment system.
43 CFR 3108.2-3--             43 CFR 3108.23--      The proposed rule
 Reinstatement at higher       Reinstatement at      would remove the
 rental and royalty rates:     higher rental and     grounds for a Class
 Class II reinstatements.      royalty rates:        II reinstatement to
                               Class II              apply to all
                               reinstatements.       noncompetitive
                                                     leases; would
                                                     remove references
                                                     to reinstating
                                                     leases that
                                                     terminated before
                                                     2005; would change
                                                     outdated references
                                                     to the House
                                                     Committee on
                                                     Interior and
                                                     Insular Affairs to
                                                     the House Committee
                                                     on Natural
                                                     Resources; and
                                                     would remove the
                                                     reference to
                                                     royalty reductions,
                                                     which are already
                                                     covered under 43
                                                     CFR subpart 3103.
43 CFR 3108.2-4--Conversion   Removed.............  The proposed rule
 of unpatented oil placer                            would remove this
 mining claims: Class III                            section as the IRA
 reinstatements.                                     rescinded the
                                                     authority for Class
                                                     III reinstatements.
43 CFR 3108.3--Cancellation.  43 CFR 3108.30--      No significant
                               Cancellation.         change.
43 CFR 3108.4--Bona fide      43 CFR 3108.40--Bona  No significant
 purchasers.                   fide purchasers.      change.
43 CFR 3108.5--Waiver or      43 CFR 3108.50        No significant
 suspension of lease rights.   Waiver or             change.
                               suspension of lease
                               rights.
------------------------------------------------------------------------


             43 CFR Subpart 3109--Leasing Under Special Acts
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3109.1--Rights-of-way  Rights-of-way.......  No significant
                                                     change.
43 CFR 3109.1-1--Generally..  43 CFR 3109.11--      No significant
                               Generally.            change.
43 CFR 3109.1-2--Application  43 CFR 3109.12--      The proposed rule
                               Application.          would add a
                                                     requirement for
                                                     applicants to
                                                     provide a map to
                                                     process rights-of-
                                                     way (ROW) lease
                                                     applications.
43 CFR 3109.1-3--Notice.....  43 CFR 3109.13--      No significant
                               Notice.               change.
43 CFR 3109.1-4--Award of     43 CFR 3109.14--      No significant
 lease or compensatory         Award of lease or     change.
 royalty agreement.            compensatory
                               royalty agreement.
43 CFR 3109.1-5--             43 CFR 3109.15--      The proposed rule
 Compensatory royalty          Compensatory          would add a list of
 agreement or lease.           royalty agreement     references to the
                               or lease.             part 3100
                                                     regulations that
                                                     apply to ROW leases
                                                     covered by subpart
                                                     3109 for clarity.
43 CFR 3109.2--Units of the   43 CFR 3109.20--      No significant
 National Park System.         Units of the          change.
                               National Park
                               System.
43 CFR 3109.2-1--Authority    Removed.............  No significant
 to lease. [Reserved].                               change.
43 CFR 3109.2-2--Area         Removed.............  No significant
 subject to lease.                                   change.
 [Reserved].
43 CFR 3109.3--Shasta and     43 CFR 3109.30--      No significant
 Trinity Units of the          Shasta and Trinity    change.
 Whiskeytown-Shasta-Trinity    Units of the
 National Recreation Area.     Whiskeytown-Shasta-
                               Trinity National
                               Recreation Area.
------------------------------------------------------------------------

43 CFR Part 3110--Noncompetitive Leases
     Removes this part in its entirety as required by the IRA.

[[Page 47605]]



                 43 CFR Subpart 3120--Competitive Leases
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3120.1--General......  General.............  No significant
                                                     change.
43 CFR 3120.1-1--Lands        43 CFR 3120.11--      No significant
 available for competitive     Lands available for   change.
 leasing.                      competitive leasing.
43 CFR 3120.1-2--             43 CFR 3120.12--      No significant
 Requirements.                 Requirements.         change.
43 CFR 3120.1-3--Protests     43 CFR 3120.13--      The proposed rule
 and appeals.                  Protests.             would update the
                                                     language under
                                                     protests and
                                                     appeals to reflect
                                                     developments in
                                                     case law.
43 CFR 3120.2--Lease terms..  Lease terms.........  No significant
                                                     change.
43 CFR 3120.2-1--Duration of  43 CFR 3120.21--      No significant
 lease.                        Duration of lease.    change.
43 CFR 3120.2-2--Dating of    43 CFR 3120.22--      No significant
 leases.                       Dating of leases.     change.
43 CFR 3120.2-3--Lease size.  43 CFR 3120.23--      No significant
                               Lease size.           change.
43 CFR 3120.3--Nomination     43 CFR 3120.30--      The proposed rule
 process.                      Nomination process.   would update the
                                                     nomination process
                                                     to make clear that
                                                     they are
                                                     nonbinding, would
                                                     add a new filing
                                                     fee, and would
                                                     remove the
                                                     allowance for
                                                     noncompetitive
                                                     lease offers to be
                                                     submitted on
                                                     unnominated
                                                     parcels.
43 CFR 3120.3-1--General....  43 CFR 3120.31--      No significant
                               General.              change.
43 CFR 3120.3-2--Filing of a  43 CFR 3120.32--      No significant
 nomination for competitive    Filing of a           change.
 leasing.                      nomination for
                               competitive leasing.
43 CFR 3120.3-3--Minimum bid  Removed.............  The proposed rule
 and rental remittance.                              would update this
                                                     section to make
                                                     nominations
                                                     nonbinding.
43 CFR 3120.3-4--Withdrawal   Removed.............  The proposed rule
 of a nomination.                                    would update this
                                                     section to make
                                                     clear that
                                                     nominations are
                                                     nonbinding.
43 CFR 3120.3-5--Parcels      43 CFR 3120.33--      No significant
 receiving nominations.        Parcels receiving     change.
                               nominations.
43 CFR 3120.3-6--Parcels not  Removed.............  The proposed rule
 receiving nominations.                              would update this
                                                     section to remove
                                                     the allowance for
                                                     noncompetitive
                                                     lease offers to be
                                                     submitted on
                                                     unnominated
                                                     parcels.
43 CFR 3120.3-7--Refund.....  Removed.............  The proposed rule
                                                     would update this
                                                     section to make
                                                     clear that
                                                     nominations are
                                                     nonbinding.
New.........................  Expressions of        The proposed rule
                               interest.             would add
                                                     information on the
                                                     submission of EOIs;
                                                     and would add a new
                                                     filing fee for
                                                     EOIs, as required
                                                     by the IRA.
New.........................  43 CFR 3120.41--      The proposed rule
                               Process.              would clarify the
                                                     BLM's existing
                                                     discretion to deny
                                                     EOIs that are not
                                                     in the public
                                                     interest.
New.........................  43 CFR 3120.42--      The proposed rule
                               Agency Inventory of   would add a section
                               Leasing.              providing that
                                                     periodically the
                                                     BLM will calculate
                                                     the acreage for
                                                     which EOIs have
                                                     been submitted in
                                                     the previous year
                                                     and the total
                                                     acreage offered for
                                                     lease.
43 CFR 3120.4--Notice of      Notice of             No significant
 competitive lease sale.       competitive lease     change.
                               sale.
43 CFR 3120.4-1--General....  43 CFR 3120.51        No significant
                               General.              change.
43 CFR 3120.4-2--Posting of   43 CFR 3120.52--      No significant
 notice.                       Posting timeframes.   change.
43 CFR 3120.5--Competitive    Competitive auction.  No significant
 sale.                                               change.
43 CFR 3120.5-1--Oral or      43 CFR 3120.61--      No significant
 Internet-based auction.       Competitive auction.  change.
43 CFR 3120.5-2--Payments     43 CFR 3120.62--      The proposed rule
 required.                     Payments required.    would increase the
                                                     minimum bonus bid
                                                     from $2 per acre to
                                                     $10 per acre, or
                                                     fraction thereof as
                                                     required by the
                                                     IRA; and would add
                                                     a new requirement
                                                     that, if a person
                                                     or entity does not
                                                     pay the minimum
                                                     monies owed the day
                                                     of the sale, the
                                                     BLM may refer that
                                                     person or entity to
                                                     the DOI's Office of
                                                     the Inspector
                                                     General,
                                                     Administrative
                                                     Remedies Division,
                                                     for appropriate
                                                     action, including
                                                     potential
                                                     suspension and
                                                     debarment.
43 CFR 3120.5-3--Award of     43 CFR 3120.63--      No significant
 lease.                        Award of lease.       change.
43 CFR 3120.6--Parcels not    43 CFR 3120.70--      No significant
 bid on at auction.            Parcels not bid on    change.
                               at auction.
43 CFR 3120.7--Future         Future interest.....  No significant
 interest.                                           change.
43 CFR 3120.7-1--Nomination   43 CFR 3120.81--      No significant
 to make lands available for   Nomination or         change.
 competitive lease.            Expression of
                               Interest to make
                               lands available for
                               competitive lease.

[[Page 47606]]

 
43 CFR 3120.7-2--Future       43 CFR 3120.82--      No significant
 interest terms and            Future interest       change.
 conditions.                   terms and
                               conditions.
43 CFR 3120.7-3--             43 CFR 3120.83--      No significant
 Compensatory royalty          Compensatory          change.
 agreements.                   royalty agreements.
------------------------------------------------------------------------


                  43 CFR Subpart 3137--Unitization Agreements-National Petroleum Reserve-Alaska
----------------------------------------------------------------------------------------------------------------
             Existing regulation                      Proposed regulation              Substantive changes
----------------------------------------------------------------------------------------------------------------
43 CFR 3137.23--What must I include in my NPR- 43 CFR 3137.23--NPR-A             The proposed rule would add a
 A unitization application?                     unitization application.          new filing fee for unit
                                                                                  applications.
43 CFR 3137.61--How do I change unit           43 CFR 3137.61--Change in unit    The proposed rule would add a
 operators?                                     operators.                        new filing fee for successor
                                                                                  operators.
----------------------------------------------------------------------------------------------------------------


       43 CFR Subpart 3138--Subsurface Storage Agreements in the National Petroleum Reserve-Alaska (NPR-A)
----------------------------------------------------------------------------------------------------------------
             Existing regulation                      Proposed regulation              Substantive changes
----------------------------------------------------------------------------------------------------------------
43 CFR 3138.11--How do I apply for a           43 CFR 3138.11--Applications for  The proposed rule would add a
 subsurface storage agreement?                  a subsurface storage agreement.   new filing fee for subsurface
                                                                                  storage agreements.
----------------------------------------------------------------------------------------------------------------


43 CFR Subpart 3140--Conversion of Existing Oil and Gas Leases and Valid
                    Claims Based on Mineral Locations
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3140.0-1--Purpose....  43 CFR 3140.1--       No significant
                               Purpose.              change.
43 CFR 3140.0-3--Authority..  43 CFR 3140.3--       No significant
                               Authority.            change.
43 CFR 3140.0-5--Definitions  43 CFR 3140.5--       No significant
                               Definitions.          change.
43 CFR 3140.1--General        General provisions..  No significant
 provisions.                                         change
43 CFR 3140.1-1--Existing     43 CFR 3140.11--      The proposed rule
 rights.                       Existing rights.      would clarify that
                                                     the application
                                                     time period ended
                                                     on November 15,
                                                     1983.
43 CFR 3140.1-2--Notice of    43 CFR 3140.12--      No significant
 intent to convert.            Notice of intent to   change.
                               convert.
43 CFR 3140.1-3--Exploration  43 CFR 3140.13--      No significant
 plans.                        Exploration plans.    change.
43 CFR 3140.1-4--Other        43 CFR 3140.14--      The proposed rule
 provisions.                   Other provisions.     would specify that
                                                     royalty rate
                                                     reductions for tar
                                                     sands would not
                                                     apply to oil and
                                                     gas leases and vice
                                                     versa.
43 CFR 3140.2--Applications.  Applications........  No significant
                                                     change.
43 CFR 3140.2-1--Forms......  43 CFR 3140.21--      No significant
                               Forms.                change.
43 CFR 3140.2-2--Who may      43 CFR 3140.22--Who   No significant
 apply.                        may apply.            change.
43 CFR 3140.2-3--Application  43 CFR 3140.23--      No significant
 requirements.                 Application           change.
                               requirements.
43 CFR 3140.3--Time           Time limitations....  No significant
 limitations.                                        change.
43 CFR 3140.3-1--Conversion   43 CFR 3140.31--      No significant
 applications.                 Conversion            change.
                               applications.
43 CFR 3140.3-2--Action on    43 CFR 3140.32--      No significant
 an application.               Action on an          change.
                               application.
43 CFR 3140.4--Conversion...  Conversion..........  No significant
                                                     change.
43 CFR 3140.4-1--Approval of  43 CFR 3140.41--      No significant
 plan of operations (and       Approval of plan of   change.
 unit and operating            operations (and
 agreements).                  unit and operating
                               agreements).
43 CFR 3140.4-2--Issuance of  43 CFR 3140.42--      No significant
 the combined hydrocarbon      Issuance of the       change.
 lease.                        combined
                               hydrocarbon lease.
43 CFR 3140.5--Duration of    43 CFR 3140.50--      No significant
 the lease.                    Duration of the       change.
                               lease.
43 CFR 3140.6--Use of         43 CFR 3140.60--Use   No significant
 additional lands.             of additional lands.  change.
43 CFR 3140.7--Lands within   43 CFR 3140.70--      No significant
 the National Park System.     Lands within the      change.
                               National Park
                               System.
------------------------------------------------------------------------


         43 CFR Subpart 3141--Leasing in Special Tar Sand Areas
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3141.0-1--Purpose....  43 CFR 3141.1--       No significant
                               Purpose.              change.
43 CFR 3141.0-3--Authority..  43 CFR 3141.3--       No significant
                               Authority.            change.
43 CFR 3141.0-5--Definitions  43 CFR 3141.5--       No significant
                               Definitions.          change.
43 CFR 3141.0-8--Other        43 CFR 3141.8--Other  No significant
 Applicable Regulations.       Applicable            change.
                               Regulations.
43 CFR 3141.1--General......  43 CFR 3141.10--      No significant
                               General.              change.
43 CFR 3141.2--Prelease       Prelease exploration  No significant
 exploration within Special    within Special Tar    change.
 Tar Sand Areas.               Sand Areas.

[[Page 47607]]

 
43 CFR 3141.2-1--Geophysical  43 CFR 3141.21--      No significant
 exploration.                  Geophysical           change.
                               exploration.
43 CFR 3141.2-2--Exploration  43 CFR 3141.22--      No significant
 licenses.                     Exploration           change.
                               licenses.
43 CFR 3141.3--Land use       43 CFR 3141.30--Land  The proposed rule
 plans.                        use plans.            would specify that
                                                     royalty rate
                                                     reductions for tar
                                                     sands would not
                                                     apply to oil and
                                                     gas leases and vice
                                                     versa.
43 CFR 3141.4--Consultation.  Consultation........  No significant
                                                     change.
43 CFR 3141.4-1--             43 CFR 3141.41--      No significant
 Consultation with the         Consultation with     change.
 Governor.                     the Governor.
43 CFR 3141.4-2--             43 CFR 3141.42--      No significant
 Consultation with others.     Consultation with     change.
                               others.
43 CFR 3141.5--Leasing        Leasing procedures..  No significant
 procedures.                                         change.
43 CFR 3141.5-1--Economic     43 CFR 3141.51--      No significant
 evaluation.                   Economic evaluation.  change.
43 CFR 3141.5-2--Term of      43 CFR 3141.52--Term  No significant
 lease.                        of lease.             change.
43 CFR 3141.5-3--Royalties    43 CFR 3141.53--      No significant
 and rentals.                  Royalties and         change.
                               rentals.
43 CFR 3141.5-4--Lease size.  43 CFR 3141.54--      No significant
                               Lease size.           change.
43 CFR 3141.5-5--Dating of    43 CFR 3141.55--      No significant
 lease.                        Dating of lease.      change.
43 CFR 3141.6--Sale           Sale procedures.....  No significant
 procedures.                                         change.
43 CFR 3141.6-1--Initiation   43 CFR 3141.61--      No significant
 of competitive lease          Initiation of         change.
 offering.                     competitive lease
                               offering.
43 CFR 3141.6-2--Publication  43 CFR 3141.62--      No significant
 of a notice of competitive    Publication of a      change.
 lease offering.               notice of
                               competitive lease
                               offering.
43 CFR 3141.6-3--Conduct of   43 CFR 3141.63--      No significant
 sales.                        Conduct of sales.     change.
43 CFR 3141.6-4--             43 CFR 3141.64--      No significant
 Qualifications.               Qualifications.       change.
43 CFR 3141.6-5--Fair market  43 CFR 3141.65--Fair  The proposed rule
 value for combined            market value for      would remove this
 hydrocarbon leases.           combined              section as it is
                               hydrocarbon leases.   not needed with the
                                                     changes to Sec.
                                                     3141.63.
43 CFR 3141.6-6--Rejection    43 CFR 3141.65--      No significant
 of bid.                       Rejection of bid.     change.
43 CFR 3141.6-7--             43 CFR 3141.66--      No significant
 Consideration of next         Consideration of      change.
 highest bid.                  next highest bid.
43 CFR 3141.7--Award of       43 CFR 3141.70--      No significant
 lease.                        Award of lease.       change.
------------------------------------------------------------------------


43 CFR Subpart 3142--Paying Quantities/Diligent Development for Combined
                     Hydrocarbon and Tar Sand Leases
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3142.0-1--Purpose....  43 CFR 3142.1--       No significant
                               Purpose.              change.
43 CFR 3142.0-3--Authority..  43 CFR 3142.3--       No significant
                               Authority.            change.
43 CFR 3142.0-5--Definitions  43 CFR 3142.5--       Added definitions
                               Definitions.          for production in
                                                     paying quantities.
43 CFR 3142.1--Diligent       43 CFR 3142.10--      No significant
 development.                  Diligent              change.
                               development.
43 CFR 3142.2--Minimum        Minimum production    No significant
 production levels.            levels.               change.
43 CFR 3142.2-1--Minimum      43 CFR 3142.21--      No significant
 production schedule.          Minimum production    change.
                               schedule.
43 CFR 3142.2-2--Advance      43 CFR 3142.22--      No significant
 royalties in lieu of          Advance royalties     change.
 production.                   in lieu of
                               production.
43 CFR 3142.3--Expiration...  43 CFR 3142.30--      No significant
                               Expiration.           change.
------------------------------------------------------------------------


           43 CFR Subpart 3151--Exploration Outside of Alaska
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3151.1--Notice of      43 CFR 3151.10--      The proposed rule
 intent to conduct oil and     Notice of intent to   would require
 gas geophysical exploration   conduct oil and gas   notices of intent
 operations.                   geophysical           to include the
                               exploration           filing fee required
                               operations.           by 43 CFR 3000.120
                                                     in order to be to
                                                     consider a Notice
                                                     of Intent to
                                                     Conduct Oil and Gas
                                                     Exploration
                                                     Operations properly
                                                     filed.
43 CFR 3151.2--Notice of      43 CFR 3151.20--      No significant
 completion of operations.     Notice of             change.
                               completion of
                               operations.
New.........................  43 CFR 3151.30--      The proposed rule
                               Collection and        would add a new
                               submission of data.   requirement for the
                                                     permittee to
                                                     provide the BLM
                                                     with all data and
                                                     information
                                                     obtained in
                                                     carrying out the
                                                     exploration plan,
                                                     matching the
                                                     requirement for
                                                     geophysical
                                                     exploration permits
                                                     in Alaska.
------------------------------------------------------------------------


[[Page 47608]]


      43 CFR Subpart 3160--Onshore Oil and Gas Operations: General
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3160.0-5--Definitions  43 CFR 3160.0-5--     The proposed rule
                               Definitions.          would add
                                                     definitions for
                                                     ``shut-in well''
                                                     and ``temporarily
                                                     abandoned well.''
------------------------------------------------------------------------


    43 CFR Subpart 3162--Requirements for Operating Rights Owners and
                                Operators
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3162.3-4--Well         43 CFR 3162.3-4--     The proposed rule
 abandonment.                  Well abandonment.     would add a cap for
                                                     temporarily
                                                     abandoning a well
                                                     and new
                                                     requirements for
                                                     shut-in wells to
                                                     reduce the
                                                     liability to the
                                                     public.
------------------------------------------------------------------------


           43 CFR Subpart 3165--Relief, Conflicts, and Appeals
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3165.1--Relief from    43 CFR 3165.1--       The proposed rule
 operating and producing       Relief from           would clarify that
 requirements.                 operating and/or      the BLM would not
                               producing             grant lease
                               requirements.         suspensions based
                                                     solely on an APD
                                                     filed at the end of
                                                     a lease's life
                                                     cycle and would
                                                     ensures that any
                                                     suspension is
                                                     justified and tied
                                                     to an end date.
------------------------------------------------------------------------


                   43 CFR 3171--Approval of Operations
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3171.6--Components of  43 CFR 3171.6--       The proposed rule
 a complete APD package.       Components of a       would avoid the
                               complete APD          need to incorporate
                               package.              by reference the
                                                     National Spatial
                                                     Reference System,
                                                     North American
                                                     Datum 1983.
43 CFR 3171.14--Valid Period  43 CFR 3171.14--      The proposed rule
 of Approved APD.              Valid Period of       would change the
                               Approved APD.         validity period for
                                                     an APD from 2 years
                                                     to 3 years and
                                                     would removes the
                                                     potential for an
                                                     extension of an
                                                     APD.
------------------------------------------------------------------------


                        43 CFR 3186--Model Forms
------------------------------------------------------------------------
     Existing regulation       Proposed regulation   Substantive changes
------------------------------------------------------------------------
43 CFR 3186.2--Model          Removed.............  The proposed rule
 Collective Bond.                                    would remove this
                                                     section in its
                                                     entirety due to
                                                     changes made under
                                                     3104.
------------------------------------------------------------------------

VII. Procedural Matters

A. Regulatory Planning and Review (E.O. 12866, E.O. 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs (OIRA) within the OMB will review all significant 
rules. The OIRA has determined that this proposed rule is economically 
significant.
    Executive Order 13563 reaffirms the principles of Executive Order 
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. Executive Order 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.
    This proposed rule would replace the BLM's current rules governing 
oil and gas leasing, which are contained in 43 CFR 3100 through 3140, 
and revise some oil and gas operations, which are contained in 43 CFR 
3160 and 3171. The BLM developed this proposed rule in a manner 
consistent with the requirements in Executive Order 12866 and Executive 
Order 13563.
    The BLM reviewed the requirements of the proposed rule and 
determined that it would 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. For more detailed information, see the RIA 
prepared for this proposed rule. The RIA has been posted in the docket 
for the proposed rule on the Federal eRulemaking Portal: https://www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE80'', click 
the

[[Page 47609]]

``Search'' button, open the Docket Folder, and look under Supporting 
Documents.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
requires that Federal agencies prepare a regulatory flexibility 
analysis for rules subject to the notice-and-comment rulemaking 
requirements under the Administrative Procedure Act (5 U.S.C. 500 et 
seq.), if the rule would have a significant economic impact, whether 
detrimental or beneficial, 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 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 Economic Census. The number of small 
businesses in states where there are existing Federal oil and gas 
leases is estimated to be 20,975 for the Crude Petroleum Extraction and 
Natural Gas Extraction industries (NAICS codes 211120 and 21130, 
respectively). The BLM concludes that the proposed bonding requirement 
changes might increase challenges when securing bonds, especially for 
small businesses. This will increase the cost for business on Federal 
onshore oil and gas leases and might provide some incentives to shift 
leasing and operations to State or private lands. The cost of securing 
bonds may have a disproportionately larger impact on small businesses 
because it results in a larger percentage of the companies' net 
revenue. However, because the bonds would cost an estimated 1 to 3.5 
percent of the bond value (one bonding agency reported that over 70 
percent of their small-business customers paid 2 percent or less on 
their surety bond premiums) the annual cost to secure a bond would not 
be material (see https://www.insureon.com/small-business-insurance/surety-bonds/cost).
    Finally, the rule would have a distributional and positive impact 
on the Direct Property and Casualty Insurance Carriers Industry (NAICS 
524126). Additional premiums would be paid by lessees in the oil and 
natural gas extraction industries to surety companies who would be 
providing the coverage to meet the proposed requirements. The number of 
small businesses in states where there are existing Federal oil and gas 
leases is estimated to be 476,687 in that industry.

C. Congressional Review Act

    Based upon the economic analysis, this proposed rule is not a major 
rule under 5 U.S.C. 804(2), the Congressional Review Act. This proposed 
rule:
    (a) Would not have an annual effect on the economy of $100 million 
or more.
    (b) Would not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Would not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S. based enterprises to compete with foreign based enterprises.

D. Unfunded Mandates Reform Act (UMRA)

    The proposed rule would not have a significant or unique effect on 
State, local, or tribal governments or the private sector. The proposed 
rule contains no requirements that would apply to State, local, or 
tribal governments. The proposed rule would revise requirements that 
would otherwise apply to the private sector participation in a 
voluntary Federal program. The costs that the proposed rule would 
impose on the private sector are below the monetary threshold 
established at 2 U.S.C. 1532(a). A statement containing the information 
required by the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1531 et 
seq.) is therefore not required for the proposed rule. This proposed 
rule is also not subject to the requirements of section 203 of UMRA 
because it contains no regulatory requirements that might significantly 
or uniquely affect small governments, because it contains no 
requirements that apply to such governments, nor does it impose 
obligations upon them.

E. Governmental Actions and Interference With Constitutionally 
Protected Property Right--Takings (Executive Order 12630)

    This proposed rule would not affect a taking of private property or 
otherwise have taking implications under Executive Order 12630. A 
takings implication assessment is not required. The proposed rule would 
replace the BLM's current rules governing oil and gas leasing, which 
are contained in 43 CFR 3100 through 3140, and some oil and gas 
operations, which are contained in 43 CFR 3160 and 3171. Therefore, the 
proposed rule would impact future leases on Federal land; however, it 
would not impact current leases. All other terms in the regulations are 
not considered a taking of private property as such operations are 
subject to the existing lease terms which expressly require that 
subsequent lease activities be conducted in compliance with 
subsequently adopted Federal laws and regulations.
    This proposed rule conforms to the terms of the existing leases and 
applicable statutes and, as such, the rule is not a government action 
capable of interfering with constitutionally protected property rights. 
Therefore, the BLM has determined that the rule would not cause a 
taking of private property or require further discussion of takings 
implications under Executive Order 12630.

F. Federalism (Executive Order 13132)

    Under the criteria in section 1 of Executive Order 13132, this 
proposed rule does not have sufficient federalism implications to 
warrant the preparation of a federalism summary impact statement. A 
federalism impact statement is not required.
    The proposed rule would not have a substantial direct effect on the 
States, on the relationship between the Federal 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 rule would affect the 
relationship between operators, lessees, and the BLM, but it does not 
directly impact the States. Therefore, in accordance with Executive 
Order 13132, the BLM has determined that this proposed rule does not 
have sufficient federalism implications to warrant preparation of a 
Federalism Assessment.

G. Civil Justice Reform (Executive Order 12988)

    This proposed rule complies with the requirements of Executive 
Order 12988. More specifically, this proposed rule meets the criteria 
of section 3(a), which requires agencies to review all regulations to 
eliminate errors and ambiguity and to write all regulations to minimize 
litigation. This proposed rule also meets the criteria of section 
3(b)(2), which requires agencies to write all regulations in clear 
language with clear legal standards.

H. Consultation and Coordination With Indian Tribal Governments 
(Executive Order 13175 and Departmental Policy)

    The Department strives to strengthen its government-to-government 
relationship with Indian Tribes through

[[Page 47610]]

a commitment to consultation with Indian Tribes and recognition of 
their right to self-governance and tribal sovereignty.
    The BLM evaluated this proposed rule under the Department's 
consultation policy and under the criteria in Executive Order 13175 to 
identify possible effects of the rule on federally recognized Indian 
Tribes. Since the proposed changes to leasing only apply to Federal 
lands, the proposed rule will not impact the leasing of Indian 
minerals.
    In August of 2021, the BLM sent a letter to each registered Tribe 
informing them of certain rulemaking efforts, including the development 
of this proposed rule. The letter offered Tribes the opportunity for 
individual government-to-government consultation regarding the proposed 
rule. The opportunity for tribal consultation will remain open 
throughout the rulemaking process.

I. Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) generally 
provides that an agency may not conduct or sponsor, and not 
withstanding any other provision of law 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 any 
request or requirement that persons obtain, maintain, retain, or report 
information to an agency, or disclose information to a third party or 
to the public (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)).
    This proposed rule contains information-collection requirements 
that are subject to review by OMB under the PRA. OMB has generally 
approved the existing information collection requirements contained in 
the regulations that would be affected by this proposed rule under the 
following OMB Control Numbers:
     43 CFR 3100, 3120, and Subpart 3162--OMB Control Number 
1004-0185;
     43 CFR 3106--OMB Control Number 1004-0034;
     43 CFR part 3130--OMB Control Number 1004-0196;
     43 CFR 3150--OMB Control Number 1004-0162; and
     43 CFR 3160--OMB Control Number 1004-0137.
    The BLM plans to transfer the information collection requirements 
contained in 43 CFR 3106 from OMB control number 1004-0034 to OMB 
Control Number 1004-0185 in order to keep similar information 
collections requirements together under the same OMB Control Number. 
Additionally, the BLM plans to transfer information collection 
requirements contained in 43 CFR 3160 from OMB Control Number 1004-0137 
to a new OMB Control Number. The new and revised information collection 
requirements are discussed as follows, along with the resulting changes 
in public burdens.
1. Proposed Changes Impacting Information Collections Formerly Under 
OMB Control Number 1004-0137
    The proposed rule would result in new information collection 
requirements that would require OMB approval under a new OMB control 
number (formerly 1004-0137). This proposed rule is estimated to result 
in 33,121 annual responses, 252,928 annual burden hours, $35,400,000 
non-hour cost burdens under this new OMB Control Number.
    The proposed new information collection requirements are described 
as follows.
    43 CFR 3162.3-4--Well Abandonment. The BLM is proposing to modify 
paragraph (c) to include that no well may be temporarily abandoned 
unless the operator provides adequate and detailed justifications, 
verifies the mechanical integrity of the wells, and isolates the 
completed interval(s). The BLM proposes to add a new paragraph (d) 
outlining new requirements for operators of shut-in wells. Paragraph 
(d)(1) provides for notification of the well's shut-in status and shut-
in date within 90 days of shut in. Paragraph (d)(2) provides for the 
verification of the mechanical integrity of the well and confirmation 
that the well remains capable of producing in paying quantities within 
3 years. When a well remains in a shut-in status by the fourth year, as 
outlined in paragraph (d)(3), the operator must either: (i) permanently 
abandon the well; (ii) resume production; or (iii) provide a detailed 
plan and timeline for the beneficial use for the well. The BLM may 
grant additional delays provided the operator submits information that 
confirms the use and is making progress on returning the well to a 
beneficial use. The new information collection requirements would 
include:
     Justification for Temporary Well Abandonment--43 CFR 
3162.3-4(c);
     Abandon Well Shut-in Status--43 CFR 3162.3-4(d);
     Verification of Mechanical Integrity--43 CFR 3162.3-
4(d)(2); and
     Plan and Timeline for Future Beneficial Use--43 CFR 
3162.3-4(d)(3)(iii).
    The BLM believes these new requirements with yearly interval checks 
will help operators stay on top of shut-in wells, thus preventing them 
from becoming orphaned in the future. The addition of these information 
collection requirements would result in an addition of 5,000 annual 
responses, 44,000 annual burden hours.
    Currently, there are 301,663 annual responses, 1,835,888 annual 
burden hours, and $31,080,000 annual non-hour cost burdens inventoried 
under the OMB Control Number 1004-0137. This rule will create a new OMB 
Control Number and removes 28,121 annual responses, 208,298 annual 
burden hours, and $31,080,000 annual non-hour cost burdens inventoried 
under OMB Control Number 1004-0137 into this OMB Control Number.
    In addition, there is an adjustment of $4.3 million in annual non-
hour cost burdens (from $31 million to 35.4 million). This adjustment 
results from the annual inflation adjustment of filing fees and do not 
result from the proposed rule. The resulting new estimated total 
burdens for this new OMB Control Number are provided as follows.
    Title of Collection: Onshore Oil and Gas Operations and Production 
(43 CFR parts 3160 and 3170).
    OMB Control Number: 1004-NEW.
    Form Numbers: BLM Form 3160-003; BLM Form 3160-004; and BLM Form 
3160-005 (these forms will not change).
    Type of Review: Revision of a currently approved collection of 
information.
    Respondents/Affected Public: Oil and gas operators on public lands 
and some Indian lands.
    Total Estimated Number of Annual Respondents: 7,500.
    Total Estimated Number of Annual Responses: 33,121.
    Estimated Completion Time per Response: Varies from 4 to 32 hours, 
depending on activity.
    Total Estimated Number of Annual Burden Hours: 252,928.
    Respondent's Obligation: Required to obtain or retain a benefit.
    Frequency of Collection: On occasion; One-time; and Monthly.
    Annual Burden Cost: $35,400,000.
2. Proposed Changes Impacting OMB Control Number 1004-0162
    Currently, there are 68 annual responses, 26 annual burden hours, 
and $25 annual non-hour cost burdens inventoried under OMB Control 
Number 1004-0162. It is not anticipated that the proposed rule will 
change the results to the annual responses, annual burden hours, or 
non-hour cost burdens under this OMB Control Number. The proposed 
revised information collection requirement is described as follows.

