Onshore Oil and Gas Operations

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[WO-310-4191-02-24 1A]

RIN 1004-AC09

Onshore Oil and Gas Operations

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: The Department of the Interior, through the Bureau of Land

Management (BLM), proposes to amend the provisions of 43 CFR Part 3160

that address BLM's responsibility for managing oil and gas operations

on lands administered by the United States Forest Service (Forest

Service). This action is being taken to clarify the regulations

implementing the Federal Onshore Oil and Gas Leasing Reform Act of 1987

(Reform Act), to establish clearly that BLM's responsibility on

National Forest System (NFS) lands is limited to the approval of

applications for permit to drill (APD), the approval of other

development or operational proposals involving subsurface activity,

related impacts, and any appeals regarding the same. On NFS lands the

approval of an APD does not, in itself, constitute approval of the

surface use plan of operations (SUPO). Surface use plans of operations

on NFS lands require separate approval by the Forest Service, and all

appeals related to the SUPO are appeals from the decision of the Forest

Service. Agency responsibilities under this rule and the Reform Act are

determined on the basis of subsurface (BLM) and surface (Forest

Service) authority for oil and gas operations on NFS lands.

DATES: Comments should be submitted by January 29, 1996. Comments

received or postmarked after this date may not be considered in the

decision making on the final rule.

ADDRESSES: Comments should be sent to: Director (420), Bureau of Land

Management, Room 401 LS, 1849 C Street, NW., Washington, DC 20240.

Comments can also be sent to internet!WO[email protected]. Please include

``attn: AC09'' and your name and return address in your internet

message. Comments will be available for public review at the above

address during regular business hours (7:45 a.m. to 4:15 p.m.), Monday

through Friday.

FOR FURTHER INFORMATION CONTACT: Erick Kaarlela, (202) 452-0340, or

Howard Lemm, (406) 255-2842.

SUPPLEMENTARY INFORMATION: The Federal Onshore Oil and Gas Reform Act

of 1987 (30 U.S.C. 226) vests the Secretary of the Interior and the

Secretary of Agriculture with the authority to take actions on NFS

lands for APD and SUPO approvals, respectively. The purpose of this

proposed rule is to clarify in the regulations the statutory division

of authority between the Department of the Interior, acting through the

BLM, and the Department of Agriculture, acting through the Forest

Service, for managing oil and gas operations on NFS lands. The

responsibility for review of actions on NFS lands by the BLM for APDs

and the Forest Service for SUPOs is clearly divisible. Each agency is

responsible for predecisional reviews under such statutes as the

National Environmental Policy Act of 1969 (42 U.S.C. 4332 et seq.) and

the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.) to the

extent that such reviews are performed for decisions proposed to be

made pursuant to its decisional authority.

The Reform Act authorizes the Secretary of Agriculture to regulate

all surface-disturbing activities carried out in conjunction with oil

and gas development and operation on NFS lands. The Act states: ``The

Secretary of the Interior, or for National Forest lands, the Secretary

of Agriculture, shall regulate all surface-disturbing activities

conducted pursuant to any lease issued under this Act, and shall

determine

[[Page 58591]]

reclamation and other actions as required in the interest of

conservation of surface resources. No permit to drill on an oil and gas

lease issued under this Act may be granted without the analysis and

approval by the Secretary concerned of a plan of operations covering

proposed surface-disturbing activities within the lease area.'' As

applied to SUPOs and APDS, the Reform Act makes an approved SUPO a

condition precedent to the granting of an APD. Although the Forest

Service is responsible for the SUPO approval prior to the APD, the

Reform Act does not make the SUPO a part of the APD. The analysis and

subsequent decisions for SUPOs and APDs are separate functions for

Forest Service and BLM, respectively.

