Geothermal Resources Leasing and Operations

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3200, 3210, 3220, 3240, 3250, and 3260

RIN: 1004-AB18

[AA-610-08-4141-02]

Geothermal Resources Leasing and Operations

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend regulations which implement the

Geothermal Steam Act of 1970, (Steam Act). This proposed rulemaking

addresses leasing, permitting and operational and unitization

requirements for geothermal exploration, drilling, and utilization

operations. The proposed rulemaking proposes no additional permit

requirements. The proposed regulations would put all the geothermal

regulations in a plain English format; reduce and streamline permitting

and information requirements; provide BLM the maximum possible

flexibility regarding permit issuance and thereby accommodate the full

range of potential geothermal operations and development scenarios; and

reorganize the regulations and provide specific permit application

informational requirements to allow more consistent interpretation of

requirements by BLM and its industrial customers.

DATES: Any comments must be received by BLM on or before Janaury 6,

1997. Comments received which are postmarked after this date will not

necessarily be considered in the decisionmaking process on the final

rule.

ADDRESSES: If you wish to comment, you may hand-deliver comments to the

Bureau of Land Management, Administrative Record, Room 401, 1620 L

Street, NW., Washington, DC; or mail comments to the Bureau of Land

Management, Administrative Record, Room 401LS, 1849 C Street, NW.,

Washington, DC 20240. You also may transmit comments electronically via

the Internet to [email protected] Please include ``attn:

RIN 1004AB18'' in your message. If you do not receive a confirmation

from the system that we have received your internet message, contact us

directly during regular business hours. You will be able to review

comments at BLM's Regulatory Management Team office, Room 401, 1620 L

Street, NW., Washington, DC, during regular business hours (7:45 a.m.

to 4:15 p.m.) Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Richard Hoops, (702) 785-6568.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures

II. Background and Discussion of Proposed Rule

III. Procedural Matters

I. Public Comment Procedures

Written Comments

Written comments on the proposed rule should be specific, should be

confined to issues pertinent to the rule, and should explain the reason

for any recommended change. Where possible, comments should reference

the specific section or paragraph of the proposal which the comment

addresses. BLM may not necessarily consider or include in the

Administrative Record for the rule comments which BLM receives after

the close of the comment period (see ``DATES'') or comments delivered

to an address other than those listed above (see ``ADDRESSES'').

[[Page 52737]]

II. Background and Discussion of Proposed Rule

This proposed rule would revise 43 CFR parts 3200, 3210, 3220,

3240, 3250, and 3260 which implement the classification, leasing,

exploration, drilling, and utilization, requirements of the Geothermal

Steam Act of 1970 and the Geothermal Steam Act Amendments of 1988 (the

Steam Act). The new rule would eliminate existing parts 3210, 3220,

3240, 3250 and 3260, rewrite corresponding subparts under part 3200,

and reorganize the existing regulations so that all permitting

requirements and operator responsibilities for each phase of

development may be found in a specific subpart. The proposed rule would

more clearly delineate the existing permitting and informational

requirements.

The existing part 3280, concerning unit agreements, will not be

affected by this proposed rule. BLM intends to revise part 3280 in

harmony with this general revision of the 3200 regulations, but in a

separate rulemaking in the very near future.

Existing parts 3200, 3210, 3220 and 3240 are consolidated and

placed in order corresponding to the sequence in which leasing

procedures occur. The exploration regulations are moved from subparts

3209 and 3264 and redesignated as subpart 3250. Existing part 3260 is

revised to describe only the requirements for drilling operations. The

existing part 3250, Site License, and the existing portions of part

3260 addressing geothermal resource utilization are revised and

redesignated as subpart 3270, Utilization of Geothermal Resources.

The following table lists how each subpart is reorganized:

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Current regulations Proposed regulations

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3200--Geothermal Resources Leasing: 3200--Geothermal Resources

General. Leasing.

3201--Available Lands; Limitations; 3201--Available Lands.

Unit Agreements.

3202--Qualifications of Lessees........ 3202--Qualifications of

Lessees.

3203--Leasing Terms.................... 3206--Lease Issuance.

3207--Additional Lease Term.

3208--Extended Lease Term.

3209--Additional Lease

Information.

3204--Surface Management Requirements.. [deleted].

3205--Fees, Rentals and Royalties...... 3210--Fees, Rentals and

Royalties.

3206--Lease Bonds...................... 3213--Personal and Surety

Bonds.

3214--Bonding and Lease

Operations.

3215--Certificate of Deposit

and Letter of Credit.

3216--Bond Collection After

Default.

3207--Leases for a Fractional or Future 3206--Lease Issuance.

Interest.

3208--(Reserved)

3209--Geothermal Resources Exploration 3250--Geothermal Exploration.

Operations.

3210--Noncompetitive Leases: General... 3204--Noncompetitive Leasing.

3220--Competitive Leases: General...... 3205--Competitive Leasing.

3241--Transfers........................ 3217--Transfers, Interest and

Qualifications.

3218--Requirements for Filing

Transfers.

3242--Production and Use of Byproducts. 3272--The Contents and Review

of a Plan of Utilization.

3243--Cooperative Conservation 3219--Cooperative Conservation

Provisions. Provisions.

3244--Terminations and Expirations..... 3212--Relinquishment,

Termination, Cancellation, and

Expiration.

3250--Utilization of Geothermal 3273--Applying for and

Resources. Obtaining a Site License.

3274--Joint utilization

Agreements.

3260--Geothermal Resources Operations: 3260--Geothermal Drilling

General. Operation--General.

3270--Utilization of Geothermal

Resources General.

3261--Jurisdiction and Responsibility.. 3260--Geothermal Drilling

Operation--General.

3262--Conducting Drilling

Operations.

3263--Well Abandonment.

3270--Utilization of Geothermal

Resources General.

3262--Requirements for Operating Rights 3261--Permitting (drilling).

Owners.

3262--Conducting Drilling

Operations.

3271--Permitting Utilization

Operations.

3272--Contents and Review of a

Plan of Utilization.

3276--Conducting Utilization

Operations.

3263--Measurement of Production........ 3276--Conducting Utilization

Operations.

3264--Reports to be Made by All Lessees 3261--Permitting (drilling).

3266--Reports (drilling).

3274--Submitting a Utilization

Permit.

3275--Submitting a Production

Permit.

3265--Procedure in Case of Violation of 3268--Inspection, Enforcement,

the Regulations. and Noncompliance (drilling).

3277--Inspection, Enforcement,

and Noncompliance

(utilization).

3266--Appeals.......................... 3255--Relief and Appeals

(exploration).

3269--Relief and Appeals

(drilling).

3278--Relief and Appeals

(utilization).

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Parts 3200--Geothermal Resources Leasing: General, 3210 Noncompetitive

Leases, 3220--Competitive Leases, and 3240 Rules Governing Leasing

Firstly, the new rule would restructure the definitions section,

retaining many of the existing terms but also removing several

technical terms (such as ``the Secretary'' and ``the Service'') which

no longer fit within the plain English style, and adding new terms

(such as ``MMS'') which play a significant role in the new rule.

Furthermore, some existing terms which have narrow applicability, such

as ``significant thermal features within units of the National Park

System'' would be relocated to the specific

[[Page 52738]]

sections to which they apply. To this extent, the new definitions

section contains only terms which are used repeatedly throughout the

regulations. Also, the definition of commercial quantities is expanded

to address the difference between commercial quantities of individual

lease and unit production. Finally, the terms would be alphabetized,

and the designations markers (a), (b), (c) and so forth, removed, in

keeping with Federal Register guidance.

Next, the section describing lands subject to geothermal leasing

would be condensed and rewritten into 43 CFR 3201.10. Nothing in the

new section alters what lands are available for geothermal leasing;

rather, this section would just be streamlined and rewritten into plain

English. Subpart 3202 would contain the qualifications for a lessee

which, likewise, are intended to retain all substantive provisions from

the existing regulations, streamlined and rewritten into plain English.

The proposed rule would completely restructure existing regulations

concerning the general leasing processes. Firstly, proposed subpart

3203 would introduce the term Known Geothermal Resource Area (KGRA) and

briefly describes how this designation determines whether an area can

be leased through noncompetitive bidding or solely through the

competitive bidding process. Subpart 3204 would then revise the manner

in which noncompetitive leases become available. BLM will no longer

prepare an availability list of relinquished or terminated leases;

instead, lands will become available for noncompetitive leasing as soon

as BLM closes each case. An offeror could apply for these lands at any

time, and instead of collecting applications in one-month application

periods, BLM would open each application upon submission and

immediately begin processing.

This new process would substantially improve the way BLM handles

noncompetitive lease applications. By eliminating the one-month delay,

BLM would create a rolling application review process which would

approve or deny an application much sooner than under the current

process. BLM could determine at any time prior to issuing the lease

that the land is a known geothermal resource area (KGRA), either as a

result of overlapping applications for the same land or due to evidence

indicating threshold geothermal activity (see the definition in 43 CFR

3203.11); which would mean that the area is subject to competitive

leasing. Otherwise, once BLM approves a noncompetitive lease

application, no KGRA designation would apply and any later overlapping

applications would be rejected.

If overlapping applications were filed prior to approval of the

first application, this competitive interest would prompt BLM to

examine the land for further evidence that might warrant a KGRA

designation. If the designation were approved, all noncompetitive

applications would be rejected and the lands would be made available

under the competitive leasing provisions. If no KGRA designation were

warranted, then the lease would be offered to the first qualified

applicant, i.e., the first person to submit an application which meets

all requirements.

Under the proposed regulations BLM would continue to issue

competitive leases as in the past, relying on published notices of

available lands and a sealed bidding process. The regulations for

competitive leasing would be relocated to subpart 3205, condensed and

written into plain English. BLM would make no substantive changes to

the manner in which we review applications, select the winning bid,

notify the successful bidder, issue the lease, revoke offers when the

successful bidder fails to respond, and so forth.

Most of the leasing terms at subpart 3203 of the existing

regulations would be retained in condensed, plain English form in

proposed subparts 3206 through 3210. However, some substantive and

organizational changes are proposed. For example, BLM would change the

requirements for diligent exploration under a lease. The current

regulation (43 CFR 3203.5) requires that diligent exploration occur

during lease years 11 through 15, but BLM proposes to remove this

requirement since these lease years are not part of the primary period.

Rather, the new regulations add a requirement at 43 CFR 3208.10(a) that

a lease be extended due to diligent drilling over the end of the

primary period. To qualify, the operator must diligently strive to

reach a reasonable drilling target, which BLM will define based on

local geology and the type of development proposed by the operator.

Under 43 CFR 3208.10 (b) and (c) of the proposed regulations leases

would be eligible for extensions in two new, additional situations:( 1)

when committed to a unit, lease terms expiring prior to the unit could

be extended to match the unit terms as long as diligent unit

development is occurring; and (2) any lease not part of a participating

area is eligible for two successive five-year extensions when it is

eliminated from a unit by contraction or unit review. These extensions

address industry concerns that leases adjacent to producing areas may

be terminated, regardless of diligence, due to the lack of electrical

sales contracts or poor energy market lasting for extended periods.

The proposed rule would enact a few other minor substantive changes

to lease terms. For example, BLM would delete the special requirements

at 43 CFR 3203.4(d) for describing unsurveyed public lands adjacent to

tidal waters in southern Louisiana and in Alaska, since this part is

rarely used, and since the general regulations for describing

unsurveyed lands are adequate. Several other portions of existing

subpart 3203 have been merged into other sections: section 3203.6,

concerning plans of development and operation, has been incorporated

into various sections within new subparts 3260 and 3270; 43 CFR 3203.7,

concerning oil, gas and helium reservations, is covered by 43 CFR

3210.17. The 43 CFR 3203.1-6 concerning converting leases to a mineral

lease would be relocated to 43 CFR 3209.10.

The provisions on fees, rentals and royalties in subpart 3205 would

be replaced by subpart 3211 in streamlined, plain English form. Except

as noted, BLM does not intend to change any of these existing

substantive provisions, but merely to make the existing ones more

readily understood by the public, and more manageable for BLM. The only

notable change is that the existing provision at 43 CFR 3205.3-7(a),

concerning waivers and suspensions of payments, would be relocated to

43 CFR 3212.14, grouping it with the regulations on suspension of

operations or operations and production leases. Finally, subparts 3206-

Lease Bonds, 3207--Leases for a Fractional or Future Interest, and

3209-Geothermal Resources Exploration Operations would be relocated to,

respectively, subparts 3214, 3206, and 3250. In each case, except as

otherwise discussed in this preamble, the changes enacted by the

proposed regulation would be limited to consolidation and plain English

rewrites.

Part 3250--Utilization of Geothermal Resources

In order to separate operational regulations from the leasing

provisions, the geothermal resources utilization regulations currently

found in part 3250 would be relocated to subpart 3270, and the new

subpart 3250 would contain the geophysical exploration operation

regulations currently found in subpart 3209. The permitting and

operational responsibilities for geophysical exploration operations

occurring on either unleased public lands, Indian

[[Page 52739]]

lands, or lands leased for geothermal resources activities conducted by

a lessee or permittee are consolidated here into a single set of

standards. An exploration permit application would consist of the

permit form and any operational and environmental information necessary

for BLM to provide a timely review and decision.

These flexible informational requirements would adequately cover

the level of detail necessary to provide sufficient information for

applications to drill shallow temperature gradient wells (up to 500

feet deep), temperature gradient wells (with depths of 4000 feet or

more), or any exploratory drilling in areas of increased environmental

concern. Currently, Geothermal Resources Operational Order 1 limits the

depth of temperature gradient wells to 500 feet unless BLM grants

specific authorization to drill deeper, but the proposed regulations at

43 CFR 3252.30 will allow an operator to propose a temperature gradient

well to any depth necessary to adequately measure temperature

gradients. Sections would be added for inspection, enforcement and

noncompliance, and appeals, and the current exploration bond

requirements would be retained.

Part 3260--Geothermal Resource Operations: General

In order to consolidate drilling operations regulations in one

location, subpart 3260 as proposed would address only the drilling

permit application, approval, and reporting requirements. Regulations

addressing permits for utilization facilities and information

requirements related to the utilization of geothermal resources would

be moved to a new subpart 3270. To address concerns often expressed by

the public as well as other regulatory agencies, the Jurisdiction and

Responsibility section (current subpart 3261) would be amended to

clarify BLM's existing authority to take post-permit actions, such as

requiring modifications to or shutting down operations that are in

noncompliance or pose an immediate threat to the public, the

environment or private property.

Under proposed subpart 3260, a drilling application would consist

of a plan of operation, geothermal drilling permit and drilling

program, and all three documents could be submitted for review

simultaneously. The plan of operation information requirements would be

reduced to cover only specific drilling activities, eliminating the

current requirement that applicants also address resource utilization.

The plan of operation and drilling program could be written to apply to

more than one well, though separate geothermal drilling permits would

be required for each proposed well. Pad construction could commence

once BLM approved the plan of operation or a sundry notice specifically

requesting authorization for the site construction, while the drilling

program and geothermal drilling permit could be submitted later. The

well location plat, as currently required, would need to be certified

by a licensed surveyor.

A geothermal sundry notice would be necessary for actions such as

casing program changes, well stimulation, or plugging and abandoning a

well, but BLM could waive the sundry notice requirement for specific

routine well work, surveys, or downhole maintenance. For activities

that would result in an environmental impact not already described in

the plan of operation, the applicant would be required to submit a

geothermal sundry notice to amend the plan of operation, which would

result in subsequent environmental review.

These permit review options would provide both BLM and resource

users the maximum flexibility and the best opportunity to address the

broad range of operational and environmental issues encountered during

geothermal development. BLM would be able, as a result, to respond to

industry requests more efficiently and ensure all environmental

requirements are met.