[[Page 47611]]

    43 CFR 3151.3--Collection and submission of data. The proposed rule 
would add a new requirement for the permittee to provide the BLM with 
all data and information obtained in carrying out the exploration plan, 
matching the requirement for geophysical exploration permits in Alaska. 
This does not change the existing burden for what applicants need to 
submit to the BLM for acquiring a geophysical exploration permit.
    Title of Collection: Onshore Geophysical Exploration (43 CFR part 
3150 and 36 CFR parts 228 and 251).
    OMB Control Number: 1004-0162.
    Form Number: BLM 3150-4/FS 2800-16; BLM 3150-5/FS 2816a (these 
forms will not change).
    Type of Review: Revision of a currently approved collection of 
information.
    Respondents/Affected Public: The respondents for this collection of 
information are businesses that seek to conduct geophysical exploration 
on Federal lands.
    Respondent's Obligation: Required to Obtain or Retain a Benefit.
    Frequency of Collection: On occasion.
    Estimated Completion Time per Response: Varies from 20 minutes to 1 
hour, depending on activity.
    Number of Respondents: 68.
    Annual Responses: 68.
    Annual Burden Hours: 26.
    Annual Burden Cost: $1,150.
3. Proposed Changes Impacting OMB Control Number 1004-0185
    Currently, there are 9,132 annual responses, 37,695 annual burden 
hours, and $751,415 annual non-hour cost burdens inventoried under OMB 
Control Number 1004-0185. This proposed rule is estimated to result in 
16,340 annual responses, 29,410 annual burden hours, $1,793,159, non-
hour cost burdens under this OMB Control Number. The proposed rule 
would result in new, revised, and removed information collection 
requirements. Additionally, as discussed earlier, the BLM will also be 
transferring certain information collection requirements, along with 
the associated burdens from OMB Control Number 1004-0034 to OMB Control 
Number 1004-0185. These proposed changes are discussed as follows.
Revised Information Collection Requirements
    43 CFR 3100.31(b)--Option Enforceability. The proposed rule revises 
this requirement to clarify that a statement of the number of acres and 
the type and percentage of interest to be conveyed and retained by the 
parties to the option must be submitted for an option or renewal to be 
enforceable. This does not change the burden requirement. The existing 
regulation already states the interest to be conveyed and retained in 
exercise of the option. The BLM needs to understand if the type of 
interest is referring to record title or operating rights and the 
percentage to be conveyed and retained by the option holder.
    43 CFR 3105.21--Where to File Communitization Agreements. The 
proposed rule removes the triplicate filing requirement. The proposed 
rule adds a new paragraph (b) to this section to require that all 
applications to form a CA be filed with a statement as to whether the 
proposed CA deviates from the BLM's current model CA form, and a 
certification that the applicant received the required signatures. 
Further, all applications to form a CA shall include an Exhibit A 
displaying a map of the agreement and the separate agreement tracts and 
all applications to form a CA shall include an Exhibit B displaying the 
separate tracts and ownership. The new paragraph (c) states that all 
applications to form a CA should be submitted at least 90 calendar days 
prior to first production to ensure correct reporting to the ONRR. 
These requirements codify existing policy requirements and does not 
change the existing burden for what applicants to submit to the BLM. 
The information is needed to understand all the parties that share in 
the production of a well due to State spacing orders.
    43 CFR 3105.31--Where to file Operating, Drilling or Development 
Contracts. The proposed rule would remove the requirement for five 
copies of an operating, drilling or development contract to be 
submitted when these contracts are submitted to the BLM for approval. 
This reduces the burden to respondents.
    43 CFR 3105.40--Subsurface storage application (formerly 3105.5). 
The proposed rule would designate the existing 43 CFR 3105.5 for gas 
storage agreements to the proposed numbering 43 CFR 3105.40. This 
redesignation would be due to the elimination of the section on the 
combination for joint operations or for transportation of oil. The 
proposed rule would update paragraph (a) to include designation of 
successor operators for gas storage agreements among the applications 
to be filed in the proper BLM office. The proposed rule would update 
paragraph (b) to remove the requirement for five copies of a gas 
storage agreements to be submitted when these are filed with the BLM. A 
new paragraph (c) would require that all applications for a gas storage 
agreement or a designation of a successor operator must include the new 
processing fee found in the fee schedule in 43 CFR 3000.120. The new 
processing fee is intended to reimburse the BLM for processing the 
applications.
    43 CFR 3105.50--Consolidation of Leases (formerly 3105.6). Leases 
may be consolidated upon written request of the lessee filed with the 
proper BLM identify each lease involved by serial number and shall 
explain the factors that justify the consolidation and requires that 
each request for a consolidation of leases the processing fee found in 
the fee schedule in 43 CFR 3000.120. The proposed rule splits the 
single paragraph under this section into several paragraphs for 
clarity, however these are not new requirements and do not change the 
existing burden.
    43 CFR 3106.81--Heirs and devisees. The proposed updates this 
information collection requirement to state that the lease interest 
will be transferred to the heirs, devisees, executor or administrator 
of the estate, as appropriate, upon the filing of a court order, death 
certificate, or other legal document demonstrating that transferee is 
to be recognized as the successor of the deceased. These requirements 
codify existing policy requirements and does not change the existing 
burden for what applicants currently submit to the BLM to show proof on 
how the lease interest transferred to another party.
    43 CFR 3106.82--Change of name. The current regulation requires a 
notice of the name change to be accompanied by a list of the serial 
numbers of the leases affected by the name change. This requirement is 
removed as it is outdated and unenforceable. This lessens the burden to 
respondents. In practice, the BLM generates a report of the leases 
affected by the name change and returns that list to the lessee with a 
notice that recognizes the name change that occurred through operation 
of law. This section is updated to require that, for a corporate name 
change, the request should include the Secretary of State's Certificate 
of Name Change along with the Articles of Incorporation, or Amendment, 
if available. This is consistent with the BLM's current approach for 
processing these types of documents. These requirements codify existing 
policy requirements and do not change the existing burden for what 
applicants currently submit to the BLM to show proof on how the lease 
interest transferred to another party.
    43 CFR 3106.83--Corporate mergers and dissolution of corporations, 
partnerships and trust. The proposed rule updates the title of this 
section from ``Corporate merger'' to ``Corporate

[[Page 47612]]

mergers and dissolution of corporations, partnerships and trust.'' The 
goal of the renaming of this section is to incorporate these other 
types of transfers that have the same process. The current regulation 
requires a notification of merger to be accompanied by a list of the 
serial numbers of the leases affected by the merger. This requirement 
is eliminated as it is outdated and unenforceable. This lessens the 
burden to respondents. In practice, the BLM does not rely on a list of 
leases provided by a lessee and instead generates its own report of the 
leases affected by the merger. The BLM returns that list to the lessee 
with a notice that recognizes the merger that occurred through 
operation of State law. This section is updated to require that, for a 
merger, the request should include the Secretary of State's Certificate 
of Merger along with the Articles of Incorporation, or Amendment, if 
available. This is consistent with the BLM's current approach for 
processing these types of documents. These requirements codify existing 
policy requirements and do not change the existing burden for what 
applicants currently submit to the BLM to show proof on how the lease 
interest transferred to another party.
    43 CFR 3108.23--Reinstatement at higher rental and royalty rates: 
Class II reinstatements. The proposed rule would eliminate the existing 
paragraph (b)(1) in its entirety. This provision addresses the 
timeliness of Class II reinstatement petitions for leases that 
terminated on or before August 8, 2005, and is no longer applicable. 
This does not change an existing burden since a petition to reinstate a 
lease that terminated on or before August 8, 2005, would have already 
been received by an applicant.
    43 CFR 3109.12--Application. The proposed rule also adds a new 
requirement that the applicant must include a map of the applicable 
lands which will support the bidding process related to the lease or 
compensatory royalty agreement. These requirements codify existing 
policy requirements and does not change the existing burden for what 
applicants to submit to the BLM.
New Information Collection Requirements
    43 CFR 3106.84--Sheriff's sale/deed. The proposed rule adds a new 
section under other types of transfers to include sheriff's sales. The 
BLM accepts these types of transfers to recognize lease interests 
transferred to other parties through foreclosure actions. The proposed 
rule states that where a notice of sale of the leasehold interest is 
published pursuant to State law applicable to the execution of sales of 
real property, the purchaser shall submit a copy of the Sheriff's 
Certificate of Sale after any redemption period has passed to the 
proper BLM office. Additional paragraphs under this new section include 
a filing fee requirement, a qualification statement, and bonding 
requirements. These requirements are consistent with the BLM's current 
approach for processing these types of documents. These documents are 
already submitted and recognized by the BLM when changes in ownership 
of interests in Federal oil and gas leases occur without any intention 
by the holder of interest to assign or transfer interest. The addition 
of this information collection would result in an addition of 1 annual 
response, 1 annual burden hour, and $55.80 annual non-hour cost 
burdens.
    43 CFR 3120.43--Expression of Interest. The proposed rule adds a 
new section titled ``Expression of Interest'' to codify the current 
process of receiving EOIs for competitive leasing to the BLM's online 
leasing system. An expression of interest is a description of lands 
that an applicant seeks to include in a competitive auction. The 
expression must provide a description of the lands identified by legal 
land description and identify the U.S. mineral ownership percentage. 
The addition of this information collection would result in an addition 
of 395,864 annual responses (calculated by acreage received), 3,958,640 
annual burden hours (to process the acreage received), and $220,892,112 
annual non-hour cost burdens.
Removed Information Collection Requirements
    43 CFR 3101.26--Ad-Hoc Acreage Statement. At any time, the BLM may 
require a lessee or operator to file a statement showing as of the 
specified date, the serial number and the date of each lease in which 
he/she has any interest, in the particular State, setting forth the 
acreage covered thereby. The BLM uses the information to determine 
whether or not a lessee is in compliance with the law with respect to 
statutory acreage limitations. This revision results in the reduction 
of 1 response and 1 burden hour, annually.
    43 CFR 3105.4--Combination for joint operations or for 
transportation of oil. The proposed rule eliminates the section on the 
combination for joint operations or for transportation of oil. These 
provisions are not used by the BLM or operators and are outdated. This 
revision results in the reduction of 1 response and 1 burden hour, 
annually.
    43 CFR 3107.8--Renewal leases. The proposed rule eliminates the 
provisions on renewal leases in their entirety because they are 
outdated. Renewal leases that had an expiration date after November 15, 
1990, were eligible for one last renewal under the provisions of the 
November 15, 1990, Act, i.e., for 10 years, and for so long thereafter 
as oil and gas is produced in paying quantities. If a lease was renewed 
after the 1990 amendment and was not producing oil or gas at the end of 
its 10-year renewal term, the lease expired with no further option for 
renewal. The removal of this information collection would result in a 
reduction 1 annual response, 1 annual burden hour, and $475 annual non-
hour cost burdens.

D. Class III reinstatement petition (43 CFR 3108.2-4).

    The requirement would be removed from the proposed rule resulting 
in a reduction of one annual response and one burden hour as well as 
$651 in non-hour cost burden.
Information Collection Requirements Transferred From OMB Control Number 
1004-0034.
    The following two information collection will be moved into OMB 
Control Number 1004-0185 to keep information collection requirements in 
Subpart 3106 under the same OMB Control Number:
    1. 43 CFR 3106.41--Transfers of record title and of operating 
rights (subleases) and 3106.42, Transfers of other interests, including 
royalty interests and production payments. This transfer would result 
in 3,852 annual responses, 1,926 annual burden hours, and $404,460 non-
hours cost burdens being added to this OMB Control Number.
    2. 43 CFR 3106.43--Mass transfers. This transfer would result in 
4,944 annual responses, 2,472 annual burden hours, and $519,120 non-
hours cost burdens being added to this OMB Control Number.
    The resulting new estimated total burdens for OMB Control Number 
1004-0185 are provided as follows.
    Title of Collection: Onshore Oil and Gas Leasing, and Drainage 
Protection (43 CFR parts 3100, 3120, and 3150, and Subpart 3162).
    OMB Control Number: 1004-0185.
    Form Number: None.
    Type of Review: Revision of a currently approved collection of 
information.
    Respondents/Affected Public: Holders of onshore oil and gas lease 
and public lands and Indian lands (except on the Osage Reservation), 
operators of such

[[Page 47613]]

leases, and holders of operating rights on such leases.
    Respondent's Obligation: Required to Obtain or Retain a Benefit.
    Frequency of Collection: Varies from 1 hour to 24 hours per 
response, depending on activity.
    Number of Respondents: 16,339.
    Annual Responses: 16,340.
    Annual Burden Hours: 29,410.
    Annual Burden Cost: $1,793,159.
4. Proposed Changes Impacting OMB Control Number 1004-0196
    Currently, there are there are 21 annual responses and 220 annual 
burden hours associated with this OMB control number. There are also no 
non-hours cost burden currently associated with this OMB control 
number. The proposed rule is not projected to result in any new annual 
responses The additional requirements proposed in 43 CFR 3170.80(b) 
include description of the anticipated PA(s) size and define the 
proposed PAs in the unit designation agreements required by 43 CFR 
3137.21, and 3137.23 is not projected to result in additional burden 
for that information collection.
    43 CFR 3000.12 would introduce new filing fees for the following 
information collections, resulting in a new non-hour burden cost of 
$1,320:
     Statement of change of unit operator (43 CFR 3137.61); and
     Application for storage agreement (43 CFR 3138.11). 
Additionally, 43 CFR 3137.86, New information demonstrating that the 
participating area should be larger or smaller than previously 
determined, contains the following three information collection 
requirements for which the burden has not been formerly captured in 
this OMB control number:
     Information demonstrating that a participating area should 
be larger than previously determined (43 CFR 3137.86(a)(1));
     Application to enlarge participating area outside of 
existing boundaries (43 CFR 3137.86(a)(2)); and
     Statement for additional committed tract or tracts are 
added to the unit under paragraph (a)(2) (43 CFR 3137.86(a)(3)).
    The resulting new estimated total burdens for OMB Control Number 
1004-0196 are provided as follows.
    Title of Collection: Oil and Gas Leasing: National Petroleum 
Reserve--Alaska (43 CFR part 3130).
    OMB Control Number: 1004-0196.
    Form Number: None.
    Type of Review: Revision of a currently approved collection of 
information.
    Respondents/Affected Public: Participants within the oil and gas 
leasing program within the National Petroleum Reserve-Alaska.
    Respondent's Obligation: Required to Obtain or Retain a Benefit.
    Frequency of Collection: On occasion.
    Estimated Completion Time per Response: Varies from 15 minutes to 
80 hours, depending on activity.
    Number of Respondents: 24.
    Annual Responses: 24.
    Annual Burden Hours: 223.
    Annual Burden Cost: $1,320.
    In summary, the net burden changes that would result from the new, 
revised, and removed information collection requirements as contained 
in the proposed rule are as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Annual responses                     Annual burden hours                   Non-hour burden costs
          OMB Control No.           --------------------------------------------------------------------------------------------------------------------
                                       Current      Proposed      Change      Current      Proposed      Change      Current      Proposed      Change
--------------------------------------------------------------------------------------------------------------------------------------------------------
1004-0NEW (transfer from 1004-0137)       28,121       33,121       +5,000      208,928      252,928      +44,000  $31,080,000  $35,400,000  +$4,320,000
1004-0162..........................           68           68            0           26           26            0           25        1,150       +1,125
1004-0185..........................        9,132       16,340       +7,208       37,695       29,410      +-8,285      751,415    1,793,159   +1,041,744
1004-0196..........................           21           24           +3          220          223           +3            0        1,320       +1,320
                                    --------------------------------------------------------------------------------------------------------------------
    Total Burden Changes...........       37,342       49,553      +12,211      246,869      282,587      +35,716   31,831,440   39,125,897   +5,364,189
Minus Burden Transferers from 1004-  ...........  ...........       -8,796  ...........  ...........       -4,398  ...........  ...........     -923,580
 0034:.............................
Minus Burden Transfer from 1004-     ...........  ...........      -28,121  ...........  ...........     -208,928  ...........  ...........    4,320,000
 0137..............................
Minus changes from the IRA in 1004-  ...........  ...........         -395  ...........  ...........       -3,160  ...........  ...........   -1,975,000
 0185 for EOIs:....................
Net Burden Changes Resulting from    ...........  ...........       +3,020  ...........  ...........      +28,160  ...........  ...........    1,854,391
 the Proposed Rule:................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    If you want to comment on the information-collection requirements 
of this proposed rule, please send your comments and suggestions on 
this information-collection by the date indicated in the DATES and 
ADDRESSES sections as previously described

J. National Environmental Policy Act

    A detailed environmental analysis under NEPA is not required, 
because the proposed rule is covered by a categorical exclusion (see 43 
CFR 46.205). This proposed rule meets the criteria set forth at 43 CFR 
46.210(i) for a Departmental categorical exclusion in that this 
proposed rule is ``of an administrative, financial, legal, technical, 
or procedural nature.'' We have also determined that the proposed rule 
does not involve any of the extraordinary circumstances listed in 43 
CFR 46.215 that would require further analysis under NEPA.

K. Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use (Executive Order 13211)

    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 on 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 OIRA as a significant 
energy action.''
    The BLM believes that the rule may affect the location chosen for 
future oil or gas development but will have little impact on an 
entity's decision to invest in energy development, the size of that 
development, or the production from that development. As a result of 
this

[[Page 47614]]

rule, an entity holding existing nonproducing leases may choose to 
shift more future development to these existing leases or to develop 
non-Federal acreage instead of securing new Federal leases, and some 
entities may be relatively less likely to choose a new Federal lease to 
a comparable non-Federal lease. Also, any incremental changes in oil or 
gas production estimated to result from the rule's enactment would 
constitute a small fraction of total U.S. gas production, and any 
potential and temporary deferred production of oil would likewise 
constitute a small fraction of total U.S. oil production. For these 
reasons, we do not expect that the proposed rule would significantly 
impact the supply, distribution, or use of energy. As such, the 
rulemaking is not a ``significant energy action'' as defined in 
Executive Order 13211.

L. Clarity of This Regulation (Executive Orders 12866, 12988, and 
13563)

    We are required by Executive Orders 12866 (section 1(b)(12)), 12988 
(section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential 
Memorandum of June 1, 1988, to write all rules in plain language. This 
means that each rule must:
    (a) Be logically organized;
    (b) Use the active voice to address readers directly;
    (c) Use common, everyday words and clear language rather than 
jargon;
    (d) Be divided into short sections and sentences; and
    (e) Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ADDRESSES section. To 
better help the BLM revise the proposed rule, your comments should be 
as specific as possible. For example, you should tell us the numbers of 
the sections or paragraphs that you find unclear, which sections or 
sentences are too long, the sections where you feel lists or tables 
would be useful, etc.
Authors
    The principal authors of this final rule include: Peter Cowan, 
Senior Mineral Leasing Specialist in BLM Headquarters; Jennifer 
Spencer, Mineral Leasing Specialist in BLM Headquarters; William 
Lambert, Petroleum Engineer in BLM Headquarters; Christopher Rhymes, 
former Attorney Advisor in DOI Office of the Solicitor. Technical 
support provided by: Scott Rickard, Economist in BLM Headquarters; 
Holly Elliott, Planning and Environmental Specialist in BLM Wind River 
Bighorn Basin District; Erik Vernon, Air Resources Program Lead in BLM 
Utah State Office; Bret Anderson, National Air Resources Program Lead 
in BLM Headquarters; and James Tichenor, Technical Advisor in BLM 
Headquarters. Assisted by: Duane Spencer, Deputy State Director of 
Minerals and Land in BLM Wyoming State Office; JulieAnn Serrano, 
Supervisory Land Law Examiner in BLM New Mexico State Office; Rebecca 
Baca, former Supervisory Land Law Examiner in BLM Colorado State 
Office; and Darrin King, Senior Regulatory Analysts in BLM 
Headquarters.

List of Subjects

43 CFR Part 3000

    Public lands-mineral resources, Reporting and recordkeeping 
requirements.

43 CFR Part 3100

    Government contracts, Mineral royalties, Oil and gas reserves, 
Public lands-mineral resources, Reporting and recordkeeping 
requirements, Surety bonds.

43 CFR Part 3110

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

43 CFR Part 3120

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

43 CFR Part 3130

    Alaska, Government contracts, Mineral royalties, Oil and gas 
exploration, Oil and gas reserves, Public lands-mineral resources, 
Reporting and recordkeeping requirements, Surety bonds.

43 CFR Part 3140

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

43 CFR Part 3150

    Administrative practice and procedure, Alaska, Oil and gas 
exploration, Public lands-mineral resources, Reporting and 
recordkeeping requirements, Surety bonds.

43 CFR Part 3160

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

43 CFR Part 3170

    Administrative practice and procedure, Flaring, Immediate 
assessments, Indians-lands, Mineral royalties, Oil and gas exploration, 
Oil and gas measurement, Public lands--mineral resources, Reporting and 
record keeping requirements, Royalty-free use, Venting.

43 CFR Part 3180

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

43 CFR Chapter II

    For the reasons set out in the preamble, the Bureau of Land 
Management proposes to amend 43 CFR parts 3000, 3100, 3110, 3120, 3130, 
3140, 3150, 3160, 3170, and 3180 as follows:

0
1. Revise part 3000 to read as follows:

PART 3000--MINERALS MANAGEMENT: GENERAL

Sec.
3000.5 Definitions.
3000.10 Nondiscrimination.
3000.20 False statements.
3000.30 Unlawful interests.
3000.40 Appeals.
3000.50 Limitations on time to institute suit to challenge a 
decision of the Secretary.
3000.60 Filing of documents.
3000.70 Multiple development.
3000.80 Management of Federal minerals from reserved mineral 
estates.
3000.90 Enforcement actions under 30 U.S.C. 195.
3000.100 Fees in general.
3000.110 Processing fees on a case-by-case basis.
3000.120 Fee schedule for fixed fees.
3000.130 Fiscal terms of new leases.

    Authority:  16 U.S.C. 3101 et seq.; 30 U.S.C. 181 et seq., 301-
306, 351-359, and 601 et seq.; 31 U.S.C. 9701; 40 U.S.C. 471 et 
seq.; 42 U.S.C. 6508; 43 U.S.C. 1701 et seq.; and Pub. L. 97-35, 95 
Stat. 357.


Sec.  3000.5  Definitions.

    As used in 43 CFR parts 3000 and 3100, the term:
    Acquired lands means lands which the United States obtained by deed 
through purchase or gift, or through condemnation proceedings, 
including lands previously disposed of under the public land laws 
including the mining laws.
    Acreage for which expressions of interest have been submitted means 
acreage that is identified in an expression of interest received by 
BLM, that has not been proposed for leasing

[[Page 47615]]

in any pending sale or other expression of interest pending BLM 
disposition, and for which BLM may lawfully issue an oil and gas lease.
    Acres offered for lease means all acres that BLM has offered for 
oil and gas lease, regardless of whether those acres are acreage for 
which expressions of interest have been submitted.
    Act or MLA means the Mineral Leasing Act of 1920, as amended and 
supplemented (30 U.S.C. 181 et seq.).
    Anniversary date means the same day and month in succeeding years 
as that on which the lease became effective.
    Authorized officer means any BLM employee authorized to perform the 
duties described in parts 3000 and 3100.
    BLM or Bureau means the Bureau of Land Management.
    Director means the Director of the Bureau of Land Management.
    Gas means any fluid, either combustible or noncombustible, which is 
produced in a natural state from the earth and which maintains a 
gaseous or rarefied state at ordinary temperatures and pressure 
conditions.
    Interest means ownership in a lease, or prospective lease, of all 
or a portion of the record title, working interest, operating rights, 
overriding royalty, payments out of production, carried interests, net 
profit share or similar instrument for participation in the benefit 
derived from a lease. An interest may be created by direct or indirect 
ownership, including options. Interest does not mean stock ownership, 
stockholding or stock control in an application, offer, competitive bid 
or lease, except for purposes of acreage limitations in 43 CFR 3101.20 
and qualifications of lessees in 43 CFR subpart 3102.
    Oil means all nongaseous hydrocarbon substances other than those 
substances leasable as coal, oil shale or gilsonite (including all 
vein-type solid hydrocarbons).
    ONRR means the Office of Natural Resources Revenue.
    Party in interest means a party who is or will be vested with any 
interest under the lease as defined in this section. No one is a sole 
party in interest with respect to an application, offer, competitive 
bid or lease in which any other party has an interest.
    Person means any individual or entity, including a partnership, 
association, State, political subdivision of a State or territory, or a 
private, public, or municipal corporation.
    Proper BLM office means the Bureau of Land Management state office 
having jurisdiction over the lands subject to the regulations in parts 
3000 and 3100. (See 43 CFR 1821.10 for office location and area of 
jurisdiction of Bureau of Land Management offices.)
    Properly filed means a document or form submitted to the proper BLM 
office with all necessary information and payments, as provided in 43 
CFR subpart 1822.
    Public domain lands means lands, including mineral estates, which 
never left the ownership of the United States, lands which were 
obtained by the United States in exchange for public domain lands, 
lands which have reverted to the ownership of the United States through 
the operation of the public land laws and other lands specifically 
identified by the Congress as part of the public domain.
    Secretary means the Secretary of the Interior.
    Surface managing agency means any Federal agency, other than the 
BLM, having management responsibility for the surface resources that 
overlay federally owned minerals.


Sec.  3000.10  Nondiscrimination.

    Any person acquiring a lease under this chapter must comply fully 
with the equal opportunity provisions of Executive Order 11246 dated 
September 24, 1965, as amended, and the rules, regulations and relevant 
orders of the Secretary of Labor (41 CFR part 60 and 43 CFR part 17).


Sec.  3000.20  False statements.

    As provided in 18 U.S.C. 1001, it is a crime punishable by 
imprisonment or a fine, or both, for any person knowingly and willfully 
to submit or cause to be submitted to any agency of the United States 
any false or fraudulent statement(s) as to any matter within the 
agency's jurisdiction.


Sec.  3000.30  Unlawful interests.

    No member of, or delegate to, Congress, or Resident Commissioner, 
and no employee of the Department of the Interior, except as provided 
in 43 CFR part 20, is allowed or entitled to acquire or hold any 
Federal lease, or interest therein. (Officer, agent or employee of the 
Department--see 43 CFR part 20; Member of Congress--see R.S. 3741; 41 
U.S.C. 22; 18 U.S.C. 431-433.)


Sec.  3000.40  Appeals.

    Except as provided in 43 CFR 3000.120, 3000.130, 3101.53(b), 
3165.4, and 3427.2, any party adversely affected by a decision of the 
authorized officer made pursuant to the provisions of 43 CFR parts 3000 
or 3100 has a right of appeal pursuant to 43 CFR part 4.


Sec.  3000.50  Limitations on time to institute suit to challenge a 
decision of the Secretary.

    No action challenging a decision of the Secretary involving any oil 
or gas lease, offer or application can be maintained unless such action 
is commenced or taken within 90 days after the final decision of the 
Secretary relating to such matter.


Sec.  3000.60  Filing of documents.

    All necessary documents must be filed in the proper BLM office. 
Documents may be submitted to the BLM using hard-copy delivery 
services, in-person delivery, or by electronic filing. A document will 
be considered filed when it is received in the proper BLM office. When 
using hard-copy delivery services or in-person delivery, the document 
will be considered filed only when received during regular business 
hours. See 43 CFR part 1820, subpart 1822.


Sec.  3000.70  Multiple development.

    The granting of a permit or lease for the prospecting, development 
or production of deposits of any one mineral does not preclude the 
issuance of other permits or leases for the same lands for deposits of 
other minerals with suitable stipulations for simultaneous operation, 
nor the allowance of applicable entries, locations or selections of 
leased lands with a reservation of the mineral deposits to the United 
States.


Sec.  3000.80  Management of Federal minerals from reserved mineral 
estates.

    Where nonmineral public land disposal statutes provide that in 
conveyances of title all or certain minerals are reserved to the United 
States together with the right to prospect for, mine and remove the 
minerals under applicable law and regulations as the Secretary may 
prescribe, the lease or sale, and administration and management of the 
use of such minerals will be accomplished under the regulations of 43 
CFR parts 3000 and 3100. Such mineral estates include, but are not 
limited to, those that have been or will be reserved under the 
authorities of the Small Tract Act of June 1, 1938, as amended (43 
U.S.C. 682(b)) and the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1701 et seq.).


Sec.  3000.90  Enforcement actions.

    The United States Department of Justice is the agency responsible 
for the enforcement actions described in 30 U.S.C. 195, which makes it 
unlawful for any person to organize or participate in any scheme, 
arrangement, plan, or agreement to circumvent or defeat the

[[Page 47616]]

provisions of the MLA or its implementing regulations; or to seek to 
obtain or to obtain any money or property by means of false statements 
of material facts or by failing to state materials facts concerning 
the:
    (a) Value of any lease or portion thereof issued or to be issued 
under the MLA;
    (b) Availability of any land for leasing under the MLA;
    (c) Ability of any person to obtain leases under the MLA; or
    (d) Provisions of the MLA and its implementing regulations.