Although Section 5102(g) of the Reform Act delineates the authority

given to each agency, clarification of this division in part 3160 of

Title 43 of the Code of Federal regulations is needed to bring the

existing regulations into greater conformance with the Reform Act. The

intent of this proposed rule is to accurately describe the authority of

the BLM for managing oil and gas operations on NFS lands. The proposed

rule would abolish the existing regulatory provision making the SUPO a

part of an APD on NFS lands, thus making it clearer that a SUPO

approved by the Forest Service is instead a precondition to the

approval of an APD on NFS lands. The proposed rule would also clarify

BLM's exclusive responsibility for APD approval and any subsequent

appeals related to actions taken on APDs for NFS lands pursuant to 43

CFR 3162.3-1(h). Concurrently, the Forest Service is preparing a

technical amendment to 36 CFR 228 subpart E to clarify the exclusive

responsibility of that agency to approve any SUPO for oil and gas

operations on NFS lands and to hear any appeals of related actions. It

is the intention of both agencies to coordinate these rulemaking

activities.

The BLM's environmental review responsibilities for oil and gas

development on NFS lands would be for decisions related to those

actions described in a new section 3161.3 subtitled Responsibility of

the authorized officer on National Forest System lands. Section 3161.3

would reiterate that BLM's authority to make decisions relating to

drilling and suspension of operations or production will be

appropriately coordinated with Forest Service decisions on the

corresponding SUPO.

It is intended under this proposed rule that environmental review

responsibilities for oil and gas development on NFS lands would be

fully met through the coordinated efforts of the BLM and Forest

Service. These coordinated efforts could include the development of

environmental documents as cooperating agencies pursuant to the

regulations located at 40 CFR 1501.6 implementing the National

Environmental Policy Act of 1969 (NEPA, 42 U.S.C. 4332 et seq.).

Although this proposed rule would not affect the working relationships

between the two agencies in terms of NEPA compliance, the rule would

make clear the limits of authority of the two agencies for the ultimate

decisions on APDs and SUPOs involving NFS lands.

The existing national level Memorandum of Understanding (MOU)

between the BLM and the Forest Service dated November 11, 1991, would

be updated, as needed, to ensure coordination between the agencies with

respect to oil and gas development on NFS lands in a manner consistent

with the rule. It is anticipated that items to be considered in future

amendment of the MOU would include, but would not be limited to, public

posting requirements, review timeframes, operator notification

requirements, SUPO and APD information sharing, and the distribution of

environmental review findings and decision documents.

The principal authors of this proposed rule are Howard Lemm and

Chun Wong of the Montana State Office and Erick Kaarlela of the

Washington Office (WO) Compliance Team, assisted by the Regulatory

Management Team, WO BLM, and the Forest Service.

It is hereby determined that this proposed rule does not constitute

a major Federal action significantly affecting the quality of the human

environment, and that no detailed statement pursuant to Section

102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C.

4332(2)(C)) is required. The Bureau of Land Management has determined

that this rule is categorically excluded from further environmental

review pursuant to Departmental Manual (DM), Chapter 2, Appendix 1,

Item 1.10, being a regulation of an administrative, financial, legal,

technical, or procedural nature, and that the rule will not

significantly affect the 10 criteria for exceptions listed in 516 DM 2,

Appendix 2. Pursuant to the Council on Environmental Quality

regulations (40 CFR 1508.4) and environmental policies and procedures

of the Department of the Interior, ``categorical exclusions'' means a

category of actions which do not individually or cumulatively have a

significant effect on the human environment and which have been found

to have no such effect in procedures adopted by a Federal agency and

for which neither an environmental assessment nor an environmental

impact statement is required.

This rule was not subject to review by the Office of Management and

Budget under Executive Order 12866. This rule will not have a

significant effect on the oil and gas industry. The rule will not

adversely affect in a material way, the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local or tribal communities. The rule would

have a positive impact in that it would eliminate duplicative

responsibilities and appeal processes, thereby streamlining the process

for all involved without compromising the stewardship of the resource.

The Department has further determined that this rulemaking would

not have a significant economic impact on a substantial number of small

entities under the Regulatory Flexibility Act (5 U.S.C. 605 et seq.).

No small entities are likely to be affected by this rule and there are

no particularly affected industries or sectors.