Several other sections have been modified to improve the way in

which BLM oversees existing operations. In new 43 CFR 3266.50, BLM

would reduce the current requirements of notification or reports for

all accidents occurring on federal lands (current 43 CFR 3262.7) to

require notification and reports only when the accident affects

operations or causes environmental hazards. Per the authority under

section 5 of the lease terms, BLM can conduct inspections to ensure

compliance with the permit, lease terms, regulations and the Steam Act.

When the lessee submits information it regards as confidential, it

would be clearly marked with the words ``confidential information,''

although BLM would ultimately determine whether such information is

exempt from public disclosure under the Freedom of Information Act

regulations set forth in 43 CFR part 2.

The noncompliance subsection is revised to more clearly define what

BLM can do when an operator fails to promptly commence or complete a

required remedial action. This would include modification of project

operations, temporary or permanent shut down of operations, or lease

termination.

Because the requirements specified in some of the current

Geothermal Resources Operational Orders have become out of date, BLM

will revise the requirements and incorporate them into new regulations

in 1997. This proposed action changes some standards and requirements

from current Orders, and when finalized these changes will have

precedence over the Orders standards.

A new subpart 3270 makes several changes to the existing permitting

procedures and operator responsibilities for producing and utilizing

geothermal resources. Several related definitions would be transferred

to this part from existing part 3260, and adding a new definition for

commercial operations that would specifically identify when the

production permit is required. To gain a permit to construct and

operate a utilization facility under this part, an operator would

submit in an application a plan of utilization, utilization permit,

production permit, site license and joint utilization agreement, where

applicable. The applicant would need to submit the plan of utilization

and the utilization permit together, while the remaining items could be

submitted together or separately, although BLM will not approve the

utilization permit until receiving a site license and related bond.

These changes to the permitting process are intended to provide the

operator increased flexibility in submitting the necessary information

as it becomes available. The same process would apply to all types of

utilization facility proposals, rather than using separate procedures

for permitting research and demonstration facilities and individual

well facilities, as the current regulations do.

Before any surface disturbing activities associated with

utilization facility construction and testing could begin, BLM would

have to approve the plan of utilization, utilization permit and site

license. An approved utilization permit would authorize the site

preparation, construction and testing of a facility located on lands

leased for federal geothermal resources or Indian land. Production

permit approval would then be needed to begin commercial operation

(defined as delivering any form of geothermal resources for sale or for

use by the operator) of the facility or the utilization of federal

resources. By contrast, only the production permit would be needed to

locate a proposed utilization facility on unleased public lands

receiving production allocated to or from wells located on federal

leases or Indian lands.

The plan of utilization would describe the proposed facility and

its

[[Page 52740]]

environmental protection measures, and the operator could begin

building the facility according to this plan once BLM approves the

utilization permit. Those portions of the plan of operation, as

described in the existing regulations, that involve requirements

related to utilization would become requirements of the plan of

utilization. However, instead of requiring the operator in all cases to

collect baseline environmental data prior to the initiation of

production, BLM would determine which, if any, specific environmental

parameters should be addressed, and begin degradation monitoring. BLM

could also require monitoring of facility operations as a condition of

approval of the permit to ensure environmental compliance.

The site license requirements would be moved from part 3250 to

proposed subpart 3270 and directly incorporated into the utilization

permitting process. At the time of application, the site license area

must be on federally leased lands, although the license term would not

be based on the lease term. Applicants would be required to submit a

site license bond with their license application. Other requirements,

such as the minimum utilization bond amount of $100,000 for any

electrical generation facility and the current bonding requirement for

direct use facilities, would remain unchanged. A site bond may not be

required for a direct use facility.

The proposed regulations would eliminate the requirement that a

lessee or unit operator pay a minimum annual rent of $100 per acre for

the site license area, because the lease already grants the right to

utilize a reasonable amount of surface for utilization and the lessee

has already paid either rental or royalties. However, if an entity

other than a lessee or unit operator owns the utilization facility, the

site license rental would still be required. Furthermore, should the

location of a site license area occur on a federal lease which has

terminated, the license could remain in effect with facility siting

authorized by BLM under FLPMA for BLM-managed lands, or by the

appropriate surface management agency (in coordination with BLM) for

all other lands.

When the facility is owned by someone other than the lessee or unit

operator, a joint utilization agreement would be required as part of

the site license approval process. This document constitutes the

agreement between a lessee or unit operator and a third party siting a

unitization facility on their land. The third party, as the facility

operator, would then assume full responsibility for all phases of

facility permitting and operations.

The production permit authorizes the sale and/or use of federal

geothermal resources, and BLM must approve this permit before a

utilization facility starts commercial operation. For this permit, the

applicant must provide specific information about the proposed

facility's operations, particularly its production and royalty

metering. The new rules would reduce the current requirement for

detailed engineering drawings to require only generalized schematics of

the facility. BLM could attach conditions of approval to the production

permit, such as monitoring of the facility to ensure compliance with

environmental and/or operational standards, and BLM could modify or

shut down the facility operation were it in noncompliance with

environmental or operational standards.

The new regulations would incorporate and add greater detail to

Geothermal Resource Operational Order 7, containing standards for the

types and accuracy of meters used to measure production or utilization

or to determine royalties. The proposed regulations would identify the

following for both electrical generation and direct use facilities: (1)

where the operator must locate the various types of meters (43 CFR

3276.41); (2) meter accuracy standards which vary depending on the

volume of resource measures (43 CFR 3276.42); and (3) meter accuracy

standards for installation and measurement.

Several issues regarding the site license and joint utilization

agreements remain open questions, and BLM is seeking the public's input

regarding these questions. First, BLM believes that the provisions for

a site license should be eliminated, as a site license does not grant

any additional authority to utilize the surface beyond that already

granted by an approved utilization plan. BLM is therefore contemplating

removing this provision in the future. If you believe the site license

performs a necessary function, are there any alternatives to the

current system that would serve the same purpose?

BLM is also seeking comments regarding whether the public believes

BLM should continue to require a rental for a site license if the site

licensee is other than a geothermal lessee.

Some final matters: editorial changes have been made to correct

several cross-references; and BLM will modify its forms to accommodate

the numerous changes in the proposed regulations, as well as to account

for existing forms which have expired.

III. Procedural Matters

National Environmental Policy Act

BLM has prepared an environmental assessment (EA), and has found

that the proposed rule would not constitute a major federal action

significantly affecting the quality of the human environment under

section 102(2)(C) of the National Environmental Policy Act of 1969

(NEPA), 42 U.S.C. 4332(2)(C). BLM has placed the EA and the Finding of

No Significant Impact (FONSI) on file in the BLM Administrative Record

at the address specified previously. BLM invites the public to review

these documents by contacting us at the addresses listed above (see

ADDRESSES), and suggests that anyone wishing to submit comments in

response to the EA and FONSI do so in accordance with the Written

Comments section above, or contact us directly.

Paperwork Reduction Act

The collection of information contained in this rule has been

approved by the Office of Management and Budget under 44 U.S.C. 3501 et

seq. and assigned clearance numbers 1004-0034, 1004-0074, 1004-0132 and

1004-0160.

Regulatory Flexibility Act

Congress enacted the Regulatory Flexibility Act of 1980 (RFA), 5

U.S.C. 601 et seq., to ensure that government regulations do not

unnecessarily or disproportionately burden small entities. The RFA

requires a regulatory flexibility analysis if a rule would have a

significant economic impact, either detrimental or beneficial, on a

substantial number of small entities. BLM has determined under the RFA

that this proposed rule would not have a significant economic impact on

a substantial number of small entities.

Executive Order 12866

According to the criteria listed in section 3(f) of Executive Order

12866, BLM has determined that the proposed rule is not a significant

regulatory action. As such, the rule is not subject to Office of

Management and Budget review under section 6(a)(3) of the order.

Unfunded Mandates Reform Act

Revision of 43 CFR group 3200 will not result in any unfunded

mandate to state, local or tribal governments in the aggregate, or to

the private sector, of $100,000,000 or more in any one year.

Executive Order 12612

The proposed rule would not have sufficient federalism implications

to

[[Page 52741]]

warrant BLM preparation of a Federalism Assessment (FA).

Executive Order 12630

The proposed rule does not represent a government action capable of

interfering with constitutionally protected property rights. Section

2(a)(1) of Executive Order 12630 specifically excludes actions

abolishing regulations or modifying regulations in a way that lessens

interference with private property use from the definition of

``policies that have takings implications.'' Since the primary function

of the proposed rule is to abolish unnecessary regulations and rewrite

existing ones, there will be no private property rights impaired as a

result. Therefore, BLM has determined that the rule would not cause a

taking of private property, or require further discussion of takings

implications under this Executive Order.

Executive Order 12988

The Department of the Interior has determined that this rule meets

the applicable standards provided in sections 3(a) and 3(b)(2) of

Executive Order 12988.

Author

The principal authors of this proposed rule are Richard Hoops and

Jack Lewis of the Nevada State Office, Sean Hagerty and Sonia

Santillian of the California State Office, Richard Estabrook of the

Ukiah District Office, Jack Feuer and Donna Kauffman of the Oregon

State Office, Dennis Davis of the Prineville District Office, and

Robert Henricks and Connie Seare of the Utah State Office, all of the

Bureau of Land Management.

List of Subjects

43 CFR Part 3200

Environmental protection, geothermal energy, government contracts,

public lands-mineral resources, reporting and recordkeeping

requirements, surety bonds.

43 CFR Part 3210

Geothermal energy, government contracts, land management bureau,

public lands-mineral resources, reporting and recordkeeping

requirements.

43 CFR Part 3220

Geothermal energy, government contracts, land management bureau,

public lands-mineral resources, reporting and recordkeeping

requirements.

43 CFR Part 3240

Geothermal energy, government contracts, land management bureau,

mineral royalties, public lands-mineral resources, reporting and record

keeping requirements, water resources.

43 CFR Part 3250

Geothermal energy, geothermal exploration, land management bureau,

public lands-mineral resources, reporting and recordkeeping

requirements, surety bonds.

43 CFR Part 3260

Environmental protection, geothermal energy, government contracts,

land management bureau, public lands-mineral resources, reporting and

recordkeeping requirements.

Dated: September 27, 1996.

Sylvia V. Baca,

Acting Assistant Secretary of the Interior.

For the reasons set forth above in the preamble, and under the

authority of the Geothermal Steam Act of 1970, as amended (30 U.S.C.

1001-1027), The Freedom of Information Act (5 U.S.C. 552), and the

Federal Land Policy and Management Act (43 U.S.C. 1701 et seq.), 43 CFR

chapter II is amended as set forth below:

PARTS 3210, 3220, 3240, 3250 AND 3260--[REMOVED]

1. Parts 3210, 3220, 3240, 3250 and 3260 are removed.

2. The heading ``GROUP 3200--GEOTHERMAL RESOURCES LEASING'' and the

accompanying note is removed.

3. Part 3200 is revised to read as follows:

PART 3200--GEOTHERMAL RESOURCE LEASING

Subpart 3200--Geothermal Resource Leasing--General

Sec.

3200.1 What are the meanings of terms I need to know to understand

the regulations in this part?

3200.2 Information collection.

3200.3 What are my rights of appeal?

Subpart 3201--Available Lands

3201.10 What lands are available for geothermal leasing?

3201.11 What lands are not subject to geothermal leasing?

Subpart 3202--Lessee Qualifications

3202.10 Who can hold a geothermal lease?

3202.11 Must I prove I can hold a lease when filing a lease offer?

3202.12 Are other persons allowed to act in my behalf?

3202.13 What happens if the offeror dies before the lease is

issued?

Subpart 3203--Obtaining a Lease

3203.10 How can I obtain a geothermal lease?

3203.11 How is a KGRA determined?

Subpart 3204--Noncompetitive Leasing

3204.10 How do I file an offer to lease?

3204.11 How do I describe the lands in my lease offer?

3204.12 What fees must accompany my offer?

3204.13 May I combine acquired and public domain lands on the same

offer?

3204.14 What are the minimum and maximum acreage requirements for

my offer?

3204.15 What happens when two or more applicants apply for a

noncompetitive lease for the same land?

3204.16 How does BLM determine the first qualified applicant?

3204.17 May I withdraw my offer?

3204.18 May I amend my offer?

Subpart 3205--Competitive Leasing

3205.10 How does BLM lease competitive lands?

3205.11 How do I obtain information on the terms and conditions of

leases being offered through competitive bidding?

3205.12 How do I bid for a parcel?

3205.13 What is the minimum acceptable bid?

3205.14 How does BLM conduct the sale?

3205.15 To whom does BLM issue the lease?

3205.16 How will I know if my bid is accepted?

3205.17 How will I know if my bid is not accepted?

Subpart 3206--Lease Issuance

3206.10 Are there any additional requirements prior to lease

issuance?

3206.11 What is the maximum acreage I may hold?

3206.12 How does BLM compute acreage holdings?

3206.13 Am I charged for acreage if the United States owns only a

fractional interest in the geothermal resources?

3206.14 Are there any acreages which are not chargeable?

3206.15 What procedures does BLM follow when a party holds or

controls excess accountable acreage?

3206.16 What is the primary term of my lease?

3206.17 When will BLM issue my lease?

Subpart 3207--Additional Lease Term

3207.10 Under what circumstances is my lease eligible for an

additional term beyond its primary term?

Subpart 3208--Extending the Current Lease Term

3208.10 Under what circumstances is my lease eligible for an

extension of the primary term?

3208.11 What procedures must I follow to obtain an extension of my

lease?

3208.12 What information must I include in the report to document

that I have made bona fide efforts?

[[Page 52742]]

3208.13 What will BLM do if I choose to make payments in lieu of

commercial operation?

3208.14 What will BLM do if I choose to make significant

expenditures?

3208.15 May I change my election of making payments in lieu of

commercial quantities or making significant expenditures during the

extension?

Subpart 3209--Conversion of a Lease Producing Byproducts

3209.10 May I convert my geothermal lease to a mineral lease?

Subpart 3210--Additional Lease Information

3210.10 When does lease segregation occur?

3210.11 Is a lease segregated from an agreement or plan eligible

for an extension?

3210.12 May I consolidate leases?

3210.13 What is the diligent exploration requirement?

3210.14 How do I meet the diligent exploration requirement?

3210.15 Is there an option to performing diligent exploration?

3210.16 What happens if I don't meet the diligence requirement or

pay the additional rental?

3210.17 Can leases or locations for other mineral commodities occur

on the same lands that my geothermal lease is located?

3210.18 May BLM readjust the terms and conditions of my lease?

3210.19 How will BLM readjust the terms and conditions of my lease?

3210.20 May BLM readjust the rental and royalty rates of my lease?

3210.21 What happens if I object to the proposed readjusted terms

and conditions or rental and royalty rates?

3210.22 What lease obligations am I accountable for during

readjustment negotiations?

3210.23 When do the readjusted terms become effective?

3210.24 Must I prevent the drainage of geothermal resources from my

lease?

Subpart 3211--Fees, Rentals, and Royalties

3211.10 What are the filing fees, rentals, and royalties for

leases?

3211.11 When is my annual rental payment due?

3211.12 How and where do I submit my rental payment?

3211.13 Is there a different rental or minimum royalty amount for a

fractional interest lease?

3211.14 Prior to production, am I expected to pay rental if my

lease is committed to an approved cooperative or unit plan?

3211.15 When unit production starts, am I expected to pay rental if

my lease is committed to an approved cooperative or unit plan?