Sec.  3000.100  Fees in general.

    (a) Setting fees. Fees may be statutorily set fees, relatively 
nominal filing fees, or processing fees intended to reimburse the BLM 
for its reasonable processing costs. For processing fees, the BLM takes 
into account the factors in section 304(b) of the Federal Land Policy 
and Management Act of 1976 (FLPMA) (43 U.S.C. 1734(b)) before deciding 
a fee. The BLM considers the factors for each type of document when the 
processing fee is a fixed fee and for each individual document when the 
fee is decided on a case-by-case basis, as explained in Sec.  3000.110.
    (b) Conditions for filing. The BLM will not accept a document that 
the applicant submits without the proper filing or processing fee 
amounts except for documents where the BLM sets the fee on a case-by-
case basis. Fees are not refundable except as provided for case-by-case 
fees in Sec.  3000.110. The BLM will keep the fixed filing or 
processing fee as a service charge even if the BLM does not approve the 
application or the applicant withdraws it completely or partially.
    (c) Periodic adjustment. The BLM will periodically adjust fees 
established in this subchapter according to changes in the Implicit 
Price Deflator for Gross Domestic Product, which is published quarterly 
by the U.S. Department of Commerce. Because the fee recalculations are 
simply based on a mathematical formula, the BLM will change the fees in 
final rules without opportunity for notice and comment.
    (d) Timing of fee applicability. (1) For a document that the BLM 
received before November 7, 2005, the BLM will not charge a fixed fee 
or a case-by-case fee under this subchapter for processing that 
document, except for fees applicable under then-existing regulations.
    (2) For a document that the BLM receives on or after November 7, 
2005, the applicant must include the required fixed fees with the 
documents filed, as provided in Sec.  3000.120(a) of this chapter, and 
the applicant is subject to case-by-case processing fees as provided in 
Sec.  3000.110 and under other provisions of this chapter.


Sec.  3000.110  Processing fees on a case-by-case basis.

    (a) Fees in this subchapter are designated either as case-by-case 
fees or as fixed fees. The fixed fees are established in this 
subchapter for specified types of documents. However, if the BLM 
decides at any time that a particular document designated for a fixed 
fee will have a unique processing cost, such as the preparation of an 
Environmental Impact Statement, the BLM may set the fee under the case-
by-case procedures in this section.
    (b) For case-by-case fees, the BLM measures the ongoing processing 
cost for each individual document and considers the factors in section 
304(b) of FLPMA on a case-by-case basis according to the following 
procedures:
    (1) The applicant may request the BLM's approval to do all or part 
of any study or other activity according to standards the BLM 
specifies, thereby reducing the BLM's costs for processing the 
document, in accordance with all other applicable laws and regulations.
    (2) Before performing any case processing, the BLM will give the 
applicant a written estimate of the proposed fee for reasonable 
processing costs after the BLM considers the FLPMA section 304(b) 
factors.
    (3) The applicant may comment on the proposed fee.
    (4) The BLM will then give the applicant the final estimate of the 
processing fee amount after considering the applicant's comments and 
any BLM-approved work that the applicant will do.
    (i) If the BLM encounters higher or lower processing costs than 
anticipated, the BLM will re-estimate the reasonable processing costs 
following the procedure in paragraphs (b)(1) through (4) of this 
section, but the BLM will not stop ongoing processing unless the 
applicant does not pay in accordance with paragraph (b)(5) of this 
section.
    (ii) If the fee the applicant would pay under this paragraph (b)(4) 
is less than the BLM's actual costs as a result of consideration of the 
FLPMA section 304(b) factors, and the BLM is not able to process the 
document promptly because of the unavailability of funding or other 
resources, the applicant will have the option to pay the BLM's actual 
costs to process the document.
    (iii) Once processing is complete, the BLM will refund to the 
applicant any money that the BLM did not spend on processing costs.
    (5)(i) The BLM will periodically estimate what its reasonable 
processing costs will be for a specific period and will bill the 
applicant for that period. Payment is due to the BLM 30 days after the 
applicant receives its bill. The BLM will stop processing the document 
if the applicant does not pay the bill by the date payment is due.
    (ii) If a periodic payment turns out to be more or less than the 
BLM's reasonable processing costs for the period, the BLM will adjust 
the next billing accordingly or make a refund. Do not deduct any amount 
from a payment without the BLM's prior written approval.
    (6) The applicant must pay the entire fee before the BLM will issue 
the final document.
    (7) The applicant may appeal the BLM's estimated processing costs 
in accordance with the regulations in 43 CFR part 4, subpart E. The 
applicant may also appeal any determination the BLM makes under 
paragraph (a) of this section that a document designated for a fixed 
fee will be processed as a case-by-case fee. The BLM will not process 
the document further until the appeal is resolved, in accordance with 
paragraph (b)(5)(i) of this section, unless the applicant pays the fee 
under protest while the appeal is pending. If the appeal results in a 
decision changing the proposed fee, the BLM will adjust the fee in 
accordance with paragraph (b)(5)(ii) of this section.


Sec.  3000.120  Fee schedule for fixed fees.

    (a) The table in this section shows the fixed fees that must be 
paid to the BLM for the services listed for FY 2024. These fees are 
nonrefundable and must be included with documents filed under this 
chapter. Fees will be adjusted annually according to the change in the 
Implicit Price Deflator for Gross Domestic Product since the previous 
adjustment and will subsequently be posted on the BLM website (https://www.blm.gov) before October 1 each year. Revised fees are effective 
each year on October 1.

[[Page 47617]]



    Table 1 to Paragraph (a)--FY 2024 Processing and Filing Fee Table
------------------------------------------------------------------------
                 Document/action                        FY 2023 fee
------------------------------------------------------------------------
Oil & Gas (parts 3100, 3110, 3120, 3130, 3150,
 3160, and 3180):
    Formal Lease nomination.....................  $125.
    Expression of Interest fee per acre, or       5.
     fraction thereof.
    Competitive lease application...............  3,100.
    Leasing under right-of-way..................  660.
    Lease consolidation.........................  525.
    Assignment and transfer of record title or    105.
     operating rights.
    Overriding royalty transfer, payment out of   15.
     production.
    Name change, corporate merger, sheriff's      250.
     deed, corporate dissolution, or transfer to
     heir/devisee.
    Lease reinstatement, Class I................  1,260.
    Geophysical exploration permit application--  1,150.
     all states.
    Renewal of exploration permit--Alaska.......  30.
    Final application for Federal unit agreement  1,200.
     approval, Federal unit agreement expansion,
     and Federal subsurface gas storage
     application.
    Designation of successor operator for         120.
     Federal agreements.
Geothermal (part 3200):
    Noncompetitive lease application............  475.
    Competitive lease application...............  185.
    Assignment and transfer of record title or    105.
     operating rights.
    Name change, corporate merger or transfer to  250.
     heir/devisee.
    Lease consolidation.........................  525.
    Lease reinstatement.........................  90.
    Nomination of lands.........................  135.
    plus per acre nomination fee................  0.13.
    Site license application....................  70.
    Assignment or transfer of site license......  70.
Coal (parts 3400, 3470):
    License to mine application.................  15.
    Exploration license application.............  390.
    Lease or lease interest transfer............  80.
Leasing of Solid Minerals Other Than Coal and
 Oil Shale (parts 3500, 3580):
    Applications other than those listed below..  45.
    Prospecting permit application amendment....  80.
    Extension of prospecting permit.............  130.
    Lease modification or fringe acreage lease..  35.
    Lease renewal...............................  610.
    Assignment, sublease, or transfer of          35.
     operating rights.
    Transfer of overriding royalty..............  35.
    Use permit..................................  35.
    Shasta and Trinity hardrock mineral lease...  35.
    Renewal of existing sand and gravel lease in  35.
     Nevada.
Public Law 359; Mining in Powersite Withdrawals:
 General (part 3730):
    Notice of protest of placer mining            15.
     operations.
Mining Law Administration (parts 3800, 3810,
 3830, 3860, 3870):
    Application to open lands to location.......  15.
    Notice of location *........................  20.
    Amendment of location.......................  15.
    Transfer of mining claim/site...............  15.
    Recording an annual FLPMA filing............  15.
    Deferment of assessment work................  130.
    Recording a notice of intent to locate        35.
     mining claims on Stockraising Homestead Act
     lands.
    Mineral patent adjudication.................  3,585 (more than 10
                                                   claims).
                                                  1,790 (10 or fewer
                                                   claims).
    Adverse claim...............................  130.
    Protest.....................................  80.
Oil Shale Management (parts 3900, 3910, 3930):
    Exploration license application.............  375.
    Application for assignment or sublease of     75.
     record title or overriding royalty.
Onshore Oil and Gas Operations and Production
 (parts 3160, 3170):
    Application for Permit to Drill.............  11,805.
------------------------------------------------------------------------
* To record a mining claim or site location, this processing fee along
  with the initial maintenance fee and the one-time location fee
  required by statute must be paid.

    (b) The amount of a fixed fee is not subject to appeal to the 
Interior Board of Land Appeals pursuant to 43 CFR part 4, subpart E.


Sec.  3000.130  Fiscal terms of new leases.

    (a) The table in this section shows the fiscal terms for new 
leases. Terms will be adjusted annually according to the change in the 
Implicit Price Deflator for Gross Domestic Product since the previous 
adjustment and will subsequently be posted on the BLM website (https://www.blm.gov) before October 1 each year. Revised fees are effective 
each year on October 1.

[[Page 47618]]



                           Table 1 to Paragraph (a)--Fiscal Terms for New Leases Table
----------------------------------------------------------------------------------------------------------------
 Oil and gas (parts 3100, 3110, 3120, 3130,
                    3140)                                                 Fiscal term
----------------------------------------------------------------------------------------------------------------
Competitive oil and gas, tar sand, and        Rental of $3 per acre, or fraction thereof, per year during the
 combined hydrocarbon leases.                  first 2-year period beginning upon lease issuance, $5 per acre
                                               per year, or fraction thereof, for the following 6 years, and
                                               then $15 per acre, or fraction thereof, per year thereafter.
Competitive lease reinstatement, Class II...  Base rental of $20 per acre, or fraction thereof.
Competitive combined hydrocarbon leases.....  Minimum bonus bids of $25 per acre, or fraction thereof.
Competitive oil and gas and tar sand leases.  Minimum bonus bids of $10 per acre, or fraction thereof.
----------------------------------------------------------------------------------------------------------------

    (b) The financial terms for new leases are not subject to appeal to 
the Interior Board of Land Appeals pursuant to 43 CFR part 4, subpart 
E.
0
2. Revise part 3100 to read as follows:

PART 3100--OIL AND GAS LEASING

Subpart 3100--Oil and Gas Leasing: General
Sec.
3100.3 Authority.
3100.5 Definitions.
3100.9 Information collection.
3100.10 Helium.

Drainage

3100.21 Compensation for drainage.
3100.22 Drilling and production or payment of compensatory royalty.

Options

3100.31 Enforceability.
3100.32 Effect of option on acreage.
3100.33 Option statements.
3100.40 Public availability of information.
Subpart 3101--Issuance of Leases

Lease Terms and Conditions

3101.11 Lease form.
3101.12 Surface use rights.
3101.13 Stipulations and information notices.
3101.14 Modification, waiver, or exception.

Acreage Limitations

3101.21 Public domain lands.
3101.22 Acquired lands.
3101.23 Excepted acreage.
3101.24 Excess acreage.
3101.25 Computation.
3101.30 Leases within unit areas, joinder evidence required.
3101.40 Terminated leases.

Federal Lands Administered by an Agency Outside of the Department of 
the Interior

3101.51 General requirements.
3101.52 Action by the Bureau of Land Management.
3101.53 Appeals.
3101.60 State's or charitable organization's ownership of surface 
overlying federally owned minerals.
Subpart 3102--Qualifications of Lessees
3102.10 Who may hold leases.
3102.20 Non-U.S. Citizens.
3102.30 Minors.
3102.40 Signature.

Compliance, Certification of Compliance and Evidence

3102.51 Compliance.
3102.52 Certification of compliance.
3102.53 Evidence of compliance.
Subpart 3103--Fees, Rentals, and Royalty

Payments

3103.11 Form of remittance.
3103.12 Where remittance is submitted.

Rentals

3103.21 Rental requirements.
3103.22 Annual rental payments.

Royalties

3103.31 Royalty on production.
3103.32 Minimum royalties.

Production Incentives

3103.41 Royalty reductions.
3103.42 Suspension of operations and/or production.
Subpart 3104--Bonds
3104.10 Bond obligations.
3104.20 Lease bond.
3104.30 Statewide bonds.
3104.40 Surface owner protection bond.
3104.50 Increased amount of bonds.
3104.60 Where filed and number of copies.
3104.70 Default.
3104.80 Termination of period of liability.
3104.90 Bonds held prior to [EFFECTIVE DATE OF THE FINAL RULE].
Subpart 3105--Cooperative Conservation Provisions
3105.10 Cooperative or unit agreement.

Communitization Agreements

3105.21 Where filed.
3105.22 Purpose.
3105.23 Requirements.
3105.24 Communitization agreement terms.

Operating, Drilling, or Development Contracts

3105.31 Where filed.
3105.32 Purpose.
3105.33 Requirements.

Subsurface Storage of Oil and Gas

3105.41 Where filed.
3105.42 Purpose.
3105.43 Requirements.
3105.44 Extension of lease term.
3105.50 Consolidation of leases.
Subpart 3106--Transfers by Assignment, Sublease, or Otherwise
3106.10 Transfers, general.
3106.20 Qualifications of assignees and transferees.
3106.30 Fees.

Forms

3106.41 Transfers of record title and of operating rights 
(subleases).
3106.42 Transfers of other interests, including royalty interests 
and production payments.
3106.43 Mass transfers.
3106.50 Description of lands.
3106.60 Bond requirements.

Approval of Transfer or Assignment

3106.71 Failure to qualify.
3106.72 Continuing obligation of an assignor or transferor.
3106.73 Lease account status.
3106.74 Effective date of transfer.
3106.75 Effect of transfer.
3106.76 Obligations of assignee or transferee.

Other Types of Transfers

3106.81 Heirs and devisees.
3106.82 Change of name.
3106.83 Corporate mergers and dissolution of corporations, 
partnerships, and trusts.
3106.84 Sheriff's sale/deed.
Subpart 3107--Continuation and Extension
3107.10 Extension by drilling.

Production

3107.21 Continuation by production.
3107.22 Cessation of production.
3107.23 Leases capable of production.

Extension for Terms of Agreements

3107.31 Leases committed to an agreement.
3107.32 Segregation of leases committed in part.
3107.40 Extension by elimination.

Extension of Leases Segregated by Assignment

3107.51 Extension after discovery on other segregated portions.
3107.52 Undeveloped parts of leases in their extended term.
3107.53 Undeveloped parts of producing leases.
3107.60 Extension of reinstated leases.

Other Types

3107.71 Payment of compensatory royalty.
3107.72 Subsurface storage of oil and gas

[[Page 47619]]

Subpart 3108--Relinquishment, Termination, Cancellation
3108.10 Relinquishment.

Termination by Operation of Law and Reinstatement

3108.21 Automatic termination.
3108.22 Reinstatement at existing rental and royalty rates: Class I 
reinstatements.
3108.23 Reinstatement at higher rental and royalty rates: Class II 
reinstatements.
3108.30 Cancellation.
3108.40 Bona fide purchasers.
3108.50 Waiver or suspension of lease rights.
Subpart 3109--Leasing Under Special Acts

Rights-of-Way

3109.11 Generally.
3109.12 Application.
3109.13 Notice.
3109.14 Award of lease or compensatory royalty agreement.
3109.15 Compensatory royalty agreement or lease.
3109.20 Units of the National Park System.
3109.21-3109.22 [Reserved]
3109.30 Shasta and Trinity Units of the Whiskeytown-Shasta-Trinity 
National Recreation Area.

    Authority:  25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, 
and 1751; 43 U.S.C. 1732(b), 1733, and 1740; and 42 U.S.C. 15801.

Subpart 3100--Onshore Oil and Gas Leasing: General


Sec.  3100.3  Authority.

    (a)(1) Public domain. Oil and gas in public domain lands and lands 
returned to the public domain under 43 CFR 2370 are subject to lease 
under the Mineral Leasing Act of 1920, as amended and supplemented (30 
U.S.C. 181 et seq.), by acts, including, but not limited to, section 
1009 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 
3148).
    (2) Exceptions. (i) Units of the National Park System, including 
lands withdrawn by section 206 of the Alaska National Interest Lands 
Conservation Act, except as provided in paragraph (g)(4) of this 
section;
    (ii) Indian reservations;
    (iii) Incorporated cities, towns and villages;
    (iv) Naval petroleum and oil shale reserves;
    (v) Lands north of 68 degrees north latitude and east of the 
western boundary of the National Petroleum Reserve--Alaska;
    (vi) Lands recommended for wilderness allocation by the surface 
managing agency;
    (vii) Lands within the BLM's wilderness study areas;
    (viii) Lands designated by Congress as wilderness study areas, 
except where oil and gas leasing is specifically allowed to continue by 
the statute designating the study area;
    (ix) Lands within areas allocated for wilderness or further 
planning in Executive Communication 1504, Ninety-Sixth Congress (House 
Document numbered 96-119), unless such lands are allocated to uses 
other than wilderness by a land and resource management plan or have 
been released to uses other than wilderness by an Act of Congress;
    (x) Lands within the National Wilderness Preservation System, 
subject to valid existing rights under section 4(d)(3) of the 
Wilderness Act (16 U.S.C. 1133) established before midnight, December 
31, 1983, unless otherwise provided by law;
    (xi) Lands designated under the Wild and Scenic Rivers Act, subject 
to valid existing rights, and that constitute the bed or bank or are 
situated within one-quarter mile of the bank of any river designated as 
a wild river under the Wild and Scenic Rivers Act (16 U.S.C. 1280); and
    (xii) Wildlife refuge lands, which are those lands embraced in a 
withdrawal of lands of the United States for the protection of all 
species of wildlife within a particular area. Sole and complete 
jurisdiction over such lands for wildlife conservation purposes is 
vested in the Fish and Wildlife Service even though such lands may be 
subject to prior rights for other public purposes or, by the terms of 
the withdrawal order, may be subject to mineral leasing. No expressions 
of interest covering wildlife refuge lands will be considered for oil 
and gas leasing, except as provided by applicable law.
    (b)(1) Acquired lands. Oil and gas in acquired lands are subject to 
lease under the Mineral Leasing Act for Acquired Lands of August 7, 
1947, as amended (30 U.S.C. 351 et seq.).
    (2) Exceptions. (i) Units of the National Park System, except as 
provided in paragraph (g)(4) of this section;
    (ii) Incorporated cities, towns and villages;
    (iii) Naval petroleum and oil shale reserves;
    (iv) Tidelands or submerged coastal lands within the continental 
shelf adjacent or littoral to lands within the jurisdiction of the 
United States;
    (v) Lands acquired by the United States for development of helium, 
fissionable material deposits or other minerals essential to the 
defense of the country, except oil, gas and other minerals subject to 
leasing under the Act;
    (vi) Lands reported as excess under the Federal Property and 
Administrative Services Act of 1949;
    (vii) Lands acquired by the United States by foreclosure or 
otherwise for resale;
    (viii) Lands recommended for wilderness allocation by the surface 
managing agency;
    (ix) Lands within the BLM's wilderness study areas;
    (x) Lands designated by Congress as wilderness study areas, except 
where oil and gas leasing is specifically allowed to continue by the 
statute designating the study area;
    (xi) Lands within areas allocated for wilderness or further 
planning in Executive Communication 1504, Ninety-Sixth Congress (House 
Document numbered 96-119), unless such lands are allocated to uses 
other than wilderness by a land and resource management plan or have 
been released to uses other than wilderness by an Act of Congress;
    (xii) Lands within the National Wilderness Preservation System, 
subject to valid existing rights under section 4(d)(3) of the 
Wilderness Act (16 U.S.C. 1133) established before midnight, December 
31, 1983, unless otherwise provided by law;
    (xiii) Lands designated under the Wild and Scenic Rivers Act, 
subject to valid existing rights, and that constitute the bed or bank 
or are situated within one-quarter mile of the bank of any river 
designated as a wild river under the Wild and Scenic Rivers Act (16 
U.S.C. 1280); and
    (xiv) Wildlife refuge lands, which are those lands embraced in a 
withdrawal of lands of the United States for the protection of all 
species of wildlife within a particular area. Sole and complete 
jurisdiction over such lands for wildlife conservation purposes is 
vested in the Fish and Wildlife Service even though such lands may be 
subject to prior rights for other public purposes or, by the terms of 
the withdrawal order, may be subject to mineral leasing. No expressions 
of interest for wildlife refuge lands will be considered except as 
provided in applicable law.
    (c) National Petroleum Reserve--Alaska is subject to lease under 
the Department of the Interior Appropriations Act, Fiscal Year 1981 (42 
U.S.C. 6508).
    (d) Where oil or gas is being drained from lands otherwise 
unavailable for leasing, there is implied authority in the agency 
having jurisdiction of those lands to grant authority to the BLM to 
lease such lands (see 43 U.S.C. 1457; also Attorney General's Opinion 
of

[[Page 47620]]

April 2, 1941 (Vol. 40 Op. Atty. Gen. 41)).
    (e) Where lands previously withdrawn or reserved from the public 
domain are no longer needed by the agency for which the lands were 
withdrawn or reserved and such lands are retained by the General 
Services Administration, or where acquired lands are declared as excess 
to or surplus by the General Services Administration, authority to 
lease such lands may be transferred to the Department in accordance 
with the Federal Property and Administrative Services Act of 1949 and 
the Mineral Leasing Act for Acquired Lands, as amended.
    (f) The Act of May 21, 1930 (30 U.S.C. 301-306), authorizes the 
leasing of oil and gas deposits under certain rights-of-way to the 
owner of the right-of-way or any assignee.
    (g)(1) Certain lands in Nevada. The Act of May 9, 1942 (56 Stat. 
273), as amended by the Act of October 25, 1949 (63 Stat. 886), 
authorizes leasing on certain lands in Nevada.
    (2) Lands patented to the State of California. The Act of March 3, 
1933 (47 Stat. 1487), as amended by the Act of June 5, 1936 (49 Stat. 
1482) and the Act of June 29, 1936 (49 Stat. 2026), authorizes leasing 
on certain lands patented to the State of California.
    (3) National Forest Service Lands in Minnesota. The Act of June 30, 
1950 (16 U.S.C. 508(b)) authorizes leasing on certain National Forest 
Service Lands in Minnesota.
    (4) Units of the National Park System. The Secretary is authorized 
to permit mineral leasing in the following units of the National Park 
System if he/she finds that such disposition would not have significant 
adverse effects on the administration of the area and if lease 
operations can be conducted in a manner that will preserve the scenic, 
scientific and historic features contributing to public enjoyment of 
the area, pursuant to the following authorities:
    (i) Lake Mead National Recreation Area--The Act of October 8, 1964 
(16 U.S.C. 460n et seq.).
    (ii) Whiskeytown Unit of the Whiskeytown-Shasta-Trinity National 
Recreation Area--The Act of November 8, 1965 (79 Stat. 1295; 16 U.S.C. 
460q et seq.).
    (iii) Ross Lake and Lake Chelan National Recreation Areas--The Act 
of October 2, 1968 (82 Stat. 926; 16 U.S.C. 90 et seq.).
    (iv) Glen Canyon National Recreation Area--The Act of October 27, 
1972 (86 Stat. 1311; 16 U.S.C. 460dd et seq.).
    (5) Shasta and Trinity Units of the Whiskeytown-Shasta-Trinity 
National Recreation Area. Section 6 of the Act of November 8, 1965 
(Pub. L. 89-336; 79 Stat. 1295), authorizes the Secretary of the 
Interior to permit the removal of leasable minerals from lands (or 
interest in lands) within the recreation area under the jurisdiction of 
the Secretary of Agriculture in accordance with the Mineral Leasing Act 
of February 25, 1920, as amended (30 U.S.C. 181 et seq.), or the 
Acquired Lands Mineral Leasing Act of August 7, 1947 (30 U.S.C. 351 et 
seq.), if he finds that such disposition would not have significant 
adverse effects on the purpose of the Central Valley project or the 
administration of the recreation area.
    (h) Under the Recreation and Public Purposes Act, as amended (43 
U.S.C. 869 et seq.), all lands within Recreation and Public Purposes 
leases and patents are subject to lease under the provisions of this 
part, subject to such conditions as the Secretary deems appropriate.
    (i)(1) Coordination lands are those lands withdrawn or acquired by 
the United States and made available to the States by cooperative 
agreements entered into between the Fish and Wildlife Service and the 
game commissions of the various States, in accordance with the Fish and 
Wildlife Coordination Act (16 U.S.C. 661), or by long-term leases or 
agreements between the Department of Agriculture and the game 
commissions of the various States pursuant to the Bankhead-Jones Farm 
Tenant Act (50 Stat. 525), as amended, where such lands were 
subsequently transferred to the Department of the Interior, with the 
Fish and Wildlife Service as the custodial agency of the United States.
    (2) Representatives of the BLM and the Fish and Wildlife Service 
will, in cooperation with the authorized members of the various State 
game commissions, confer for the purpose of determining by agreement 
those coordination lands which will not be subject to oil and gas 
leasing. Coordination lands not closed to oil and gas leasing may be 
subject to leasing on the imposition of such stipulations as are agreed 
upon by the State Game Commission, the Fish and Wildlife Service and 
the BLM.
    (j) No lands within a refuge in Alaska open to leasing will be 
available until the Fish and Wildlife Service has first completed 
compatibility determinations.


Sec.  3100.5  Definitions.

    As used in this part, the term:
    Actual drilling operations includes not only the physical drilling 
of a well, but also the testing, completing or equipping of such well 
for production.
    Assignment means a transfer of all or a portion of the lessee's 
record title interest in a lease.
    Bid means an amount of remittance offered as partial compensation 
for a lease equal to or in excess of the national minimum acceptable 
bonus bid set by statute or by the Secretary, submitted by a person for 
a lease parcel in a competitive lease sale. For leases or compensatory 
royalty agreements issued under 43 CFR subpart 3109, ``bid'' means an 
amount or percent of royalty or compensatory royalty that the owner or 
lessee must pay for the extraction of the oil and gas underlying the 
right-of-way.
    Competitive auction means an in-person or internet-based bidding 
process where leases are offered to the highest bidder.
    Exception is a limited exemption, for a particular site within the 
leasehold, to a stipulation.
    Lessee means a person holding record title in a lease issued by the 
United States.
    Modification is a change to the provisions of a lease stipulation 
for some or all sites within the leasehold and either temporarily or 
for the term of the lease.
    National Wildlife Refuge System Lands means lands and water, or 
interests therein, administered by the Secretary as wildlife refuges, 
areas for the protection and conservation of fish and wildlife that are 
threatened with extinction; wildlife management areas; or waterfowl 
production areas.
    Oil and gas agreement means an agreement between lessees and the 
BLM to govern the development and allocation of production for existing 
leases, including, but not limited to, communitization agreements, unit 
agreements, secondary recovery agreements, and gas storage agreements.
    Operating right (working interest) means the interest created out 
of a lease authorizing the holder of that right to enter upon the 
leased lands to conduct drilling and related operations, including 
production of oil or gas from such lands in accordance with the terms 
of the lease. Operating rights include the obligation to comply with 
the terms of the original lease, as it applies to the area or horizons 
for the interest acquired, including the responsibility to plug and 
abandon all wells that are no longer capable of producing, reclaim the 
lease site, and remedy environmental problems.
    Operating rights owner means a person holding operating rights in a 
lease issued by the United States. A

[[Page 47621]]

lessee also may be an operating rights owner if the operating rights in 
a lease or portion thereof have not been severed from record title.
    Operator means any person, including, but not limited to, the 
lessee or operating rights owner, who has stated in writing to the 
authorized officer that it is responsible under the terms and 
conditions of the lease for the operations conducted on the leased 
lands or a portion thereof.
    Primary term of lease subject to section 4(d) of the Act prior to 
the revision of 1960 (30 U.S.C. 226-1(d)) means all periods of the life 
of the lease prior to its extension by reason of production of oil and 
gas in paying quantities; and
    Primary term of all other leases means the initial term of the 
lease, which is 10 years.
    Qualified bidder means any person in compliance with the laws and 
regulations governing a bid.
    Qualified lessee means any person in compliance with the laws and 
regulations governing the BLM issued leases held by that person.
    Record title means a lessee's interest in a lease, which includes 
the obligation to pay rent and the ability to assign and relinquish the 
lease. Record title includes the obligation to comply with the lease 
terms, including requirements relating to well operations and 
abandonment. Overriding royalty and operating rights are severable from 
record title interests.
    Responsible bidder means any person who has not defaulted on the 
payment of winning bids for BLM-issued oil and gas leases, is capable 
of fulfilling the requirements of onshore BLM oil and gas leases, and 
does not have a history of noncompliance with applicable statutes and 
regulations or with the terms of a BLM-issued oil and gas lease. The 
term ``responsible bidder'' does not include persons who bid with no 
intention of paying a winning bid or persons who default on a winning 
bid.
    Responsible lessee means any person who has not defaulted on 
previous winning bids, is capable of fulfilling the requirements of 
onshore Federal oil and gas leases, and does not have a history of 
noncompliance with applicable statutes or the terms of a BLM-issued oil 
and gas lease.
    Sublease means a transfer of a non-record title interest in a 
lease, i.e., a transfer of operating rights is normally a sublease, and 
a sublease also is a subsidiary arrangement between the lessee 
(sublessor) and the sublessee, but a sublease does not include a 
transfer of a purely financial interest, such as overriding royalty 
interest or payment out of production, nor does it affect the 
relationship imposed by a lease between the lessee(s) and the United 
States.
    Transfer means any conveyance of an interest in a lease by 
assignment, sublease or otherwise. This definition includes the terms: 
Assignment and Sublease. Unit operator means the person authorized 
under the unit agreement approved by the Department of the Interior to 
conduct operations within the unit.
    Waiver is a permanent exemption from a lease stipulation.


Sec.  3100.9  Information collection.

    (a) Authority: 44 U.S.C. 3501-3520.
    (b)(1) Purpose. The Paperwork Reduction Act of 1995 generally 
provides that an agency may not conduct or sponsor, and notwithstanding 
any other provision of law, a person is not required to respond to a 
collection of information, unless the collection displays a currently 
valid Office of Management and Budget (OMB) Control Number. This part 
displays OMB control numbers assigned to information collection 
requirements contained in the BLM's regulations at 43 CFR part 3100. 
This section aids in fulfilling the requirements of the Paperwork 
Reduction Act to display current OMB Control Numbers for these 
information collection requirements. Interested persons should consult 
https://www.reginfo.gov for the most current information on these OMB 
control numbers; including among other things, the justification for 
the information collection requirements, description of likely 
respondents, estimated burdens, and current expiration dates.
    (2) Table 1 to Paragraph (b)--OMB Control number assigned pursuant 
to the Paperwork Reduction Act.