The Department certifies that this proposed rule does not represent

a governmental action capable of interference with constitutionally

protected property rights. Therefore, as required by Executive Order

12630, the Department of the Interior has determined that the rule

would not cause a taking of private property.

The Department has certified to the Office of Management and Budget

that these regulations meet the applicable standards provided in

Sections 2(a) and 2(b)(2) of Executive Order 12778.

This rule does not contain information collection requirements that

require approval by the Office of Management and Budget under 44 U.S.C.

3501 et seq.

List of Subjects in 43 CFR Part 3160

Government contracts, Indian lands--mineral resources, Mineral

royalties, Oil and gas exploration, Oil and gas production, Public

lands--mineral resources, Reporting and recordkeeping requirements.

For the reasons stated in the preamble, part 3160, of title 43 of

the Code of Federal Regulations is proposed to be amended as follows.

PART 3160--ONSHORE OIL AND GAS OPERATIONS

1. The authority citation for Part 3160 is revised to read as

follows:

[[Page 58592]]

Authority: 30 U.S.C. 181 et seq.; 30 U.S.C. 359; 30 U.S.C. 306;

25 U.S.C. 396; 25 U.S.C. 396d; 25 U.S.C. 398e; 25 U.S.C. 399; and 30

U.S.C. 1701, 1751(a).

Sec. 3160.0-2 [Removed]

2. Section 3160.0-2 is removed.

3. Section 3160.0-5 is amended by redesignating paragraphs (m)

through (w) as paragraphs (n) through (x), respectively, and by adding

a new paragraph (m) to read as follows:

Sec. 3160.0-5 Definitions.

* * * * *

(m) National Forest System lands means all National Forest lands

reserved or withdrawn from the public domain of the United States, all

National Forest lands acquired through purchase, exchange, donation, or

other means, the National Grasslands and land utilization projects

administered by the Forest Service under title III of the Bankhead-

Jones Farm Tenant Act (7 U.S.C. 1010 et seq.), and other lands, waters

or interests therein which are administered by the Forest Service or

are designated for administration through the Forest Service as a part

of the System (16 U.S.C. 1609).

* * * * *

4. In Sec. 3161.1 paragraph (a) is revised to read as follows:

Sec. 3161.1 Jurisdiction.

(a) All operations conducted on a Federal or Indian oil and gas

lease by the operator are subject to the regulations in this part

except as provided in Sec. 3161.3.

* * * * *

5. Section 3161.2 is revised to read as follows:

Sec. 3161.2 Responsibility of the authorized officer.

Except as provided in Sec. 3161.3 of this title, the authorized

officer is authorized and directed to approve unitization,

communitization, gas storage and other contractual agreements for

Federal lands; to assess compensatory royalty; to approve suspensions

of operations or production, or both; to issue NTLs; to approve and

monitor other operator proposals for drilling, development or

production of oil and gas; to perform administrative reviews; to impose

monetary assessments or penalties; to provide technical information and

advice relative to oil and gas development and operations on Federal

and Indian lands; to enter into cooperative agreements with States,

Federal agencies and Indian tribes relative to oil and gas development

and operations; to approve, inspect and regulate the operations that

are subject to the regulations in this part; to require compliance with

lease terms, with the regulations in this title and all other

applicable regulations promulgated under the cited laws; and to require

that all operations be conducted in a manner which protects other

natural resources and environmental quality, protects life and property

and results in the maximum ultimate recovery of oil and gas with

minimum waste and with minimum adverse effect on the ultimate recovery

of other mineral resources. The authorized officer may issue written or

oral orders to govern specific lease operations. Any such oral orders

shall be confirmed in writing by the authorized officer within 10

working days from issuance thereof. Before approving operations on

leasehold, the authorized officer shall determine that the lease is in

effect, that acceptable bond coverage has been provided and that except

as provided in Sec. 3161.3 of this title the proposed plan of

operations is sound both from a technical and environmental standpoint.

Sec. 3161.3 [Redesignated as Sec. 3161.4]

6. Section 3161.3 is redesignated as Sec. 3161.4.

7. A new Sec. 3161.3 is added as follows:

Sec. 3161.3 Responsibility of the authorized officer on National

Forest System lands.