3211.16 Will I always pay rental on my lease?

3211.17 What are the possible royalty rates of my lease?

Subpart 3212--Suspension of Operations or Operations and Production

3212.10 May I obtain a suspension of operations or operations and

production on my lease, and if so, for what reasons?

3212.11 When is a lease suspension effective or terminated?

3212.12 How does a suspension affect the lease terms?

3212.13 What happens when the suspension is lifted or removed?

3212.14 May BLM reduce or suspend the royalty or rental rate of my

lease?

3212.15 What information must I submit when requesting a reduction

or suspension of the royalty or rental rate of my lease?

Subpart 3213--Relinquishment, Termination, Cancellation, and Expiration

3213.10 Who may relinquish a lease?

3213.11 What form must I submit to relinquish a lease?

3213.12 Can BLM accept a partial relinquishment resulting in less

than 640 acres?

3213.13 When does my relinquishment take effect?

3213.14 How does a lease terminate?

3213.15 What if I don't pay the entire amount of rental due?

3213.16 Will BLM notify me if my lease terminates?

3213.17 Can my lease be reinstated? If so, how?

3213.18 Who may petition to reinstate a lease?

3213.19 What must I do to obtain a reinstatement?

3213.20 Are there reasons why BLM would not approve a

reinstatement?

3213.21 When will my lease expire?

3213.22 Will BLM notify me when my lease expires if it is in an

extended term?

3213.23 May BLM cancel my lease?

3213.24 When is a cancellation effective?

Subpart 3214--Personal and Surety Bonds

3214.10 Who must post a geothermal bond?

3214.11 Who is covered by the bond?

3214.12 What does my bond cover?

3214.13 What is the minimum dollar amount required under each type

of operation bond?

3214.14 What kind of financial guarantee will BLM accept to back my

bond?

3214.15 Is there a special bond form I must use?

3214.16 Where must I submit my bond?

3214.17 Who will BLM hold liable under the bond and what are they

liable for?

3214.18 What are my bonding requirements when a lease interest is

transferred to me?

3214.19 How do I modify the terms and conditions of my bond?

3214.20 Can BLM ever increase the bond amount above the minimums?

3214.21 Where must I get a certificate of deposit or a letter of

credit?

3214.22 What special requirements are there if I want to use a

certificate of deposit to back my bond?

3214.23 What special requirements are there if I want to use a

letter of credit to back my bond?

Subpart 3215--Bond Collection After Default

3215.10 In what circumstances does BLM collect on a bond?

3215.11 As the principal on the bond, may BLM require me to restore

the face amount of my bond or require me to replace my bond after

BLM collects on default?

3215.12 What if I do not restore the face amount or file a new

bond?

3215.13 When will BLM cancel or terminate my bond?

Subpart 3216--Transfers

3216.10 What types of lease interests can I transfer?

3216.11 Where and when am I required to file a transfer of

interest?

3216.12 When does a transferee assume responsibility for lease

obligations?

3216.13 What are the responsibilities of the transferor?

3216.14 Are there required filing fees and forms associated with

filing my transfer?

3216.15 Is there a required time frame for filing requests for

approval of transfers?

3216.16 Must I file separate requests for approval of transfers for

each lease?

3216.17 Where must I file estate transfers, corporate mergers and

name changes?

3216.18 How do I describe the lands in my lease transfer?

3216.19 Can I transfer record title interest for less than 640

acres?

3216.20 When does an assignment segregate a lease?

3216.21 When is my assignment/transfer effective?

3216.22 Does BLM grant all requests for approval of transfer?

Subpart 3217--Cooperative Conservation Provisions

3217.10 What is the purpose of unit agreements and cooperative

plans?

3217.11 What is the purpose for communitization or drilling

agreements?

3217.12 What information regarding a proposed communitization or

drilling agreement must you submit to BLM?

3217.13 When is a communitization or drilling agreement effective?

3217.14 Under what conditions will BLM approve operating, drilling

or development contracts?

3217.15 What information must I submit to BLM regarding proposed

operating, drilling or development contracts?

Subpart 3250--Exploration Operations--General

3250.10 What is the purpose, scope and authority of the subparts

pertaining to exploration operations?

Subpart 3251--Permitting of Exploration Operations

3251.10 What types of operations may I propose when submitting an

application for an exploration permit?

3251.11 May I conduct exploration operations on my lease, someone

else's lease or unleased land?

3251.12 Do I need a permit prior to conducting exploration

operations?

[[Page 52743]]

3251.13 What information must I submit with my application for an

exploration permit?

3251.14 What action will BLM take on my permit?

3251.15 How do I receive BLM approval to change permitted

exploration operations?

3251.16 Must I submit data obtained through exploration operations

to BLM?

3251.17 Are there any bonding requirements for conducting

exploration operations?

3251.18 When will the bond be released?

Subpart 3252--Conducting Exploration Operations

3252.10 What operational requirements must I meet when conducting

exploration operations?

3252.11 What environmental requirements must I meet when conducting

exploration operations?

3252.12 How deep may I drill a temperature gradient well?

3252.13 How long may I collect information from my temperature

gradient well?

3252.14 What are the requirements for completing and abandoning a

temperature gradient well?

3252.15 Must I notify BLM when I have completed my exploration

operations?

Subpart 3254--Inspection, Enforcement, and Noncompliance

3254.10 Will BLM inspect my exploration operations?

3254.11 What action may BLM take if my exploration operations are

not in compliance?

Subpart 3255--Exploration Operations Relief and Appeals

3255.10 May I request variances from notices to lessees, permit

conditions of approval, and operational or other orders issued by

the BLM?

3255.11 How may I appeal a BLM decision regarding my exploration

operations?

Subpart 3260--Geothermal Drilling Operation--General

3260.10 What types of geothermal operations are covered under this

subpart?

3260.11 What standards apply to my drilling operations?

3260.12 Can BLM issue additional orders or instructions?

Subpart 3261--Permitting of Drilling Operations

3261.10 What approval must I obtain prior to well pad construction

drilling?

3261.11 What information must I submit to get approval for drilling

operations or well pad construction?

3261.12 What is a plan of operations?

3261.13 When must I have an approved plan of operations?

3261.14 Must I submit my drilling permit application and plan of

operations at the same time?

3261.15 Can a plan of operations and drilling permit apply to more

than one well?

3261.16 How do I amend a plan of operations or a drilling permit

application?

3261.17 Do I need a bond before I build a well pad or drill a well?

3261.18 How will BLM review my application documents and notify me

of their status?

3261.19 How do I get approval to change an approved drilling

operation?

3261.20 How do I get approval for subsequent well operations?

Subpart 3262--Conducting Drilling Operations

3262.10 What operational requirements must I meet when drilling a

well?

3262.11 What environmental requirements must I meet when drilling a

well?

3262.12 Must I post a sign at every well?

3262.13 Can BLM require well spacing?

3262.14 Can BLM require me to take samples or perform tests and

surveys?

Subpart 3263--Well Abandonment

3263.10 May I abandon a well without notifying BLM?

3263.11 What information must I submit to get my sundry notice for

abandonment approved?

3263.12 How will BLM review my sundry notice for abandonment and

notify me of its status?

3263.13 What must I do to restore the site?

3263.14 Can BLM require me to abandon a well?

3263.15 Can I abandon a producible well?

Subpart 3266--Reports

3266.10 What information must I submit after completing a well?

3266.11 What information must I submit after completing subsequent

well operations?

3266.12 What information must I submit after abandoning a well?

3266.13 What well records must I maintain for each well?

3266.14 Must I notify BLM of accidents occurring on my lease?

Subpart 3267--Confidential, Proprietary Information

3267.10 Must I identify confidential information that I submit to

BLM?

3267.11 Will BLM treat information marked as confidential, as such?

3267.12 How long will confidential information I submit to BLM

remain confidential?

Subpart 3268--Inspection, Enforcement, and Noncompliance

3268.10 What part of my drilling operation can BLM inspect?

3268.11 What action can BLM take if my operations are in

noncompliance?

Subpart 3269--Geothermal Drilling Operations Relief and Appeals

3269.10 May I request a variance from notices to lessees, permit

conditions of approval, and operational and other orders issued by

BLM?

Subpart 3270--Utilization of Geothermal Resources--General

3270.10 What types of geothermal operations are permitted under

this part?

3270.11 What standards apply to my utilization operations?

3270.12 What are my responsibilities for utilizing geothermal

resources on a lease?

Subpart 3271--Permitting of Utilization Operations

3271.10 How do I obtain authorization to construct and test a

utilization facility?

3271.11 How do I obtain authorization to begin commercial

operations?

Subpart 3272--The Contents and Review of a Plan of Utilization and

Utilization Permit

3272.10 What must I do prior to commencing site preparation,

construction and testing of the facility?

3272.11 What information must I submit in a plan of utilization?

3272.12 How should I describe the proposed facility?

3272.13 How should I describe the environmental protection measures

I intend to take?

3272.14 How will BLM review my plan of utilization and notify me of

its status?

3272.15 How do I obtain authorization to construct and test my

facility?

Subpart 3273--Applying for and Obtaining a Site License

3273.10 When do I need a site license?

3273.11 Are there any situations in which I do not need a site

license?

3273.12 What if the lands I want a license for are not administered

by BLM?

3273.13 Are any lands not available for geothermal site licenses?

3273.14 What area does a site license include?

3273.15 What information must I include in my site license

application?

3273.16 What is the annual rental for a site license or direct use

facility?

3273.17 Can BLM reassess the annual rental for my site license?

3273.18 Must all facility operators pay the annual site license

rental?

3273.19 What are the bonding requirements for a site license?

3273.20 What are my obligations under the site license?

3273.21 How long will my site license remain in effect?

3273.22 May BLM terminate my site license?

3273.23 May I relinquish my site license?

3273.24 May I assign or transfer my site license?

3273.25 What if my site license application involves lands under

the jurisdiction of another agency?

[[Page 52744]]

Subpart 3274--Submitting a Joint Utilization Agreement

3274.10 What is the purpose of a joint utilization agreement?

3274.11 Which parties must sign the joint utilization agreement?

Subpart 3275--Applying for and Obtaining a Production Permit

3275.10 What information must I include in my application for a

production permit?

3275.11 How will BLM review my application for a production permit?

3275.12 Can I get an authorization even if I cannot prove I can

operate within required standards?

Subpart 3276--Conducting Utilization Operations

3276.10 Can I change my approved plan of utilization or production

permit?

3276.11 What are the facility operator's obligations?

3276.12 Are there environmental and safety requirements for lease

operations?

3276.13 Are there reporting requirements for lease operations?

3276.14 What information must be included for each well in monthly

well reports?

3276.15 What information must be included in the monthly report for

generation facilities?

3276.16 What additional information must be submitted in the

monthly report for flash and dry facilities?

3276.17 What information must be included in the monthly report for

direct use facilities?

3276.18 Does the facility operator have to measure the geothermal

resources?

3276.19 What aspects of my geothermal operations must I measure?

3276.20 How accurately must I measure my production and

utilization?

3276.21 To what standards must I install and maintain my meters?

3276.22 What must I do if I find an error in a meter?

3276.23 May BLM require me to test for byproducts associated with

the production of geothermal resources?

3276.24 May I commingle production?

3276.25 What action will BLM take if I waste geothermal resources?

3276.26 Can BLM order me to drill and produce wells on my lease?

Subpart 3277--Inspection, Enforcement, and Noncompliance

3277.10 Will BLM inspect my operations?

3277.11 What records must I keep available for inspection?

3277.12 What actions may BLM take if I am in noncompliance?

Subpart 3278--Utilization Relief and Appeals

3278.10 May I request a variance from notices of lessees, permit

conditions of approval, and operational and other orders issued by

BLM?

3278.11 Can I appeal a BLM decision regarding my utilization

operations?

Authority: 5 U.S.C. 552; 30 U.S.C. 1001-1027; 43 U.S.C. 1733,

1740.

Subpart 3200--Geothermal Resource Leasing

Sec. 3200.1 What are the meanings of terms I need to know to

understand the regulations in this part?

Act means the Geothermal Steam Act of 1970, as amended (30 U.S.C.

1001 et seq.).

Additional term means the 40 years beyond the primary term of a

producing lease. The additional term is granted when geothermal steam

is produced or utilized in commercial quantities within the primary

term. This differs from an extended term because additional terms

constitute a new lease term; whereas extensions lengthen the primary

term without creating a new term. See the procedures in subpart 3207 of

this part.

Assignment means a transfer of all or a portion of the lessee's

record title interest in a lease.

Byproducts are minerals (exclusive of oil, hydrocarbon gas, and

helium) which are found in solution or in association with geothermal

steam that are not of sufficient value to warrant extraction and

production by themselves because they have a value of less than 75% of

the value of the geothermal steam or because of technical difficulties

in extraction and production.

Casual use means activities that ordinarily lead to no more than

negligible disturbance or damage to lands, resources, or improvements.

Commercial quantities means either:

(1) For production from a lease, a sufficient volume (in terms of

flow and temperature) of the resource to provide a reasonable return

after all variable costs of production are met; or

(2) For production from a unit, a sufficient volume of the resource

to provide a reasonable return after all variable costs of production

and drilling are met.

Cooperative agreement means an agreement for the production and

utilization of separately owned interests in the geothermal resources

in which separate ownership units are independently operated without

allocation of production.

Development contract means an agreement between one or more lessees

and one or more entities which, when approved by BLM, facilitates

resource exploration and serves to protect the public interest.

Exploration operations means any activity relating to the search

for evidence of geothermal resources. This activity requires physical

presence on the land and may result in damage to public lands or

resources. Exploration includes, but is not limited to, geophysical

operations such as drilling shallow temperature gradient wells or holes

used for explosive charges for seismic exploration. It also includes

related construction of roads and trails, and cross-country transit by

vehicles over public land. Exploration operations do not include the

production or utilization of geothermal resources, which may only be

conducted under a lease and in accordance with the regulations of this

part (see subparts 3260 and 3270 of this part).

Extended term means an initial and any successive 5-year period

beyond the primary term of a lease during which BLM will grant the

lessee the right to continue activities under the existing lease.

Extensions differ from an additional term because they serve to extend

the primary term, rather than creating a new one. See the procedures in

subpart 3208 of this part.

Facility operator means the entity receiving authorization from BLM

to site, construct, test and/or operate a utilization facility. A

facility operator may be a lessee, a unit operator, or a third party.

Geothermal exploration permit is an application you submit

describing proposed exploration operations and which, when approved by

BLM, authorizes geothermal exploration operations and associated

surface disturbance.

Geothermal resources operational order means a formal, numbered

order, issued by BLM, that implements or enforces the regulations in

this Part.

Geothermal steam and associated geothermal resources are products

of geothermal steam or hot water and hot brines, including those

resulting from water, gas, or other fluids artificially introduced into

geothermal formations, heat or other associated energy found in

geothermal formations, and byproducts derived from these.

Geothermal sundry notice is a written request submitted by an

operator for permission to deviate from operations in a previously

approved permit or sundry notice. A geothermal sundry notice may also

be submitted to obtain permission to perform work not otherwise covered

in a permit or sundry notice.

Joint utilization agreement means an agreement between a facility

operator and a Federal lessee or unit operator, if the two entities are

different, which permits a facility operator to construct a utilization

facility on Federal lands leased for geothermal resources. The

agreement must provide for the construction, testing and operation of a

utilization facility on the lease.

Known geothermal resource area (KGRA) is an area where BLM

determines that persons knowledgeable

[[Page 52745]]

in geothermal development would expend money to develop geothermal

resources. For more information on how BLM determines KGRAs, see 43 CFR

3203.11.

MMS means the Minerals Management Service.

Notice to lessees means a written notice issued by BLM that

implements the regulations in this part or geothermal resource

operational orders, and provides more specific instructions on

geothermal issues within a state, district or resource area.