------------------------------------------------------------------------
                                                            OMB Control
                 43 CFR part or section                         No.
------------------------------------------------------------------------
Sec.  Sec.   3100, 3103.41, 3120, and Subpart 3162......       1004-0185
Sec.  Sec.   3106, 3135, and 3216.......................       1004-0034
Part 3130...............................................       1004-0196
Subpart 3195............................................       1004-0179
Sec.   3150.............................................       1004-0162
Sec.  Sec.   ,* 3160 3171, 3176, and 3177...............        1004-NEW
Sec.  Sec.   3172, 3173, 3174, 3175.....................       1004-0137
Sec.  Sec.   3162.3-1, 3178.5, 3178.7, 3178.8, 3178.9          1004-0211
 and Subpart * 3179.....................................
------------------------------------------------------------------------
* Information collection requirements for onshore oil and gas operations
  are generally accounted for under OMB Control Number 1004-NEW;
  however, information collection requirements pertaining to particular
  to waste prevention, production subject to royalties, and resource
  conservation are accounted for under OMB Control Number 1004-0211.

Sec.  3100.10  Helium.

    The ownership of and the right to extract helium from all gas 
produced from lands leased or otherwise disposed of under the Act have 
been reserved to the United States.

Drainage


Sec.  3100.21  Compensation for drainage.

    Upon a determination by the authorized officer that lands owned by 
the United States are being drained of oil or gas by wells drilled on 
adjacent lands, the authorized officer may execute agreements with the 
owners of adjacent lands whereby the United States and its lessees will 
be compensated for such drainage. Such agreements must be made with the 
consent of any lessee affected by an agreement. Such lands may also be 
offered for lease in accordance with 43 CFR part 3120.


Sec.  3100.22  Drilling and production or payment of compensatory 
royalty.

    Where lands in any leases are being drained of their oil or gas 
content by wells either on a Federal lease issued at a lower rate of 
royalty or on non-Federal lands, the lessee must both drill and produce 
all wells necessary to protect the leased lands from drainage. In lieu 
of drilling necessary wells, the lessee may, with the consent of the 
authorized officer, pay compensatory royalty in the amount determined 
in accordance with 43 CFR 3162.2-4.

[[Page 47622]]

Options


Sec.  3100.31  Enforceability.

    (a) No option to acquire any interest in a lease is enforceable if 
entered into for a period of more than 3 years (including any renewal 
period that may be provided for in the option).
    (b) No option or renewal thereof is enforceable until a signed copy 
or notice of the option has been filed in the proper BLM office. Each 
such signed copy or notice must include:
    (1) The names and addresses of the parties thereto;
    (2) The serial number of the lease to which the option is 
applicable;
    (3) A statement of the number of acres and the type and percentage 
of interests to be conveyed and retained by the parties to the option, 
including the date and expiration date of the option.
    (c) The signatures of all parties to the option or their duly 
authorized agents. The signed copy or notice of the option required by 
this paragraph must contain or be accompanied by a signed statement by 
the holder of the option that he/she is the sole party in interest in 
the option; if not, he/she must set forth the names and provide a 
description of the interest therein of the other interested parties, 
and provide a description of the agreement between them, if oral, and a 
copy of such agreement, if written.


Sec.  3100.32  Effect of option on acreage.

    The acreage to which the option is applicable will be charged both 
to the grantor of the option and the option holder. The acreage covered 
by an unexercised option remains charged during its term until notice 
of its relinquishment or surrender has been filed in the proper BLM 
office.


Sec.  3100.33  Option statements.

    Each option holder must file in the proper BLM office within 90 
days after June 30 and December 31 of each year a statement showing:
    (a) Any changes to the statements submitted under Sec.  3100.31(b); 
and
    (b) The number of acres covered by each option and the total 
acreage of all options held in each State.


Sec.  3100.40  Public availability of information.

    (a) All data and information concerning Federal and Indian minerals 
submitted under this part 3100 and parts 3120 through 3190 of this 
chapter are subject to 43 CFR part 2, except as provided in paragraph 
(c) of this section. 43 CFR part 2 includes the regulations of the 
Department of the Interior covering the public disclosure of data and 
information contained in Department of the Interior records. Certain 
mineral information not protected from public disclosure under 43 CFR 
part 2may be made available for inspection without a Freedom of 
Information Act (FOIA) (5 U.S.C. 552) request.
    (b) When you submit data and information under this part 3100 and 
parts 3120 through 3190 of this chapter that you believe to be exempt 
from disclosure to the public, you must clearly mark each page that you 
believe includes confidential information. The BLM will keep all such 
data and information confidential to the extent allowed by 43 CFR 2.26.
    (c) Under the Indian Mineral Development Act of 1982 (IMDA) (25 
U.S.C. 2101 et seq.), the Department of the Interior will hold as 
privileged proprietary information of the affected Indian or Indian 
Tribe--
    (1) All findings forming the basis of the Secretary's intent to 
approve or disapprove any Minerals Agreement under IMDA; and
    (2) All projections, studies, data, or other information concerning 
a Minerals Agreement under IMDA, regardless of the date received, 
related to:
    (i) The terms, conditions, or financial return to the Indian 
parties;
    (ii) The extent, nature, value, or disposition of the Indian 
mineral resources; or
    (iii) The production, products, or proceeds thereof.
    (d) For information concerning Indian minerals not covered by 
paragraph (c) of this section:
    (1) The BLM will withhold such records as may be withheld under an 
exemption to FOIA when it receives a request for information related to 
tribal or Indian minerals held in trust or subject to restrictions on 
alienation;
    (2) The BLM will notify the Indian mineral owner(s) identified in 
the records of the Bureau of Indian Affairs (BIA) and give them a 
reasonable period of time to state objections to disclosure, using the 
standards and procedures of 43 CFR 2.28, before making a decision about 
the applicability of FOIA exemption 4 to:
    (i) Information obtained from a person outside the United States 
Government; when
    (ii) Following consultation with a submitter under 43 CFR 2.28, the 
BLM determines that the submitter does not have an interest in 
withholding the records that can be protected under FOIA; but
    (iii) The BLM has reason to believe that disclosure of the 
information may result in commercial or financial injury to the Indian 
mineral owner(s) but is uncertain that such is the case.

Subpart 3101--Issuance of Leases

Lease Terms and Conditions


Sec.  3101.11  Lease form.

    A lease will be issued only on the standard form approved by the 
Director.


Sec.  3101.12  Surface use rights.

    A lessee will have the right to use only so much of the leased 
lands as is necessary to explore for, drill for, mine, extract, remove 
and dispose of all the leased resource in a leasehold subject to 
applicable requirements, including stipulations attached to the lease, 
restrictions deriving from specific, nondiscretionary statutes, and 
such reasonable measures as may be required and detailed by the 
authorized officer to avoid, minimize, or mitigate adverse impacts to 
other resource values, land uses or users, federally recognized Tribes, 
and underserved communities. Such reasonable measures may include, but 
are not limited to, relocation or modification to siting or design of 
facilities, timing of operations, specification of interim and final 
reclamation measures, and specification of rates of development and 
production in the public interest. Modifications that are consistent 
with lease rights include, but are not limited to, requiring relocation 
of proposed operations by more than 800 meters and prohibiting new 
surface disturbing operations for a period of up to 90 days in any 
lease year.


Sec.  3101.13  Stipulations and information notices.

    (a) The BLM may consider the sensitivity and importance of 
potentially affected resources and any uncertainty concerning the 
present or future condition of those resources and will assess whether 
a resource is adequately protected by stipulation without regard for 
the restrictiveness of the stipulation on operations.
    (b) The authorized officer may require stipulations as conditions 
of lease issuance. Stipulations will become part of the lease and will 
supersede inconsistent provisions of the standard lease form. Any party 
submitting a bid under subpart 3120 will be deemed to have agreed to 
stipulations applicable to the specific parcel as indicated in the 
Notice of Competitive Lease Sale available from the proper BLM office.
    (c) The BLM may attach an information notice to the lease. An 
information notice has no legal consequences, except to give notice of 
existing requirements, and may be

[[Page 47623]]

attached to a lease by the authorized officer at the time of lease 
issuance to convey certain operational, procedural or administrative 
requirements relative to lease management within the terms and 
conditions of the standard lease form. Information notices may not be a 
basis for denial of lease operations.
    (d) Where the surface managing agency is the Fish and Wildlife 
Service, leases will be issued subject to stipulations prescribed by 
the Fish and Wildlife Service as to the time, place, nature and 
condition of such operations in order to minimize impacts to fish and 
wildlife populations and habitat and other refuge resources on the 
areas leased. The specific conduct of lease activities on any refuge 
lands will be subject to site-specific stipulations prescribed by the 
Fish and Wildlife Service.


Sec.  3101.14  Modification, waiver, or exception.

    (a) A stipulation included in an oil and gas lease will be subject 
to modification, waiver, or exception if the authorized officer 
determines, in conjunction with any surface management agency, that the 
factors leading to its inclusion in the lease have changed sufficiently 
to make the specific protections provided by the stipulation no longer 
justified. If the authorized officer determines that a change to a 
lease term or stipulation is substantial or a stipulation involves an 
issue of major concern to the public, the changes to the stipulation 
will be subject to public review for at least 30 calendar days.
    (b) Prior to lease issuance, if the BLM determines that an 
additional stipulation will be added to the lease or a modification to 
an existing stipulation is required, the potential lessee must be given 
an opportunity to accept the additional or modified stipulation. If the 
potential lessee does not accept the additional or modified 
stipulation, the BLM may reject the bid, and may include the lands in 
the next Notice of Competitive Lease Sale. If the change in 
stipulation(s) increases the value of the parcel, the BLM will reject 
the bid, and will include the lands in the next Notice of Competitive 
Lease Sale.
    (c) After lease issuance, if a lessee does not accept an additional 
or modified stipulation, that additional or modified stipulation is not 
binding on the lessee and is without effect. When a stipulation is 
required by the relevant Resource Management Plan, or surface 
management agency land management plan, and was inadvertently omitted, 
a lessee's failure to sign and accept changes in the stipulations when 
requested by the authorized officer may subject the lease to 
cancellation.

Acreage Limitations


Sec.  3101.21  Public domain lands.

    (a) No person may take, hold, own or control more than 246,080 
acres of Federal oil and gas leases in any one State at any one time. 
No more than 200,000 acres of such acres may be held under option.
    (b) In Alaska, the acreage that can be taken, held, owned or 
controlled is limited to 300,000 acres in the northern leasing district 
and 300,000 acres in the southern leasing district, of which no more 
than 200,000 acres may be held under option in each of the two leasing 
districts. The boundary between the two leasing districts in Alaska 
begins at the northeast corner of the Tetlin National Wildlife Refuge 
as established by section 302(8) of the Alaska National Interest Lands 
Conservation Act, at a point on the boundary between the United States 
and Canada, then northwesterly along the northern boundary of the 
refuge to the left limit of the Tanana River (63[deg]9'38'' north 
latitude, 142[deg]20'52'' west longitude), then westerly along the left 
limit to the confluence of the Tanana and Yukon Rivers, and then along 
the left limit of the Yukon River from said confluence to its principal 
southern mouth.


Sec.  3101.22  Acquired lands.

    No person may take, hold, own or control more than 246,080 acres of 
Federal oil and gas leases in any one State at any one time. No more 
than 200,000 acres of such acres may be held under option. Where the 
United States owns only a fractional interest in the mineral resources 
of the lands involved in a lease, only that part owned by the United 
States will be charged as acreage holdings. The acreage embraced in a 
future interest lease will not be charged as acreage holdings until the 
lease for the future interest becomes effective.


Sec.  3101.23  Excepted acreage.

    (a) The following acreage will not be included in computing acreage 
limitations:
    (1) Acreage under any lease any portion of which is committed to 
any federally approved oil and gas agreement;
    (2) Acreage under any lease for which royalty (including 
compensatory royalty or royalty in-kind) was paid in the preceding 
calendar year; and
    (3) Acreage under leases subject to an operating, drilling or 
development contract approved by the Secretary, as provided in 43 CFR 
3105.30.
    (b) Acreage subject to offers to lease, overriding royalties and 
payments out of production will not be included in computing acreage 
limitations.


Sec.  3101.24  Excess acreage.

    (a) Where, as the result of the termination or contraction of an 
oil and gas agreement or the elimination of a lease from an operating, 
drilling, or development contract, a party holds or controls excess 
accountable acreage, that party will have 90 calendar days from the 
date of termination, contraction or elimination, to reduce the holdings 
to the prescribed limitation and to file proof of the reduction in the 
proper BLM office. Where, as a result of a merger or the purchase of 
the controlling interest in a corporation, a party acquired acreage in 
excess of the amount permitted, the party holding the excess acreage 
will have 180 calendar days from the date of the merger or purchase to 
divest the excess acreage. If additional time is required to complete 
the divestiture of the excess acreage, a petition requesting additional 
time, along with a full justification for the additional time, may be 
filed with the authorized officer prior to the termination of the 180 
days provided herein.
    (b) If any person is found to hold accountable acreage in violation 
of the provisions of these regulations, lease(s) or interests therein 
will be subject to cancellation or forfeiture in their entirety, until 
sufficient acreage has been eliminated to comply with the acreage 
limitation. Excess acreage or interest will be cancelled in the inverse 
order of acquisition.


Sec.  3101.25  Computation.

    The accountable acreage of a party owning an undivided interest in 
a lease will be the party's proportionate part of the total lease 
acreage.


Sec.  3101.30  Leases within unit areas, joinder evidence required.

    Before issuance of a lease for lands within an approved unit, the 
lease offeror must file evidence with the proper BLM office that it has 
joined in the unit agreement and unit operating agreement or a 
statement giving satisfactory reasons for its failure to enter into 
such agreement. If such statement is satisfactory to the authorized 
officer, the lessee may be permitted to operate independently but will 
be required to conform to the terms and provisions of the unit 
agreement with respect to such operations.


Sec.  3101.40  Terminated leases.

    (a) The authorized officer will not issue a lease for lands which 
have been

[[Page 47624]]

covered by a lease which terminated automatically until 90 calendar 
days after the date of termination.
    (b) The authorized officer will not, after the receipt of a 
petition for reinstatement, issue a new lease affecting any of the 
lands covered by the terminated lease until all action on the petition 
is final.

Federal Lands Administered by an Agency Outside of the Department of 
the Interior


Sec.  3101.51  General requirements.

    Public domain and acquired lands will be leased only with the 
consent of the surface managing agency, which, upon receipt of a 
description of the lands from the authorized officer, will report to 
the authorized officer that it consents to leasing with stipulations, 
if any, or withholds consent or objects to leasing.


Sec.  3101.52  Action by the Bureau of Land Management.

    (a) Where the surface managing agency has consented to leasing with 
required stipulations, and the Secretary decides to issue a lease, the 
authorized officer will incorporate the stipulations into any lease 
which it may issue. The authorized officer may add stipulations.
    (b) The authorized officer will not issue a lease on lands to which 
the surface managing agency objects or withholds consent. In all other 
instances, the Secretary has the final authority and discretion to 
decide to issue a lease.
    (c) The authorized officer will review all recommendations and will 
accept all reasonable recommendations of the surface managing agency.
    (d) Where the surface managing agency is the Fish and Wildlife 
Service, there will be no drilling or prospecting under any lease 
heretofore or hereafter issued on lands within a wildlife refuge, 
except with the consent and approval of the Secretary with the 
concurrence of the Fish and Wildlife Service as to the time, place and 
nature of such operations in order to give complete protection to 
wildlife populations and wildlife habitat on the areas leased, and all 
such operations must be conducted in accordance with BLM stipulations.


Sec.  3101.53  Appeals.

    (a) The decision of the authorized officer to reject an offer to 
lease or to issue a lease with stipulations recommended by the surface 
managing agency may be appealed to the Interior Board of Land Appeals 
under 43 CFR part 4.
    (b) Where, as provided by statute, the surface managing agency has 
required that certain stipulations be included in a lease or has 
consented, or objected or refused to consent to leasing, any appeal by 
an affected lease offeror will be subject to the administrative 
remedies if provided for by the particular surface managing agency.


Sec.  3101.60  State's or charitable organization's ownership of 
surface overlying federally owned minerals.

    Where the United States has conveyed title to, or otherwise 
transferred the control of the surface of lands to any State or 
political subdivision, agency, or instrumentality thereof, or a college 
or any other educational corporation or association, or a charitable or 
religious corporation or association, with reservation of the oil and 
gas rights to the United States, such party will be given an 
opportunity to suggest any lease stipulations deemed necessary for the 
protection of existing surface improvements or uses, to set forth the 
facts supporting the necessity of the stipulations and also to file any 
objections it may have to the issuance of a lease. Where a party 
controlling the surface opposes the issuance of a lease or wishes to 
place such restrictive stipulations upon the lease that it could not be 
operated upon or become part of a drilling unit and hence is without 
mineral value, the facts submitted in support of the opposition or 
request for restrictive stipulations may be given consideration and 
each case will be decided on its merits. The opposition to lease or 
necessity for restrictive stipulations expressed by the party 
controlling the surface affords no legal basis or authority to refuse 
to issue the lease or to issue the lease with the requested restrictive 
stipulations for the reserved minerals in the lands; in such case, the 
final determination whether to issue and with what stipulations, or not 
to issue the lease depends upon whether or not the interests of the 
United States would best be served by the issuance of the lease.

Subpart 3102--Qualifications of Lessees


Sec.  3102.10  Who may hold leases.

    Leases or interests therein may be acquired and held only by 
citizens of the United States; associations (including partnerships and 
trusts) of such citizens; corporations organized under the laws of the 
United States or of any State or Territory thereof; and municipalities.


Sec.  3102.20  Non-U.S. Citizens.

    (a) Leases or interests therein may be acquired and held by non-
U.S. Citizens only through stock ownership, holding or control in a 
present or potential lessee that is incorporated under the laws of the 
United States or of any State or territory thereof, and only if the 
laws, customs or regulations of their country do not deny similar or 
like privileges to citizens or corporations of the United States. If it 
is determined that a country has denied similar or like privileges to 
citizens or corporations of the United States, it would be placed on a 
list available from any BLM State office.
    (b) The Committee on Foreign Investment in the United States is 
authorized to review covered real estate transactions and to mitigate 
any risk to the national security of the United States that arises as a 
result of such transactions. Covered real estate transactions may 
include certain transactions involving the Federal mineral estate (see 
31 CFR part 802).


Sec.  3102.30  Minors.

    Leases must not be acquired or held by someone considered to be a 
minor under the laws of the State in which the lands are located, but 
leases may be acquired and held by legal guardians or trustees of 
minors on their behalf. Such legal guardians or trustees must be 
citizens of the United States or otherwise meet the provisions of 43 
CFR 3102.10.


Sec.  3102.40  Signature.

    Signatures on all applications and BLM forms certify acceptance of 
lease terms and stipulations, as well as compliance with the 
regulations under 43 CFR part 3100. Refer to Sec.  3102.50 for 
certification of compliance and evidence. The BLM also accepts 
electronic signatures and submissions.
    (a) A bid to lease must be made on a current form approved by the 
Director. Copies must be exact reproductions of the official approved 
form, without additions, omissions, or other changes. When the bid is 
filed in person at the proper BLM office, the bid must be typed or 
printed plainly, signed, and dated by the offeror or an authorized 
agent on behalf of the present or potential lessee. Bids may be made to 
the BLM by other arrangements, such as electronically signed and filed, 
when specifically authorized by the BLM.
    (b) Documents signed by any party other than the present or 
potential lessee must be rendered in a manner to reveal the name of the 
present or potential lessee, the name of the signatory and their 
relationship. A signatory who is a member of the organization that 
constitutes the present or potential lessee (e.g., officer of a 
corporation, partner of a partnership, etc.) may be requested by the 
authorized

[[Page 47625]]

officer to clarify his/her relationship, when the relationship is not 
shown on the documents filed.

Compliance, Certification of Compliance and Evidence


Sec.  3102.51  Compliance.

    Only responsible and qualified bidders and lessees may own, hold, 
or control an interest in a lease or prospective lease. Responsible and 
qualified bidders and lessees, including corporations, and all members 
of associations, including partnerships of all types, will, without 
exception, be qualified and in compliance with the Act. Compliance 
means that the persons are:
    (a) Citizens of the United States (see Sec.  3102.10) or non-U.S. 
citizens who own stock in a corporation organized under State or 
Federal law (see Sec.  3102.20);
    (b) In compliance with the Federal acreage limitations (see Sec.  
3101.20);
    (c) Not minors (see Sec.  3102.30);
    (d) Except for an assignment or transfer under 43 CFR subpart 3106, 
in compliance with section 2(a)(2)(A) of the Act (30 U.S.C. 201(2)(A)), 
in which case the signature on a bid or lease constitutes evidence of 
compliance. A lease issued to any person in violation of this paragraph 
(d) will be subject to the cancellation provisions of 43 CFR 3108.30.
    (e) Not in violation of the provisions of section 41 of the Act (30 
U.S.C. 195); and
    (f) In compliance with section 17(g) of the Act (30 U.S.C. 226(g)), 
in which case the signature on an offer, lease, assignment, or transfer 
constitutes evidence of compliance that the signatory and any 
subsidiary, affiliate, or person, association, or corporation 
controlled by or under common control with the signatory, as defined in 
43 CFR 3400.0-5(rr), has not failed or refused to comply with 
reclamation requirements with respect to all leases and operations 
thereon in which such person has an interest. A person is noncompliant 
with section 17(g) of the Act when they fail to comply with their 
reclamation obligations or other standards established under 30 U.S.C. 
226 in the time specified in a notice from the BLM. A lease issued, or 
an assignment or transfer approved, to any such person in violation of 
this paragraph (f) will be subject to the cancellation provisions of 43 
CFR 3108.30, notwithstanding any administrative or judicial appeals 
that may be pending with respect to violations or penalties assessed 
for failure to comply with the prescribed reclamation standards on any 
lease holdings. Noncompliance will end upon a determination by the 
authorized officer that all required reclamation has been completed and 
that the United States has been fully reimbursed for any costs incurred 
due to the required reclamation.
    (g) In compliance with 43 CFR 3106.10(d) and section 30A of the Act 
(30 U.S.C. 187(a)). The authorized officer may accept the signature on 
a request for approval of an assignment of less than 640 acres outside 
of Alaska (2,560 acres within Alaska) as acceptable certification that 
the assignment would further the development of oil and gas, or the 
authorized officer may apply the provisions of 43 CFR 3102.53.
    (h) Not excluded or disqualified from participating in a 
transaction covered by Federal non-procurement debarment and suspension 
(2 CFR parts 180 and 1400), unless the Department explicitly approves 
an exception for a transaction pursuant to the regulations in those 
parts.


Sec.  3102.52  Certification of compliance.

    Any party(s) seeking to obtain an interest in a lease must certify 
that it is in compliance with the Act as set forth in 43 CFR 3102.51. A 
corporation or publicly traded association, including a publicly traded 
partnership, must certify that constituent members of the corporation, 
association or partnership holding or controlling more than 10 percent 
of the instruments of ownership of the corporation, association or 
partnership are in compliance with the Act. Execution and submission of 
a competitive bid form or request for approval of a transfer of record 
title or of operating rights (sublease), constitutes certification of 
compliance.


Sec.  3102.53  Evidence of compliance.

    The authorized officer may request at any time further evidence of 
compliance and qualification from any party holding or seeking to hold 
an interest in a lease. Failure to comply with the request of the 
authorized officer will result in adjudication of the action based on 
the incomplete submission.

Subpart 3103--Fees, Rentals and Royalty Payments


Sec.  3103.11  Form of remittance.

    All remittances must be by personal check, cashier's check, 
certified check, or money order, and must be made payable to the 
Department of the Interior--Bureau of Land Management or the Department 
of the Interior--Office of Natural Resources Revenue, as appropriate. 
Payments made to the BLM may be made by other arrangements such as by 
electronic funds transfer or credit card when specifically authorized 
by the BLM. In the case of payments made to the ONRR, such payments may 
also be made by electronic funds transfer.


Sec.  3103.12  Where remittance is submitted.

    (a)(1) All processing fees for the respective lease applications, 
nominations, or requests for approval of a transfer found in the fee 
schedule in Sec.  3000.120 of this chapter and all first-year rentals 
and bonuses for leases issued under 43 CFR part 3100 must be paid to 
the proper BLM office.
    (2) All second-year and subsequent rentals, except for leases 
specified in paragraph (b) of this section, must be paid to the ONRR 
through its online rental payment system.
    (b) All rentals and royalties on producing leases, communitized 
leases in producing spacing units, unitized leases in producing unit 
areas, leases on which compensatory royalty is payable and all payments 
under subsurface storage agreements must be paid to the ONRR.

Rentals


Sec.  3103.21  Rental requirements.

    (a) Each competitive bid submitted in response to a Notice of 
Competitive Lease Sale must be accompanied by full payment of the first 
year's rental based on the total acreage in the Notice of Competitive 
Lease Sale.
    (b) If the acreage is incorrectly indicated in a Notice of 
Competitive Lease Sale, payment of the rental based on the error is 
curable within 15 calendar days of receipt of notice from the 
authorized officer of the error.
    (c) Rental will not be prorated for any lands in which the United 
States owns an undivided fractional interest and must be paid for the 
full acreage in such lands.


Sec.  3103.22  Annual rental payments.

    Rentals must be paid on or before the lease anniversary date. A 
full year's rental must be submitted even when less than a full year 
remains in the lease term, except as provided in 43 CFR 3103.42(d). 
Failure to make the required payment on or before the lease anniversary 
date will cause a lease to terminate automatically by operation of law. 
If the designated ONRR office is not open on the anniversary date, 
payment received on the next day the designated ONRR office is open to 
the public will be deemed to be timely made. Payments made to an 
improper BLM or ONRR office will be returned and will not be forwarded 
to the designated ONRR

[[Page 47626]]

office. Rental must be paid at the following rates:
    (a) The annual rental for all leases is as stated in the lease;
    (b) Rental will not be due on acreage for which royalty or minimum 
royalty is being paid, except on nonproducing leases when compensatory 
royalty has been assessed in which case annual rental as established in 
the lease will be due in addition to compensatory royalty;
    (c) For leases that are reinstated under Sec.  3108.23, the annual 
rental will be as specified in 43 CFR 3000.130 beginning with the 
termination date upon the filing of a petition to reinstate a lease; 
and
    (d) Each succeeding time a specific lease is reinstated under Sec.  
3108.23, the annual rental on that lease will increase by an additional 
$10 per acre or fraction thereof.

Royalties


Sec.  3103.31  Royalty on production.

    (a) Royalty on production will be payable only on the mineral 
interest owned by the United States. Royalty must be paid in the amount 
or value of the production removed or sold as follows:
    (1) For leases issued before August 16, 2022, the rate prescribed 
in the lease or in applicable regulations at the time of lease 
issuance;
    (2) For leases issued between August 16, 2022, and August 16, 2032, 
the royalty rate will be 16.67 percent;
    (3) For leases issued on or after August 16, 2032, a rate of not 
less than 16.67 percent on all leases issued under the Act;
    (4) A minimum of 16.67 percent on all leases issued under 43 CFR 
subpart 3109;
    (5) For reinstated leases, the rate used for royalty determination 
that applies to new leases at the time of the reinstatement plus 4 
percentage points, plus an additional 2 percentage points for each 
succeeding reinstatement. In no case will royalties on the reinstated 
lease be less than 20 percent.
    (b) Leases that qualify under specific provisions of the Act of 
August 8, 1946 (30 U.S.C. 226c) may apply for a limitation of a 12\1/2\ 
percent royalty rate.
    (c) The average production per well per day for oil and gas will be 
determined pursuant to 43 CFR 3162.7-4.
    (d) Payment of a royalty on the helium component of gas will not 
convey the right to extract the helium from the gas stream. 
Applications for the right to extract helium from the gas stream will 
be made under 43 CFR part 16.


Sec.  3103.32  Minimum royalties.

    (a) A minimum royalty must be paid at the expiration of each lease 
year beginning on or after a discovery of oil or gas in paying 
quantities on the lands leased, except on unitized leases that lack 
production, the minimum royalty must be paid only on the participating 
acreage, at the following rates:
    (1) On leases issued on or after August 8, 1946, and on those 
issued prior thereto if the lessee files an election under section 15 
of the Act of August 8, 1946, a minimum royalty of $1 per acre or 
fraction thereof in lieu of rental, except as provided in paragraph 
(a)(2) of this section; and
    (2) On leases issued from offers filed after December 22, 1987, and 
on competitive leases issued after December 22, 1987, a minimum royalty 
in lieu of rental of not less than the amount of rental which otherwise 
would be required for that lease year.
    (b) Minimum royalties will not be prorated for any lands in which 
the United States owns a fractional interest and must be paid on the 
full acreage of the lease.
    (c) Minimum royalties and rentals on non-participating acreage must 
be paid to the ONRR.
    (d) The minimum royalty provisions of this section are applicable 
to leases reinstated under 43 CFR 3108.23.
    (e) If the royalty paid during any year aggregates to less than the 
minimum royalty, then the lessee must pay the difference at the end of 
the lease year.

Production Incentives


Sec.  3103.41  Royalty reductions.

    (a) In order to encourage the greatest ultimate recovery of oil or 
gas and in the interest of conservation, the Secretary, upon a 
determination that it is necessary to promote development or that the 
leases cannot be produced in paying quantities under the terms provided 
therein, may waive, suspend or reduce the rental or minimum royalty or 
reduce the royalty on an entire leasehold, or any portion thereof.
    (b)(1) An application for the benefits under paragraph (a) of this 
section must be filed by the operator/payor in the proper BLM office. 
The application must contain the serial number of the leases, the names 
of the record title holders, operating rights owners (sublessees), and 
operators for each lease, the description of lands by legal subdivision 
and a description of the relief requested.
    (2) Each application must show the number, location and status of 
each well drilled, a tabulated statement for each month covering a 
period of not less than 6 months prior to the date of filing the 
application of the aggregate amount of oil or gas subject to royalty, 
the number of wells counted as producing each month and the average 
production per well per day.
    (3) Every application must contain a detailed statement of expenses 
and costs of operating the entire lease, the income from the sale of 
any production and all facts tending to show whether the wells can be 
produced in paying quantities upon the fixed royalty or rental. Where 
the application is for a reduction in royalty, complete information 
must be furnished as to whether overriding royalties, payments out of 
production, or similar interests are paid to others than the United 
States, the amounts so paid and efforts made to reduce them. The 
applicant must also file agreements of the holders to a reduction of 
all other royalties or similar payments from the leasehold to an 
aggregate not in excess of one-half the royalties due the United 
States.
    (c) Petition may be made for a reduction of royalty for leases 
reinstated under 43 CFR 3108.23. Petitions to waive, suspend or reduce 
rental or minimum royalty for leases reinstated under 43 CFR 3108.23 
may be made under this section.


Sec.  3103.42  Suspension of operations and/or production.

    (a) A suspension of all operations and production may be directed 
or consented to by the authorized officer only in the interest of 
conservation of natural resources. A suspension of operations only or a 
suspension of production only may be directed or consented to by the 
authorized officer in cases where the lessee is prevented from 
operating on the lease or producing from the lease, despite the 
exercise of due care and diligence, by reason of force majeure, that 
is, by matters beyond the reasonable control of the lessee. 
Applications for any suspension must be filed in the proper BLM office. 
Complete information showing the necessity of such relief must be 
furnished.
    (b) The term of any lease will be adjusted to account for the 
suspension. Beginning on the date the suspension is lifted, the term 
will be extended by the time that was remaining on the term of the 
lease on the effective date of the suspension. No lease will expire 
during any suspension.
    (c) A suspension will take effect as of the time specified in the 
direction or assent of the authorized officer, in accordance with the 
provisions of 43 CFR 3165.1.