(a) The authorized officer is responsible for the approval,

inspection, and regulation of drilling, development and production

operations on National Forest System lands to the same extent as

described in Sec. 3161.2 of this title except that the authorized

officer has no responsibility for the approval, enforcement,

modification or revocation of any surface use plan of operations

covering National Forest System lands. Approval of Applications for

Permit to Drill, or approval of other proposed actions that would

involve additional surface disturbance or reclamation, shall not be

granted for operations to be conducted on National Forest System lands

until the authorized representative of the Secretary of Agriculture has

approved a surface use plan of operations covering related surface-

disturbing activities. The authorized officer has the right to

reexamine Applications for Permit to Drill, and other proposed

development or production activities on National Forest System lands,

if a related surface use plan of operations is revoked, modified or

amended by the authorized representative of the Secretary of

Agriculture.

(b) A surface use plan of operations related to the operator's

proposed oil and gas operations must be furnished to the authorized

officer for informational purposes at the time the operator submits an

Application for Permit to Drill or other development or operational

proposals applying to National Forest System lands.

8. In Sec. 3162.3-1 paragraph (d)(1) is amended by removing the

period and adding a semicolon in its place, paragraph (d)(3) is amended

by removing ``, and'' and adding ``; and'' in its place, and paragraph

(d)(2) is revised to read as follows:

Sec. 3162.3-1 Drilling applications and plans.

* * * * *

(d) * * *

(2) A surface use plan of operations containing information

required by paragraph (f) of this section and appropriate orders and

notices, except on National Forest System lands a surface use plan of

operations is not required as part of an Application for Permit to

Drill;

* * * * *

9. Paragraph (a) of Sec. 3162.3-2 is revised to read as follows:

Sec. 3162.3-2 Subsequent well operations.

(a) A proposal for further well operations shall be submitted by

the operator on Form 3160-5 and approved by the authorized officer

prior to commencing operations to redrill, perform casing repairs,

plug-back, alter casing, perform nonroutine fracturing jobs, recomplete

in a different interval, perform water shut off, commingle production

between intervals and/or convert to an injection well. If there will be

additional surface disturbance, the proposal shall include a surface

use plan of operations as an integral part of the proposal unless it

comes within the exception provided in Sec. 3161.3, in which case a

copy of such surface use plan must be provided in accordance with

Sec. 3161.3(b). The authorized officer may prescribe that each proposal

contain all or a portion of the information set forth in Sec. 3162.3-1

of this part. The operator shall file a subsequent report of these

operations with the authorized officer using Form 3160-5.

* * * * *

10. Section 3162.3-3 is revised to read as follows:

Sec. 3162.3-3 Other lease operations.

Prior to commencing any operation on the leasehold that will result

in additional surface disturbance, other than those activities

authorized under Sec. 3162.3-1 or Sec. 3162.3-2 of this title, the

operator shall submit a proposal on Form 3160-5 and receive approval of

the authorized officer. The proposal

[[Page 58593]]

shall include a surface use plan of operations as an integral part of

the proposal unless it comes within the exception provided in

Sec. 3161.3 of this title, in which case a copy of such surface use

plan must be provided in accordance with Sec. 3161.3(b).

11. Paragraph (c) of Sec. 3162.3-4 is amended by revising the last

sentence to read as follows:

Sec. 3162.3-4 Well abandonment.

* * * * *

(c) * * * Upon the removal of drilling or producing equipment from

the site of a well that is to be permanently abandoned, the surface of

the lands disturbed in connection with the conduct of operations shall

be reclaimed in accordance with a plan already approved or prescribed

by the authorized officer or, where appropriate, where approved by the

authorized representative of the Secretary of Agriculture as provided

in Sec. 3161.3 of this title.

Dated: November 13, 1995.

Bob Armstrong,

Assistant Secretary of the Interior.

[FR Doc. 95-28965 Filed 11-27-95; 8:45 am]

BILLING CODE 4310-84-P