Operating rights owner means a person or entity holding operating

rights in a lease. A lessee is also an operating rights owner if the

operating rights or a portion of them have not been severed from record

title.

Operator means any person or entity who has assumed responsibility

for the operations conducted on the leased lands.

Plan of utilization means a plan which fully describes the

utilization facility, including measures for environmental protection

and mitigation. An approved plan of utilization permits the siting of a

utilization facility on federal lands.

Primary term means the first 10 years of a lease, not including any

periods of suspension.

Produced or utilized in commercial quantities means a well

producing geothermal resources in commercial quantities, or the

completion of a well capable of producing geothermal resources in

commercial quantities when BLM determines the lessee is diligently

attempting to utilize the geothermal steam.

Production permit means authorization from BLM allowing for the

production of geothermal resources from federal lands.

Public domain lands or public lands means lands, including mineral

estates, that never left the ownership of the United States, were

obtained in exchange, reverted to the ownership of the United States

through the operation of the public land laws, or have been identified

by Congress as part of the public domain.

Record title means an interest in a lease which includes the

responsibility for paying rent and the right to assign and relinquish

the lease.

Relinquishment means action taken by the lessee to voluntarily end

the lease in whole or in part.

Shallow temperature gradient wells means a well drilled up to 500

feet deep for the purpose of obtaining information on the change in

temperature over the depth of the well in order to extrapolate

temperatures at a greater depth.

Site license means authorization from BLM allowing the construction

of a utilization facility on leased Federal lands.

Stipulation means a condition attached by BLM to a lease or permit.

Temperature gradient wells means a well drilled to a depth of 4000

feet or more for the purpose of obtaining information on the change in

temperature over the depth of the well in order to extrapolate

temperatures at a greater depth.

Termination means the cancellation of a lease due to nonpayment of

annual rental, cessation of production, or other action by the lessee

which breaches the contract.

Transfer means conveyance of any interest a party may have in a

Federal lease. This definition includes the terms assignment and

sublease.

Unit agreement means an agreement for the exploration, production

and utilization of separately owned interests in geothermal resources

as a single consolidated unit without regard to separate ownerships and

which provides for the allocation of costs and benefits on a basis

defined in the agreement.

Unit area means all tracts committed to an approved unit agreement.

Unit operator means any person or entity that has stated in writing

to BLM that it is responsible for the operations conducted under the

unit agreement and is so designated in the unit agreement.

Unitized substances means geothermal resources recovered from lands

committed to a unit agreement.

Utilization permit means authorization from BLM allowing site

preparation, construction, and testing of a utilization facility.

Waste means:

(1) Physical waste, including refuse; and/or

(2) Improper use or unnecessary dissipation of geothermal resources

through inefficiency in drilling, production, transmission, or

utilization.

Working Interest means an interest granted by a lease, operating

agreement or other authorizing document in geothermal resources

conveying the right to explore for, develop, produce, and use

geothermal resources, except that such rights delegated to a unit

operator by a unit agreement are not working interests.

Sec. 3200.2 Information collection.

(a) The collection of information contained in this part has been

approved by the Office of Management and Budget under 44 U.S.C. 3501 et

seq. and assigned clearance numbers 1004-0034, 1004-0074, 1004-0132 and

1004-0160. The information will be used to maintain an orderly program

for leasing, development and production of Federal geothermal

resources, to evaluate technical feasibility and environmental impacts

of geothermal operations on Federal and Indian lands, and to determine

whether exploration expenditures meet the requirements for diligence

credit under 43 CFR 3202.5. The public must respond to the requests for

information in order to obtain a benefit.

(b) Public reporting burden for this information is estimated to

average 1.6 hours per response, including the time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Send comments regarding this burden

estimates or any other aspects of this collection of information,

including suggestions for reducing the burden, to Administrative

Record, Bureau of Land Management, Room 401 LS, 1849 C Street, NW.,

Washington, DC 20240; and the Paperwork Reduction Project (1004-0160),

Office of Management and Budget, Washington, DC 20503.

(c) There are many leases and agreements currently in effect, and

which will remain in effect, involving Federal geothermal resources

leases that specifically refer to the United States Geological Survey,

USGS, Minerals Management Service, MMS, or Conservation Division. These

leases and agreements may also specifically refer to various officers

such as Supervisor, Conservation Manager, Deputy Conservation Manager,

Minerals Manager, and Deputy Minerals Manager. In addition, many leases

and agreements specifically refer to 30 CFR part 270 or a specific

section thereof. Those references must now be read to mean either the

Bureau of Land Management or the Minerals Management Service as

appropriate.

Sec. 3200.3 What are my rights of appeal?

You may appeal any decision made by BLM under this part in

accordance with 43 CFR parts 4 and 1840.

Subpart 3201--Available Lands

Sec. 3201.10 What lands are available for geothermal leasing?

(a) BLM may issue leases on:

(1) Lands administered by the Department of the Interior, including

public, withdrawn and acquired lands;

(2) Lands administered by the Department of Agriculture with its

concurrence;

[[Page 52746]]

(3) Lands conveyed by the United States where the geothermal

resources were reserved to the United States; and

(4) Lands subject to section 24 of the Federal Power Act, as

amended (16 U.S.C. 818), with concurrence from the Secretary of Energy.

(b) BLM will not issue, extend, review or modify a lease that would

result in a significant adverse effect on a significant thermal feature

within a unit of the National Park system. If BLM determines such a

potential exists, we will include in any lease action all stipulations

required by law and necessary to protect such features.

Sec. 3201.11 What lands are not subject to geothermal leasing?

BLM will not issue leases for:

(a) Lands where the Secretary has determined that issuance of the

lease would cause unnecessary or undue degradation;

(b) Lands that are contained within a unit of the National Park

System, or are otherwise administered by the National Park Service;

(c) Lands within a national recreation area;

(d) Lands where the Secretary determines that geothermal operations

are reasonably likely to result in a significant adverse effect on a

significant thermal feature within a unit of the National Park System;

(e) Fish hatcheries or wildlife management areas administered by

the Secretary;

(f) Indian trust or restricted lands within or without the

boundaries of Indian reservations;

(g) The Island Park Geothermal Area; and

(h) Lands where section 43 of the Mineral Leasing Act (30 U.S.C.

226-3) prohibits leasing which includes:

(1) Wilderness areas or wilderness study areas administered by BLM

or other surface management agencies;

(2) Lands designated by Congress as wilderness study areas, except

where leasing is specifically allowed to continue by the statute

designating the study area; and

(3) 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 are released to

uses other than wilderness by an act of Congress.

Subpart 3202--Lessee Qualifications

Sec. 3202.10 Who can hold a geothermal lease?

You may hold a geothermal lease if you are:

(a) A citizen of the United States who has reached the age of

majority;

(b) An association, including a partnership, of United States

citizens;

(c) A corporation organized under the laws of the United States,

any state or the District of Columbia; or

(d) Any domestic governmental unit.

Sec. 3202.11 Must I prove I can hold a lease when filing a lease

offer?

Ordinarily you do not need to submit proof at the same time you

submit the offer, but BLM has the right to request information

regarding your qualifications at any time, including when you submit

your offer. If BLM requires additional information, you have 30 days

from your receipt of the request to submit the information.

Sec. 3202.12 Are other persons allowed to act in my behalf?

Yes, one person may act on behalf of another, provided he or she

notifies BLM. The person taking the action must sign the document, note

his or her title, identify the person on whose behalf he or she is

acting, and be qualified to hold a lease under 43 CFR 3202.10. BLM may

require the person to provide written proof of his or her

qualifications and authority to take such action.

Sec. 3202.13 What happens if the offeror dies before the lease is

issued?

If the offeror dies before the lease is issued, BLM will issue the

lease to either the administrator or executor of the estate or the

heirs. If the heirs are minors, BLM will issue the lease to either a

legal guardian or trustee, provided that the legal guardian or trustee

is also qualified to hold a lease under 43 CFR 3202.10.

Subpart 3203--Obtaining a Lease

Sec. 3203.10 How can I obtain a geothermal lease?

You must first determine if the lands are located in a known

geothermal resource area (KGRA). BLM leases lands within a KGRA through

a competitive sale. If the lands you wish to lease are within a KGRA,

you must follow the procedures for submitting a bid set out in subpart

3205 of this part. BLM issues a competitive lease to the person or

entity submitting the highest qualified bid. BLM leases available lands

outside a KGRA noncompetitively. You may lease lands outside a KGRA by

submitting an offer following the procedures set out in subpart 3204 of

this part. BLM issues noncompetitive leases to the first qualified

applicant. BLM may issue a lease for a fractional interest if we

determine the public interest is well served by doing so.

Sec. 3203.11 How is a KGRA determined?

BLM determines the boundaries of a KGRA based on the following

indicators:

(a) Geologic and technical evidence that indicates persons

knowledgeable in geothermal resource development would spend money

developing the area;

(b) Lands within 5 miles of a well capable of production in

commercial quantities, or all lands in the same geologic structure,

regardless of the distance from the well capable of production in

commercial quantities; and

(c) Where competitive interest exists. Competitive interest exists

where more than one person expresses interest in leasing an area for

geothermal resources.

Subpart 3204--Noncompetitive Leasing

Sec. 3204.10 How do I file an offer to lease?

You or your authorized agent must submit three (3) executed copies

of current Form 3200-24 to BLM. At least one form must have an original

signature. We will accept only exact copies of the form on one two-

sided page, to match the original. The application must accurately

describe the lands covered by your application. You may obtain this

form (and other BLM forms) by contacting the nearest BLM Office.

Sec. 3204.11 How do I describe the lands in my lease offer?

You must describe the lands as follows:

(a) For lands surveyed under the public land rectangular survey

system, describe the lands by legal subdivision, section, township, and

range;

(b) 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;

(c) For approved protracted surveys, include an entire section,

township, and range. Do not divide protracted sections into aliquot

parts;

(d) Discuss offers for unsurveyed lands in Louisiana and Alaska

that have water boundaries with BLM prior to submission; and

(e) For fractional interest lands, identify the United States

mineral ownership by percentage.

[[Page 52747]]

Sec. 3204.12 What fees must accompany my offer?

You must submit a nonrefundable filing fee of $75 for each offer

and advance rental in the amount of $1 per acre, or fraction of an

acre. BLM will refund the advance rental if we reject the offer, or you

withdraw the offer before BLM accepts it. If your advance rental is

deficient by more than 10 percent, BLM will reject the offer.

Sec. 3204.13 May I combine acquired and public domain lands on the

same offer?

Yes, as long as you clearly identify both the acquired lands and

the public domain lands.

Sec. 3204.14 What are the minimum and maximum acreage requirements for

my offer?

The minimum size of a lease is 640 acres. Your offer must include

all available lands in the section. If the section contains lands not

available for leasing, the lease must include all the available lands

in the section, which is then the minimum size of the lease. The

maximum size of a lease is 2560 acres, although BLM will make an

exception to this requirement when an offer includes an irregular

subdivision. Leases must not extend outside a 6 mile square area.

Sec. 3204.15 What happens when two or more applicants apply for a

noncompetitive lease for the same land?

BLM begins processing applications as soon as they are received.

Once BLM approves a noncompetitive lease application, any later

applications received for the same land are rejected. However, if BLM

receives additional applications for the same land while the original

application is still pending, BLM must determine if the overlapping

applications warrant converting the land at issue to a KGRA.

(a) If BLM determines that the land should be considered a KGRA,

then all noncompetitive applications are rejected, and applicants must

follow the procedures for competitive bidding to obtain a lease.

(b) If BLM determines that KGRA status is not warranted despite the

multiple applications, then the lease will be awarded to the first

qualified applicant.

Sec. 3204.16 How does BLM determine the first qualified applicant?

BLM determines the first qualified applicant by the priority in

which the application is filed. BLM issues a noncompetitive lease to

the offeror who is first to file an application that meets all the

application requirements.

Sec. 3204.17 May I withdraw my offer?

Yes, you may withdraw your offer in whole or in part prior to lease

issuance, provided the remaining lands in a partial withdrawal comply

with the acreage requirements.

Sec. 3204.18 May I amend my offer?

Yes, you may amend your offer prior to lease issuance provided your

amended offer complies with all the lease offer requirements. BLM will

give your amended offer a new priority based on the date we receive it.

Subpart 3205--Competitive Leasing

Sec. 3205.10 How does BLM lease competitive lands?

BLM leases Federal lands within KGRAs through a sealed bid,

competitive sale process. BLM generally establishes parcels of lands

available for competitive leasing from terminated, expired, or

relinquished leases and from public expressions of interest. BLM lists

these parcels, with stipulations, if applicable, in a sale notice,

posts the notice in an appropriate BLM office and publishes the notice

for 3 consecutive weeks in a newspaper of general circulation in the

area of the lands. The sale notice will tell you which lands are

offered, and where and when to submit your bids. BLM can request you to

pay the cost of publication, if you are awarded the lease.

Sec. 3205.11 How do I obtain information on the terms and conditions

of the leases being offered through competitive bidding?

BLM will post a statement which will include the terms and

conditions of the lease(s), including the rental and royalty rates. The

statement will also tell you where you may obtain a form on which to

submit your bid.

Sec. 3205.12 How do I bid for a parcel?

Unlawful combination or intimidation of bidders is prohibited by 18

U.S.C. 1860. You must follow these procedures:

(a) Submit your bid to the BLM office indicated in the notice prior

to the date and time specified in the sale notice;

(b) Submit your bid on Form 3000-2 (or exact copy);

(c) Submit a bid in a separate, sealed envelope for each full

parcel;

(d) Include in each bid a certified or cashier's check, bank draft,

or money order equal to one-fifth of the amount bid, payable to the

``Department of the Interior, Bureau of Land Management;'' and

(e) Label each envelope with the parcel number and the statement

``Not to be opened before (date posted in the sale notice).''

Sec. 3205.13 What is the minimum acceptable bid?

BLM will not accept bids which do not meet or exceed the fair

market value as determined by BLM in accordance with generally

acceptable appraisal methods. BLM determines the fair market value

prior to the sale, but does not disclose it to the public.

Sec. 3205.14 How does BLM conduct the sale?

On the date, and at the place and time set out in the sale notice,

BLM opens, announces, and records bids. BLM does not accept or reject

any bid at that time. Bidders are not required to attend the sale.

Sec. 3205.15 To whom does BLM issue the lease?

BLM will issue the lease to the highest responsible qualified

bidder within 30 days. If BLM determines that the highest bid is

inadequate, BLM will reject the bid. BLM reserves the right to reject

any and all bids.

Sec. 3205.16 How will I know if my bid is accepted?

(a) BLM will send you a letter accepting your bid. The letter will

be accompanied by 3 copies of the lease. Upon receipt of the letter and

lease forms, you have 15 days in which to submit:

(1) The signed lease forms;

(2) The remaining four-fifths of the bonus bid;

(3) The first year's advance rental; and

(4) Signed stipulations, if applicable.

(b) If you fail to comply with these requirements BLM will revoke

acceptance of your bid and you will forfeit one-fifth of your bonus

bid.

Sec. 3205.17 How will I know if my bid is not accepted?

BLM will send a letter rejecting your bid. At that time, BLM will

return the one-fifth of the bonus bid that you submitted with your

application.

Subpart 3206--Lease Issuance

Sec. 3206.10 Are there any additional requirements prior to lease

issuance?

Yes.

(a) You must:

(1) Accept all lease stipulations;

(2) Sign a unit joinder or waiver, if applicable; and

(3) Comply with the maximum limits on acreage holdings.