[[Page 47627]]

    (d) Rental and minimum royalty payments will be suspended during 
any period of suspension of all operations and production directed or 
assented to by the authorized officer beginning with the first day of 
the lease month in which the suspension of all operations and 
production becomes effective, or if the suspension of all operations 
and production becomes effective on any date other than the first day 
of a lease month, beginning with the first day of the lease month 
following such effective date. However, if there is any production sold 
or removed during the suspension, the lessee must pay royalty on that 
production.
    (e) Rental and minimum royalty payments will resume on the first 
day of the lease month in which the suspension of all operations and 
production is lifted. Where rentals are creditable against royalties 
and have been paid in advance, proper credit may be allowed on the next 
rental or royalty due under the terms of the lease.
    (f) Rental and minimum royalty payments will not be suspended 
during any period of suspension of operations only or suspension of 
production only.
    (g) Where all operations and production are suspended on a lease on 
which there is a well capable of producing in paying quantities and the 
authorized officer approves resumption of operations and production, 
such resumption will be regarded as lifting the suspension, including 
the suspension of rental and minimum royalty payments, as provided in 
paragraph (e) of this section.
    (h) The relief authorized under this section also may be obtained 
for any Federal lease included within an approved oil and gas 
agreement. Oil and gas agreement obligations will not be suspended by 
relief obtained under this section but will be suspended only in 
accordance with the terms and conditions of the specific agreement.

Subpart 3104--Bonds


Sec.  3104.10  Bond obligations.

    (a) Prior to the commencement of surface disturbing activities 
related to drilling operations, the lessee, operating rights owner 
(sublessee), or operator must submit a surety or a personal bond, 
conditioned upon compliance with all of the terms and conditions of the 
entire leasehold(s) covered by the bond, as described in this subpart. 
The bond amounts must be not less than the minimum amounts described in 
this subpart in order to ensure compliance with the Act, including 
complete and timely plugging of the well(s), reclamation of the lease 
area(s), and the restoration of any lands or surface waters adversely 
affected by lease operations after the abandonment or cessation of oil 
and gas operations on the lease(s) in accordance with, but not limited 
to, the standards and requirements set forth in 43 CFR 3162.3 and 
3162.5 and orders issued by the authorized officer.
    (b) Surety bonds must be issued by qualified surety companies 
approved by the Department of the Treasury (see Department of the 
Treasury Circular No. 570).
    (c) Personal bonds must be accompanied by a:
    (1) Cashier's check;
    (2) Certified check; or
    (3) Negotiable Treasury securities of the United States of a value 
equal to the amount specified in the bond. Negotiable Treasury 
securities must be accompanied by a proper conveyance to the Secretary 
of full authority to sell such securities in case of default in the 
performance of the terms and conditions of a lease.


Sec.  3104.20  Lease bond.

    The operator must be covered by a bond in its own name as principal 
or obligor in an amount of not less than $150,000 for each lease 
conditioned upon compliance with all of the terms of the lease. 
Additional bonding may be posted by a lessee, or owner of operating 
rights (sublessee), as they are ultimately responsible under Sec.  
3106.72. Where two or more principals have interests in different 
formations or portions of the lease, separate bonds may be posted.


Sec.  3104.30  Statewide bonds.

    In lieu of lease bonds, lessees, owners of operating rights 
(sublessees), or operators may furnish a bond in an amount of not less 
than $500,000 covering all leases and operations in any one State.


Sec.  3104.40  Surface owner protection bond.

    (a) If a good-faith effort by the Federal lessee, its operator, or 
representatives has not resulted in an agreement with the surface owner 
to pay compensatory damages to the surface owner, the authorized 
officer will require an adequate surface owner protection bond in an 
amount sufficient to indemnify the surface owner against the reasonable 
and foreseeable damages to crops and tangible improvements from the 
proposed operations that would not otherwise be covered by a bond held 
by the BLM. This surface owner protection bond is not part of the bond 
obligations under lease or statewide bonds.
    (b) The surface owner protection bond must be provided on a BLM-
approved form.
    (c) The surface owner protection bond may be a personal or surety 
bond and must be not less than $1,000.
    (d) The BLM will notify the surface owner of the proposed surface 
owner protection bond amount.
    (e) If the surface owner objects to the sufficiency of the surface 
owner protection bond, the BLM authorized officer will determine the 
sufficiency of the bond necessary to indemnify the surface owner for 
the reasonable and foreseeable damages to crops and tangible 
improvements.


Sec.  3104.50  Increased amount of bonds.

    (a) When an operator desiring approval of an APD has caused the 
BLM, or a surface management agency, to make a demand for payment under 
a bond or other financial guarantee within the 5-year period prior to 
submission of the APD, due to failure to plug a well or reclaim lands 
completely in a timely manner, the authorized officer will require, 
prior to approval of the APD, a bond in an amount equal to the costs, 
when higher than the minimum bond amounts, as estimated by the 
authorized officer of plugging the well and reclaiming the disturbed 
area involved in the proposed operation, or in the minimum amount as 
prescribed in this subpart, whichever is greater.
    (b) The authorized officer may require an increase in the amount of 
any bond whenever it is determined that the operator poses a risk due 
to factors, including, but not limited to, a history of previous 
violations, a notice from the ONRR that there are uncollected royalties 
due, or the total cost of plugging existing wells and reclaiming lands 
exceeds the present bond amount based on the estimates determined by 
the authorized officer. The increase in bond amount may be to any level 
specified by the authorized officer, but in no circumstances will it 
exceed the total of the estimated costs of plugging and reclamation, 
the amount of uncollected royalties due to the ONRR, plus the amount of 
money owed to the lessor due to previous violations remaining 
outstanding.


Sec.  3104.60  Where filed and number of copies.

    All bonds must be filed in the proper BLM office on a current form 
approved by the Director. A single copy executed by the principal or, 
in the case of surety bonds, by both the principal and an acceptable 
surety is sufficient. A bond filed on a form not currently in use will 
be acceptable, unless such form has been declared obsolete by the 
Director prior to the filing of such bond. For purposes of 43 CFR 
3104.20 and

[[Page 47628]]

3104.30, bonds or bond riders must be filed in the BLM State office 
having jurisdiction over the lease or operations covered by the bond or 
rider.


Sec.  3104.70  Default.

    (a) Where, upon a default, the surety makes a payment to the United 
States of an obligation incurred under a lease, the face amount of the 
surety bond or personal bonds and the surety's liability thereunder 
will be reduced by the amount of such payment.
    (b) After default, where the obligation in default equals or is 
less than the face amount of the bond(s), the principal must either 
post a new bond or restore the existing bond(s) to the amount 
previously held or a larger amount as determined by the authorized 
officer. In lieu thereof, the principal may file separate bonds for 
each lease covered by the deficient bond(s). Where the obligation 
incurred exceeds the face amount of the bond(s), the principal must 
make full payment to the United States for all obligations incurred 
that are in excess of the face amount of the bond(s) and must post a 
new bond in the amount previously held or such larger amount as 
determined by the authorized officer. The restoration of a bond or 
posting of a new bond must be made within 6 months or less after 
receipt of notice from the authorized officer. Failure to comply with 
these requirements may:
    (1) Subject all leases covered by such bond(s) to cancellation 
under the provisions of 43 CFR 3108.30;
    (2) Prevent the bond obligor or principal from acquiring any 
additional Federal leases in accordance with 43 CFR 3102.51(f); and
    (3) Result in the bond obligor or principal being referred to the 
Department's Suspension and Debarment Program under 2 CFR part 1400 to 
determine if the person will be suspended or debarred from doing 
business with the Federal Government.


Sec.  3104.80  Termination of period of liability.

    The authorized officer will not give consent to termination of the 
period of liability of any bond unless an acceptable replacement bond 
has been filed or until all the terms and conditions of the lease have 
been met.


Sec.  3104.90  Bonds held prior to [EFFECTIVE DATE OF THE FINAL RULE].

    (a) Unit operator bonds accepted by the BLM prior to [EFFECTIVE 
DATE OF THE FINAL RULE] must be replaced with a statewide bond by [DATE 
TWO YEARS AFTER EFFECTIVE DATE OF THE FINAL RULE]. The BLM will not 
accept any new unit operator bonds.
    (b) All bonds not meeting the appropriate minimum bond amount as of 
[EFFECTIVE DATE OF THE FINAL RULE] must meet that amount by:
    (1) [DATE ONE YEAR AFTER THE EFFECTIVE DATE OF THE FINAL RULE] for 
lease bonds; and
    (2) [DATE TWO YEARS AFTER THE EFFECTIVE DATE OF THE FINAL RULE] for 
statewide bonds;
    (c) All nationwide bonds must be converted to statewide bonds by 
[DATE THREE YEARS AFTER THE EFFECTIVE DATE OF THE FINAL RULE].

Subpart 3105--Cooperative Conservation Provisions


Sec.  3105.10  Cooperative or unit agreement.

    (a) The suggested contents of such an agreement and the procedures 
for obtaining approval are contained in 43 CFR part 3180.
    (b) An application to form a unit agreement, a unit expansion, or a 
designation of a successor operator must include the processing fee 
found in the fee schedule in Sec.  3000.120 of this chapter.

Communitization Agreements


Sec.  3105.21  Where filed.

    (a) An application to form a communitization agreement (CA) or 
modify an existing agreement must be filed with the proper BLM office 
for final approval.
    (b) An application for a CA must include:
    (1) A statement as to whether the proposed CA deviates from the 
BLM's current model CA form, and a certification that the applicant 
received the required signatures;
    (2) An Exhibit A displaying a map of the area covered by the 
proposed agreement and the separate agreement tracts; and
    (3) An Exhibit B displaying the separate tracts and ownership;
    (c) To ensure accurate reporting to ONRR, an application for a CA 
should be submitted at least 90 calendar days prior to first 
production.
    (d) An application for designations of successor operator for a CA 
must include the processing fee found in the fee schedule in Sec.  
3000.120 of this chapter.


Sec.  3105.22  Purpose.

    When a lease or a portion thereof cannot be independently developed 
and operated in conformity with an established well-spacing or well-
development program, the authorized officer may approve a CA for such 
lands with other lands, whether or not owned by the United States, upon 
a determination that it is in the public interest. Operations or 
production under such an agreement will be deemed to be operations or 
production as to each lease committed thereto.


Sec.  3105.23  Requirements.

    (a) The CA must describe the separate tracts comprising the 
drilling or spacing unit, must show the apportionment of the production 
or royalties to the several parties, the name of the operator, and 
contain adequate provisions for the protection of the interests of the 
United States. The agreement must be signed by or on behalf of all 
necessary parties and must be filed prior to the expiration of the 
Federal lease(s) involved in order to confer the benefits of the 
agreement upon such lease(s).
    (b) The agreement will be effective as to the Federal lease(s) 
involved only if approved by the authorized officer. Approved CAs are 
considered effective from the date of the agreement or from the date of 
the onset of production from the communitized formation, whichever is 
earlier, except when the spacing unit is subject to a State pooling 
order after the date of first sale, then the effective date of the 
agreement will be the effective date of the order.
    (c) The public interest requirement for an approved CA will be 
satisfied only if the well dedicated thereto has been completed for 
production in the communitized formation at the time the agreement is 
approved or, if not, that the operator thereafter commences and/or 
diligently continues drilling operations to a depth sufficient to test 
the communitized formation or establishes to the satisfaction of the 
authorized officer that further drilling of the well would be 
unwarranted or impracticable. If an application is received for 
voluntary termination of a CA during its fixed term or such an 
agreement automatically expires at the end of its fixed term without 
the public interest requirement having been satisfied, the approval of 
that agreement by the authorized officer will be invalid and no Federal 
lease included in the CA will be eligible for an extension under 43 CFR 
3107.40.


Sec.  3105.24  Communitization agreement terms.

    The CA will remain in effect for a period of 2 years from the 
effective date or approval date, whichever is later, and so long 
thereafter as communitized substances may be produced in paying 
quantities, or as otherwise specified in the agreement.

[[Page 47629]]

Operating, Drilling or Development Contracts


Sec.  3105.31  Where filed.

    A contract submitted for approval under this section must be filed 
with the proper BLM office.


Sec.  3105.32  Purpose.

    Approval of operating, drilling or development contracts will be 
granted only to permit operators or pipeline companies to enter into 
contracts with a number of lessees sufficient to justify operations on 
a scale large enough to justify the discovery, development, production 
or transportation of oil or gas and to finance the same.


Sec.  3105.33  Requirements.

    The contract must be accompanied by a statement showing all the 
interests held by the contractor in the area or field and the proposed 
or agreed plan for development and operation of the field. All the 
contracts held by the same contractor in the area or field must be 
submitted for approval at the same time and full disclosure of the 
projects made.

Subsurface Storage of Oil and Gas


Sec.  3105.41  Where filed.

    (a) Applications for subsurface storage or designations of 
successor operator must be filed in the proper BLM office.
    (b) The final gas storage agreement signed by all the parties in 
interest must be submitted to the BLM.
    (c) Applications for subsurface storage agreements or designations 
of successor operator must include the processing fee found in the fee 
schedule in Sec.  3000.120 of this chapter.


Sec.  3105.42  Purpose.

    To avoid waste and to promote conservation of natural resources, 
the Secretary, upon application by the interested parties, may 
authorize the subsurface storage of oil and gas, whether or not 
produced from lands owned by the United States. Such authorization will 
provide for the payment of such storage fee or rental on the stored oil 
or gas as may be determined adequate in each case, or, in lieu thereof, 
for a royalty other than that prescribed in the lease when such stored 
oil or gas is produced in conjunction with oil or gas not previously 
produced. The BLM will require a bond as provided under Sec.  3104 for 
operations conducted in a subsurface storage agreement.


Sec.  3105.43  Requirements.

    The agreement must disclose the ownership of the lands involved, 
the parties in interest, the storage fee, rental or royalty offered to 
be paid for such storage and all information demonstrating such storage 
would avoid waste and promote the conservation of natural resources.


Sec.  3105.44  Extension of lease term.

    Any lease used for the storage of oil or gas will be extended for 
the period of storage under an approved agreement. The obligation to 
pay annual lease rent continues during the extended period.


Sec.  3105.50  Consolidation of leases.

    (a) Leases may be consolidated upon written request of the lessee 
filed with the proper BLM office. The request must identify each lease 
involved by serial number and justify the consolidation. Each request 
for a consolidation of leases must include the processing fee found in 
the fee schedule in Sec.  3000.120 of this chapter.
    (b) All parties holding any undivided interest in any lease 
involved in the consolidation must agree to enter into the same lease 
consolidation.
    (c) Leases containing different types of lands (public domain lands 
vs. acquired lands), mixed fractional mineral interest, or provisions 
required by law that cannot be reconciled, will not be consolidated.
    (d) Consolidation of leases will not exceed acreage limits of 2,560 
acres for competitive leases and 10,240 acres for noncompetitive 
leases.
    (e) The effective date, the anniversary date, and the primary term 
of the consolidated lease will be those of the oldest original lease 
included in the consolidation. The term of a consolidated lease may be 
extended beyond the primary lease term under subpart 3107.
    (f) The highest royalty and rental rates of the each of the leases 
to be consolidated will apply to the consolidated lease.
    (g) Lease stipulations and other terms and conditions of each 
original lease, except as noted in paragraphs (e) and (f) of this 
section, will continue to apply to that lease or any portion thereof 
regardless of the lease becoming a part of a consolidated lease.

Subpart 3106--Transfers by Assignment, Sublease, or Otherwise


Sec.  3106.10  Transfers, general.

    (a) Leases may be transferred by assignment or sublease as to all 
or part of the acreage in the lease or as to either a divided or 
undivided interest therein.
    (b) An assignment of a separate zone, deposit, depth, formation, 
specific well, or of part of a legal subdivision, will be denied.
    (c) Within the boundaries of a Federal lease, operating rights may 
only be divided with respect to legal subdivisions, depth ranges, and 
formations.
    (d) An assignment of less than 640 acres outside Alaska or of less 
than 2,560 acres within Alaska will be denied unless the assignment 
constitutes the entire lease or is demonstrated to further the 
development of oil and gas to the satisfaction of the authorized 
officer. Reference 43 CFR 3102.51(g) for certification of compliance.
    (e) The rights of the transferee to a lease or an interest therein 
will not be recognized by the Department until the transfer has been 
approved by the authorized officer.
    (f) A transfer may be withdrawn in writing, signed by the 
transferor and the transferee, if the transfer has not been approved by 
the authorized officer.
    (g) A request for approval of a transfer of a lease or interest in 
a lease must be filed within 90 days from the date of its execution. 
The 90-day filing period will begin on the date the transferor signs 
and dates the transfer. If the transfer is filed after the 90th day, 
the authorized officer may require verification that the transfer is 
still in force and effect.
    (h) A transfer of production payments or overriding royalty or 
other similar payments, arrangements, or interests must be filed in the 
proper BLM office but will not require approval.
    (i) No transfer of an offer to lease or interest in a lease will be 
approved prior to the issuance of the lease.


Sec.  3106.20  Qualifications of assignees and transferees.

    Assignees and transferees must comply with the provisions of 43 CFR 
subpart 3102 and post any bond that may be required. Only responsible 
and qualified lessees may own, hold, or control an interest in a lease.


Sec.  3106.30  Fees.

    (a) Each transfer of record title or of operating rights (sublease) 
for each lease must include payment of the processing fee for 
assignments and transfers found in the fee schedule in Sec.  3000.120 
of this chapter.
    (b) Each transfer of overriding royalty or payment out of 
production must include payment of the processing fee for overriding 
royalty transfers or payments out of productions found in the fee 
schedule in Sec.  3000.120 of this chapter for each lease to which it 
applies.

[[Page 47630]]

Forms


Sec.  3106.41  Transfers of record title and of operating rights 
(subleases).

    Each transfer of record title or of an operating right (sublease) 
must be filed with the proper BLM office on a current form approved by 
the Director. A separate form for each transfer, in duplicate, must be 
filed for each lease out of which a transfer is made. The BLM does not 
require a duplicate copy of the assignment or transfer when it is 
electronically submitted. Copies of documents other than the current 
form approved by the Director must not be submitted. However, 
reference(s) to other documents containing information affecting the 
terms of the transfer may be made on the submitted form.


Sec.  3106.42  Transfers of other interests, including royalty 
interests and production payments.

    (a) Each transfer of overriding royalty interest, payment out of 
production or similar interests created or reserved must be described 
for each lease on the current assignment or transfer form when filed.
    (b) A single executed copy of each such transfer of other interests 
for each lease must be filed with the proper BLM office.


Sec.  3106.43  Mass transfers.

    (a) A mass transfer may be utilized in lieu of the provisions of 43 
CFR 3106.41 and 3106.42 when an assignor or transferor transfers 
interests of any type in more than one Federal lease to the same 
assignee or transferee.
    (b) The mass transfer must be filed with each proper BLM office 
administering any lease affected by the mass transfer. The transfer 
must be on a current form approved by the Director with an exhibit 
attached to each copy listing the following for each lease:
    (1) The serial number;
    (2) The type and percent of interest being conveyed; and
    (3) A description of the lands affected by the transfer in 
accordance with 43 CFR 3106.50.
    (c)(1) One duplicate copy of the form must be filed with the proper 
BLM office for each lease involved in the mass transfer. A copy of the 
exhibit for each lease may be limited to line items pertaining to 
individual leases as long as that line item includes the information 
required by paragraph (b) of this section. The BLM does not require a 
duplicate copy of the assignment or transfer when it is electronically 
submitted.
    (2) When the BLM does not receive the requisite number of copies, 
the applicant must reimburse the BLM for the full costs incurred to 
make the required number of copies. The BLM will waive fees under one 
dollar.
    (d) A mass transfer must include the processing fee for assignments 
and transfers found in the fee schedule in Sec.  3000.120 of this 
chapter for each such interest transferred for each lease.


Sec.  3106.50  Description of lands.

    Each assignment of record title must describe the lands involved in 
the same manner as the lands are described in the lease, except no land 
description is required when 100 percent of the entire area encompassed 
within a lease is conveyed.


Sec.  3106.60  Bond requirements.

    Where the lessee or operating rights owner (sublessee) maintains a 
bond covering the lease (including a statewide bond), the assignee of 
record title interest or transferee of operating rights in such lease 
must furnish, if bond coverage continues to be required, a proper bond 
that will cover any obligations arising under the lease to the same 
extent as the assignor's or transferor's bond.

Approval of Transfer or Assignment


Sec.  3106.71  Failure to qualify.

    The BLM will not approve any assignment of record title or transfer 
of operating rights (sublease) if any party in interest is not a 
qualified lessee, or if the bond is insufficient. The BLM approves 
assignments and transfers for administrative purposes only. Approval 
does not warrant or certify that either party to a transfer holds legal 
or equitable title to a lease.


Sec.  3106.72  Continuing obligation of an assignor or transferor.

    (a) The lessee or sublessee remains responsible for performing all 
obligations under the lease until the date the BLM approves an 
assignment of record title interest or transfer of operating rights.
    (b) After the BLM approves the assignment or transfer, the assignor 
or transferor will continue to be responsible for lease obligations 
that accrued before the approval date, whether or not they were 
identified at the time of the assignment or transfer. This includes 
paying compensatory royalties for drainage. It also includes 
responsibility for plugging wells and abandoning facilities drilled, 
installed, or used before the effective date of the assignment or 
transfer.


Sec.  3106.73  Lease account status.

    The BLM will not approve a transfer if the lease account is 
delinquent with respect to: royalty payments; lease obligations, such 
as, but not limited to, rent and minimum royalty; or production 
reporting to ONRR for a lease in non-terminable status.


Sec.  3106.74  Effective date of transfer.

    The signature of the authorized officer on the official form will 
constitute approval of the assignment of record title or transfer of 
operating rights (sublease) which will take effect as of the first day 
of the lease month following the date of filing in the proper BLM 
office of all documents and statements required by this subpart and an 
appropriate bond, if one is required.


Sec.  3106.75  Effect of transfer.

    An assignment of record title to 100 percent of a portion of the 
lease segregates the transferred portion and the retained portion into 
separate leases. Each resulting lease retains the anniversary date and 
the terms and conditions of the original lease. An assignment of record 
title to less than 100 percent of a portion of the lease or a transfer 
of operating rights (sublease) will not segregate the transferred and 
retained portions into separate leases.


Sec.  3106.76  Obligations of assignee or transferee.

    (a) The assignee of record title agrees to comply with the terms of 
the original lease during the lease tenure. The assignee assumes the 
responsibility to plug and abandon all wells which are no longer 
capable of producing, reclaim the lease site, and remedy all 
environmental problems in existence and that a purchaser exercising 
reasonable diligence should have known existed at the time of the 
transfer. When required, the record title holder must also maintain an 
adequate bond to ensure performance of these responsibilities.
    (b) The transferee of operating rights agrees to comply with the 
terms of the original lease as it applies to the area or horizons for 
the interest acquired. The transferee assumes the responsibility to 
plug and abandon all wells that are no longer capable of producing, 
reclaim the lease site, and remedy all environmental problems in 
existence and that a purchaser exercising reasonable diligence should 
have known at the time of the transfer. When required, the operating 
rights holder must also maintain an adequate bond to ensure performance 
of these responsibilities.

Other Types of Transfers


Sec.  3106.81  Heirs and devisees.

    (a) If an offeror, applicant, lessee or transferee dies, their 
rights will be

[[Page 47631]]

assigned or transferred to the heirs, devisees, executor or 
administrator of the estate, as appropriate, upon the filing of legal 
documents demonstrating that the assignee or transferee is recognized 
as the successor of the deceased.
    (b) The filing must include the processing fee for the assignment 
to an heir/devisee found in the fee schedule in Sec.  3000.120 of this 
chapter with the request to assign lease rights.
    (c) The filing must include a qualification statement demonstrating 
qualification to hold an interest in a lease in accordance with 43 CFR 
subpart 3102. Any ownership or interest otherwise forbidden by the 
regulations in this part which may be acquired by descent, will, 
judgment or decree may be held for a period not to exceed 2 years after 
its acquisition. Any such forbidden ownership or interest held for a 
period of more than 2 years after acquisition may be subject to 
cancellation.
    (d) A bond rider or replacement bond may be required for any 
bond(s) previously furnished by the decedent.


Sec.  3106.82  Change of name.

    (a) A legally recognized change of name of a lessee or sublessee 
must be reported to the proper BLM office. The notice of name change 
must be submitted in writing with adequate information concerning the 
name change. For a corporate name change, the request must include the 
Secretary of State's Certificate of Name Change, along with the 
Articles of Incorporation, or Amendment, if available.
    (b) An entity must include with the notice of name change the 
required processing fee listed in the fee schedule in Sec.  3000.120 of 
this chapter.
    (c) If a bond(s) has been furnished, a change of name on the bond 
may be made by surety consent or a rider to the original bond or by a 
replacement bond.


Sec.  3106.83  Corporate mergers and dissolution of corporations, 
partnerships, and trusts.

    (a) In the event a corporate merger affects leases where property 
of the dissolving corporation to the surviving corporation is 
accomplished by operation of law, an assignment of any affected lease 
interest is not required. An entity must notify the BLM of the merger 
and provide copies of the Secretary of State's Certificate of Merger, 
along with the Articles of Incorporation, or Amendment, if available, 
to the BLM.
    (b) The BLM will not recognize any transfers provided by the 
Articles of Dissolution unless an entity has filed with the BLM a 
Certificate of Dissolution of an incorporated entity, certified as 
accepted by the State where the entity was incorporated.
    (c) An entity must file with the BLM a dissolution of a partnership 
or trust through an order or decree that authorizes settlement, 
discharge, and distribution of the lease holdings and/or interests for 
official recognition of the assignment of lease interests.
    (d) An entity must include the processing fee for corporate merger 
found in the fee schedule in Sec.  3000.120 of this chapter.
    (e) The authorized officer may require a bond rider or replacement 
bond for all affected corporations, partnerships or trusts.


Sec.  3106.84  Sheriff's sale/deed.

    (a) Where a notice of sale of the leasehold interest is published 
pursuant to State law applicable to the execution of sales of real 
property, the purchaser must submit a copy of the Sheriff's Certificate 
of Sale to the proper BLM office after any redemption period has 
passed.
    (b) When submitting the certificate described in paragraph (a), an 
entity must include the processing fee for sheriff's deed found in the 
fee schedule in Sec.  3000.120 of this chapter.
    (c) The purchaser(s) must file a qualification statement to hold an 
interest in a lease in accordance with 43 CFR subpart 3102. Failure to 
provide a qualification statement after 2 years will result in the BLM 
cancelling the lease or interest.
    (d) If a bond has been furnished by the previous interest holder, 
the authorized officer may require a new bond.

Subpart 3107--Continuation and Extension


Sec.  3107.10  Extension by drilling.

    (a) Any lease on which actual drilling operations were commenced 
prior to the end of its primary term and are being diligently 
prosecuted at the end of the primary term or any lease which is part of 
an approved oil and gas agreement upon which such drilling takes place, 
will be extended for 2 years subject to the rental being timely paid as 
required by 43 CFR 3103.20, and subject to the provisions of 43 CFR 
3105.23 and 3186.1, if applicable. The BLM will not grant a drilling 
extension for a lease in its extended term.
    (b) Actual drilling operations must be conducted in a manner that a 
reasonable person seriously looking for oil or gas could be expected to 
make in that particular area, given the existing knowledge of geologic 
and other pertinent facts. In drilling a new well on a lease or for the 
benefit of a lease under the terms of an approved agreement, it must be 
taken to a depth sufficient to penetrate at least one formation 
recognized in the area as potentially productive of oil or gas, or 
where an existing well is reentered, it must be taken to a depth 
sufficient to penetrate at least one new and deeper formation 
recognized in the area as potentially productive of oil or gas. The 
authorized officer may determine that further drilling is unwarranted 
or impracticable.
    (c) When a BLM-approved directional or horizontal well is drilled 
within the leased area from an off-lease location with the intent to 
produce from the leased area, the BLM will consider drilling to have 
commenced on the leased area when drilling is commenced at the off-
lease location.

Production


Sec.  3107.21  Continuation by production.

    A lease will be extended so long as oil or gas is being produced in 
paying quantities.


Sec.  3107.22  Cessation of production.

    A lease in its extended term because of production (and lacking a 
well capable of production in paying quantities) will not expire upon 
cessation of production, if, within 60 calendar days of cessation of 
production, reworking or drilling operations on the leasehold are 
commenced and are thereafter conducted with reasonable diligence during 
the period of nonproduction. If these reworking or drilling operations 
fail to result in production in paying quantities, the lease will 
expire by operation of law, effective as of the date production ceased.


Sec.  3107.23  Leases capable of production.

    No lease for lands on which there is a well capable of producing 
oil or gas in paying quantities will expire because the lessee fails to 
produce the same, unless the lessee fails to place the lease in 
production within a period of not less than 60 calendar days as 
specified by the authorized officer after receipt of notice by 
certified mail from the authorized officer to do so. Such production 
must be continued unless and until suspension of production is granted 
by the authorized officer.

Extension for Terms of Agreements


Sec.  3107.31  Leases committed to an agreement.

    (a) Any lease or portion of a lease committed to an oil and gas 
agreement that contains a general provision for

[[Page 47632]]

allocation of oil or gas will continue in effect so long as the lease 
or portion thereof remains subject to the agreement; provided, that 
there is production of oil or gas in paying quantities under the 
agreement prior to the expiration date of such lease.
    (b) A well that is drilled and completed on a lease committed to a 
unit agreement, and that is capable of production in paying quantities 
on a lease basis, will extend the term of all expiring Federal leases 
committed to the unit agreement for the term of the unit agreement and 
for so long as the well is capable of production in paying quantities.


Sec.  3107.32  Segregation of leases committed in part.

    (a) Any lease committed after July 29, 1954, to any unit agreement, 
which covers lands within and lands outside the area covered by the 
agreement, will be segregated, as of the effective date of commitment 
to the unit, into separate leases; one covering the lands committed to 
the agreement, the other lands not committed to the agreement. For 
unproven areas, such segregation will occur only when the public 
interest requirement is satisfied pursuant to 43 CFR 3183.4(b). Upon 
satisfaction of the public interest requirement, the BLM will deem the 
segregation to have been effective as of the date of commitment of the 
lands to the unit.
    (b)(1) The segregated lease covering the non-unitized portion of 
the lands will continue in force and effect for the term of the lease 
or for 2 years from the date of segregation, whichever is longer.
    (2) If a partially committed lease is in an extended term because 
of production, the segregated, non-producing lease will continue in 
effect so long as the producing lease exists and rentals are paid, and 
so long thereafter as oil or gas is produced from the committed lease.


Sec.  3107.40  Extension by elimination.

    Any lease eliminated from any approved or prescribed oil and gas 
agreement authorized by the Act and any lease in effect at the 
termination of such agreement, unless relinquished, will continue in 
effect for the original term of the lease or for 2 years after its 
elimination from the agreement or after the termination of the plan or 
agreement, whichever is longer, and for so long thereafter as oil or 
gas is produced in paying quantities. No lease will be extended if the 
public interest requirement for an approved oil and gas agreement has 
not been satisfied, as determined by the authorized officer.