(b) BLM must:

(1) Make a determination of land availability;

(2) Make a determination that development on your lease will not

significantly impact any significant

[[Page 52748]]

thermal feature within any of the following units of the National Park

System:

(i) Mount Rainier National Park;

(ii) Crater Lake National Park;

(iii) Yellowstone National Park;

(iv) John D. Rockefeller, Jr. Memorial Parkway;

(v) Bering Land Bridge National Preserve;

(vi) Gates of the Arctic National Park and Preserve;

(vii) Katmai National Park;

(viii) Aniakchak National Monument and Preserve;

(ix) Wrangell-St. Elias National Park and Preserve;

(x) Lake Clark National Park and Preserve;

(xi) Hot Springs National Park;

(xii) Big Bend National Park (including that portion of the Rio

Grande National Wild Scenic River within the boundaries of Big Bend

National Park);

(xiii) Lassen Volcanic National Park;

(xiv) Hawaii Volcanoes National Park;

(xv) Haleakala National Park;

(xvi) Lake Mead National Recreation Area; and

(xvii) Any other significant thermal features within National Park

System Units which the Secretary may, after notice and public comment,

in accordance with the criteria set out in 30 U.S.C. 1026(a)(3), add to

the list of significant thermal features.

Sec. 3206.11 What is the maximum acreage I may hold?

You may not hold, either directly or indirectly, more than 51,200

acres in any one state, including any leases acquired under the

provisions of sections 4(a)-4(f) of the Act. You are also not permitted

to convert mineral leases, permits, applications for permits, or mining

claims, pursuant to the provision of sections 4(a)-4(f) of the Act,

into geothermal leases totaling more than 10,240 acres.

Sec. 3206.12 How does BLM compute acreage holdings?

BLM will compute acreage holdings in the following manner:

(a) If you own an undivided interest in a lease, your accountable

acreage will be your proportionate part of the total lease acreage.

(b) If you own stock in a corporation or a beneficial interest in

an association which holds a geothermal lease, your accountable acreage

will be your proportionate part of the corporation's or association's

acreage; except no one will be charged with a pro rata share of any

acreage holdings of any association or corporation unless the person is

a beneficial owner of more than 10% of the stock of the corporation or

the beneficial interest of the association.

(c) If you own a royalty interest, record title, or operating

rights, you will be charged with your proportionate percentage of the

total lease acreage only. You will not be charged twice for the same

lease or for different interests in the same lease. For example, if you

own a 2% overriding royalty, 10% of the operating rights and 50% of the

record title in a lease, you will be charged with 50% of the total

lease acreage.

Sec. 3206.13 Am I charged for acreage if the United States owns only

a fractional interest in the geothermal resources?

Yes, you are charged with the same proportion as the United States

owns of the mineral estate. For example, if you own 100% of record

title in a 100 acre lease, and the United States owns 50% of the

mineral estate, you are charged with 50 acres.

Sec. 3206.14 Are there any acreages which are not chargeable?

BLM does not count acreage in any approved unit or cooperative plan

or acreage subject to an operating, drilling or development contract

other than communitization or drilling agreements, in determining

accountable acreage of the lessees or operators.

Sec. 3206.15 What procedures does BLM follow when a party holds or

controls excess accountable acreage?

BLM will notify you of an excess acreage situation, and give you 90

days to divest yourself of the excess acreage. If you fail to comply

BLM will cancel your leases, beginning with the lease most recently

issued, until your chargeable acreage is within the maximum allowable.

Sec. 3206.16 What is the primary term of my lease?

Leases have a primary term of 10 years.

Sec. 3206.17 When will BLM issue my lease?

Leases are issued the day they are signed by BLM, and are effective

the first day of the month following the issue date.

Subpart 3207--Additional Lease Term

Sec. 3207.10 Under what circumstances is my lease eligible for an

additional term beyond its primary term?

A lease is eligible to be renewed for an additional term under the

following conditions:

(a) If you produce or use geothermal steam in commercial quantities

within the primary term, the lease will continue for as long as

geothermal steam is produced or used in commercial quantities. However,

the additional term may not exceed forty years beyond the primary term

unless the provisions of paragraph (c) of this section apply.

(b) If, prior to the end of the primary term, you have a well

capable of producing geothermal steam in commercial quantities, BLM may

decide to continue the lease for an additional forty-year period, if we

determine that you are making diligent efforts to commence production.

You must submit to BLM a written description of the efforts completed

for the lease year and the efforts planned for the next lease year 60

days before the lease expires. Your submission should include

descriptions of negotiations for sales contract, marketing

arrangements, and electrical generating and transmission agreements and

any other information you believe supports a finding of diligent

efforts.

(c) If at the end of the additional 40-year term, BLM does not need

the lands for another purpose and you are producing geothermal steam in

commercial quantities, you will have preferential right to renew the

lease for an additional 40-year term under terms and conditions

determined by BLM.

Subpart 3208--Extending the Current Lease Term

Sec. 3208.10 Under what circumstances is my lease eligible for an

extension of the primary term?

(a) A lease is eligible for an extension under the following

circumstances:

(1) If you commence drilling before the end of the primary term and

diligently pursue drilling to a reasonable drilling target, as

determined by BLM based on the local geology and type of development

proposed by the operator, the lease will be extended for a 5-year

period. If geothermal steam is produced or utilized during this 5-year

period, the lease will be extended for a further period not to exceed

35 years. If at the end of that 35-year period you are producing or

utilizing geothermal steam in commercial quantities and the lands are

not needed for other purposes, you will have a preferential right to

renew the lease for an additional 40-year period under such terms and

conditions as BLM determines are appropriate.

(2) If the term of any lease committed to a unit agreement would

expire prior to the term of the unit expiring, BLM will extend the term

of the lease to match the term of the unit.

(3) BLM may extend any lease which at the end of its primary term

or at the end of an extension provided by either

[[Page 52749]]

paragraphs (a)(1) or (a)(2) of this section is not producing geothermal

steam, for up to 10 years in successive five-year extensions.

(4) If you have a lease which produced geothermal steam, and BLM

determines that it is no longer capable of commercial production, BLM

may extend the lease for a 5-year period. This extension will only

continue if you are producing one or more valuable byproducts in

commercial quantities. You should consult 43 CFR 3209.10 if you wish to

convert your lease to a mineral lease for the byproduct.

(b) For an explanation of the difference between an ``additional

term'' and an ``extended term'' please see the definitions in 43 CFR

3200.1.

Sec. 3208.11 What procedures must I follow to obtain an extension of

my lease?

(a) If you are obtaining an extension under 43 CFR 3208.10 (a)(2)

or (a)(4), you need not take any action. BLM will grant your lease the

applicable extension. If your lease is eligible for the extension under

43 CFR 3208.10(a)(1), you should notify BLM of your drilling activities

so we may document that you conducted the required drilling at the end

of the primary term of your lease.

(b) If you are requesting an extension under 43 CFR 3208.10(a)(3),

you must:

(1) Submit a written request to BLM for lease extension 60 days

prior to the end of the primary or extended term of your lease;

(2) Include a report documenting that you have made bona fide

efforts to produce or utilize geothermal resources in commercial

quantities given the current economic conditions for marketing

geothermal steam; and

(3) Indicate whether you choose to make payments in lieu of

commercial quantities production or to make significant expenditures

during the period of extension.

(c) Within 30 days of receipt of your request for extension, BLM

will notify you whether the request is approved or disapproved, or we

will request additional information from you, if necessary.

Sec. 3208.12 What information must I include in the report to

document that I have made bona fide efforts?

The report must include a description of:

(a) Operations conducted during the primary term of the lease and

currently in progress to identify and define the geothermal resource on

the lease;

(b) A summary of the results of those operations;

(c) Actions taken in support of operations such as obtaining

permits, conducting environmental studies, meeting permit requirements

or other related activities;

(d) Actions taken during the primary term of the lease and

currently in progress to negotiate marketing arrangements, sales

contracts, drilling agreements, financing for electrical generation and

transmission projects, or other related actions; and

(e) Current economic factors and conditions which affect your

efforts to produce or utilize geothermal resources in commercial

quantities on the lease.

Sec. 3208.13 What will BLM do if I choose to make payments in lieu of

commercial operation?

If you elect to make payments in lieu of commercial quantities

production and BLM approves the extension, BLM will modify the lease to

require that you make an annual payment in lieu of production in the

amount specified by BLM, but not less than $3.00 per acre or fraction

of an acre of the lands under lease during an initial extension, or

$6.00 per acre or fraction of an acre for a subsequent extension. The

actual payment per acre is fixed for the period of the extension. If

you request it, BLM will inform you of the rate before you submit your

petition for extension. You must submit in lieu payments to MMS at the

same time you pay the lease rental. The lease is subject to

cancellation if you do not make these payments.

Sec. 3208.14 What will BLM do if I choose to make significant

expenditures?

If you elect to make significant expenditures, and BLM approves the

extension, we modify the lease to require you to make annual

expenditures of at least $15.00 per acre or fraction of an acre for

lands under lease during an initial extension. You must have

expenditures of $18.00 per acre or fraction of an acre during a

subsequent extension. BLM credits expenditures you make in excess of

the minimum required to subsequent years within the same period of

extension. Expenditures that qualify as significant expenditures are

limited to those involving actual drilling operations on the lease,

geochemical or geophysical surveys for exploratory or development

wells, road or generating facility construction on the lease,

architectural or engineering services procured for the design of

generating facilities located on the lease, and environmental studies

required by State or Federal law. To obtain credit toward meeting the

significant expenditure requirement, you must submit to BLM a report of

qualifying expenditures no later than 60 days after the end of the

lease year in which the expenditures were made. BLM may cancel your

lease if you fail to make such expenditures.

Sec. 3208.15 May I change my election of making payments in lieu of

commercial quantities or making significant expenditures during the

extension?

No. You may not change election during a period of extension, but

must continue either to make payments in lieu of production or make

significant expenditures until you drill a well that is capable of

producing geothermal resources in commercial quantities.

Subpart 3209--Conversion of Lease Producing Byproducts

Sec. 3209.10 May I convert my geothermal lease to a mineral lease?

Yes, you may under the following conditions:

(a) If you have received a 5-year extension under subpart 3208 and

the byproducts being produced are leasable under the Mineral Leasing

Act of February 25, 1920, as amended (30 U.S.C. 181 et seq.), or under

the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-358), and the

lease is primarily valuable for the production of that mineral, you are

entitled to convert your geothermal lease to a mineral lease, provided

you convert your lease prior to the end of the 5-year period. You will

be subject to all the terms and conditions of the act permitting

leasing of the mineral.

(b) If the minerals are not leasable but are locatable and would be

considered a byproduct if geothermal steam production were to continue,

you are entitled to locate these minerals under the mining laws. To

acquire these rights, you must complete the location of the mining

claim within 90 days after the termination of the geothermal lease, as

long as there has been no intervening location and the lands are open

to entry under the mining laws.

(c) If leases converted under either paragraphs (a) or (b) of this

section affect lands withdrawn or acquired in aid of a function of a

federal department or agency, including the Department of the Interior,

you may be subject to additional terms and conditions as prescribed by

the appropriate agency.

Subpart 3210--Additional Lease Information

Sec. 3210.10 When does lease segregation occur?

(a) Lease segregation occurs when:

(1) A portion of a lease is committed to a unit agreement,

communitization agreement, drilling agreement, or

[[Page 52750]]

cooperative plan, and a portion of the lease is not committed; or

(2) Only a portion of a lease is located in a participating area

and the unit contracts. The portion of the lease outside the

participating area is eliminated from the unit agreement and segregated

as of the effective date of the unit agreement.

(b) The portion of the lease within the plan or agreement will keep

the same serial number. BLM will give the portion outside the plan or

agreement a new serial number with the same lease terms as the original

lease.

Sec. 3210.11 Is a lease segregated from an agreement or plan eligible

for an extension?

No. The new lease will stand alone, and will not receive any of the

benefits provided to the original lease by virtue of the agreement or

plan. The eliminated portion of the lease is not eligible for extension

due to production in commercial quantities, or the existence of a

producible well on the lands remaining in the agreement or plan, or by

virtue of the segregation.

Sec. 3210.12 May I consolidate leases?

BLM may approve the consolidation of two or more contiguous leases

that have the same ownership and same lease terms, as long as the

combined leases do not exceed 2,560 acres in size.

Sec. 3210.13 What is the diligent exploration requirement?

Diligent exploration is a lease requirement to perform activities

which derive new geologic information regarding the lease or related

lands. You must conduct diligent exploration beginning in the sixth

year of the primary term until there is a well capable of commercial

production. Some examples of activities that would qualify as diligent

exploration are geochemical surveys, heat flow measurement, core

drilling or drilling of test drill wells.

Sec. 3210.14 How do I meet the diligent exploration requirement?

(a) During the first 5 years of the primary term, you only need to

pay your rentals. If you conduct activities during these first five

years that would otherwise qualify as diligent exploration

expenditures, and BLM approves them as such during those five years,

BLM will count them toward the requirements of future years.

(b) To qualify as diligent exploration expenditures in lease years

6 through 10, you must make expenditures equal to the minimum amounts

set forth in the table below. BLM will apply approved expenditures in

excess of the requirement in any one year to subsequent years.

------------------------------------------------------------------------

Expenditure

Lease year per acre

------------------------------------------------------------------------

6.......................................................... $4

7.......................................................... 6

8.......................................................... 8

9.......................................................... 10

10......................................................... 12

------------------------------------------------------------------------

(c) To obtain credit for the expenditures you must submit a report

to BLM no later than 60 days after the end of the lease year in which

you made the expenditures. You must include the following information

in your report:

(1) The types of operations conducted;

(2) The location of the operations;

(3) When the operations occurred;

(4) The amount of money spent conducting those operations; and

(5) All geologic information obtained from your operations.

(d) After BLM reviews your report, we will notify you in writing

whether you have met the diligent expenditure requirement. BLM must

approve the type of work done and the expenditures claimed in your

report before they will be credited toward your diligent exploration

requirements.

Sec. 3210.15 Is there an option to performing diligent exploration?

Yes. If you do not wish to conduct diligent exploration or if your

total expenditures do not fully meet the requirement for any lease

year, you may meet the diligent exploration requirement by paying an

additional rental of $3 per acre or fraction of an acre. If you choose

this option, you must submit the additional rental to MMS prior to the

end of the lease year.

Sec. 3210.16 What happens if I don't meet the diligence requirement or

pay the additional rental?

BLM will cancel your lease if you fail to perform and report the

necessary operations and expenditures or pay the additional rental for

each lease year prior to the end of that lease year.

Sec. 3210.17 Can leases or locations for other mineral commodities

occur on the same lands that my geothermal lease is located?

Yes. The United States reserves the ownership of and the right to

extract helium, oil and hydrocarbon gas from all geothermal steam and

associated geothermal resources. In addition, mineral leasing or

location is allowed on the same lands that are leased for geothermal

resources, provided that operations under the mineral leasing or mining

laws do not unreasonably interfere with or endanger geothermal

operations, and the lands are not withdrawn.

Sec. 3210.18 May BLM readjust the terms and conditions of my lease?

Yes. Ten years after the commencement of production from your lease

and at not less than 10-year intervals thereafter, BLM may readjust the

terms and conditions of your lease as they pertain to stipulations and

surface disturbance requirements. If the readjustment pertains to use,

protection or restoration of the surface and the lands are managed by

another federal agency, that agency must approve the adjustments.

Sec. 3210.19 How will BLM readjust the terms and conditions of my

lease?

BLM will provide you with a written proposal for adjustment of the

terms and conditions of your lease. You have 30 days to object to the

new terms or relinquish your lease. If BLM does not receive an

objection, these terms will become part of your lease.

Sec. 3210.20 May BLM readjust the rental and royalty rates of my

lease?