Extension of Leases Segregated by Assignment


Sec.  3107.51  Extension after discovery on other segregated portions.

    Any lease segregated by assignment, including the retained portion, 
will continue in effect for the primary term of the original lease, or 
for 2 years after the date a well capable of production in paying 
quantities is established upon any other portion of the original lease, 
whichever is the longer period.


Sec.  3107.52  Undeveloped parts of leases in their extended term.

    Undeveloped parts of leases retained or assigned out of leases 
which are in their extended term will continue in effect for 2 years 
after the effective date of assignment, provided the parent lease was 
issued prior to September 2, 1960.


Sec.  3107.53  Undeveloped parts of producing leases.

    Undeveloped parts of leases retained or assigned out of leases 
which are extended by production, actual or suspended, or the payment 
of compensatory royalty will continue in effect for 2 years after the 
effective date of assignment and for so long thereafter as oil or gas 
is produced in paying quantities.


Sec.  3107.60  Extension of reinstated leases.

    Where a reinstatement of a terminated lease is granted under 43 CFR 
3108.20 and the authorized officer finds that the reinstatement will 
not afford the lessee a reasonable opportunity to continue operations 
under the lease, the authorized officer may extend the term of such 
lease for a period sufficient to give the lessee such an opportunity. 
Any extension will be subject to the following conditions:
    (a) No extension will exceed a period equal to the unexpired 
portion of the lease or any extension thereof remaining at the date of 
termination.
    (b) When the reinstatement occurs after the expiration of the term 
or extension thereof, the lease may be extended from the date the 
authorized officer grants the petition, but in no event for more than 2 
years from the date the reinstatement is authorized and so long 
thereafter as oil or gas is produced in paying quantities.

Other Types


Sec.  3107.71  Payment of compensatory royalty.

    The payment of a compensatory royalty will extend the term of any 
lease for the period during which such compensatory royalty is paid and 
for a period of 1 year from the discontinuance of such payments.


Sec.  3107.72  Subsurface storage of oil and gas.

    Any lease used for the storage of oil or gas will be extended for 
the period of storage under an approved agreement.

Subpart 3108--Relinquishment, Termination, Cancellation


Sec.  3108.10  Relinquishment.

    The lessee(s) may relinquish the lease or any legal subdivision of 
the lease at any time. The lessee(s) must file a written relinquishment 
with the BLM State Office with jurisdiction over the lease. All lessees 
holding record title interests in the lease must sign the 
relinquishment. A relinquishment takes effect on the date the lessee 
filed it with the BLM. However, the lessee(s) and the party that issued 
the bond will continue to be obligated to:
    (a) Make payments of all accrued rentals and royalties, including 
payments of compensatory royalty due for all drainage that occurred 
before the relinquishment;
    (b) Place all wells to be relinquished in condition for suspension 
or abandonment as the BLM requires; and
    (c) Complete reclamation of the leased sites after stopping or 
abandoning oil and gas operations on the lease, under a plan approved 
by the BLM or the appropriate surface management agency.

Termination by Operation of Law and Reinstatement


Sec.  3108.21  Automatic termination.

    (a) Except as provided in paragraph (b) of this section, any lease 
on which there is no well capable of producing oil or gas in paying 
quantities will automatically terminate by operation of law (30 U.S.C. 
188) if the lessee fails to pay the rental at the designated ONRR 
office on or before the lease anniversary date. However, if the 
designated ONRR office is closed on the anniversary date, a rental 
payment received on the next business day the ONRR office is open to 
the public will be considered timely made.
    (b) If the rental payment due under a lease is paid on or before 
its anniversary date but the amount of the payment is deficient and the 
deficiency is nominal as defined in this section, or the amount of 
payment made was determined in accordance with the rental or acreage 
figure stated in a decision rendered by the authorized officer, and 
such figure is found to be in error resulting in a deficiency, such 
lease will not have automatically terminated unless the lessee fails to 
pay the deficiency within the period prescribed in the Notice of 
Deficiency provided for in this section.

[[Page 47633]]

A deficiency will be considered nominal if it is not more than $100 or 
more than 5 percent of the total payment due, whichever is less. The 
designated ONRR office will send a Notice of Deficiency to the lessee. 
The Notice will allow the lessee 15 days from the date of receipt or 
until the due date, whichever is later, to submit the full balance due 
to the designated ONRR office. If the payment required by the Notice is 
not paid within the time allowed, the lease will have terminated by 
operation of law as of its anniversary date.
    (c) The automatic termination provision does not apply where, due 
to other contingencies, additional rental is due on a date other than 
the lease anniversary date and where the lessee did not receive notice 
that the obligation had accrued, unless the lessee fails to pay the 
rental within the period prescribed in the BLM Notice.


Sec.  3108.22  Reinstatement at existing rental and royalty rates: 
Class I reinstatements.

    (a) Except as hereinafter provided, the authorized officer may 
reinstate a lease which has terminated for failure to pay on or before 
the anniversary date the full amount of rental due, provided that:
    (1) Such rental was paid or tendered within 20 days after the 
anniversary date; and
    (2) It is shown to the satisfaction of the authorized officer that 
the failure to timely submit the full amount of the rental due was 
either justified or not due to a lack of reasonable diligence on the 
part of the lessee (reasonable diligence includes a rental payment that 
is paid to the ONRR through its online rental payment system on or 
before the lease anniversary date. If the designated ONRR office or 
payment system is not operational on the anniversary date, payment 
received on the next business day in which the designated ONRR office 
or payment system is operational to the public will be deemed timely); 
and
    (3) A petition for reinstatement and the processing fee for lease 
reinstatement, Class I, found in the fee schedule in Sec.  3000.120 of 
this chapter, are filed with the proper BLM office within 60 days after 
receipt of Notice of Termination of Lease due to late payment of 
rental. If a terminated lease becomes productive prior to the time the 
lease is reinstated, all required royalty that has accrued must be paid 
to the ONRR.
    (b) The burden of showing that the failure to pay on or before the 
anniversary date was justified or not due to lack of reasonable 
diligence is on the lessee.
    (c) Under no circumstances will a terminated lease be reinstated 
if:
    (1) A valid oil and gas lease has been issued prior to the filing 
of a petition for reinstatement affecting any of the lands covered by 
that terminated lease; or
    (2) The oil and gas interests of the United States in the lands 
have been disposed of or otherwise have become unavailable for leasing.


Sec.  3108.23  Reinstatement at higher rental and royalty rates: Class 
II reinstatements.

    (a) The authorized officer may, if the requirements of this section 
are met, reinstate a competitive oil and gas lease which was terminated 
by operation of law for failure to pay rental timely when the rental 
was not paid or tendered within 20 calendar days of the termination 
date, and it is shown to the satisfaction of the authorized officer 
that such failure was justified or not due to a lack of reasonable 
diligence, or no matter when the rental was paid, it is shown to the 
satisfaction of the authorized officer that such failure was 
inadvertent.
    (b)(1) Such leases may be reinstated if the required back rental 
and royalty at the increased rates accruing from the date of 
termination, together with a petition for reinstatement, are filed on 
or before the earlier of:
    (i) Sixty calendar days after the last date that any lessee of 
record received Notice of Termination by certified mail; or
    (ii) Twenty-four months after termination of the lease.
    (2) After determining that the requirements for filing of the 
petition for reinstatement have been timely met, the authorized officer 
may reinstate the lease if:
    (i) No valid lease has been issued prior to the filing of the 
petition for reinstatement affecting any of the lands covered by the 
terminated lease, whether such lease is still in effect or not;
    (ii) The oil and gas interests of the United States in the lands 
have not been disposed of or have not otherwise become unavailable for 
leasing;
    (iii) Payment of all back rentals and royalties at the rates 
established for the reinstated lease has been made;
    (iv) An agreement has been signed by the lessee and attached to and 
made a part of the lease specifying future rentals at the applicable 
rates specified for reinstated leases in 43 CFR 3103.22 and future 
royalties at the rates set in 43 CFR 3103.31 for all production removed 
or sold from such lease or shared by such lease from production 
allocated to the lease by virtue of its participation in an oil and gas 
agreement;
    (v) A notice of the proposed reinstatement of the terminated lease 
and the terms and conditions of reinstatement has been published in the 
Federal Register at least 30 days prior to the date of reinstatement 
for which the lessee must reimburse the BLM for the full costs incurred 
in the publishing of said notice; and
    (vi) The lessee has paid the BLM a nonrefundable administrative fee 
of $500.
    (c) The authorized officer will furnish to the Chairpersons of the 
Committee on Natural Resources of the House of Representatives and of 
the Committee on Energy and Natural Resources of the Senate, at least 
30 days prior to the date of reinstatement, a copy of the notice, 
together with information concerning rental, royalty, volume of 
production, if any, and any other matter which the authorized officer 
considers significant in making the determination to reinstate.
    (d) If the authorized officer reinstates the lease, the 
reinstatement will be effective as of the date of termination, for the 
unexpired portion of the original lease or any extension thereof 
remaining on the date of termination, and so long thereafter as oil or 
gas is produced in paying quantities. Where a lease is reinstated under 
this section and the authorized officer finds that the reinstatement of 
such lease either:
    (1) Occurs after the expiration of the primary term or any 
extension thereof; or
    (2) Will not afford the lessee a reasonable opportunity to continue 
operations under the lease, the authorized officer may extend the term 
of the reinstated lease for such period as determined reasonable, but 
in no event for more than 2 years from the date of the reinstatement 
and so long thereafter as oil or gas is produced in paying quantities.


Sec.  3108.30  Cancellation.

    (a) Whenever the lessee fails to comply with any of the provisions 
of the law, the regulations issued thereunder, or the lease, the lease 
may be canceled by the Secretary, if the leasehold does not contain a 
well capable of production of oil or gas in paying quantities, or if 
the lease is not committed to an approved oil and gas agreement that 
contains a well capable of production of unitized substances in paying 
quantities. The lease may be canceled only if the default continues for 
30 calendar days after a notice of default has been delivered in 
accordance with 43 CFR 1810.2.
    (b) Whenever the lessee fails to comply with any of the provisions 
of the

[[Page 47634]]

law, the regulations issued thereunder, or the lease, and if the 
leasehold contains a well capable of production of oil or gas in paying 
quantities, or if the lease is committed to an approved oil and gas 
agreement that contains a well capable of production of unitized 
substances in paying quantities, the lease may be canceled only by 
court order in the manner provided by section 31(a) of the Act (30 
U.S.C. 188).
    (c) If any interest in any lease is owned or controlled, directly 
or indirectly, by means of stock or otherwise, in violation of any of 
the provisions of the Act, the lease may be canceled, or the interest 
so owned may be forfeited, or the person so owning or controlling the 
interest may be compelled to dispose of the interest, only by court 
order in the manner provided by section 27(h)(1) of the Act (30 U.S.C. 
184).
    (d) Leases will be subject to cancellation if improperly issued.


Sec.  3108.40  Bona fide purchasers.

    A lease or interest therein may not be cancelled to the extent that 
such action adversely affects the title or interest of a bona fide 
purchaser even though such lease or interest, when held by a 
predecessor in title, may have been subject to cancellation. All 
purchasers will be charged with constructive notice as to all pertinent 
regulations and all BLM records pertaining to the lease and the lands 
covered by the lease. Prompt action may be taken to dismiss as a party 
to any proceedings with respect to a violation by a predecessor of any 
provisions of the Act, any person who shows the holding of an interest 
as a bona fide purchaser without having violated any provisions of the 
Act. No hearing will be necessary upon such showing unless prima facie 
evidence is presented that the purchaser is not a bona fide purchaser.


Sec.  3108.50  Waiver or suspension of lease rights.

    If, during any proceeding with respect to a violation of any 
provision of the regulations in 43 CFR parts 3000 and 3100 or the Act, 
a party thereto files a waiver of his/her rights under the lease to 
drill or to assign his/her lease interests, or if such rights are 
suspended by order of the Secretary pending a decision, payments of 
rentals and the running of time against the term of the lease involved 
will be suspended as of the first day of the month following the filing 
of the waiver or the Secretary's suspension until the first day of the 
month following the final decision in the proceeding or the revocation 
of the waiver or suspension.

Subpart 3109--Leasing Under Special Acts

Rights-of-Way


Sec.  3109.11  Generally.

    The Act of May 21, 1930 (30 U.S.C. 301-306), authorizes either the 
leasing of oil and gas deposits under railroad and other rights-of-way 
to the owner of the right-of-way or the entering of a compensatory 
royalty agreement with adjoining landowners. This authority will be 
exercised only with respect to railroad rights-of-way and easements 
issued pursuant either to the Act of March 3, 1875 (43 U.S.C. 934 et 
seq.), or pursuant to earlier railroad right-of-way statutes, and with 
respect to rights-of-way and easements issued pursuant to the Act of 
March 3, 1891 (43 U.S.C. 946 et seq.). The oil and gas underlying any 
other right-of-way or easement is included within any oil and gas lease 
issued pursuant to the Act which covers the lands within the right-of-
way, subject to the limitations on use of the surface, if any, set out 
in the statute under which, or permit by which, the right-of-way or 
easement was issued, and such oil and gas will not be leased under the 
Act of May 21, 1930.


Sec.  3109.12  Application.

    (a) No approved form is required for an application to lease oil 
and gas deposits underlying a right-of-way.
    (b) The right-of-way owner or his/her transferee must file the 
application in the proper BLM office.
    (c) Include the processing fee for leasing under right-of-way found 
in the fee schedule in Sec.  3000.120 of this chapter.
    (d) An application must include:
    (1) Facts as to the ownership of the right-of-way, and of the 
transfer if the application is filed by a transferee;
    (2) An executed transfer of the right to obtain a lease, if 
necessary;
    (3) A description of the development of oil or gas in adjacent or 
nearby lands, the location and depth of the wells, the production and 
the probability of drainage of the deposits in the right-of-way;
    (4) A description of each legal subdivision through which a portion 
of the right-of-way desired to be leased traverses; however, a 
description by metes and bounds of the right-of-way is not required; 
and
    (5) A map of the applicable lands.


Sec.  3109.13  Notice.

    After the BLM has determined that a lease of a right-of-way or any 
portion thereof is consistent with the public interest, either upon 
consideration of an application for lease or on its own motion, the 
authorized officer will serve notice on the owner or lessee of the oil 
and gas rights of the adjoining lands. The adjoining landowner or 
lessee will be allowed a reasonable time, as provided in the notice, 
within which to submit a bid for the percent of compensatory royalty, 
the owner or lessee must pay for the extraction of the oil and gas 
underlying the right-of-way through wells on such adjoining lands. The 
owner of the right-of-way will be given the same time period to submit 
a bid for the lease.


Sec.  3109.14  Award of lease or compensatory royalty agreement.

    Award of lease to the owner of the right-of-way, or a contract for 
the payment of compensatory royalty by the owner or lessee of the 
adjoining lands will be made to the bidder whose offer is determined by 
the authorized officer to be to the best advantage of the United 
States, considering the amount of royalty to be received and the better 
development under the respective means of production and operation.


Sec.  3109.15  Compensatory royalty agreement or lease.

    (a) The lease or compensatory royalty agreement will be on a form 
approved by the Director.
    (b) The primary term of the lease will be for a period of 10 years.
    (c) The following provisions of 43 CFR part 3100 apply to the 
issuance and administration of leases for oil and gas deposits 
underlying a right-of-way issued under this part:
    (1) All of subpart 3101, except Sec.  3101.20; and
    (2) All of subparts 3102 through 3108;


Sec.  3109.20  Units of the National Park System.

    (a) Oil and gas leasing in units of the National Park System will 
be governed by 43 CFR part 3100 and all operations conducted on a lease 
or permit in such units will be governed by 43 CFR parts 3160 and 3180.
    (b) Any lease or permit respecting minerals in units of the 
National Park System may be issued or renewed only with the consent of 
the Regional Director, National Park Service. Such consent will only be 
granted upon a determination by the Regional Director that the activity 
permitted under the lease or permit will not have significant adverse 
effect upon the resources or administration of the unit pursuant to the 
authorizing legislation of the unit. Any lease or permit issued will be 
subject to such conditions as may be prescribed by the Regional 
Director to protect the surface and significant resources of the unit, 
to preserve their

[[Page 47635]]

use for public recreation, and to the condition that site specific 
approval of any activity on the lease will only be given upon 
concurrence by the Regional Director. All lease applications received 
for reclamation withdrawn lands will also be submitted to the Bureau of 
Reclamation for review.
    (c) The units subject to the regulations in this part are those 
units of land and water which are shown on the following maps on file 
and available for public inspection in the office of the Director of 
the National Park Service and in the Superintendent's Office of each 
unit. The boundaries of these units may be revised by the Secretary as 
authorized in the Acts.
    (1) Lake Mead National Recreation Area--The map identified as 
``boundary map, 8360-80013B, revised February 1986.
    (2) Whiskeytown Unit of the Whiskeytown-Shasta-Trinity National 
Recreation Area--The map identified as ``Proposed Whiskeytown-Shasta-
Trinity National Recreation Area,'' numbered BOR-WST 1004, dated July 
1963.
    (3) Ross Lake and Lake Chelan National Recreation Areas--The map 
identified as ``Proposed Management Units, North Cascades, 
Washington,'' numbered NP-CAS-7002, dated October 1967.
    (4) Glen Canyon National Recreation Area--the map identified as 
``boundary map, Glen Canyon National Recreation Area,'' numbered GLC-
91,006, dated August 1972.
    (d) The following excepted units will not be open to mineral 
leasing:
    (1) Lake Mead National Recreation Area. (i) All waters of Lakes 
Mead and Mohave and all lands within 300 feet of those lakes measured 
horizontally from the shoreline at maximum surface elevation;
    (ii) All lands within the unit of supervision of the Bureau of 
Reclamation around Hoover and Davis Dams and all lands outside of 
resource utilization zones as designated by the Superintendent on the 
map (602-2291B, dated October 1987) of Lake Mead National Recreation 
Area which is available for inspection in the Office of the 
Superintendent.
    (2) Whiskeytown Unit of the Whiskeytown-Shasta-Trinity National 
Recreation Area. (i) All waters of Whiskeytown Lake and all lands 
within 1 mile of that lake measured from the shoreline at maximum 
surface elevation;
    (ii) All lands classified as high-density recreation, general 
outdoor recreation, outstanding natural and historic, as shown on the 
map numbered 611-20,004B, dated April 1979, entitled ``Land 
Classification, Whiskeytown Unit, Whiskeytown-Shasta-Trinity National 
Recreation Area.'' This map is available for public inspection in the 
Office of the Superintendent;
    (iii) All lands within section 34 of Township 33 north, Range 7 
west, Mt. Diablo Meridian.
    (3) Ross Lake and Lake Chelan National Recreation Areas. (i) All of 
Lake Chelan National Recreation Area;
    (ii) All lands within \1/2\ mile of Gorge, Diablo and Ross Lakes 
measured from the shoreline at maximum surface elevation;
    (iii) All lands proposed for or designated as wilderness;
    (iv) All lands within \1/2\ mile of State Highway 20;
    (v) Pyramid Lake Research Natural Area and all lands within \1/2\ 
mile of its boundaries.
    (4) Glen Canyon National Recreation Area. Those units closed to 
mineral disposition within the natural zone, development zone, cultural 
zone and portions of the recreation and resource utilization zone as 
shown on the map numbered 80,022A, dated March 1980, entitled ``Mineral 
Management Plan--Glen Canyon National Recreation Area.'' This map is 
available for public inspection in the Office of the Superintendent and 
the office of the BLM State Offices, Arizona and Utah.


Sec. Sec.  3109.21-3109.22  [Reserved]


Sec.  3109.30  Shasta and Trinity Units of the Whiskeytown-Shasta-
Trinity National Recreation Area.

    Section 6 of the Act of November 8, 1965 (Pub. L. 89-336), 
authorizes the Secretary to permit the removal of oil and gas from 
lands within the Shasta and Trinity Units of the Whiskeytown-Shasta-
Trinity National Recreation Area in accordance with the Act or the 
Mineral Leasing Act for Acquired Lands. Subject to the determination by 
the Secretary of Agriculture that removal will not have significant 
adverse effects on the purposes of the Central Valley project or the 
administration of the recreation area.

PART 3110 [REMOVED]

0
3. Under the authority of 30 U.S.C. 189, part 3110 is removed.
0
4. Revise part 3120 to read as follows:

PART 3120--COMPETITIVE LEASES

Sec.
Subpart 3120--Competitive Leases

General

3120.11 Lands available for competitive leasing.
3120.12 Requirements.
3120.13 Protests.

Lease Terms

3120.21 Duration of lease.
3120.22 Dating of leases.
3120.23 Lease size.
3120.30 Nomination process.
3120.31 General.
3120.32 Filing of a nomination for competitive leasing.
3120.33 Parcels receiving nominations.

Expressions of Interest

3120.41 Process.
3120.42 Agency inventory of leasing.

Notice of Competitive Lease Sale

3120.51 General.
3120.52 Posting timeframes.

Competitive Auction

3120.61 Competitive auction.
3120.62 Payments required.
3120.63 Award of lease.
3120.70 Parcels not bid on at auction.

Future Interest

3120.81 Nomination or expression of interest to make lands available 
for competitive lease.
3120.82 Future interest terms and conditions.
3120.83 Compensatory royalty agreements.

    Authority:  16 U.S.C. 3101 et seq.; 30 U.S.C. 181 et seq. and 
351-359; 40 U.S.C. 471 et seq.; 43 U.S.C. 1701 et seq.; Pub. L. 113-
291, 128 Stat. 3762; and the Attorney General's Opinion of April 2, 
1941 (40 Op. Atty. Gen. 41).

Subpart 3120--Competitive Leases

General


Sec.  3120.11  Lands available for competitive leasing.

    All lands eligible and available for leasing may be offered for 
competitive auction under this subpart, including but not limited to:
    (a) Lands that were covered by previously issued oil and gas leases 
that have terminated, expired, been cancelled or relinquished;
    (b) Lands for which authority to lease has been delegated from the 
General Services Administration;
    (c) If, in proceeding to cancel a lease, interest in a lease, 
option to acquire a lease or an interest therein, acquired in violation 
of any of the provisions of the Act, an underlying lease, interest or 
option in the lease is cancelled or forfeited through a bankruptcy or 
otherwise to the United States and there are valid interests therein 
that are not subject to cancellation, forfeiture, or compulsory 
disposition, such underlying lease, interest, or option may be sold to 
the highest responsible and qualified bidder by competitive bidding 
under this subpart, subject to all outstanding valid interests therein 
and valid options pertaining thereto. If less

[[Page 47636]]

than the whole interest in the lease, interest, or option is cancelled 
or forfeited, such partial interest may likewise be sold by competitive 
bidding. If no satisfactory bid is obtained as a result of the 
competitive offering of such whole or partial interests, such interests 
may be sold in accordance with 30 U.S.C. 184(h)(2) by such other 
methods as the authorized officer deems appropriate, but on terms no 
less favorable to the United States than those of the best competitive 
bid received. Interest in outstanding leases(s) so sold will be subject 
to the terms and conditions of the existing lease(s);
    (d) Lands which are otherwise unavailable for leasing but which are 
subject to drainage (protective leasing);
    (e) Lands included in any expression of interest submitted to the 
authorized officer;
    (f) Lands selected by the authorized officer; and
    (g) Lands that were offered on a previous sale for which no bid was 
accepted or received.


Sec.  3120.12  Requirements.

    (a) Each BLM State Office will hold sales at least quarterly if 
eligible lands are available for competitive leasing.
    (b) Lease sales will be conducted by a competitive auction process.
    (c) The BLM may issue a lease only to the highest responsible and 
qualified bidder. If a person does not pay the minimum monies owed the 
day of the sale, the BLM may refer that person to the Department of the 
Interior's Office of the Inspector General, Administrative Remedies 
Division, for appropriate action, including potential suspension and 
debarment.
    (d) The national minimum acceptable bid will be as specified in 
Sec.  3000.130 of this chapter and payable on the gross acreage and 
will not be prorated for any lands in which the United States owns a 
fractional interest.


Sec.  3120.13  Protests.

    (a) No action pursuant to the regulations in this subpart will be 
suspended under 43 CFR 4.21(a) due to a protest from a notice by the 
authorized officer to hold a lease sale.
    (b) Notwithstanding paragraph (a) of this section, the authorized 
officer may suspend the offering of a specific parcel while considering 
a protest against its inclusion in a Notice of Competitive Lease Sale.
    (c) Only the Assistant Secretary for Land and Minerals Management 
may suspend a lease sale for good cause after reviewing the reason(s) 
for a protest.

Lease Terms


Sec.  3120.21  Duration of lease.

    Competitive leases will be issued for a primary term of 10 years.


Sec.  3120.22  Dating of leases.

    All competitive leases will be considered issued when signed by the 
authorized officer. Competitive leases, except future interest leases 
issued under Sec.  3120.80, will be effective as of the first day of 
the month following the date the leases are signed on behalf of the 
United States. A lease may be made effective on the first day of the 
month within which it is issued if a written request is made prior to 
the date of signature of the authorized officer. Leases for future 
interest will be effective as of the date the mineral interests vest in 
the United States.


Sec.  3120.23  Lease size.

    Lands may be offered in leasing units of not more than 2,560 acres 
outside Alaska, or 5,760 acres within Alaska, which may be as nearly 
compact in form as possible.


Sec.  3120.30  Nomination process.

    The Director may elect to implement the provisions contained in 
Sec. Sec.  3120.31 through 3120.33 after review of any comments 
received during a period of not less than 30 calendar days following 
publication in the Federal Register of notice that implementation of 
those sections is being considered.


Sec.  3120.31  General.

    The Director may elect to accept nominations, as set forth in this 
section, as part of the competitive process required by the Act or 
elect to accept informal expressions of interest. A List of Lands 
Available for Competitive Nominations may be posted, and nominations in 
response to this list must be made in accordance with instructions 
contained therein and on a form or by a method approved by the 
Director. Those parcels receiving nominations will be included in a 
Notice of Competitive Lease Sale, unless the parcel is withdrawn by the 
BLM.


Sec.  3120.32  Filing of a nomination for competitive leasing.

    Nominations filed in response to a List of Lands Available for 
Competitive Nominations and on a form or using a method approved by the 
Director must:
    (a) Include the nominator's name and personal or business address. 
The name of only one citizen, association or partnership, corporation 
or municipality must appear as the nominator. All communications 
relating to leasing will be sent to that name and address, which will 
constitute the nominator's name and address of record;
    (b) Be completed, and filed in accordance with the instructions 
printed on the form and the regulations in this subpart;
    (c) Be filed within the filing period and in the BLM State Office 
specified in the List of Lands Available for Competitive Nominations. A 
nomination will be unacceptable and will be returned if it has not been 
completed and timely filed in accordance with the instructions on the 
form or with the other requirements in this subpart; and
    (d) Be accompanied by a remittance, as specified in Sec.  3000.120 
of this chapter for a formal lease nomination.


Sec.  3120.33  Parcels receiving nominations.

    Parcels which receive nominations may be included in a Notice of 
Competitive Lease Sale. The Notice will indicate the number of 
nominations received for each parcel.

Expressions of Interest


Sec.  3120.41  Process.

    (a) A party submitting an expression of interest in leasing land 
available for disposition under section 17 of the Mineral Leasing Act 
must include the submitter's name and address and must submit the 
expression of interest through the BLM's online leasing system.
    (b) The expression must provide a description of the lands 
identified by legal land description, as follows:
    (1) For lands surveyed under the public land survey system, 
describe the lands to the nearest aliquot part within the legal 
subdivision, section, township, range, and meridian;
    (2) For unsurveyed lands, describe the lands by metes and bounds, 
giving courses and distances, and tie this information to an official 
corner of the public land surveys, or to a prominent topographic 
feature;
    (3) For approved protracted surveys, include an entire section, 
township, range, and meridian. Do not divide protracted sections into 
aliquot parts;
    (4) For lands that have water boundaries, describe the lands based 
on the initial survey or deed acquiring ownership;
    (5) For fractional interest lands, identify the United States 
mineral ownership by percentage;
    (6) For split estate lands, where the surface rights are in private 
ownership and the rights to develop the oil and gas are managed by the 
Federal Government, submit the private surface owner's name and 
address.

[[Page 47637]]

    (7) For lands where the acquiring agency has assigned an 
acquisition or tract number covering the lands applied, submit the 
number in addition to any description otherwise required by this 
section. If the authorized officer determines that the acquisition or 
tract number, together with identification of the State and county, 
constitutes an adequate description, the authorized officer may allow 
the description in this manner in lieu of other descriptions required 
by this section.
    (c) A submitter may submit more than one expression of interest, so 
long as each expression separately satisfies the requirements of 
paragraph (b) of this section.
    (d) Each expression of interest must include a filing fee, as found 
in the fee schedule in Sec.  3000.120 of this chapter.
    (e) The BLM may include lands in a lease sale on its own 
initiative.
    (f) When determining whether the BLM should offer lands specified 
in an expression of interest at lease sales, the BLM will evaluate the 
Secretary's obligations to manage public lands for multiple use and 
sustained yield and to take any action required to prevent unnecessary 
or undue degradation of the lands and their resources, along with other 
applicable legal requirements. At a minimum, the BLM will consider:
    (1) Proximity to oil and gas development existing at the time of 
the BLM's evaluation, giving preference to lands upon which a prudent 
operator would seek to expand existing operations;
    (2) The presence of important fish and wildlife habitats or 
connectivity areas, giving preference to lands that would not impair 
the proper functioning of such habitats or corridors;
    (3) The presence of historic properties, sacred sites, and other 
high value leasing lands, giving preference to lands that would not 
impair the cultural significance of such resources;
    (4) The presence of recreation and other important uses or 
resources, giving preference to lands that would not impair the value 
of such uses or resources; and
    (5) The potential for oil and gas development, giving preference to 
lands with high potential for development.
    (g) The BLM may offer for sale all or some of the lands specified 
in an expression of interest and may offer those lands as part of a 
parcel that includes lands not specified in the expression of interest.


Sec.  3120.42  Agency inventory of leasing.

    Until August 16, 2032, the BLM will from time to time calculate, 
for the preceding 1-year period, the acreage for which expressions of 
interest have been submitted to the BLM and the sum total of acres 
offered for lease.

Notice of Competitive Lease Sale


Sec.  3120.51  General.

    (a) The lands available for competitive lease sale under this 
subpart will be described in a Notice of Competitive Lease Sale.
    (b) The time, date, and place of the competitive lease sale will be 
stated in the notice.
    (c) The notice will include an identification of, and a copy of, 
stipulations applicable to each parcel.


Sec.  3120.52  Posting timeframes.

    (a) After identifying a preliminary list of lands for a lease sale, 
the BLM will provide a scoping period, of not less than 30 calendar 
days, for public comment on the preliminary parcel list for the 
upcoming lease sale. The preliminary parcel list is not subject to 
protests.
    (b) After drafting a National Environmental Policy Act (NEPA) 
document for a lease sale, the BLM will provide a comment period, of 
not less than 30 calendar days, for public comment on the NEPA document 
for the upcoming lease sale. The draft NEPA document is not subject to 
protests or appeals.
    (c) At least 60 calendar days prior to conducting a competitive 
auction, the BLM will make available to the public a list of lands to 
be offered for competitive lease sale in a Notice of Competitive Lease 
Sale.
    (d) After posting the Notice of Competitive Lease Sale notice, the 
BLM will provide a protest period, of not less than 30 calendar days, 
for public input on the upcoming lease sale.
    (e) The BLM will make available the final NEPA compliance documents 
prior to issuing a lease from the lease sale.