Yes. Your lease rates are subject to readjustment at not less than

20-year intervals beginning thirty-five years after BLM determines that

your lease is producing. Your rental and royalty will not be increased

by more than 50 percent of what was paid during the preceding period.

In no case will BLM raise the royalty rate beyond 22\1/2\ percent. You

will be provided with written notice of BLM's proposed adjustments. If

you do not object to the adjustment or relinquish your lease within 30

days of receipt of the notice, the new rate will become a part of your

lease.

Sec. 3210.21 What happens if I object to the proposed readjusted terms

and conditions or rental and royalty rates?

BLM will issue a decision responding to your objections. If we

cannot reach an agreement within a 60-day period, either party may

terminate the lease.

Sec. 3210.22 What lease obligations am I accountable for during

readjustment negotiations?

If you object to the proposed terms and conditions of your lease,

you are still bound by the current lease terms. To avoid termination of

the lease, you must pay the proposed rentals and royalties timely,

under protest. If we reach an agreement on rentals that differs from

BLM's proposal, BLM will refund the difference.

[[Page 52751]]

Sec. 3210.23 When do the readjusted terms become effective?

The new terms and conditions will be effective at the end of the

prior term.

Sec. 3210.24 Must I prevent the drainage of geothermal resources from

my lease?

Yes. You must prevent the drainage of geothermal resources from

your lease by either:

(a) Diligently drilling and producing wells which will protect the

Federal geothermal resource from loss caused by production from other

properties; or

(b) Paying a sum determined by BLM as adequate compensation for

failure to drill and produce any wells necessary to protect the Federal

resource. BLM must agree to your use of this option.

Subpart 3211--Fees, Rentals, and Royalties

Sec. 3211.10 What are the filing fees, rentals, and royalties for

leases?

Rental and royalty payments are calculated based on the acreage

amount. Therefore, prior to calculating rental and minimum royalty

payments, you must determine the acreage amount. You must round up

partial acreage to the next whole acre. You would then multiply the

rounded acreage by the appropriate amount set out in the following

chart to determine the amount you owe. Example: Rental on a lease

containing 2,456.39 acres is calculated based on 2,457.00 acres.

Filing Fees, Rentals, and Royalties

------------------------------------------------------------------------

Type Competitive Non competitive

------------------------------------------------------------------------

Lease Filing Fee............ N/A................. $75.00.

Lease Rental................ $2.00 per acre...... $1.00 per acre.

Lease Assignment Filing Fee. $50.00.............. $50.00.

Royalties:

steam, heat, or energy.. between 10% and 15%. between 10% and 15%.

demineralized water..... 5%.................. 5%

byproducts.............. 5% a................ 5% a.

minimum royalty......... $2.00 per acre...... $2.00 per acre.

Additional rental/In lieu of $3.00 per acre in $3.00 per acre in

diligent exploration. addition to regular addition to regular

lease rental. lease rental.

Additional rental/In lieu of $3.00 per year/first $3.00 per year/first

commercial quantities 5 years, $6.00 per 5 years, $6.00 per

production. year/second 5 years. year/second 5

years.

------------------------------------------------------------------------

a Note the exception stated in 43 CFR 3211.17(b).

Sec. 3211.11 When is my annual rental payment due?

(a) You must submit your annual rental payments so they are

received by BLM or MMS, as appropriate, on or before the anniversary

date of each lease year. There is no grace period for rental payments.

If the rental for your lease is not timely paid, the lease will

automatically terminate by operation of law, unless you meet the

conditions of 43 CFR 3213.15 of this part. Rental payments are

considered timely received if they are postmarked by the United States

Postal Service, common carrier, or their equivalent, on or before the

anniversary of the lease. This does not include private postal meters.

If less than a full year remains on a lease, you are still responsible

for paying a full year's rental on or before the anniversary date of

the lease.

(b) When BLM terminates a lease suspension (see subpart 3212 of

this part) and you had paid rent in advance, BLM applies a prorated

amount to the annual rental or minimum royalty to complete the lease

year requirement and return to the next anniversary date. BLM applies

any remaining monies to the next year's rental. You must pay the

balance due on or before the next anniversary date to fulfill your

rental obligation for the next year. If you relinquish the lease, or

fail to pay the balance due on or before the next anniversary date, BLM

will refund the outstanding monies. If there is insufficient rental to

complete payment on the lease year (i.e., to return the next

anniversary date), BLM will notify you of payment due and grant you 30

days from receipt of the notification to remit the balance.

(c) If payment is due on a day in which the designated payment

office is closed, payment received on the next official working day is

considered timely.

Sec. 3211.12 How and where do I submit my rental payment?

You must pay BLM the first year's advance rental. You must pay

subsequent rentals, royalties, and in lieu payments to MMS. Payments

may be made to the BLM in the form of personal or cashier's check or

money order and should be made payable to the Department of the

Interior--Bureau of Land Management. You may also make payments by

credit card or electronic funds transfer when specifically authorized

by BLM. Payments to the MMS by personal or cashier's check, money

order, or electronic funds transfer, should be made payable to the

Department of the Interior--Minerals Management Service.

Sec. 3211.13 Is there a different rental or minimum royalty amount for

a fractional interest lease?

BLM will not prorate rentals and minimum royalties payable under

leases for lands in which the United States owns only a fractional

mineral interest. You must pay for the full acreage in the lease.

Sec. 3211.14 Prior to production, am I expected to pay rental if my

lease is committed to an approved cooperative or unit plan?

Yes. You are expected to pay rental in accordance with 43 CFR

3211.10.

Sec. 3211.15 When unit production starts, am I expected to pay rental

if my lease is committed to an approved cooperative or unit plan?

As soon as production is established on your lease, lands included

in an approved cooperative or unit plan, which are within the

participating area, are subject to royalties in accordance with 43 CFR

3211.17. All other unitized lands remain subject to rental in

accordance with 43 CFR 3211.10.

Sec. 3211.16 Will I always pay rental on my lease?

No, you are required to pay rentals only until you achieve

production in commercial quantities. At that time the lease converts to

royalty status.

[[Page 52752]]

Sec. 3211.17 What are the possible royalty rates of my lease?

(a) BLM will set out the royalty rate in the lease. BLM will

determine the royalty rate based on the following:

(1) The royalty rate for heat or energy derived from lease

production may range from 10-15% of the heat or energy value.

(2) The royalty rate for the value of byproducts derived from

production under the lease and sold or utilized or reasonably

susceptible to sale or utilization may not exceed 5%, except that the

royalty rate for minerals listed in section 1 of the Mineral Leasing

Act (MLA), 30 U.S.C. 181, will be the same as that provided in the MLA.

(3) The royalty rate for demineralized water produced on a lease

may not exceed 5%, except that BLM will not charge a royalty for water

used in the operations of a utilization facility.

(4) The minimum royalty rate on a producing lease is $2.00 per

acre.

(b) Occasions when the minimum royalty rate might apply are when an

initial positive well commerciality determination is made but actual

production has not yet begun, or when the value of actual production is

so low that royalty due under the applicable schedule (in paragraphs

(a)(1) through (a)(3) of this section) is less than $2.00 per acre.

Subpart 3212--Suspension of Operations or Operations and Production

Sec. 3212.10 May I obtain a suspension of operations or operations and

production on my lease, and if so, for what reasons?

The operator may request in writing that BLM place a producing

lease in suspension. Your request must fully describe the need for the

suspension. BLM, on its own, may suspend operations on any lease in the

interest of conservation. The suspension may include leases committed

to an approved unit agreement. Suspending the leases in a unit does not

affect unit obligations.

Sec. 3212.11 When is a lease suspension effective or terminated?

(a) A suspension will take effect and will last for the period

specified by BLM. Prior to the expiration of the time specified, you

may request in writing that BLM lift the suspension. If BLM agrees to

lift the suspension and permit you to resume operations, you must also

resume payment of rentals and royalty, as applicable.

(b) BLM may, upon information obtained by or furnished to BLM,

order the resumption of operations, if BLM determines that the

operations are necessary to protect the interests of the United States.

Sec. 3212.12 How does a suspension affect the lease terms?

An approved suspension stays all lease obligations. You do not have

to conduct drilling, produce thermal steam or pay rents or royalties.

The time during which the suspension is effective does not count toward

the lease term.

Sec. 3212.13 What happens when the suspension is lifted or removed?

When BLM lifts a suspension, we extend the lease term by adding the

number of days the lease was under suspension to the term. BLM suspends

rental or minimum royalty payments the first day of the lease month

following the effective date of the suspension. Your obligation to

resume these payments begins on the first day of the lease month in

which BLM lifts the suspension.

Sec. 3212.14 May BLM reduce or suspend the royalty or rental rate of

my lease?

Yes, if you submit an application requesting a waiver, suspension

or reduction of your rent or royalty, BLM may grant the request if it

determines the following:

(a) It is in the interests of conservation;

(b) Doing so will encourage the greatest ultimate recovery of

resources;

(c) It is necessary to promote development; or

(d) The lease cannot be successfully operated under the current

lease terms.

Sec. 3212.15 What information must I submit when requesting a

reduction or suspension of the royalty or rental rate of my lease?

(a) Your request must include:

(1) The type of reduction being requested;

(2) The serial number of the lease;

(3) The name of the lessee and operator;

(4) The number, location, and status of each well;

(5) A summary of monthly production from the lease during the last

6 months;

(6) A detailed statement of expenses and costs, and all facts

necessary for BLM to determine if the well can be operated under its

current terms; and

(7) Any other information requested by BLM.

(b) If the application is for a reduction in royalty, you must also

submit a list of names and amounts of royalties or payments out of

production paid to each individual, and every effort you have made to

reduce these payments.

Subpart 3213--Relinquishment, Termination, Cancellation, and

Expiration

Sec. 3213.10 Who may relinquish a lease?

The record title holder or its authorized agent may relinquish a

lease in full or in part, and must sign the relinquishment. If there is

more than one record title holder to a lease, all record title holders

or their authorized agents must sign the relinquishment.

Sec. 3213.11 What form must I submit to relinquish a lease?

You must submit a written request to BLM that includes the serial

number of each lease you are relinquishing. If you are relinquishing

the entire lease, no legal description of the land is required. If you

are relinquishing part of the lease, you must describe the lands

relinquished.

Sec. 3213.12 Can BLM accept a partial relinquishment resulting in less

than 640 acres?

BLM may not accept a partial relinquishment that reduces the lease

acreage to less than 640 acres or all of the land in the section if

less than 640 acres is available. BLM may waive the minimum acreage

provision found at 43 CFR 3204.14, if BLM determines that an exception

is justified to further development of the resource.

Sec. 3213.13 When does my relinquishment take effect?

Once approved by BLM, your relinquishment takes effect as of the

date it is filed, provided that you and your surety have fulfilled your

obligations to:

(a) Pay all rentals and royalties due prior to relinquishment;

(b) Plug and abandon all wells on the relinquished land; and

(c) Restore the surface resources and comply with environmental

stipulations in accordance with all applicable laws and regulations and

lease terms.

Sec. 3213.14 How does a lease terminate?

A lease terminates under the following conditions:

(a) If you fail to produce or commence production prior to the end

of the primary term or obtain an extension, the lease terminates at the

end of that period; or

(b) If you fail to pay the rental on or before the anniversary

date, the lease automatically terminates by operation of law, unless

you meet the conditions of 43 CFR 3213.15.

Sec. 3213.15 What if I don't pay the entire amount of rental due?

If your payment is received timely, but is deficient by a nominal

amount,

[[Page 52753]]

your lease will not automatically terminate. A nominal amount is not

more than $100 or 5% of the total payment due, whichever is less. BLM

will notify you if your payment is deficient and will set a date by

which the deficient payment must be made. Failure to submit the

deficiency in the time allowed will result in lease termination as of

its anniversary date.

Sec. 3213.16 Will BLM notify me if my lease terminates?

Yes, BLM will send a notice by certified mail, return receipt

requested.

Sec. 3213.17 Can my lease be reinstated? If so, how?

Yes, if the lease was terminated for failure to timely pay your

rentals. You will be given 30 days to petition for reinstatement.

Sec. 3213.18 Who may petition to reinstate a lease?

Every record title holder of the lease must sign a petition for

reinstatement.

Sec. 3213.19 What must I do to obtain a reinstatement?

You must submit a petition to BLM requesting reinstatement. The

petition should include the serial number for each lease and state your

reason for late payment. You must also submit the rental, including any

back rental which has accrued from the date of termination with your

petition, if you have not already paid it to MMS. You must also include

an explanation of why the delay in payment was justifiable and not due

to a lack of diligence.

Sec. 3213.20 Are there reasons why BLM would not approve a

reinstatement?

Yes, BLM will not approve a reinstatement if:

(a) You do not prove that failure to pay rent on or before the

anniversary date was justifiable or was not due to a lack of diligence

on the part of the lessee;

(b) A valid lease has been issued for any of the lands prior to the

filing of a petition for reinstatement (BLM will not issue another

lease for at least 90 days after the date of termination); or

(c) The land has become unavailable for leasing.

Sec. 3213.21 When will my lease expire?

A lease expires at the end of its primary term (10 years) unless it

meets requirements for an extended or additional term. BLM will not

notify you when your lease expires at the end of the primary term.

Sec. 3213.22 Will BLM notify me when my lease expires if it is in an

extended term?

BLM will notify the lessee by decision that BLM has determined that

diligent efforts are not being made to use the geothermal resources.

The lease will expire 30 days after you receive the decision. During

those 30 days, you may request reconsideration of the decision by

submitting information detailing why you believe you have made diligent

efforts to use the resource.

Sec. 3213.23 May BLM cancel my lease?

BLM may cancel a lease after 30 days notice if we determine that

you violated the laws and regulations governing geothermal leases and

operations or you violated the lease terms. BLM may also cancel a lease

that was issued in error.

Sec. 3213.24 When is a cancellation effective?

(a) If cancellation is due to a violation of the laws, regulations

or lease terms, the cancellation is effective 30 days from your receipt

of notification of the violation. The cancellation of a lease issued in

error is effective upon issuance of the notice of cancellation. BLM

will not cancel the lease if:

(1) You have corrected the violation; or

(2) BLM determines that the violation can not be corrected during

the 30 day period and BLM determines you are making a good faith

attempt to timely correct the violation.

(b) You may request an evidentiary hearing regarding the violation

or proposed lease cancellation within 30 days from receipt of the

violation notification, in accordance with 43 CFR parts 4 and 1840. If

a hearing occurs and the administrative law judge decides a violation

occurred, you will have 30 days from receipt of the decision to

commence or complete any corrective action.

Subpart 3214--Personal and Surety Bonds

Sec. 3214.10 Who must post a geothermal bond?

The lessee, operating rights owner, or operator must file a bond

prior to the commencement of exploration operations, drilling

operations or whenever the operator is changed.

Sec. 3214.11 Who is covered by the bond?

The principals named on the bond and any other parties the

principal or surety has consented to cover are covered by the bond.

Sec. 3214.12 What does my bond cover?

Your bond covers all surface disturbing and down hole activities

related to drilling and associated operations on a Federal lease,

reclamation, payment of rentals and royalties, performance of all other

lease terms and conditions, and compliance with all applicable laws and

regulations.

Sec. 3214.13 What is the minimum dollar amount required under each

type of operation bond?

(a) For exploration activities, the bond may not be less than

$5,000 for each operation;

(b) For an individual lease, the bond may not be less than $10,000

for each lease;

(c) For a statewide bond which covers all of your leases and

operations in any one state, the amount may not be less than $50,000;

or

(d) For a nationwide bond which covers all of your leases and

operations nationwide, the amount may not be less than $150,000.