Competitive Auction


Sec.  3120.61  Competitive auction.

    (a) Parcels will be offered by competitive auction.
    (b) A winning bid will be the highest bid by a responsible and 
qualified bidder, equal to or exceeding the national minimum acceptable 
bid. The decision of the auctioneer will be final.


Sec.  3120.62  Payments required.

    (a) Payments must be made in accordance with 43 CFR 3103.11.
    (b) Each winning bidder must submit, by the close of official 
business hours, or such other time as may be specified by the 
authorized officer, on the day of the sale for the parcel:
    (1) The minimum bonus bid as specified in Sec.  3000.130 of this 
chapter;
    (2) The total amount of the first year's rental; and
    (3) The processing fee for competitive lease applications found in 
the fee schedule in Sec.  3000.120 of this chapter for each parcel.
    (c) The winning bidder must submit the balance of the bonus bid to 
the proper BLM office within 10 business days after the last day of the 
competitive auction.


Sec.  3120.63  Award of lease.

    (a) A bid will not be withdrawn and will constitute a legally 
binding commitment to execute the lease bid form and accept a lease, 
including the obligation to pay the bonus bid, first year's rental, and 
processing fee. Execution by the high bidder of a competitive lease bid 
form approved by the Director constitutes certification of compliance 
with 43 CFR subpart 3102, will constitute a binding lease offer, 
including all terms and conditions applicable thereto, and must be 
submitted when payment is made in accordance with Sec.  3120.62(b). 
Failure to comply with Sec.  3120.62(c) will result in rejection of the 
bid and forfeiture of the monies submitted under Sec.  3120.62(b).
    (b) A lease will be awarded to the highest responsible and 
qualified bidder. A copy of the lease will be provided to the lessee 
after signature by the authorized officer.
    (c) If a bid is rejected, the land may be reoffered competitively 
under this subpart.
    (d) The BLM will not issue a lease until it resolves all protests 
covering the lands to be leased.
    (e) Leases will be issued within 60 calendar days, following 
payment by the successful bidder of the remainder of the bonus bid, if 
any, and the annual rental for the first lease year. If the BLM cannot 
issue the lease within 60 days, the BLM may reject the offer.


Sec.  3120.70  Parcels not bid on at auction.

    Lands offered at the competitive auction that received no bids may 
be offered in a future competitive auction.

Future Interest


Sec.  3120.81  Nomination or expression of interest to make lands 
available for competitive lease.

    A nomination or expression of interest for a future interest lease 
must be filed in accordance with this subpart.


Sec.  3120.82  Future interest terms and conditions.

    (a) No rental or royalty will be due to the United States prior to 
the vesting of

[[Page 47638]]

the oil and gas rights in the United States. However, the future 
interest lessee must agree that if, he/she is or becomes the holder of 
any present interest operating rights in the lands:
    (1) The future interest lessee transfers all or a part of the 
lessee's present oil and gas interests, such lessee must file in the 
proper BLM office an assignment or transfer, in accordance with 43 CFR 
subpart 3106, of the future interest lease of the same type and 
proportion as the transfer of the present interest; and
    (2) The future interest lessee's present lease interests are 
relinquished, cancelled, terminated, or expired, the future interest 
lease rights with the United States also will cease and terminate to 
the same extent.
    (b) Upon vesting of the oil and gas rights in the United States, 
the future interest lease rental and royalty will be as for any 
competitive lease issued under this subpart, as provided in 43 CFR 
subpart 3103, and the acreage will be chargeable in accordance with 43 
CFR 3101.20.


Sec.  3120.83  Compensatory royalty agreements.

    The terms and conditions of compensatory royalty agreements 
involving acquired lands in which the United States owns a future or 
fractional interest will be established on an individual case basis. 
Such agreements may be required when leasing is not possible in 
situations where the interest of the United States in the oil and gas 
deposit includes both a present and a future fractional interest in the 
same tract containing a producing well.

PART 3130--OIL AND GAS LEASING: NATIONAL PETROLEUM RESERVE, ALASKA

0
5. The authority citation for part 3130 continues to read as follows:

    Authority:  42 U.S.C. 6508, 43 U.S.C. 1733 and 1740.

0
6. Revise Sec.  3137.23 to read as follows:


Sec.  3137.23  NPR-A unitization application.

    The unitization application must include:
    (a) The proposed unit agreement;
    (b) A map showing the proposed unit area;
    (c) A list of committed tracts including, for each tract, the:
    (1) Legal land description and acreage;
    (2) Names of persons holding record title interest;
    (3) Names of persons owning operating rights; and
    (4) Name of the unit operator.
    (d) A statement certifying:
    (1) The operator invited all owners of oil and gas rights (leased 
or unleased) and lease interests (record title and operating rights) 
within the external boundary of the unit area described in the 
application to join the unit;
    (2) That there are sufficient tracts committed to the unit 
agreement to reasonably operate and develop the unit area;
    (3) The commitment status of all tracts within the area proposed 
for unitization; and
    (4) The operator accepts unit obligations under Sec.  3137.60 of 
this subpart.
    (e) Evidence of acceptable bonding;
    (f) A discussion of reasonably foreseeable and significantly 
adverse effects on the surface resources of the NPR-A and how unit 
operations may reduce impacts compared to individual lease operations;
    (g) A discussion of the proposed methodology for allocating 
production among the committed tracts. If the unit includes non-Federal 
oil and gas mineral estate, you must explain how the methodology takes 
into account reservoir heterogeneity and area variation in reservoir 
producibility; and
    (h) Other documentation that the BLM may request. The BLM may 
require additional copies of maps, plats, and other similar exhibits.
    (i) The processing fee found in the fee schedule in Sec.  3000.120 
of this chapter.
0
7. Revise Sec.  3137.61 to read as follows:


Sec.  3137.61  Change in unit operators.

    (a) To change unit operators, the new unit operator must submit to 
the BLM:
    (1) Statements that:
    (i) The new operator accepts unit obligations; and
    (ii) The percentage of required interest owners consented to a 
change of unit operator;
    (2) Evidence of acceptable bonding (see Sec.  3137.60(b)); and
    (3) The processing fee found in the fee schedule in Sec.  3000.120 
of this chapter.
    (b) The effective date of the change in unit operator is the date 
the BLM approves the new unit operator.
0
8. Revise Sec.  3138.11 to read as follows:


Sec.  3138.11  Applications for a subsurface storage agreement.

    (a) An application for a subsurface storage agreement must include:
    (1) The reason for forming a subsurface storage agreement;
    (2) A description of the area to be included in the subsurface 
storage agreement;
    (3) A description of the formation to be used for storage;
    (4) The proposed storage fees or rentals. The fees or rentals must 
be based on the value of the subsurface storage, injection, and 
withdrawal volumes, and rental income or other income generated by the 
operator for letting or subletting the storage facilities;
    (5) The payment of royalty for native oil or gas (oil or gas that 
exists in the formation before injection and that is produced when the 
stored oil or gas is withdrawn);
    (6) A description of how often and under what circumstances the 
operator and the BLM intend to renegotiate fees and payments;
    (7) The proposed effective date and term of the subsurface storage 
agreement;
    (8) Certification that all owners of mineral rights (leased or 
unleased) and lease interests have consented to the gas storage 
agreement in writing;
    (9) An ownership schedule showing lease or land status;
    (10) A schedule showing the participation factor for all parties to 
the subsurface storage agreement;
    (11) Supporting data (geologic maps showing the storage formation, 
reservoir data, etc.) demonstrating the capability of the reservoir for 
storage; and
    (12) The processing fee found in the fee schedule in Sec.  3000.120 
of this chapter.
    (b) The BLM will negotiate the terms of a subsurface storage 
agreement with the operator, including bonding, and reservoir 
management.
    (c) The BLM may request documentation in addition to that which the 
operator provides under paragraph (a) of this section.
0
9. Revise part 3140 to read as follows:

PART 3140--LEASING IN SPECIAL TAR SAND AREAS

Subpart 3140--Conversion of Existing Oil and Gas Leases and Valid 
Claims Based on Mineral Locations
Sec.
3140.1 Purpose.
3140.3 Authority.
3140.5 Definitions.

General Provisions

3140.11 Existing rights.
3140.12 Notice of intent to convert.
3140.13 Exploration plans.
3140.14 Other provisions.

Applications

3140.21 Forms.
3140.22 Who may apply.
3140.23 Application requirements.

Time Limitations

3140.31 Conversion applications.
3140.32 Action on an application.

Conversion

3140.41 Approval of plan of operations (and unit and operating 
agreements).

[[Page 47639]]

3140.42 Issuance of the combined hydrocarbon lease.
3140.50 Duration of the lease.
3140.60 Use of additional lands.
3140.70 Lands within the National Park System.
Subpart 3141--Leasing in Special Tar Sand Areas
3141.1 Purpose.
3141.3 Authority.
3141.5 Definitions.
3141.8 Other applicable regulations.
3141.10 General.

Prelease Exploration Within Special Tar Sand Areas

3141.21 Geophysical exploration.
3141.22 Exploration licenses.
3141.30 Land use plans.

Consultation

3141.41 Consultation with the Governor.
3141.42 Consultation with others.

Leasing Procedures

3141.51 Economic evaluation.
3141.52 Term of lease.
3141.53 Royalties and rentals.
3141.54 Lease size.
3141.55 Dating of lease.

Sale Procedures

3141.61 Initiation of competitive lease offering.
3141.62 Publication of a notice of competitive lease offering.
3141.63 Conduct of sales.
3141.64 Qualifications.
3141.65 Rejection of bid.
3141.66 Consideration of next highest bid.
3141.70 Award of lease.
Subpart 3142--Paying Quantities/Diligent Development for Combined 
Hydrocarbon and Tar Sand Leases
3142.1 Purpose.
3142.3 Authority.
3142.5 Definitions.
3142.10 Diligent development.

Minimum Production Levels

3142.21 Minimum production schedule.
3142.22 Advance royalties in lieu of production.
3142.30 Expiration.

    Authority:  30 U.S.C. 181 et seq.; 30 U.S.C. 351-359; 43 U.S.C. 
1701 et seq.; Pub. L. 97-78, 95 Stat. 1070; 42 U.S.C. 15801, unless 
otherwise noted.

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


Sec.  3140.1  Purpose.

    The purpose of this subpart is to provide for the conversion of 
existing oil and gas leases and valid claims based on mineral locations 
within Special Tar Sand Areas to combined hydrocarbon leases.


Sec.  3140.3  Authority.

    These regulations are issued under the authority of the Mineral 
Lands Leasing Act of February 25, 1920 (30 U.S.C. 181 et seq.), the 
Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), and the 
Combined Hydrocarbon Leasing Act of 1981 (Pub. L. 97-78).


Sec.  3140.5  Definitions.

    As used in this subpart, the term:
    Combined hydrocarbon lease means a lease issued in a Special Tar 
Sand Area for the removal of gas and nongaseous hydrocarbon substances 
other than coal, oil shale or gilsonite.
    Complete plan of operations means a plan of operations that is in 
substantial compliance with the information requirements of 43 CFR part 
3592 for both exploration plans and mining plans, as well as any 
additional information required in this part and under 43 CFR part 
3593, as may be appropriate.
    Owner of an oil and gas lease means all of the record title holders 
of an oil gas lease.
    Owner of a valid claim based on a mineral location means all 
parties appearing on the title records recognized as official under 
State law as having the right to sell or transfer any part of the 
mining claim, which was located within a Special Tar Sand Area prior to 
January 21, 1926, for any hydrocarbon resource, except coal, oil shale 
or gilsonite, leasable under the Combined Hydrocarbon Leasing Act.
    Special Tar Sand Area means an area designated by the Department of 
the Interior's orders of November 20, 1980 (45 FR 76800), and January 
21, 1981 (46 FR 6077) referred to in those orders as Designated Tar 
Sand Areas, as containing substantial deposits of tar sand.
    Unitization means unitization as that term is defined in 43 CFR 
part 3180.

General Provisions


Sec.  3140.11  Existing rights.

    (a) The owner of an oil and gas lease issued prior to November 16, 
1981, or the owner of a valid claim based on a mineral location 
situated within a Special Tar Sand Area may convert that portion of the 
lease or claim so situated to a combined hydrocarbon lease, provided 
that such conversion is consistent with the provisions of this subpart. 
The application time period ended on November 15, 1983.
    (b) Owners of oil and gas leases in Special Tar Sand Areas who 
elect not to convert their leases to a combined hydrocarbon lease do 
not acquire the rights to any hydrocarbon resource except oil and gas 
as those terms were defined prior to the enactment of the Combined 
Hydrocarbon Leasing Act of 1981. The failure to file an application to 
convert a valid claim based on a mineral location within the time 
herein provided will have no effect on the validity of the mining claim 
nor the right to maintain that claim.


Sec.  3140.12  Notice of intent to convert.

    (a) Owners of oil and gas leases in Special Tar Sand Areas which 
were scheduled to expire prior to November 15, 1983, could have 
preserved the right to convert their leases to combined hydrocarbon 
leases by filing a Notice of Intent to Convert with the BLM Utah State 
Office.
    (b) A letter, submitted by the lessee, notifying the BLM of the 
lessee's intention to submit a plan of operations constituted a notice 
of intent to convert a lease. The Notice of Intent must have contained 
the lease number.
    (c) The Notice of Intent must have been filed prior to the 
expiration date of the lease. The notice would have preserved the 
lessee's conversion rights only until November 15, 1983.


Sec.  3140.13  Exploration plans.

    (a) The authorized officer may grant permission to holders of 
existing oil and gas leases to gather information to develop, perfect, 
complete or amend a plan of operations required for conversion upon the 
approval of the authorized officer of an exploration plan developed in 
accordance with 43 CFR 3592.1.
    (b) The approval of an exploration plan in units of the National 
Park System requires the consent of the Regional Director of the 
National Park Service in accordance with Sec.  3140.70.
    (c) The filing of an exploration plan alone will be insufficient to 
meet the requirements of a complete plan of operations as set forth in 
Sec.  3140.2-3.


Sec.  3140.14  Other provisions.

    (a) A combined hydrocarbon lease will be for no more than 5,760 
acres. Acreage held under a combined hydrocarbon lease in a Special Tar 
Sand Area is not chargeable to State oil and gas limitations allowable 
in 43 CFR 3101.2.
    (b) The annual rental rate for all combined hydrocarbon leases will 
be as stated in the lease. The rental rate for a combined hydrocarbon 
lease will be payable upon conversion and annually, in advance, 
thereafter.
    (c)(1) The royalty rate for a combined hydrocarbon lease converted 
from an oil and gas lease will be that provided for in the original oil 
and gas lease.
    (2) The royalty rate for a combined hydrocarbon lease converted 
from a valid claim based on a mineral location will be 16.67 percent.

[[Page 47640]]

    (3) A reduction of royalties may be granted either as provided in 
Sec.  3103.40 or, at the request of the lessee and upon a review of 
information provided by the lessee, prior to commencement of commercial 
operations if the purpose of the request is to promote development and 
the maximum production of tar sand. A reduction of royalties for the 
tar sand will not apply to the oil and gas resource. A reduction of 
royalties for the oil and gas will not apply to the tar sand resource.
    (d)(1) Existing oil and gas leases and valid claims based on 
mineral locations may be unitized prior to or after the lease or claim 
has been converted to a combined hydrocarbon lease. The requirements of 
43 CFR part 3180 will provide the procedures and general guidelines for 
unitization of combined hydrocarbon leases. For leases within units of 
the National Park System, unitization requires the consent of the 
Regional Director of the National Park Service in accordance with Sec.  
3140.41(b).
    (2) If the plan of operations submitted for conversion is designed 
to cover a unit, a fully executed unit agreement will be approved 
before the plan of operations applicable to the unit may be approved 
under Sec.  3140.20. The proposed plan of operations and the proposed 
unit agreement may be reviewed concurrently. The approved unit 
agreement will be effective after the leases or claims subject to it 
are converted to combined hydrocarbon leases. The plan of operations 
will explain how and when each lease included in the unit operation 
will be developed.
    (e) Except as provided for in this subpart, the regulations set out 
in 43 CFR part 3100 are applicable, as appropriate, to all combined 
hydrocarbon leases issued under this subpart.

Applications


Sec.  3140.21  Forms.

    No special form is required for a conversion application.


Sec.  3140.22  Who may apply.

    Only owners of oil and gas leases issued within Special Tar Sands 
Areas, on or before November 16, 1981, and owners of valid claims based 
on mineral locations within Special Tar Sands Areas, are eligible to 
convert leases or claims to combined hydrocarbon leases in Special Tar 
Sands Areas.


Sec.  3140.23  Application requirements.

    (a) The BLM stopped accepting conversion applications on November 
15, 1983. The applicant must have submitted to the BLM Utah State 
Office, a written request for a combined hydrocarbon lease signed by 
the owner of the lease or valid claim which must be accompanied by 
three copies of a plan of operations which must meet the requirements 
of 43 CFR 3592.1 and which must have provided for reasonable protection 
of the environment and diligent development of the resources requiring 
enhanced recovery methods of development or mining.
    (b) A plan of operations may be modified or amended before or after 
conversion of a lease or valid claim to reflect changes in technology, 
slippages in schedule beyond the control of the lessee, new information 
about the resource or the economic or environmental aspects of its 
development, changes to or initiation of applicable unit agreements or 
for other purposes. To obtain approval of a modification or amended 
plan, the applicant must submit a written statement of the proposed 
changes or supplements and the justification for the changes proposed. 
Any modifications will be in accordance with 43 CFR 3592.1(c). The 
approval of the modification or amendment is the responsibility of the 
authorized officer. Changes or modification to the plan of operations 
will have no effect on the primary term of the lease. The authorized 
officer will, prior to approving any amendment or modification, review 
the modification or amendment with the appropriate surface management 
agency. For leases within units of the National Park System, no 
amendment or modification will be approved without the consent of the 
Regional Director of the National Park Service in accordance with Sec.  
3140.70.
    (c) The plan of operations may be for a single existing oil and gas 
lease or valid claim or for an area of proposed unit operation.
    (d) The plan of operations must identify by lease number all 
Federal oil and gas leases proposed for conversion and identify valid 
claims proposed for conversion by the recordation number of the mining 
claim.
    (e) The plan of operations must include any proposed designation of 
operator or proposed operating agreement.
    (f) The plan of operations may include an exploration phase, if 
necessary, but it must include a development phase. Such a plan can be 
approved even though it may indicate work under the exploration phase 
is necessary to perfect the proposed plan for the development phase as 
long as the overall plan demonstrates reasonable protection of the 
environment and diligent development of the resources requiring 
enhanced recovery methods of mining.
    (g)(1) Upon determination that the plan of operations is complete, 
the authorized officer will suspend the term of the Federal oil and gas 
lease(s) as of the date that the complete plan was filed until the plan 
is finally approved or rejected. Only the term of the oil and gas lease 
will be suspended, not any operation and production requirements 
thereunder.
    (2) If the authorized officer determines that the plan of 
operations is not complete, the applicant will be notified that the 
plan is subject to rejection if not completed within the period 
specified in the notice.
    (3) The authorized officer may request additional data after the 
plan of operations has been determined to be complete. This request for 
additional information will have no effect on the suspension of the 
running of the oil and gas lease.

Time Limitations


Sec.  3140.31  Conversion applications.

    A plan of operations to convert an existing oil and gas lease or 
valid claim based on a mineral location to a combined hydrocarbon lease 
must have been filed on or before November 15, 1983, or prior to the 
expiration of the oil and gas lease, whichever was earlier, except as 
provided in Sec.  3140.12.


Sec.  3140.32  Action on an application.

    The authorized officer will take action on an application for 
conversion within 15 months of receipt of a proposed plan of 
operations.

Conversion


Sec.  3140.41  Approval of plan of operations (and unit and operating 
agreements).

    (a) The owner of an oil and gas lease, or the owner of a valid 
claim based on a mineral location will have such lease or claim 
converted to a combined hydrocarbon lease when the plan of operations, 
filed under Sec.  3140.23, is deemed acceptable and is approved by the 
authorized officer.
    (b) The conversion of a lease within a unit of the National Park 
System will be approved only with the consent of the Regional Director 
of the National Park Service in accordance with Sec.  3140.70.
    (c) A plan of operations may not be approved in part but may be 
approved where it contains an appropriately staged plan of exploration 
and development operations.

[[Page 47641]]

Sec.  3140.42  Issuance of the combined hydrocarbon lease.

    (a) After a plan of operations is found acceptable, and is 
approved, the authorized officer will prepare and submit to the owner, 
for execution, a combined hydrocarbon lease containing all appropriate 
terms and conditions, including any necessary stipulations that were 
part of the oil and gas lease being converted, as well as any 
additional stipulations, such as those required to ensure compliance 
with the plan of operations.
    (b) The authorized officer will not sign the combined hydrocarbon 
lease until it has been executed by the conversion applicant and the 
lease or claim to be converted has been formally relinquished to the 
United States.
    (c) The effective date of the combined hydrocarbon lease will be 
the first day of the month following the date that the authorized 
officer signs the lease.
    (d) The authorized officer will issue one combined hydrocarbon 
lease to cover the existing contiguous oil and gas leases or valid 
claims based on mineral locations which have been approved for 
conversion within the special tar sand area.


Sec.  3140.50  Duration of the lease.

    A combined hydrocarbon lease will be for a primary term of 10 years 
and for so long thereafter as oil or gas is produced in paying 
quantities. If the applicant withdraws the combined hydrocarbon lease 
application or the BLM denies the conversion application, the 
suspension on the oil and gas lease will be lifted and the term will be 
extended by the time remaining on the term of the lease.


Sec.  3140.60  Use of additional lands.

    (a) The authorized officer may noncompetitively lease additional 
lands for ancillary facilities in a Special Tar Sand Area that are 
needed to support any operations necessary for the recovery of tar 
sand. Such uses include, but are not limited to, mill site or waste 
disposal. Application for a lease or permit to use additional lands 
must be filed under the provisions of 43 CFR part 2920 with the proper 
BLM office having jurisdiction of the lands. The application for 
additional lands may be filed at the time a plan of operations is 
filed.
    (b) A lease for the use of additional lands will not be issued when 
the use can be authorized under 43 CFR parts 2800 and 2880. Such uses 
include, but are not limited to, reservoirs, pipelines, electrical 
generation systems, transmission lines, roads, and railroads.
    (c) Within units of the National Park System, permits or leases for 
additional lands will only be issued by the National Park Service. 
Applications for such permits or leases must be filed with the Regional 
Director of the National Park Service.


Sec.  3140.70  Lands within the National Park System.

    The BLM stopped accepting conversion applications on November 15, 
1983. Conversions of existing oil and gas leases and valid claims based 
on mineral locations to combined hydrocarbon leases within units of the 
National Park System will be allowed only where mineral leasing is 
permitted by law and where the lands covered by the lease or claim 
proposed for conversion are open to mineral resource disposition in 
accordance with any applicable minerals management plan. (See 43 CFR 
3100.3(h)(4)). In order to consent to any conversion or any subsequent 
development under a combined hydrocarbon lease requiring further 
approval, the Regional Director of the National Park Service must find 
that there will be no resulting significant adverse impacts on the 
resources and administration of such areas or on other contiguous units 
of the National Park System in accordance with 43 CFR 3109.20(b).

Subpart 3141--Leasing in Special Tar Sand Areas


Sec.  3141.1  Purpose.

    The purpose of this subpart is to provide for the competitive 
leasing of lands and issuance of combined hydrocarbon leases, oil and 
gas leases, or tar sand leases within special tar sand areas.


Sec.  3141.3  Authority.

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


Sec.  3141. 5  Definitions.

    As used in this subpart, the term:
    Combined hydrocarbon lease means a lease issued in a Special Tar 
Sand Area for the removal of any gas and nongaseous hydrocarbon 
substance other than coal, oil shale or gilsonite.
    Oil and gas lease means a lease issued in a Special Tar Sand Area 
for the exploration and development of oil and gas resources other than 
tar sand.
    Special Tar Sand Area means an area designated by the Department of 
the Interior's Orders of November 20, 1980 (45 FR 76800), and January 
21, 1981 (46 FR 6077), and referred to in those orders as Designated 
Tar Sand Areas, as containing substantial deposits of tar sand.
    Tar sand means any consolidated or unconsolidated rock (other than 
coal, oil shale or gilsonite) that either:
    (1) Contains a hydrocarbonaceous material with a gas-free 
viscosity, at original reservoir temperature greater than 10,000 
centipoise, or
    (2) contains a hydrocarbonaceous material and is produced by mining 
or quarrying.
    Tar sand lease means a lease issued in a Special Tar Sand area 
exclusively for the exploration for and extraction of tar sand.


Sec.  3141.8  Other applicable regulations.

    (a) Combined hydrocarbon leases. (1) The following provisions of 43 
CFR part 3100, as they relate to competitive leasing, apply to the 
issuance and administration of combined hydrocarbon leases issued under 
this part.
    (i) All of 43 CFR subpart 3100;
    (ii) The following sections of 43 CFR subpart 3101: Sec. Sec.  
3101.11, 3101.21, 3101.22, 3101.24, 3101.25, 3101.61, 3101.62, and 
3101.65;
    (iii) All of 43 CFR subpart 3102;
    (iv) All of 43 CFR subpart 3103, with the exception of Sec. Sec.  
3103.21, and 3103.31-1 (a), (b), and (c);
    (v) All of 43 CFR subpart 3104;
    (vi) All of 43 CFR subpart 3105;
    (vii) All of 43 CFR subpart 3106, with the exception of Sec.  
3106.10(i);
    (viii) All of 43 CFR subpart 3107;
    (ix) All of 43 CFR subpart 3108; and
    (x) All of 43 CFR subpart 3109, with special emphasis on Sec.  
3109.20(b).
    (2) Prior to commencement of operations, the lessee must develop 
either a plan of operations as described in 43 CFR 3592.1 which ensures 
reasonable protection of the environment or file an application for a 
permit to drill as described in 43 CFR part 3160, whichever is 
appropriate.
    (3) The provisions of 43 CFR part 3180 will serve as general 
guidance to the administration of combined hydrocarbon leases issued 
under this part to the extent they may be included in unit or 
cooperative agreements.
    (b) Oil and gas leases. (1) All of the provisions of 43 CFR parts 
3100, and 3120 apply to the issuance and administration of oil and gas 
leases issued under this part.

[[Page 47642]]

    (2) All of the provisions of 43 CFR parts 3160 and 3170 apply to 
operations on an oil and gas lease issued under this part.
    (3) The provisions of 43 CFR part 3180 apply to the administration 
of oil and gas leases issued under this part.
    (c) Tar sand leases. (1) The following provisions of 43 CFR part 
3100, as they relate to competitive leasing, apply to the issuance of 
tar sand leases issued under this part.
    (i) All of 43 CFR subpart 3102;
    (ii) All of 43 CFR subpart 3103 with the exception of Sec. Sec.  
3103.21, 3103.22(d), and 3103.30;
    (iii) All of 43 CFR 3120.50; and
    (iv) All of 43 CFR 3120.60.
    (2) Prior to commencement of operations, the lessee must develop a 
plan of operations as described in 43 CFR 3592.1 which ensures 
reasonable protection of the environment.


Sec.  3141.10  General.

    (a) Combined hydrocarbons or tar sands within a Special Tar Sand 
Area will be leased only by competitive bonus bidding.
    (b) Oil and gas within a Special Tar Sand Area will be leased by 
competitive bonus bidding as described in 43 CFR part 3120.
    (c) The authorized officer may issue either combined hydrocarbon 
leases, or oil and gas leases for oil and gas within such areas.
    (d) The rights to explore for or develop tar sand deposits in a 
Special Tar Sand Area may be acquired through either a combined 
hydrocarbon lease or a tar sand lease.
    (e) An oil and gas lease in a Special Tar Sand Area does not 
include the rights to explore for or develop tar sand.
    (f) A tar sand lease in a Special Tar Sand Area does not include 
the rights to explore for or develop oil and gas.
    (g) The minimum acceptable bid for a lease issued for tar sand will 
be as specified in Sec.  3000.130 of this chapter.
    (h) The acreage of combined hydrocarbon leases or tar sand leases 
held within a Special Tar Sand Area will not be charged against acreage 
limitations for the holding of oil and gas leases as provided in 43 CFR 
3101.21.
    (i)(1) The authorized officer may noncompetitively lease additional 
lands for ancillary facilities in a Special Tar Sand Area that are 
shown by an applicant to be needed to support any operations necessary 
for the recovery of tar sand. Such uses include, but are not limited 
to, mill siting or waste disposal. An application for a lease or permit 
to use additional lands must be filed under the provisions of 43 CFR 
part 2920 with the proper BLM office having jurisdiction of the lands. 
The application for additional lands may be filed at the time a plan of 
operations is filed.
    (2) A lease for the use of additional lands will not be issued 
under this part when the use can be authorized under 43 CFR part 2800. 
Such uses include, but are not limited to, reservoirs, pipelines, 
electrical generation systems, transmission lines, roads and railroads.
    (3) Within units of the National Park System, permits or leases for 
additional lands for any purpose will be issued only by the National 
Park Service. Applications for such permits or leases must be filed 
with the Regional Director of the National Park Service.

Prelease Exploration Within Special Tar Sand Areas


Sec.  3141.21  Geophysical exploration.

    Geophysical exploration in Special Tar Sand Areas will be governed 
by 43 CFR part 3150. Information obtained under a permit must be made 
available to the BLM upon request.


Sec.  3141.22  Exploration licenses.