Sec. 3214.14 What kind of financial guarantee will BLM accept to back

my bond?

BLM will accept:

(a) Corporate surety bonds, provided that the surety company is

approved by the Department of Treasury (see Department of the Treasury

Circular No. 570 which is published in the Federal Register every year

on or about July 1); and

(b) Personal bonds, which are guaranteed by a cashier's check,

certified check, certificate of deposit, negotiable securities such as

Treasury notes, or irrevocable letter of credit (see 43 CFR 3214.22).

BLM will not accept cash to back a bond.

Sec. 3214.15 Is there a special bond form I must use?

You must use a bond Form (Form 3000-4, June 1988 or later editions)

approved by BLM for either a corporate surety bond or a personal bond.

Sec. 3214.16 Where must I submit my bond?

You must file personal or corporate surety bonds and statewide

bonds in the BLM State Office having jurisdiction over your lease or

operations. You may file nationwide bonds in any BLM State Office. You

must file bond riders in the BLM State Office where your bond is

located. For personal or corporate surety bonds you must file a single,

originally signed copy of the bond.

Sec. 3214.17 Who will BLM hold liable under the bond and what are

they liable for?

All interest owners in a lease assume full liability, jointly and

severally, from the effective date of the lease for compliance with all

applicable laws, regulations, lease terms and conditions. Among other

things, all interest owners are liable for:

[[Page 52754]]

(a) Well plugging and abandonment;

(b) Surface reclamation;

(c) Outstanding rental or royalty payments;

(d) Assessed royalties to compensate for drainage; and

(e) Other requirements related to operations on the lease.

Sec. 3214.18 What are my bonding requirements when a lease interest

is transferred to me?

(a) If the lands transferred to you contain a well or any other

surface disturbing activity which was not reclaimed by the original

lessee, you must post a bond. The bond must cover all of the

transferee's liability, and those holding an interest or engaging in

operations on the lease.

(b) If you previously furnished a statewide or nationwide bond, you

do not need to post an additional bond.

(c) If the operator provided the original bond, and the operator

does not change, you do not need to post a new bond.

(d) If the original lessee does not transfer all interest in the

lease to you, you may become a co-principal on the original bond.

Sec. 3214.19 How do I modify or extend the terms and conditions of my

bond?

You may modify your bond by submitting a rider to the BLM State

Office where your bond is held. There is no special form required.

Sec. 3214.20 Can BLM ever increase the bond amount above the

minimums?

Yes. BLM may increase the bond amount beyond the minimums set out

in 43 CFR 3214.13, if those amounts will not cover the estimated costs

of plugging and abandoning wells, abandoning utilization facilities,

and/or performing surface reclamation. BLM may also increase the amount

of your bond if BLM determines that:

(a) The liability on the lease exceeds the amount of the bond; or

(b) The operator has a history of noncompliance.

Sec. 3214.21 Where can I get a certificate of deposit or a letter of

credit?

You must obtain a certificate of deposit or letter of credit

through a Federally insured financial institution authorized to do

business in the United States.

Sec. 3214.22 What special requirements are there if I want to use a

certificate of deposit to back my bond?

Your certificate of deposit must:

(a) Be issued by a federally insured financial institution;

(b) Include on its face the statement, ``The Secretary of the

Interior or his delegate must approve redemption of this certificate by

any party'';

(c) Not expire;

(d) Automatically renew; and

(e) Show it is payable to the Department of the Interior--Bureau of

Land Management.

Sec. 3214.23 What special requirements are there if I want to use a

letter of credit to back my bond?

Your letter of credit must:

(a) Be issued by a federally insured financial institution

authorized to do business in the United States;

(b) Be payable to the Department of the Interior--BLM;

(c) Be irrevocable during its term and have an initial expiration

date of not less than one year following the date BLM receives it;

(d) Be automatically renewable for a period of not less than one

year, unless the issuing financial institution provides BLM with

written notice that it will no longer be renewed at least 90 days

before the letter of credit expires; and

(e) Include a clause that grants the Secretary authority to demand

immediate payment, if you fail to meet your obligations under the

regulations and lease terms.

Subpart 3215--Bond Collection After Default

Sec. 3215.10 In what circumstances does BLM collect on a bond?

If you fail to meet your obligations under the regulations or the

lease terms, BLM may collect up to the face amount of the bond.

Examples of some activities that may result in forfeiture of the bond

are failure to:

(a) Properly plug and abandon a well;

(b) Reclaim the lease area;

(c) Pay outstanding rental and royalty payments;

(d) Pay assessed royalties to compensate for drainage; and,

(e) Meet other requirements related to lease operations.

Sec. 3215.11 As the principal on the bond, may BLM require me to

restore the face amount of my bond or require me to replace my bond

after BLM collects on default?

Yes. If the bond is reduced or fully depleted, you must either:

(a) Post a new bond of equal value; or

(b) Restore the existing bond to the amount previously held, before

continuing any operations on the lease.

Sec. 3215.12 What if I do not restore the face amount or file a new

bond?

BLM may initiate action to shut-in any well(s) and proceed to

cancel all of your leases covered by the subject bond.

Sec. 3215.13 When will BLM cancel or terminate my bond?

(a) BLM does not cancel or terminate bonds. However, BLM will:

(1) Terminate the period of liability of a surety or other provider

of a bond at any time. The bond provider must provide 30 days' notice

to BLM and to the principals whose obligations are secured. You may not

conduct any operations after a bond is terminated, without providing a

new bond satisfactory to BLM. BLM will also terminate the period of

liability on an old bond once a new bond has been filed and BLM accepts

it; and

(2) Release your bond when we have determined, after the passage of

a reasonable period of time, that you have paid all royalties, rentals,

penalties, and assessments, satisfied all permit or lease obligations,

reclaimed the site, and taken effective measures to ensure that the

mineral prospecting or development activities will not have an adverse

effect on surface or subsurface resources.

(b) Any release of the bond does not release or waive any claim the

BLM may have against any person under the Comprehensive Environmental

Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.

9601 et seq., or under any other applicable laws or any regulations.

Subpart 3216--Transfers

Sec. 3216.10 What types of lease interests can I transfer?

You can transfer record title, operating rights, or overriding

royalty interests.

Sec. 3216.11 Where and when am I required to file a transfer of

interest?

You must file your transfer in the BLM State Office in which your

lease is located if:

(a) You are conveying any interest in your lease;

(b) An interest holder dies; or

(c) A corporate merger or name change occurs.

Sec. 3216.12 When does a transferee assume responsibility for lease

obligations?

Upon BLM's approval of your transfer, the transferee assumes full

liability for performance of all lease obligations incurred after the

date of the transfer.

Sec. 3216.13 What are the responsibilities of the transferor?

The transferor remains responsible for payment of rents and

royalties accrued prior to the transfer, payment due to any drainage,

and all lease obligations that accrued prior to the transfer.

[[Page 52755]]

Sec. 3216.14 Are there required filing fees and forms associated with

filing my transfer?

Yes. The following table identifies filing requirements:

----------------------------------------------------------------------------------------------------------------

Type of transfer Form required Form number Number of copies Filing fee

----------------------------------------------------------------------------------------------------------------

Record Title.................... Yes............... 3000-3............ 3 executed copies. $50.00

Operating Rights................ Yes............... 3000-3(a)......... 3 executed copies. $50.00

Overriding Royalty.............. No................ Form 3000-3 or in 2 executed copies. $50.00

letter form.

Estate Transfers................ No................ N/A............... 1 List of Leases.. None

Corporate Mergers............... No................ N/A............... 1 List of Leases.. None

Name Changes.................... No................ N/A............... 1 List of Leases.. None

----------------------------------------------------------------------------------------------------------------

Sec. 3216.15 Is there a required time frame for filing requests for

approvals of transfers?

Yes.

(a) You must file a request for approval of transfers of record

title, operating rights, and overriding royalty within 90 days from the

date the transferor signs the document. If you do not file the request

within the 90 days, BLM may require you to recertify that the transfer

is still in force and effect.

(b) No specific time frame is required for filing estate transfers,

corporate mergers, and name changes. However, such documents must be

filed within a reasonable time.

Sec. 3216.16 Must I file separate requests for approval of transfers

for each lease?

Yes. You must file a separate request for approval of transfer for

each lease involving transfers of record title or operating rights,

unless you are transferring rights on more than one lease to the same

entity. In that case, you may file just one transfer application.

Sec. 3216.17 Where must I file estate transfers, corporate mergers and

name changes?

(a) If you hold a bond for any Federal lease, you must file estate

transfers, corporate mergers, and name changes in the BLM State Office

that maintains your bond.

(b) If you do not hold a bond, you must file estate transfer,

corporate merger and name change documents in the State Office having

jurisdiction over the lease.

Sec. 3216.18 How do I describe the lands in my lease transfer?

(a) If you are transferring the entire lease, a legal description

of the land is not required.

(b) If you are transferring a portion of the lease, describe the

lands in the same manner as they are described on the lease.

Sec. 3216.19 Can I transfer record title interest for less than 640

acres?

BLM will not approve a record title assignment in whole or in part

if the lease size is reduced to less than 640 acres, unless the total

acreage in the lease includes an irregular subdivision. BLM may make an

exception to the minimum acreage provision found at 43 CFR 3204.14, if

it is necessary to conserve the resource.

Sec. 3216.20 When does an assignment segregate a lease?

If you assign 100% of the record title interest in a portion of

your lease, BLM segregates the assigned portion from the original lease

and gives it a new serial number with the same terms and conditions as

those in the original lease.

Sec. 3216.21 When is my assignment/transfer effective?

Your transfer or assignment becomes effective the first day of the

month following its approval by BLM.

Sec. 3216.22 Does BLM grant all requests for approval of transfer?

No. BLM will not approve a transfer if the lease account is not in

good standing or the transferee does not qualify to hold a lease under

this part.

Subpart 3217--Cooperative Conservation Provisions

Sec. 3217.10 What is the purpose of unit agreements and cooperative

plans?

Lessees enter into a unit agreement or a cooperative plan to

conserve the resources of any geothermal field or area. Conservation of

the resource is achieved by collectively developing and operating a

geothermal field or area. BLM will not approve unit agreements which

BLM determines are not in the public interest. Unit agreement

application procedures are provided in 43 CFR part 3280.

Sec. 3217.11 What is the purpose for communitization or drilling

agreements?

Communitization or drilling agreements provide for resource

development when operators cannot independently develop separate tracts

due to established well spacing or well development programs. Lessees

may request approval of communitization or drilling agreements or BLM

may require the lessees to enter into such agreements.

Sec. 3217.12 What information regarding a proposed communitization or

drilling agreement must you submit to BLM?

You must provide the following information:

(a) The location of the separate tracts comprising the drilling or

spacing unit;

(b) The apportionment of production or royalties to each separate

tract;

(c) The name of each tract operator; and

(d) Provisions for the protection of the interests of all parties,

including the United States.

Sec. 3217.13 When is a communitization or drilling agreement

effective?

A communitization or drilling agreement is effective when it is

signed by BLM. BLM will not approve the agreement unless all involved

parties sign the agreement, and BLM determines that the tracts cannot

be independently developed.

Sec. 3217.14 Under what conditions will BLM approve operating,

drilling or development contracts?

BLM may approve an operating, drilling or development contract

when:

(a) The contract is entered into by one or more geothermal lessees

with one or more persons or partnerships;

(b) The contract is necessary for large scale operations and

financing related to the discovery, development, production, or

transmission, transportation or utilization of geothermal resources;

and

(c) BLM determines that the contract is required for the

conservation of the resource, or public convenience, or the interest of

the United States would be served by the approval.

[[Page 52756]]

Sec. 3217.15 What information must I submit to BLM regarding proposed

operating, drilling or development contracts?

You must submit:

(a) The contract and a statement of its need;

(b) All the interests held by the contractor in the area or field;

(c) The types and scheduling of operations to be conducted under

the contract;

(d) Indication that approval of the contract will not result in any

concentration of control over the production or sale of geothermal

resources which would violate the antimonopoly laws of the United

States;

(e) Copies of all contracts held by the same contractor in the area

or field; and

(f) Any other information BLM may require to make a decision

regarding the proposed contract or to attach any conditions of

approval.

Subpart 3250--Exploration Operations--General

Sec. 3250.10 What is the purpose, scope and authority of the subparts

pertaining to exploration operations?

(a) The regulations in this subpart establish procedures for

conducting geothermal exploration operations:

(1) On BLM administered public lands, whether leased or unleased

for geothermal resources, and covers lessees and nonlessees; and

(2) On any Federally owned lands leased for geothermal resources.

(b) The regulations in this subpart do not apply to:

(1) Unleased land when the surface is administered by an agency

other than the Bureau of Land Management, unless the surface management

agency decides to apply them;

(2) Privately owned land; or

(3) Casual use activities.

Subpart 3251--Permitting of Exploration Operations

Sec. 3251.10 What types of operations may I propose when submitting

an application for an exploration permit?

You may propose any activity fitting the definition of

``exploration operations''.

Sec. 3251.11 May I conduct exploration operations on my lease,

someone else's lease or unleased land?

Yes. You may conduct exploration operations on any public lands

open to geothermal leasing regardless of whether or not the lands are

leased. The right to conduct exploration operations under an approved

permit is nonexclusive. If the lands are already leased for geothermal

resources or other minerals, your operations may not unreasonably

interfere with or endanger other operations. In addition, you must not

unreasonably interfere with or endanger other authorized uses, or cause

unnecessary or undue degradation of the lands.

Sec. 3251.12 Do I need a permit prior to conducting exploration

operations?

Yes. You must have an approved exploration permit prior to

beginning any exploration operations, whether you have a geothermal

lease covering the lands or not.

Sec. 3251.13 What information must I submit with my application for

an exploration permit?

(a) For any exploration operation other than temperature gradient

wells, you must fully describe your exploration plans and procedures,

and include the approximate commencement and termination dates.

(b) For temperature gradient wells, you must fully describe your

drilling and completion procedures. You must submit the following

information submitted for a single well or for several wells proposed

to be drilled in an area of geologic and environmental similarity:

(1) A detailed description of the equipment, materials, and

procedures you will use;

(2) The depth of the well;

(3) The casing and cementing program;

(4) The circulation media (mud, air, foam, etc.);

(5) A description of the logs that you will run;

(6) A description and diagram of the blowout prevention equipment

you will use during each phase of drilling;

(7) The expected depth and thickness of fresh water zones;

(8) Anticipated lost circulation zones;

(9) Anticipated temperature gradient in the area;

(10) Well site layout and design;

(11) Existing and planned access roads or ancillary facilities;

(12) Source of drill pad and road building material and water

supply; and

(13) Any other information BLM may require.

(c) For both (a) and (b) above, you must provide:

(1) Evidence of bond coverage;

(2) Estimates of how much surface disturbance your exploration may

cause;

(3) A narrative statement describing the proposed measures to be

taken for the protection of the environment;

(4) Methods for reclamation of the surface; and

(5) All other information or data that BLM may require.

Sec. 3251.14 What action will BLM take on my permit?

BLM will notify you if additional information is needed to process

your permit. You will also be notified as to whether your permit has

been approved or denied.

Sec. 3251.15 How do I receive BLM approval to change permitted

exploration operations?

You may request a change to an approved exploration permit by

submitting a sundry notice. The sundry notice must fully describe the

requested changes. You may not proceed with the change until you

receive approval from BLM.

Sec. 3251.16 Must I submit data obtained through exploration

operations to BLM?

Yes. When you conduct exploration operations on your lease(s), you

must submit all data obtained as a result of the operations with the

notice of completion of exploration operations, unless BLM approves a

later submission.

Sec. 3251.17 Are there any bonding requirements for conducting

exploration operations?