    (a) Any person(s) responsible and qualified to hold a lease under 
the provisions of 43 CFR subpart 3102 and this subpart may obtain an 
exploration license to conduct core drilling and other exploration 
activities to collect geologic, environmental and other data concerning 
tar sand resources only on lands, the surface of which are under the 
jurisdiction of the BLM, within or adjacent to a Special Tar Sand Area. 
The application for such a license must be submitted to the proper BLM 
office having jurisdiction over the lands. No drilling for oil or gas 
will be allowed under an exploration license issued under this subpart. 
No specific form is required for an application for an exploration 
license.
    (b) The application for an exploration license will be subject to 
the following requirements:
    (1) Each application must contain the name and address of the 
applicant(s);
    (2) Each application must be accompanied by a nonrefundable filing 
fee based on the coal exploration license application fee found in the 
fee schedule in Sec.  3000.120 of this chapter;
    (3) Each application must contain a description of the lands 
covered by the application according to section, township and range in 
accordance with the official survey;
    (4) Each application must include an exploration plan which 
complies with the requirements of 43 CFR 4392.1(a); and
    (5) An application must cover no more than 5,760 acres, which will 
be as compact as possible. The authorized officer may grant an 
exploration license covering more than 5,760 acres only if the 
application contains a justification for an exception to the normal 
limitation.
    (c) The authorized officer may, if he/she determines it necessary 
to avoid impacts resulting from duplication of exploration activities, 
require applicants for exploration licenses to provide an opportunity 
for other parties to participate in exploration under the license on a 
pro rata cost sharing basis. If joint participation is determined 
necessary, it will be conducted according to the following:
    (1) Immediately upon the notification of a determination that 
parties will be given an opportunity to participate in the exploration 
license, the applicant must publish a ``Notice of Invitation,'' 
approved by the authorized officer, once every week for 2 consecutive 
weeks in at least one newspaper of general circulation in the area 
where the lands covered by the exploration license are situated. This 
notice must contain an invitation to the public to participate in the 
exploration license on a pro rata cost sharing basis. Copies of the 
``Notice of Invitation'' must be filed with the authorized officer at 
the time of publication by the applicant for posting in the proper BLM 
office having jurisdiction over the lands covered by the application 
for at least 30 days prior to the issuance of the exploration license.
    (2) Any person seeking to participate in the exploration program 
described in the Notice of Invitation must notify the authorized 
officer and the applicant in writing of such intention within 30 days 
after posting in the proper BLM office having jurisdiction over the 
lands covered by the Notice of Invitation. The authorized officer may 
require modification of the original exploration plan to accommodate 
the legitimate exploration needs of the person(s) seeking to 
participate and to avoid the duplication of exploration activities in 
the same area, or that the person(s) should file a separate application 
for an exploration license.
    (3) An application to conduct exploration which could have been 
conducted under an existing or recent exploration license issued under 
this paragraph may be rejected.
    (d) The authorized officer may accept or reject an exploration 
license application. An exploration license will become effective on 
the date specified by the authorized officer as the date when 
exploration activities may begin. The exploration plan approved by the

[[Page 47643]]

BLM will be attached and made a part of each exploration license.
    (e) An exploration license will be subject to these terms and 
conditions:
    (1) The license will be for a term of not more than 2 years;
    (2) The annual rental rate for an exploration license will be as 
stated in the license;
    (3) The licensee must provide a bond in an amount determined by the 
authorized officer, but not less than $5,000. The authorized officer 
may accept bonds furnished under 43 CFR subpart 3104, if adequate. The 
period of liability under the bond will be terminated only after the 
authorized officer determines that the terms and conditions of the 
license, the exploration plan and the regulations have been met;
    (4) The licensee must provide to the BLM, upon request, all 
required information obtained under the license. Any information 
provided will be treated as confidential and proprietary, if 
appropriate, at the request of the licensee, and will not be made 
public until the areas involved have been leased or if the BLM 
determines that public access to the data will not damage the 
competitive position of the licensee.
    (5) Operations conducted under a license will not unreasonably 
interfere with or endanger any other lawful activity on the same lands, 
must not damage any improvements on the lands, and will not result in 
any substantial disturbance to the surface of the lands and their 
resources;
    (6) The authorized officer will include in each license 
requirements and stipulations to protect the environment and associated 
natural resources, and to ensure reclamation of the land disturbed by 
exploration operations;
    (7) When unforeseen conditions are encountered that could result in 
an action prohibited by paragraph (e)(5) of this section, or when 
warranted by geologic or other physical conditions, the authorized 
officer may adjust the terms and conditions of the exploration license 
and may direct adjustment in the exploration plan;
    (8) The licensee may submit a request for modification of the 
exploration plan to the authorized officer. Any modification will be 
subject to the regulations in this section and the terms and conditions 
of the license. The authorized officer may approve the modification 
after any necessary adjustments to the terms and conditions of the 
license that are accepted in writing by the licensee; and
    (9) The license will be subject to termination or suspension as 
provided in 43 CFR 2920.9-3.


Sec.  3141.30  Land use plans.

    No lease will be issued under this subpart unless the lands have 
been included in a land use plan which meets the requirements under 43 
CFR part 1600 or an approved Minerals Management Plan of the National 
Park Service. The decision to hold a lease sale and issue leases will 
be in conformance with the appropriate plan.

Consultation


Sec.  3141.41  Consultation with the Governor.

    The Secretary will consult with the Governor of the State in which 
any tract proposed for sale is located. The Secretary will give the 
Governor 30 days to comment before determining whether to conduct a 
lease sale. The Secretary will seek the recommendations of the Governor 
of the State in which the lands proposed for lease are located as to 
whether or not to lease such lands and what alternative actions are 
available and what special conditions could be added to the proposed 
lease(s) to mitigate impacts. The Secretary will accept the 
recommendations of the Governor if he/she determines that they provide 
for a reasonable balance between the national interest and the State's 
interest. The Secretary will communicate to the Governor in writing and 
publish in the Federal Register the reasons for his/her determination 
to accept or reject such Governor's recommendations.


Sec.  3141.42  Consultation with others.

    (a) Where the surface is administered by an agency other than the 
BLM, including lands patented or leased under the provisions of the 
Recreation and Public Purposes Act, as amended (43 U.S.C. 869 et seq.), 
all leasing under this subpart will be in accordance with the 
consultation requirements of 43 CFR subpart 3100.
    (b) The issuance of combined hydrocarbon leases, oil and gas 
leases, and tar sand leases within special tar sand areas in units of 
the National Park System will be allowed only where mineral leasing is 
permitted by law and where the lands are open to mineral resource 
disposition in accordance with any applicable Minerals Management Plan. 
In order to consent to any issuance of a combined hydrocarbon lease, 
oil and gas lease, tar sand lease, or subsequent development of 
hydrocarbon resources within a unit of National Park System, the 
Regional Director of the National Park Service will find that there 
will be no resulting significant adverse impacts to the resources and 
administration of the unit or other contiguous units of the National 
Park System in accordance with 43 CFR 3109.20(b).

Leasing Procedures


Sec.  3141.51  Economic evaluation.

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


Sec.  3141.52  Term of lease.

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


Sec.  3141.53  Royalties and rentals.

    (a) The royalty rate on all combined hydrocarbon leases or tar sand 
leases is 16.67 percent of the value of production removed or sold from 
a lease. The ONRR will be responsible for collecting and administering 
royalties.
    (b) The lessee may request the Secretary to reduce the royalty rate 
applicable to a tar sand lease prior to commencement of commercial 
operations in order to promote development and maximum production of 
the tar sand resource in accordance with procedures established by the 
BLM for oil shale leases and may request a reduction in the royalty 
after commencement of commercial operations in accordance with 43 CFR 
3103.41.
    (c) The annual rental rate for a combined hydrocarbon lease will be 
as stated in the lease.
    (d) The annual rental rate for a tar sand lease will be as stated 
in the lease.
    (e) Except as explained in paragraphs (a) through (c) of this 
section, all other provisions of 43 CFR 3103.20 and 3103.30 apply to 
combined hydrocarbon leasing.


Sec.  3141.54  Lease size.

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


Sec.  3141.55  Dating of lease.

    A combined hydrocarbon lease will be effective as of the first day 
of the month following the date the lease is signed on behalf of the 
United States, except where a prior written request is made, a lease 
may be made effective on

[[Page 47644]]

the first of the month in which the lease is signed.

Sale Procedures


Sec.  3141.61  Initiation of competitive lease offering.

    The BLM may, on its own motion, offer lands through competitive 
bidding. A request or expression(s) of interest in tract(s) for 
competitive lease offerings must be submitted in writing to the proper 
BLM office.


Sec.  3141.62  Publication of a notice of competitive lease offering.

    Combined Hydrocarbon Leases, Tar Sand Leases or Oil and Gas Leases. 
At least 45 days prior to conducting a competitive auction, lands to be 
offered for a competitive lease sale, as in a Notice of Competitive 
Lease Sale, will be made available to the public. The notice will 
specify the time and place of sale; the manner in which the bids may be 
submitted; the description of the lands; the terms and conditions of 
the lease, including the royalty and rental rates; the amount of the 
minimum bid; and will state that the terms and conditions of the leases 
are available for inspection and designate the proper BLM office where 
bid forms may be obtained.


Sec.  3141.63  Conduct of sales.

    (a) Oil and gas leases. Lease sales for oil and gas leases will be 
conducted using the procedures for oil and gas leases in 43 CFR 
3120.60.
    (b) Combined hydrocarbon leases and tar sand leases. (1) Parcels 
will be offered by competitive auction.
    (2) The winning bid will be the highest bid by a responsible and 
qualified bidder, equal to the minimum bonus bid amount as specified in 
Sec.  3000.130 of this chapter or for hydrocarbon leases, the minimum 
bonus bid amount determined under Sec.  3141.51, whichever is larger.
    (3) Payments must be made as provided in 43 CFR 3120.62.


Sec.  3141.64  Qualifications.

    Each bidder must submit with the bid a statement over the bidder's 
signature with respect to compliance with 43 CFR subpart 3102.


Sec.  3141.65  Rejection of bid.

    If the high bid is rejected for failure by the successful bidder to 
execute the lease forms and pay the balance of the bonus bid, or 
otherwise to comply with the regulations of this subpart, the minimum 
bonus payment accompanying the bid will be forfeited.


Sec.  3141.66  Consideration of next highest bid.

    The Department reserves the right to accept the next highest bid if 
the highest bid is rejected. In no event will an offer be made to the 
next highest bidder if the difference between that bid and the bid of 
the rejected successful bidder is greater than the minimum bonus 
payment forfeited by the rejected successful bidder.


Sec.  3141.70  Award of lease.

    After determining the highest responsible and qualified bidder, the 
authorized officer will send the lease on a form approved by the 
Director, and any necessary stipulations, to the successful bidder. The 
successful bidder must, not later than the 30th calendar day after 
receipt of the lease, execute the lease, pay the balance of the bid and 
the first year's rental, and file a bond as required in 43 CFR subpart 
3104. Failure to comply with this section will result in rejection of 
the lease.

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


Sec.  3142.1  Purpose.

    This subpart provides definitions and procedures for meeting the 
production in paying quantities and the diligent development 
requirements for tar sand in all combined hydrocarbon leases and tar 
sand leases.


Sec.  3142.3  Authority.

    These regulations are issued under the authority of the Mineral 
Leasing Act of 1920, as amended and supplemented (30 U.S.C. 181 et 
seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-359), 
the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et 
seq.) and the Combined Hydrocarbon Leasing Act of 1981 (95 Stat. 1070).


Sec.  3142.5  Definitions.

    As used in this subpart, the term:
    Production in paying quantities for combined hydrocarbon leases 
means:
    (1) Production, in compliance with an approved plan of operations 
and by nonconventional methods, of oil and gas which can be marketed; 
or
    (2) Production of oil or gas by conventional methods as the term is 
currently used in 43 CFR part 3160.
    Production in paying quantities for oil and gas leases means 
production of oil or gas by conventional methods that meets the 
definition of ``production in paying quantities'' in 43 CFR 3160.0-5.
    Production in paying quantities for tar sand leases means 
production of shale oil quantities that provide a positive return after 
all costs of production have been met, including the amortized costs of 
the capital investment.


Sec.  3142.10  Diligent development.

    A lessee will have met its diligent development obligation if:
    (a) The lessee is conducting activity on the lease in accordance 
with an approved plan of operations; and
    (b) The lessee files with the authorized officer, not later than 
the end of the eighth lease year, a supplement to the approved plan of 
operations which must include the estimated recoverable tar sand 
reserves and a detailed development plan for the next stage of 
operations;
    (c) The lessee has achieved production in paying quantities, as 
that term is defined in Sec.  3142.5(a), by the end of the primary 
term; and
    (d) The lessee annually produces the minimum amount of tar sand 
established by the authorized officer under the lease in the minimum 
production schedule which will be made part of the plan of operations 
or pays annually advance royalty in lieu of this minimum production.

Minimum Production Levels


Sec.  3142.21  Minimum production schedule.

    (a) Upon receipt of the supplement to the plan of operations 
described in Sec.  3142.10(b), the authorized officer will examine the 
information furnished by the lessee and determine if the estimate of 
the recoverable tar sand reserves is adequate and reasonable. In making 
this determination, the authorized officer may request, and the lessee 
must furnish, any information that is the basis of the lessee's 
estimate of the recoverable tar sand reserves. As part of the 
authorized officer's determination that the estimate of the recoverable 
tar sand reserves is adequate and reasonable, he/she may consider, but 
is not limited to, the following: ore grade, strip ratio, vertical and 
horizontal continuity, extract process recoverability, and proven or 
unproven status of extraction technology, terrain, environmental 
mitigation factors, marketability of products and capital operations 
costs. The authorized officer will then establish as soon as possible, 
but prior to the beginning of the eleventh year, based upon the 
estimate of the recoverable tar sand reserves, a minimum annual tar 
sand production schedule for the lease or unit operations which will 
start in the eleventh year of the lease. This minimum production level 
will escalate in equal annual increments to a maximum of 1 percent of 
the estimated recoverable tar sand reserves in the twentieth year of 
the

[[Page 47645]]

lease and remain at 1 percent each year thereafter.
    (b) The minimum annual tar sand production schedule for the lease 
or unit operations will be set at a level for paying quantities. If the 
operator or lessee cannot establish production in paying quantities, 
the lease will terminate at the end of the lease's primary term.


Sec.  3142.22  Advance royalties in lieu of production.

    (a) Failure to meet the minimum annual tar sand production schedule 
level in any year will result in the assessment of an advance royalty 
in lieu of production which will be credited to future production 
royalty assessments applicable to the lease or unit.
    (b) If there is no production during the lease year, and the lessee 
has reason to believe that there will be no production during the 
remainder of the lease year, the lessee must submit to the authorized 
officer a request for suspension of production at least 90 days prior 
to the end of that lease year and a payment sufficient to cover any 
advance royalty due and owing as a result of the failure to produce. 
Upon receipt of the request for suspension of production and the 
accompanying payment, the authorized officer may approve a suspension 
of production for that lease year and the lease will not expire during 
that year for lack of production.
    (c) If there is production on the lease or unit during the lease 
year, but such production fails to meet the minimum production schedule 
required by the plan of operations for that lease or unit, the lessee 
must pay an advance royalty within 60 days of the end of the lease year 
in an amount sufficient to cover the difference between such actual 
production and the production schedule required by the plan of 
operations for that lease or unit and the authorized officer may direct 
a suspension of production for those periods during which no production 
occurred.


Sec.  3142.30  Expiration.

    Failure of the lessee to pay advance royalty within the time 
prescribed by the authorized officer, or failure of the lessee to 
comply with any other provisions of this subpart following the end of 
the primary term of the lease, will result in the automatic expiration 
of the lease as of the first of the month following notice to the 
lessee of its failure to comply. The lessee will remain subject to the 
requirement of applicable laws, regulations and lease terms which have 
not been met at the expiration of the lease.

PART 3150--ONSHORE OIL AND GAS GEOPHYSICAL EXPLORATION

0
10. The authority citation for part 3150 continues to read as follows:

    Authority:  16 U.S.C. 3150(b) and 668dd; 30 U.S.C. 189 and 359; 
42 U.S.C. 6508; 43 U.S.C. 1201, 1732(b), 1733, 1734, 1740.

0
11. Revise subpart 3151 to read as follows:
Subpart 3151--Exploration Outside of Alaska
Sec.
3151.10 Notice of intent to conduct oil and gas geophysical 
exploration operations.
3151.20 Notice of completion of operations.
3151.30 Collection and submission of data.

Subpart 3151--Exploration Outside of Alaska


Sec.  3151.10  Notice of intent to conduct oil and gas geophysical 
exploration operations.

    Parties wishing to conduct oil and gas geophysical exploration 
outside of the State of Alaska must file a Notice of Intent to Conduct 
Oil and Gas Exploration Operations, referred to herein as a notice of 
intent. The notice of intent must include the filing fee required by 43 
CFR 3000.120 and must be filed with the authorized officer of the 
proper BLM office on the form approved by the Director. Within 5 
business days of the filing date, the authorized officer will process 
the notice of intent and notify the operator of practices and 
procedures to be followed. If the notice of intent cannot be processed 
within 5 business days of the filing date, the authorized officer will 
promptly notify the operator as to when processing will be completed, 
giving the reason for the delay. The operator must, within 5 business 
days of the filing date, or such other time as may be convenient for 
the operator, participate in a field inspection if requested by the 
authorized officer. Signing of the notice of intent by the operator 
will signify agreement to comply with the terms and conditions 
contained therein and in this part, and with all practices and 
procedures specified at any time by the authorized officer.


Sec.  3151.20  Notice of completion of operations.

    Upon completion of exploration, the permitee must file with the 
District Manager a Notice of Completion of Oil and Gas Exploration 
Operations. Within 30 days after this filing, the authorized officer 
will notify the permitee whether rehabilitation of the lands is 
satisfactory or whether additional rehabilitation is necessary, 
specifying the nature and extent of actions to be taken by the 
permitee.


Sec.  3151.30  Collection and submission of data.

    (a) The permittee must submit to the authorized officer all data 
and information obtained in carrying out the exploration plan.
    (b) All information submitted under this section is subject to 43 
CFR part 2, which sets forth the rules of the Department of the 
Interior relating to public availability of information contained in 
Departmental records, as provided at Sec.  3100.40 of this chapter.

PART 3160--ONSHORE OIL AND GAS OPERATIONS

0
12. The authority citation for part 3160 continues to read as follows:

    Authority:  25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, 
and 1751; 43 U.S.C. 1732(b), 1733, 1740; and Sec. 107, Pub. L. 114-
74, 129 Stat. 599, unless otherwise noted.

0
13. Revise Sec.  3160.0-5 to read as follows:


Sec.  3160.0-5  Definitions.

    As used in this part, the term:
    Authorized representative means any entity or individual authorized 
by the Secretary to perform duties by cooperative agreement, delegation 
or contract.
    Drainage means the migration of hydrocarbons, inert gases (other 
than helium), or associated resources caused by production from other 
wells.
    Federal lands means all lands and interests in lands owned by the 
United States which are subject to the mineral leasing laws, including 
mineral resources or mineral estates reserved to the United States in 
the conveyance of a surface or nonmineral estate.
    Fresh water means water containing not more than 1,000 ppm of total 
dissolved solids, provided that such water does not contain 
objectionable levels of any constituent that is toxic to animal, plant 
or aquatic life, unless otherwise specified in applicable notices or 
orders.
    Knowingly or willfully means a violation that constitutes the 
voluntary or conscious performance of an act that is prohibited or the 
voluntary or conscious failure to perform an act or duty that is 
required. It does not include performances or failures to perform that 
are honest mistakes or merely inadvertent. It includes, but does not 
require, performances or failures to perform that result from a 
criminal or evil intent or from a specific intent to violate the law. 
The knowing or willful

[[Page 47646]]

nature of conduct may be established by plain indifference to or 
reckless disregard of the requirements of the law, regulations, orders, 
or terms of the lease. A consistent pattern of performance or failure 
to perform also may be sufficient to establish the knowing or willful 
nature of the conduct, where such consistent pattern is neither the 
result of honest mistakes or mere inadvertency. Conduct that is 
otherwise regarded as being knowing or willful is rendered neither 
accidental nor mitigated in character by the belief that the conduct is 
reasonable or legal.
    Lease means any contract, profit-share arrangement, joint venture 
or other agreement issued or approved by the United States under a 
mineral leasing law that authorizes exploration for, extraction of, or 
removal of oil or gas.
    Lease site means any lands, including the surface of a severed 
mineral estate, on which exploration for, or extraction and removal of, 
oil or gas is authorized under a lease.
    Lessee means any person holding record title or owning operating 
rights in a lease issued or approved by the United States.
    Lessor means the party to a lease who holds legal or beneficial 
title to the mineral estate in the leased lands.
    Major violation means noncompliance that causes or threatens 
immediate, substantial, and adverse impacts on public health and 
safety, the environment, production accountability, or royalty income.
    Maximum ultimate economic recovery means the recovery of oil and 
gas from leased lands which a prudent operator could be expected to 
make from that field or reservoir given existing knowledge of reservoir 
and other pertinent facts and utilizing common industry practices for 
primary, secondary, or tertiary recovery operations.
    Minor violation means noncompliance that does not rise to the level 
of a major violation.
    New or resumed production under section 102(b)(3) of the Federal 
Oil and Gas Royalty Management Act means the date on which a well 
commences production, or resumes production after having been off 
production for more than 90 days, and is to be construed as follows:
    (1) For an oil well, the date on which liquid hydrocarbons are 
first sold or shipped from a temporary storage facility, such as a test 
tank, or the date on which liquid hydrocarbons are first produced into 
a permanent storage facility, whichever first occurs; and
    (2) For a gas well, the date on which gas is first measured through 
sales metering facilities or the date on which associated liquid 
hydrocarbons are first sold or shipped from a temporary storage 
facility, whichever first occurs.
    Notice to lessees and operators (NTL) means a written notice issued 
by the authorized officer. NTL's implement the regulations in this part 
and operating orders, and serve as instructions on specific item(s) of 
importance within a State, District, or Area.
    Onshore oil and gas order means a formal numbered order issued by 
the Director that implements and supplements the regulations in this 
part.
    Operating rights owner means a person who owns operating rights in 
a lease. A record title holder may also be an operating rights owner in 
a lease if it did not transfer all of its operating rights.
    Operator means any person or entity including but not limited to 
the lessee or operating rights owner, who has stated in writing to the 
authorized officer that it is responsible under the terms and 
conditions of the lease for the operations conducted on the leased 
lands or a portion thereof.
    Paying well means a well that is capable of producing oil or gas of 
sufficient value to exceed direct operating costs and the costs of 
lease rentals or minimum royalty.
    Person means any individual, firm, corporation, association, 
partnership, consortium or joint venture.
    Production in paying quantities means production from a lease of 
oil and/or gas of sufficient value to exceed direct operating costs and 
the cost of lease rentals or minimum royalties.
    Protective well means a well drilled or modified to prevent or 
offset drainage of oil and gas resources from its Federal or Indian 
lease.
    Record title holder means the person(s) to whom BLM or an Indian 
lessor issued a lease or approved the assignment of record title in a 
lease.
    Shut-in well means a nonoperational well that can physically and 
mechanically operate by opening valves or activating existing 
equipment.
    Superintendent means the superintendent of an Indian Agency, or 
other officer authorized to act in matters of record and law with 
respect to oil and gas leases on restricted Indian lands.
    Surface use plan of operations means a plan for surface use, 
disturbance, and reclamation.
    Temporarily abandoned well means a nonoperational well that is not 
physically or mechanically capable of production or injection without 
additional equipment or without servicing the well, but that may have 
future beneficial use.
    Waste of oil or gas means any act or failure to act by the operator 
that is not sanctioned by the authorized officer as necessary for 
proper development and production and which results in:
    (1) A reduction in the quantity or quality of oil and gas 
ultimately producible from a reservoir under prudent and proper 
operations; or
    (2) Avoidable surface loss of oil or gas.
0
14. Revise Sec.  3162.3-4 to read as follows:


Sec.  3162.3-4  Well abandonment.

    (a) The operator must promptly plug and abandon, in accordance with 
a plan first approved in writing or prescribed by the authorized 
officer, each newly completed or recompleted well in which oil or gas 
is not encountered in paying quantities or which, after being completed 
as a producing well, is demonstrated to the satisfaction of the 
authorized officer to be no longer capable of producing oil or gas in 
paying quantities, unless the authorized officer approves the use of 
the well as a service well for injection to recover additional oil or 
gas or for subsurface disposal of produced water. In the case of a 
newly drilled or recompleted well, the approval to abandon may be 
written or oral with written confirmation.
    (b) Completion of a well as plugged and abandoned may also include 
conditioning the well as a water supply source for lease operations or 
for use by the surface owner or appropriate Government Agency, when 
authorized by the authorized officer. All costs over and above the 
normal plugging and abandonment expense will be paid by the party 
accepting the water well.
    (c) No well may be temporarily abandoned for more than 30 days 
without the prior approval of the authorized officer. The operator must 
provide adequate and detailed justification for the abandonment, verify 
the mechanical integrity of the well, and isolate the completed 
interval(s) prior to abandonment. The authorized officer may authorize 
a delay in the permanent abandonment of a well for a period of up to 1 
year and the authorized officer may authorize additional delays, no one 
of which may exceed an additional 1-year period. Except in 
extraordinary circumstances, the maximum period of time for an operator 
to delay permanent abandonment of a temporarily abandoned well will not 
exceed 4 years. Upon the removal of drilling or producing equipment 
from the site of a well which is to be permanently abandoned, the 
surface of the lands disturbed in connection with the conduct of 
operations must be

[[Page 47647]]

reclaimed in accordance with a plan first approved or prescribed by the 
authorized officer.
    (d) Operators of shut-in wells must:
    (1) Notify the authorized officer of the well's shut-in status and 
provide the date the well was shut-in within 90 days of well shut-in;
    (2) Within 3 years of well shut-in, provide the authorized officer 
with verification of the mechanical integrity of the well and 
confirmation that the well remains capable of producing in paying 
quantities; and
    (3) Within 4 years of well shut-in, complete one of the following 
actions:
    (i) Permanently abandon the well;
    (ii) Resume production in paying quantities; or
    (iii) Provide the authorized officer with a detailed plan and 
timeline for future beneficial use of the well. If the authorized 
officer determines that there is a legitimate future beneficial use for 
the well, the officer may allow the operator to delay permanent 
abandonment by 1 year. The authorized officer may grant additional 
delays in 1-year increments, provided that the operator confirms the 
future beneficial use of the well and is making verifiable progress on 
returning the well to a beneficial use.
0
15. Revise Sec.  3165.1 to read as follows:


Sec.  3165.1  Relief from operating and/or producing requirements.

    (a) Applications for relief from either the operating or the 
producing requirements of a lease, or both, must be filed with the 
authorized officer, and must include a full statement of the 
circumstances that render such relief necessary.
    (b) The authorized officer will act on applications submitted for a 
suspension of operations or production, or both, filed pursuant to 43 
CFR 3103.42. The application for suspension must be filed with the 
authorized officer prior to the expiration date of the lease; must be 
executed by all operating rights owners or by the operator on behalf of 
the operating rights owners; and must include a full statement of the 
circumstances that makes such relief necessary.
    (c) The authorized officer will not approve an application for a 
suspension of a lease where the applicant cites, as the basis for the 
suspension, a pending APD filed less than 90 calendar days prior to the 
expiration date of the lease.
    (d) If approved, a suspension of operations and production will be 
effective on the first of the month in which the completed application 
was filed or the date specified by the authorized officer in the 
approval. Approved suspensions will not exceed 1 year. If the 
circumstances warrant all operating rights owners, or the operator on 
behalf of the operating rights owners, may submit a request to extend 
the suspension prior to the end of the suspension.
    (e) BLM-directed suspensions may exceed 1 year.
    (f) Suspensions will lift when the basis provided for the 
suspension no longer exists, when lifting the suspension is in the 
public interest, or as otherwise stated by the authorized officer in 
the approval letter.

PART 3170--ONSHORE OIL AND GAS PRODUCTION

0
16. The authority citation for part 3170 continues to read as follows:

    Authority:  25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, 
and 1751; and 43 U.S.C. 1732(b), 1733, and 1740.

0
17. Revise Sec.  3171.6 to read as follows:


Sec.  3171.6  Components of a complete APD package.

    Operators are encouraged to consider and incorporate Best 
Management Practices into their APDs because Best Management Practices 
can result in reduced processing times and reduced number of Conditions 
of Approval. An APD package must include the following information that 
will be reviewed by technical specialists of the appropriate agencies 
to determine the technical adequacy of the package:
    (a) A completed Form 3160-3; and
    (b) A well plat. Operators must include in the APD package a well 
plat and geospatial database prepared by a registered surveyor 
depicting the proposed location of the well and identifying the points 
of control and datum used to establish the section lines or metes and 
bounds. The purpose of this plat is to ensure that operations are 
within the boundaries of the lease or agreement and that the depiction 
of these operations is accurately recorded both as to location 
(latitude and longitude) and in relation to the surrounding lease or 
agreement boundaries (public land survey corner and boundary ties). The 
registered surveyor should coordinate with the cadastral survey 
division of the appropriate BLM State Office, particularly where the 
lands have not been surveyed under the Public Land Survey System.
    (1) The plat and geospatial database must describe the location of 
operations in:
    (i) Geographical coordinates generated by an electronic navigation 
system, and document the datum referenced to generate these 
coordinates; and
    (ii) In feet and direction from the nearest two adjacent section 
lines, or, if not within the Rectangular Survey System, the nearest two 
adjacent property lines, generated from the BLM's current Geographic 
Coordinate Data Base.
    (2) The surveyor who prepared the plat must sign it, certifying 
that the location has been staked on the ground as shown on the plat.
    (3) Surveying and staking are necessary casual uses, typically 
involving negligible surface disturbance. The operator is responsible 
for making access arrangements with the appropriate Surface Managing 
Agency (other than the BLM and the FS) or private surface owner. On 
tribal or allotted lands, the operator must contact the appropriate 
office of the BIA to make access arrangements with the Indian surface 
owners. In the event that not all of the Indian owners consent or may 
be located, but a majority of those who can be located consent, or the 
owners of interests are so numerous that it would be impracticable to 
obtain their consent and the BIA finds that the issuance of the APD 
will cause no substantive injury to the land or any owner thereof, the 
BIA may approve access. Typical off-road vehicular use, when conducted 
in conjunction with these activities, is a necessary action for 
obtaining a permit and may be done without advance approval from the 
Surface Managing Agency, except for:
    (i) Lands administered by the Department of Defense;
    (ii) Other lands used for military purposes;
    (iii) Indian lands; or
    (iv) Where more than negligible surface disturbance is likely to 
occur or is otherwise prohibited.
    (4) No entry on split estate lands for surveying and staking should 
occur without the operator first making a good faith effort to notify 
the surface owner. Also, operators are encouraged to notify the BLM or 
the FS, as appropriate, before entering private lands to stake for 
Federal mineral estate locations.
0
18. Revise Sec.  3171.14 to read as follows:


Sec.  3171.14  Valid Period of Approved APD.

    (a) An APD approval is ordinarily valid for 3 years from the date 
that it is approved, or until lease expiration, whichever occurs first.
    (b) Notwithstanding paragraph (a) of this section, if an APD 
approval expires by reason other than lease expiration, the APD 
approval shall remain valid if the operator or lessee:

[[Page 47648]]

    (1) Has drilled the well to the approximate total depth in the 
approved APD;
    (2) Is drilling the well with a rig capable of drilling the well to 
the proposed total depth in the approved APD; or
    (3) Has submitted a plan, approved by the BLM prior to expiration 
of the APD approval, for continuously drilling the well to reach the 
proposed total depth in the approved APD.
    (c) If, upon expiration of the approved APD, the operator created 
surface disturbance or began drilling the well under the approved APD, 
the operator or lessee must comply with all applicable plugging, 
abandonment, and reclamation requirements.
    (d) The operator is responsible for reclaiming any surface 
disturbance that resulted from its actions, even if a well was not 
drilled.

PART 3180--ONSHORE OIL AND GAS UNIT AGREEMENTS: UNPROVEN AREAS

0
19. The authority citation for part 3180 continues to read as follows:

    Authority:  30 U.S.C. 189.


Sec.  3186.2  [Removed]

0
20. Remove Sec.  3186.2.

Laura Daniel-Davis,
Principal Deputy Assistant Secretary, Land and Minerals Management.
[FR Doc. 2023-14287 Filed 7-21-23; 8:45 am]
BILLING CODE 4331-29-P