(a) Yes. Before you start any operation BLM must receive and

approve one of the following:

(1) A surety or personal bond for the individual permit or lease

for at least $5,000;

(2) A statewide exploration bond of at least $25,000 covering all

exploration operations in the state in which the exploration is being

conducted;

(3) A nationwide exploration bond of at least $50,000 or

(4) A rider to an existing nationwide or statewide oil and gas

exploration bond to include geothermal resources exploration

operations.

(b) These bond amounts are minimums. BLM may require an increase if

you have a history of noncompliance or if the minimum amounts will not

cover the estimated costs of reclamation, or performance of other

permit terms.

Sec. 3251.18 When will the bond be released?

BLM will not release any bond until we are satisfied that you have

complied with the terms and conditions of the exploration permit,

including reclamation, associated sundry notices, and all applicable

requirements.

[[Page 52757]]

Subpart 3252--Conducting Exploration Operations

Sec. 3252.10 What operational requirements must I meet when

conducting exploration operations?

(a) You must comply with BLM orders and other standards and

procedures found in the applicable laws, regulations, geothermal

resources operational orders, notice to lessees, conditions to the

approved plan or permit, and lease terms.

(b) You must also:

(1) Take all necessary precautions to keep all exploration

operations under control at all times;

(2) Use trained and competent personnel;

(3) Use properly maintained equipment and materials;

(4) Use operating practices which ensure the safety of life and

property;

(5) Prevent the unnecessary waste of or damage to geothermal or

other energy and mineral resources; and

(6) Prevent injury.

Sec. 3252.11 What environmental requirements must I meet when

conducting exploration operations?

(a) You must conduct all operations performed under this part in a

workmanlike manner to:

(1) Protect the quality of surface and subsurface waters, air, and

other natural resources, including wildlife, soil, vegetation, and

natural history;

(2) Protect the quality of cultural, scenic and recreational

resources;

(3) Accommodate, as much as possible, other land uses; and

(4) Protect human and wildlife resources from unacceptable noise

level.

(b) You must remove or, with BLM's permission, properly store all

equipment and materials not in use.

(c) You must provide and use pits, tanks and sumps of adequate

capacity. They must be designed to retain all materials and fluids

resulting from drilling of temperature gradient wells or other

operations, unless otherwise specified by BLM. When no longer needed,

you must properly abandon pits and sumps.

(d) BLM may require you to submit a contingency plan describing

procedures to protect life, property, and the environment.

Sec. 3252.12 How deep may I drill a temperature gradient well?

You may drill a temperature gradient well to any depth approved by

BLM in your exploration permit or sundry notice. Regardless of depth,

you are not permitted to produce or inject geothermal resources. BLM

may modify your permitted depth at any time before or during drilling,

when the bottom hole temperature or other information indicates that

drilling to the original permitted depth could create risks to human

health, safety or the environment.

Sec. 3252.13 How long may I collect information from my temperature

gradient well?

You may collect information from your temperature gradient well for

as long as approved by BLM. BLM will require you to abandon a well when

BLM determines it is necessary to protect the environment or to meet

operational standards.

Sec. 3252.14 What are the requirements for completing and abandoning a

temperature gradient well?

You must submit a sundry notice to obtain BLM approval before

abandoning a well and conducting surface reclamation. You must complete

temperature gradient wells in a manner which will allow for abandonment

and which will prevent interzonal migration of fluids. Tubing must be

capped when not in use. You must also reclaim the surface to BLM

specifications.

Sec. 3252.15 Must I notify BLM when I have completed my exploration

operations?

Yes. You must file with BLM a notice of completion of exploration

operations describing the exploration operations, well history,

completion, abandonment procedures, and site reclamation measures

within 30 days after:

(a) Completion of any geophysical exploration operations;

(b) Completion of the drilling of temperature gradient wells;

(c) Abandonment of a temperature gradient well; and

(d) When all exploration sites are abandoned.

Subpart 3253--Inspection, Enforcement, and Noncompliance

Sec. 3253.10 Will BLM inspect my exploration operations?

Yes. BLM may inspect all exploration operations to ensure

compliance with all applicable laws, regulations, permit terms and

conditions of approval, lease terms, if applicable, orders, and notices

to lessees. BLM may require additional measures to be taken to correct

any unnecessary or undue damage to the lands. BLM will notify you of

the nature and extent of any required measures and the time during

which they must be completed.

Sec. 3253.11 What action may BLM take if my exploration operations are

not in compliance?

(a) If BLM finds your operation to be in noncompliance, BLM may

take one or both of the following actions:

(1) Issue you a written Incident of Noncompliance, directing you to

correct any deficiencies within a specific time period;

(2) Require you to mitigate unnecessary and undue degradation

caused by your operations; or

(3) Revoke or suspend your exploration permit, after notice and a

hearing in accordance with 43 CFR parts 4 and 1840.

(b) If the noncompliance continues or is of a serious nature, BLM

will take one or more of the following actions:

(1) Correct any operational deficiencies at your expense;

(2) Forfeit all or part of your bond;

(3) Direct modification or shutdown of your operations;

(4) Temporarily suspend your exploration permit if necessary to

protect public health, safety, or the environment. This temporary

suspension will go into effect immediately and will remain in effect

while appeals are pending; or

(5) Initiate cancellation of the lease, if applicable.

Subpart 3255--Exploration Operations Relief and Appeals

Sec. 3255.10 May I request variances from notices to lessees, permit

conditions of approval, and operational or other orders issued by the

BLM?

Yes. BLM may approve variances which:

(a) Continue to accomplish the purpose of a requirement; and

(b) Are necessary for the proper control of:

(1) Exploration operations;

(2) Conservation of natural resources; or

(3) Protection of human health and safety, property, or the

environment.

Sec. 3255.11 How may I appeal a BLM decision regarding my exploration

operations?

(a) A party adversely affected by a decision of the BLM may appeal

that decision to the Interior Board of Land Appeals as set forth in 43

CFR parts 4 and 1840.

(b) All decisions or approvals of BLM under this subpart shall

remain effective pending appeal unless the Interior Board of Land

Appeals determines otherwise under 43 CFR part 4.

[[Page 52758]]

Subpart 3260--Geothermal Drilling Operations--General

Sec. 3260.10 What types of geothermal operations are covered under

this subpart?

(a) This subpart establishes permitting and operating procedures

for drilling wells intended to flow test or produce geothermal fluids

and related activities, or inject fluids into a geothermal reservoir.

This subpart also addresses redrilling, deepening, plugging back, and

other subsequent well operations.

(b) This subpart does not address the drilling of temperature

gradient wells, which is described in subpart 3250 of this part, or the

utilization of geothermal resources, which is described in subpart 3270

of this part.

Sec. 3260.11 What standards apply to my drilling operations?

You must conduct all drilling operations:

(a) In a prudent manner;

(b) To prevent unnecessary and undue degradation to the surface and

subsurface;

(c) To maximize ultimate recovery;

(d) To result in the beneficial utilization of geothermal resources

with minimum waste; and

(e) In a manner consistent with the principles of multiple use and

protection of the environment.

Sec. 3260.12 Can BLM issue additional orders or instructions?

(a) Yes. BLM can issue detailed procedures under this subpart, so

long as they are consistent with the regulations under this part.

Detailed procedures will be in the form of:

(1) Geothermal Resource Operational Orders, for detailed

requirements on a nationwide basis;

(2) Notices to Lessees, for detailed requirements on a statewide or

regional basis;

(3) Other orders and instructions specific to a field or area;

(4) Permit conditions of approval; and

(5) Verbal orders which will be confirmed in writing.

(b) Before issuing Geothermal Resource Operation Orders or Notices

to Lessees, BLM will consult with appropriate Federal and state

agencies, lessees, operators, and other interested parties.

Subpart 3261--Permitting of Drilling Operations

Sec. 3261.10 What approval must I obtain prior to well pad

construction drilling?

You must have either an approved geothermal drilling permit, and

sundry notice for well pad construction, prior to beginning any surface

disturbance or drilling activities.

Sec. 3261.11 What information must I submit to get approval for

drilling operations or well pad construction?

(a) You must submit a completed and signed drilling permit or

sundry notice form. The drilling permit application must include at

least the following information:

(1) A detailed description of the equipment, materials, and

procedures you will use;

(2) The depth of the well;

(3) If applicable, a directional program including:

(i) The bottom hole location and distances from the nearest section

or tract lines;

(ii) The kick-off point;

(iii) The direction of deviation;

(iiii) The angle build-up and maximum angle; and

(iiiii) Plan and cross section maps indicating the surface and

bottom hole locations;

(4) The casing and cementing program;

(5) The circulation media (mud, air, foam, etc.);

(6) A description of the logs that you will run;

(7) A description and diagram of the blowout prevention equipment

you will use during each phase of drilling;

(8) The expected depth and thickness of fresh water zones;

(9) Anticipated lost circulation zones;

(10) Anticipated reservoir temperature and pressure;

(11) Anticipated temperature gradient in the area;

(12) A plat certified by a licensed surveyor showing the surveyed

surface location and distances from the nearest section or tract lines;

and

(13) Any other information BLM may require.

(b) A sundry notice for well pad construction must include a

description of the well pad layout and design.

Sec. 3261.12 What is a plan of operations?

A plan of operation describes your plans and procedures for

production and utilization of the geothermal resources from the lease.

It contains enough information about your proposal to permit BLM to

assess the environmental impacts of your operations. This generally

includes:

(a) Well pad layout and design;

(b) A description of existing and planned access roads;

(c) A description of any ancillary facilities;

(d) The source of drill pad and road building material;

(e) The source for water;

(f) A statement of surface ownership;

(g) Plans for reclamation of the surface;

(h) A description of environmental protection measures; and

(i) Any other information BLM may require.

Sec. 3261.13 When must I have an approved plan of operations?

You must submit a plan of operations and have it approved by BLM

prior to commencing production operations on a lease. You do not need

an approved plan for subsequent well operations, the construction of

new production facilities or the alteration of existing production

facilities, unless BLM notifies you that you must submit a plan.

Sec. 3261.14 Must I submit my drilling permit application and the plan

of operations at the same time?

No.

(a) You may submit your drilling permit application and plan of

operations simultaneously or separately. If you submit them separately:

(1) You must submit the plan of operations before the drilling

permit application to allow BLM time to comply with the National

Environmental Policy Act (NEPA);

(2) You must submit a sundry notice for well pad construction when

you are ready to begin actual pad construction; and

(3) You must submit the plan of operations and drilling permit

application when you are ready to drill a well. You should submit the

plan of operations and drilling permit application at the same time.

(b) If you submit the drilling permit application and plan of

operations simultaneously, the approved drilling permit application

will authorize both the pad construction and the drilling and testing

of the well.

Sec. 3261.15 Can a plan of operations and drilling permit apply to

more than one well?

Yes.

(a) The plan of operation can apply to any number of well sites

that are in areas of similar geology and environment.

(b) A drilling permit application may apply to more than one well

if you will drill the wells in the same manner, and you expect to

encounter similar reservoir conditions.

[[Page 52759]]

Sec. 3261.16 How do I amend a plan of operations or a drilling permit

application?

------------------------------------------------------------------------

If you want to amend a plan of operations

or drilling permit application . . . Then . . .

------------------------------------------------------------------------

(a) That has not been approved............ Submit an amended plan of

operation or drilling

permit application.

(b) That has been approved................ Submit a sundry notice

describing your proposed

change.

------------------------------------------------------------------------

Sec. 3261.17 Do I need a bond before I build a well pad or drill a

well?

Before starting any operation, BLM must approve either a surety or

personal bond in the amounts identified under 43 CFR 3214.13(b), (c),

or (d).

Sec. 3261.18 How will BLM review my application documents and notify

me of their status?

(a) When BLM receives your plan of operations, BLM will begin a

review in accordance with NEPA. You will be notified if BLM needs more

information during the NEPA review process. You will also be notified

when BLM signs the Record of Decision (ROD).

(b) BLM will review your drilling permit application or sundry

notice for well pad construction for conformance with your plan of

operation and any mitigation measures developed during review of your

plan of operation. BLM will notify you if we need additional

information and will return the drilling permit application or sundry

notice to you for correction.

(c) BLM will review your drilling permit application for technical

adequacy and compliance with geothermal resource operation orders,

notices to lessees, or other orders that BLM may have issued. BLM will

notify you if we need additional information and will return the

drilling permit application to you for correction.

Sec. 3261.19 How do I get approval to change an approved drilling

operation?

(a) You must submit a sundry notice describing the proposed

changes. You may not proceed with the changes until you have received

approval from BLM. For operations such as redrilling, deepening, or

plugging back a well, we may require you to submit a new drilling

permit application (see 43 CFR 3261.20), if we determine that you are

proposing a significant change to the approved drilling permit

application. An example of a significant change would be redrilling the

well to a completely different target, especially a target in an

unknown area.

(b) For changes that will create additional surface disturbance,

BLM may also require you to submit an amendment to the plan of

operation.

(c) BLM may give you verbal approval for a change requiring

immediate action, such as those necessary to protect life or property.

In this case, you must submit a written sundry notice within 48 hours

of BLM's verbal approval.

Sec. 3261.20 How do I get approval for subsequent well operations?

(a) You must submit a sundry notice describing your proposed

operation. You may not proceed with the operation until you have

received approval from BLM.

(b) BLM may waive the requirement for a sundry notice for work we

determine to be routine such as cleanouts, surveys, or general

maintenance. You must continue to submit sundry notices for the

specific operation unless you receive a waiver from BLM. For

information on how to obtain a waiver, contact BLM.

Subpart 3262--Conducting Drilling Operations

Sec. 3262.10 What operational requirements must I meet when drilling a

well?

(a) You must:

(1) Take all necessary precautions to keep the well under control

at all times;

(2) Use trained and competent personnel;

(3) Use properly maintained equipment; and

(4) Use operating practices that ensure the safety of life and

property.

(b) You must use sound engineering principles and take into account

all pertinent data when:

(1) Selecting the types and weights of drilling fluids;

(2) Designing a system for controlling fluid temperatures;

(3) Designing a blowout prevention equipment; and

(4) Designing a casing and cementing program.

(c) You must conduct your operation in accordance with:

(1) The Act and the regulations of this part;

(2) Orders;

(3) Notices to lessees;

(4) Lease terms;

(5) Approved plans and permits;

(6) Conditions of approval;

(7) Other instructions from BLM; and

(8) Any other applicable laws and regulations.

Sec. 3262.11 What environmental requirements must I meet when drilling

a well?

(a) You must conduct operations to:

(1) Protect the quality of surface and subsurface water, air,

natural resources including wildlife, soil, vegetation, and natural

history;

(2) Protect the quality of cultural, scenic, and recreational

resources;

(3) Accommodate, as much as possible, other land uses;

(4) Minimize noise;

(5) Prevent injury; and

(6) Prevent damage to property and unnecessary or undue degradation

of the lands.

(b) You must remove or, with BLM's approval, properly store all

equipment and materials that are not in use.

(c) You must retain all fluids from drilling and testing the well

in properly designed pits, sumps, or tanks.

(d) When a pit or sump is no longer needed, you must abandon it and

restore the site as directed by BLM.

(e) BLM may require you to submit a contingency plan describing how

you will protect life, property, and the environment.

Sec. 3262.12 Must I post a sign at every well?

(a) Prior to drilling a well, you must place a sign in a

conspicuous place containing the following information:

(1) The name of the lessee or operator;

(2) Lease serial number;

(3) Well number; and

(4) Well location described by section, township, range, and

quarter quarter-section.

(b) You must maintain each well sign until the well site is

reclaimed.

Sec. 3262.13 Can BLM require well s

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